When would you buy cryptocurrency?

Discuss all general (i.e. non-personal) investing questions and issues, investing news, and theory.
JSPECO9
Posts: 458
Joined: Thu Nov 24, 2016 11:34 pm

Re: When would you buy cryptocurrency?

Post by JSPECO9 »

warner25 wrote: Wed May 12, 2021 4:01 am I'll exchange USD for some cryptocurrency when I need cryptocurrency to buy things that I want, just like how I've exchanged USD for Euros when I took a trip and needed local currency. Isn't this the obvious answer?
+1.
bogledogle
Posts: 656
Joined: Wed May 07, 2014 4:34 pm

Re: When would you buy cryptocurrency?

Post by bogledogle »

TheLaughingCow wrote: Wed May 12, 2021 2:55 am For those who own no crypto. Under what conditions would you consider exchanging some USD for crypto?

Edit: This is a thought experiment. The point is to challenge Bogleheads' existing beliefs. At one point bonds were considered a safe investment and common stocks were regarded as excessively risky. Yet today the family who held stocks for the last 100 years is substantially richer than the family which held bonds. I do not want to be so attached to dogma that I miss fundamental shifts in the way the world works.

There is a point at which everyone would hold crypto, Boglehead or not. For example if your salary were paid in crypto, and the dollar was worthless, you would have no choice. I am asking, at what point would you decide there is some merit to holding some crypto "just in case" it really is the next big thing?

1) If the Dollar and other currencies were more unstable than Crypto. I would exchange some of my USD to Crypto.
2) If there was some application unique to Crypto space that I cannot access otherwise, I might buy some Crypto.
3) For the Lulz
User avatar
Blister
Posts: 240
Joined: Fri Feb 17, 2012 7:59 am
Location: Tennessee

Re: When would you buy cryptocurrency?

Post by Blister »

Agree with Bogledogle

Used 500$ on Robinhood last weekend to Lulz. Made a quick 100$ on a couple of Doggiecoin trades. No casinos nearby.

Until bitcoin or other cryptos become more stable it all feels highly speculative . Certainly not a stable value at present.
Everthing works out in the end. If it doesn't then its not the end.
TigerNest
Posts: 393
Joined: Mon May 10, 2010 12:58 pm

Re: When would you buy cryptocurrency?

Post by TigerNest »

My biggest concern with crypto is that there's massive potential for market manipulation.

Imagine if the stock exchanges and regulators didn't aggressively monitor wash trades, pump-and-dump schemes, churning, painting the tape, and insider trading. Of course fraud would be rampant.

The anonymity of accounts, the global diffusion of ownership, the artificial scarcity of supply, the total lack of regulatory oversight, and the paucity of trustworthy exchanges makes cryptocurrencies the ripest opportunity for market manipulation since the 1800s.

40% of bitcoin are held by less than 1,000 accounts (and who knows how far fewer actual individuals). What's preventing a few of them to coordinate trading? Push prices up by trading amongst yourselves, generate buzz so new entrants buy with real currency, sell some coins from other untraceable accounts, let it crash -- but not all the way -- rinse, repeat.

Even borrowing terms from finance is ludicrous and masks how amateur hour these "markets" are. Look at Quadringa, where a guy track of over $1 billion worth of trading on a spreadsheet on a laptop only he could access. All deposits disappeared when he suddenly died (though people speculate he faked his death).

I'm reminded of a story of the South Seas bubble, where a founder of a joint-stock company offered investors the chance to invest in a top secret project, raising capital but disclosing nothing about what it was for. Investors clamored for access and gave him a lot of money, which he promptly took and was never heard from again.

With cryptocurrency, the emperor's clothes are on full display.
User avatar
watchnerd
Posts: 13614
Joined: Sat Mar 03, 2007 10:18 am
Location: Gig Harbor, WA, USA

Re: When would you buy cryptocurrency?

Post by watchnerd »

TigerNest wrote: Wed May 12, 2021 1:03 pm My biggest concern with crypto is that there's massive potential for market manipulation.

Imagine if the stock exchanges and regulators didn't aggressively monitor wash trades, pump-and-dump schemes, churning, painting the tape, and insider trading. Of course fraud would be rampant.

The anonymity of accounts, the global diffusion of ownership, the artificial scarcity of supply, the total lack of regulatory oversight, and the paucity of trustworthy exchanges makes cryptocurrencies the ripest opportunity for market manipulation since the 1800s.

40% of bitcoin are held by less than 1,000 accounts (and who knows how far fewer actual individuals). What's preventing a few of them to coordinate trading? Push prices up by trading amongst yourselves, generate buzz so new entrants buy with real currency, sell some coins from other untraceable accounts, let it crash -- but not all the way -- rinse, repeat.

