Crypto I'm conducting some research on Bitcoin

Have been checking back on this thread with interest due to the volatility of Blockchain technology

 

Hows are they faring @Dan Donoghue ?

Crypto’s 80% Plunge Is Now Worse Than the Dot-Com Crash

The Great Crypto Crash of 2018 looks more and more like one for the record books.

As virtual currencies plumbed new depths on Wednesday, the MVIS CryptoCompare Digital Assets 10 Index extended its collapse from a January high to 80 percent. The tumble has now surpassed the Nasdaq Composite Index’s 78 percent peak-to-trough decline after the dot-com bubble burst in 2000.

 

I'm interested too. Hard to have a robust discussion with Bitcoin enthusiasts as questioning their views makes you a stupid newb.

My simple view is that the technology is valid, the implementation of these coins is of questionable value.

Hanging for an update

 

It’s really hard to research what is the real value of these crypto currencies. As you say the tech is valid but it is hard to find any balanced view on it either people who are already wealthy through other forms of investment sayings it’s a scam or people who see crypto as there only chance to ever be wealthy sprouting **** like ‘to the moon’ ‘institutional investors’. The former can be dismissed as fearing crypto and the wealth it has created the latter as not seeing it is just as Pokémon go like fad that has already past.

Fake news and market manipulation are all over the internet and it is hard to decipher what is being written without an agenda behind it

Can’t help but feel that the recent crypto mania will lead to a long term boost to the stock market, it has created a new generation of investors. Crypto was/is like a supercharged version of the sharemarket quick gains and quick losses gaining the attention of millennials that would otherwise have no interest in investment. If crypto dies these investors will move to the share market, even if crypto continues to grow they will diversify to less volatile investments

 

ASX managing director and CEO Dominic Stevens believes using blockchain technology to replace CHESS will enable the development of new services and reduce costs, while placing Australia at the forefront of innovation in financial markets.

Link

Ethereum fell bellow the $199.77 level on Wednesday.

 

Here is this month update



The losses are quite amazing, at this point I am continuing the monthly investment purely from an analysis point of view, I don't see any major increases on the horizon.

I will continue for another 3 months as the experiment was always a 12 month one. It's not something I really care about and to be honest I will most likely leave whatever coins I have just sitting there in case one day in the future it's a viable everyday currency.

 

Another month over with, only 2 left to go in this experiment

 

You're only 30 percent down! Epic!

The power of dollar cost averaging....

 

There's obviously some ardent fans

 

This months update:

 

After today's $250 investment its worth lower than last months update LOL. This is the second biggest loss to date, we had a loss of 313 in Aug, then 289 this month and 240 in May. The biggest gain in any given month has been $35 in Feb. There have been 4 months of gains and 7 of losses for a total loss of $1,050.12

 

So this experiment is coming to an end with Decembers investment being the last one of the 12. It's been an interesting experiment which really outlines the volatility of the crypto market and shows the risk profile you open yourself up to when you embark on alternative investment strategies. I will continue to maintain the sheet that shows the value over time of the investment as I won't be taking the money out, I will post it in this thread each month but there will be no further deposits after December.

I said from the start that this experiment was never about making money (especially considering the very small investment amounts) but about gaining knowledge and understanding of this market. From that standpoint this has delivered, I have learned a lot and really enjoyed this experiment.

I have decided that this was such a success from a knowledge gain and analytical standpoint that I will be running another 12 month experiment next year. The stock market is something I also know very little about (surprising considering I worked at BT Financial Group for 8 years lol). Using stake.com.au I will be investing $250 a month for 12 months into stocks that I feel could be worth it.

There will be a very heavy leaning towards AI and Tech stocks as that is the area I am more comfortable with and feel I can do more research in that field.

If anything, these apps and micro investing systems allow us to "dabble" for experimental purposes without really opening ourselves up to too much risk and the analyst in me loves these opportunities .

I will create a new thread when my new experiment starts.

 

Quality content Dan thanks for creating the thread and sharing your results

 

What I learned:
- Bitcoin was a bad investment and the "market" performed as many expected - Based on the fundamentals the "currency" boom was a balloon - All hot air and no fundamentals
- Only those who bet against the media and traditional market views lost money. Many got out ahead of the collapse. Digital currency ownership was a defiance more than a strategy to produce profit.
- Unlike currency which has a market made by the relevant central banks, bitcoin is not a currency but a supply and demand based market. It has no floor. It has no ceiling allowing over speculation. - It has volatility. This creates risk and opportunity. But when prices fall it creates losses. Nothing else. The early buyer sells and makes a profit. The newer buyer loses. A ponzi scheme described as a market.
- Everyone seems to add fees in the process. Brokers, wallets and exchanges. Just buying bitcoin costs around 4%. Assume same with selling. Its like suggesting travellers cheques are currency. Or speculating using the currency booths at the airport.
- Its important to use accurate maths. Dan invested $250 x 11 = $2750 and not $2656. Dan has ignored costs to enter the market and costs to exit the market which are approx 4% each. The value of the bitcoin excludes selling costs ?. Lets call it $1592. There is a loss of over 50%
- What isnt evident is the dollar cost averaging impact on losses. The $250 invested 11mths ago has suffered a major loss (73%) and the later losses are less. The 50% loss disguises the true apparent loss which is as high as 70% of the funds invested and as low as 7% if I have my maths right. The smoothed average loss is just over 50% hiding the truth about bitcoin as a investment over the longer term.
- As a currency bitcoin has no capital base. It is unstable and not a hedge against inflation or to set aside for later spending. Setting $250 a month aside in Australian dollars would have outperformed and been stable.
- Blockchain has been recognised as a clever way to manage trading of digital matters. It may have future benefits for real time transacting.

 

Here is the final installment in the 12 month experiment:



a staggering 60% loss. It will be interesting to see how quickly it continues to erode, as there is no intrinsic value against Crypto it's purely down to market sentiment and speculation.

I have no intentions of removing the funds from this, I will continue to monitor it.

The new thread for micro investing in stocks can be found here.

 

Monitoring month 1, note I made a mistake in the Dec update and forgot to add the funds before updating the values in the spreadsheet, here is the correct Dec also:

 

Thanks for posting this Dan. It has been very interesting to watch.

 

No probs, I will continue to post a monthly update even though there will be no further investments. I think it will still yield some interesting data .

 

Monitoring month 2:



I find it strange how I made a loss pretty much every month I put money in and the 2 months since I stopped investing in it the returns are in the positive again.

 

Monitoring month 3: