Crypto Warren Buffett - Crypto will almost certainly come to a bad ending.

Don't beat me up crypto lovers. He said it. I'd probably take heed.

 

The Oracle has spoken...I 100% agree with this....another dot gone in the making...

 

Didn't watch the whole thing. He lost me early on when he admitted he knows nothing about cryptocurrencies.....

 

To be fair though, I know nothing about mining towns but I know enough to know they generally wont end well for many. Just be careful.

 

Fair call. People still made a lot of money with mining towns when they timed their exit well.

But yes, I agree crypto will end badly for some. It's a volatile market that isn't sustainable at it's current levels. Full of too many emotional and uneducated investors chasing a quick buck.

The technology has real world use it will just be a matter of who is left standing when it stabilises.

 

Bad ending for who? Does he mean GPU manufacturers, miners, crypto exchanges, speculative investors, believers in the technology? I'm not sure I would listen to technology advice from someone who doesn't own a smart phone.

 

Touché

 

I agree 100%; it is going to end very badly for a lot of crypto "investors". Unless say you've gone 10x on your original investment and cashed out about 15-20% to cover that original investment amount plus any applicable CGT. Then the risk is nil.

 

It reminds me so much of the '.com Boom' of the early 2000's when people were paying crazy prices for anything with a web site without paying any mind to what the company was actually doing.
So many got burnt.
But the few with solid businesses and reliable funding stood solid and are now worth billions....

 

Hey Buddy,

I'm trying to understand how the risk is nil.. I mean if you put in 10x original money 'invested' and then cash out 20% increase, yes I can see a profit. But what if when you put in 10x your original amount and the markets tank further at that point?

 

Sorry, by "gone 10x" I mean your crypto assets have increased in value ten-fold. Then you cash out enough to reduce your cost base to zero.

 

I see what your saying, but the money left in is still real money isn't it..

 

amazon,apple,microsoft,google... say no more.

 

Be fearful when others are greedy and greedy when other are fearful ~ Warren Buffett

 

I remember Warren Buffet said at the time of the Dotcom boom he didn’t invest in any tech stocks because he didn’t understand their businesses (even though Bill Gates was and still is a good personal friend of his).
That meant he avoided the Dotcom crash but also missed out on the meteoric rise of Apple, Google, Facebook and Amazon.
IMO even the greatest have their blind spots

 

Yep even though you're playing purely with profits, there is a certain "opportunity value" there that sits unrealised until you convert back to AUD. Your crypto holdings also technically contribute towards your networth so if the market tanks, your networth drops. However once you've recouped your costs, you'll be no worse off than if you had done nothing, and every day becomes bonus day

 

I guess its a calculated risk to suit one's risk profile.

 

Haha I wonder what risk profile would be averse to free money Getting started is another matter, although you really only need to hold some of the top coins for long enough to see big returns, e.g. if you bought $1000 of Ethereum last May, it would now be worth $10,000. Similarly if you bought Stellar 2 months ago.

No substitute for a proper blend of property, funds and LICs though imho.

 

Imho though its not 'free money'. There was significant risk taken in order to get that 'free money' situation. So its not really free.

 

This is a very good point... I would sooner call it a gamble than a calculated risk.

Personally it took me years of property before I was stable and confident enough to buy funds. Then a year or two of funds before I had the balls for shares. Then another year for crypto. The only way I could justify venturing into a riskier asset class was to only use investment profits, and cycle the risky profits back up through the order.