Even borrowing terms from finance is ludicrous and masks how amateur hour these "markets" are. Look at Quadringa, where a guy track of over $1 billion worth of trading on a spreadsheet on a laptop only he could access. All deposits disappeared when he suddenly died (though people speculate he faked his death).

I'm reminded of a story of the South Seas bubble, where a founder of a joint-stock company offered investors the chance to invest in a top secret project, raising capital but disclosing nothing about what it was for. Investors clamored for access and gave him a lot of money, which he promptly took and was never heard from again.

With cryptocurrency, the emperor's clothes are on full display.
I don't think there is *potential* for market manipulation -- I think it's overt and blatantly happening.

And, yes, I feel like I'm LARPing the stock market from a bygone era of capitalism.
Global stocks, IG/HY bonds, gold & digital assets at market weights 75% / 19% / 6% || LMP: TIPS ladder
User avatar
JonnyDVM
Posts: 2999
Joined: Wed Feb 12, 2014 5:51 pm
Location: Atlanta, GA

Re: When would you buy cryptocurrency?

Post by JonnyDVM »

watchnerd wrote: Wed May 12, 2021 1:17 pm
TigerNest wrote: Wed May 12, 2021 1:03 pm My biggest concern with crypto is that there's massive potential for market manipulation.

Imagine if the stock exchanges and regulators didn't aggressively monitor wash trades, pump-and-dump schemes, churning, painting the tape, and insider trading. Of course fraud would be rampant.

The anonymity of accounts, the global diffusion of ownership, the artificial scarcity of supply, the total lack of regulatory oversight, and the paucity of trustworthy exchanges makes cryptocurrencies the ripest opportunity for market manipulation since the 1800s.

40% of bitcoin are held by less than 1,000 accounts (and who knows how far fewer actual individuals). What's preventing a few of them to coordinate trading? Push prices up by trading amongst yourselves, generate buzz so new entrants buy with real currency, sell some coins from other untraceable accounts, let it crash -- but not all the way -- rinse, repeat.

Even borrowing terms from finance is ludicrous and masks how amateur hour these "markets" are. Look at Quadringa, where a guy track of over $1 billion worth of trading on a spreadsheet on a laptop only he could access. All deposits disappeared when he suddenly died (though people speculate he faked his death).

I'm reminded of a story of the South Seas bubble, where a founder of a joint-stock company offered investors the chance to invest in a top secret project, raising capital but disclosing nothing about what it was for. Investors clamored for access and gave him a lot of money, which he promptly took and was never heard from again.

With cryptocurrency, the emperor's clothes are on full display.
I don't think there is *potential* for market manipulation -- I think it's overt and blatantly happening.

And, yes, I feel like I'm LARPing the stock market from a bygone era of capitalism.
Is this investment opportunity still available ? I would like to get in.
I’d trade it all for a little more | -C Montgomery Burns
User avatar
ruralavalon
Posts: 26351
Joined: Sat Feb 02, 2008 9:29 am
Location: Illinois

Re: When would you buy cryptocurrency?

Post by ruralavalon »

Wiggums wrote: Wed May 12, 2021 6:14 am
JoeRetire wrote: Wed May 12, 2021 5:08 am
TheLaughingCow wrote: Wed May 12, 2021 2:55 am For those who own no crypto. Under what conditions would you consider exchanging some USD for crypto?
Right after I cash in a winning lottery ticket.

(hint: I don't buy lottery tickets)
+1

Same answer
+ 2.

I have never bought a lottery ticket.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link: Bogleheads® investment philosophy
bogledogle
Posts: 656
Joined: Wed May 07, 2014 4:34 pm

Re: When would you buy cryptocurrency?

Post by bogledogle »

Blister wrote: Wed May 12, 2021 12:10 pm Agree with Bogledogle

Used 500$ on Robinhood last weekend to Lulz. Made a quick 100$ on a couple of Doggiecoin trades. No casinos nearby.

Until bitcoin or other cryptos become more stable it all feels highly speculative . Certainly not a stable value at present.
There is a new show on Netflix "money explained" that popped up on my recommendations the other day. They have an episode on casinos and human behavior - it was interesting and of course Robinhood an Crypto made an appearance on it. I needed a reminder how much money gets spent on gambling - no wonder stocks soared during covid with all that cash flow.

I wanted to wager on DOGE and see how I would do on Robinhood. I was going to sell my one free ZYNGA stock and go all in, but I forgot my password and the lost interest while trying to reset it and looking up fees. I could not figure out what fees to trade crypto on RH - its says trading is free but something about order flow and not getting expected prices. How does that work?
User avatar
unclescrooge
Posts: 6265
Joined: Thu Jun 07, 2012 7:00 pm

Re: When would you buy cryptocurrency?

Post by unclescrooge »

Since I don't invest in currencies, the only time I would buy them is if I needed them to make a purchase for something.

Since most legitimate good and services can be purchased using the US dollar, I must assume it is either the purchase of something illegal, or the US government has completely collapsed.

Since I don't buy illegal stuff, the answer must therefore be to buy cryptos when the US government collapses.
ballons
Posts: 782
Joined: Sun Aug 18, 2019 3:05 pm

Re: When would you buy cryptocurrency?

Post by ballons »

fortunefavored wrote: Wed May 12, 2021 8:03 am I've no idea why crypto pumpers have invaded a forum like Bogleheads, hopefully it can get shut down and relegated to a single thread soon.
Cypto is an ideology and middle finger to boomers so of course this place is targeted. Look how successful they already are at grabbing the "market weight" ones here.

I will never buy until they deliver on their original promise of buying a pizza.
ballons
Posts: 782
Joined: Sun Aug 18, 2019 3:05 pm

Re: When would you buy cryptocurrency?

Post by ballons »

Freefun wrote: Wed May 12, 2021 9:11 am
dt123 wrote: Wed May 12, 2021 8:21 am They shouldn't be on this site trying to convince others to jump in. Like others have said, I don't know why it's being allowed.
...
There are other unconventional investments on this forum such as highly leveraged hybrid portfolios (such as hedgefundie adventure). While some cautionary advice is there, it’s not like it’s repeated on every post or page.
And yet there aren't daily threads about hedgefundie. There are no thought experiment threads like the OP asking what it would take for you to buy into hedgefundie.
Cycle
Posts: 2047
Joined: Sun May 28, 2017 7:57 pm
Location: Minneapolis

Re: When would you buy cryptocurrency?

Post by Cycle »

I purchased a bunch in February, and while it is up ~20%, it still represents less than 2% of my investible assets. I purchased the ~40k worth of crypto specifically bc I didn't want to have regrets if in the future it is worth a lot.

I don't think I'd ever regret losing 2% of assets if it's a once in a lifetime gamble, ie if crypto went to 0, which I doubt it will but I'd be ok with.
Never look back unless you are planning to go that way
User avatar
flossy21
Posts: 555
Joined: Sun May 27, 2007 2:04 pm

Re: When would you buy cryptocurrency?

Post by flossy21 »

Probably never but...

I believe in the Bogleheads' Investment Philosophy -- https://www.bogleheads.org/wiki/Boglehe ... philosophy

These are it's tenets...

1 Develop a workable plan
2 Invest early and often
3 Never bear too much or too little risk
4 Diversify
5 Never try to time the market
6 Use index funds when possible
7 Keep costs low
8 Minimize taxes
9 Invest with simplicity
10 Stay the course

Crypto does not suit my portfolio because I never bear too much or too little risk. Crypto is more risky than stock and bond index funds and I don't need to take on any more risk that I have with my current portfolio.

Crypto does not suit my portfolio because I never try to time the market. Crypto is on a run and it is the en vogue thing right now. If I buy in right now then I would be market timing.

Crypto does not suit my portfolio because I use index funds when possible. Crypto is not an index fund.

Crypto does not suit my portfolio because I seek to minimize taxes. Crypto will be taxed at regular capital gains no matter how long I hold it and I can't hold it in tax deferred accounts.

Crypto does not suit my portfolio because I seek to invest with simplicity. Crypto is far from simple to buy, hold and sell. If I die and my spouse needs to access our account can she do so? How about our beneficiaries if we both die?

Crypto does not suit my portfolio because I have resolved to stay the course. This plan has gotten us nearly to the FI finish line. Why deviate now?

You asked so there are your answers. An investment in Crypto violates 6 of the 10 Boglehead tenets so I likely won't be investing in Crypto.

If it can be demonstrated that Crypto is in line with the Bogleheads' Philosophy then I would consider investing.
AJS
Posts: 84
Joined: Sat May 14, 2011 6:56 pm
Location: The Elizabeth Arkham Asylum

Re: When would you buy cryptocurrency?

Post by AJS »

Laughing Cow,

First, I must say your cheese is delightful. I prefer the spicy variety but sometimes opt for the light Swiss. Second, you have woken the herd from their restless sleep with your tantalizing question. They were dreaming of their Ibonds and hoping they could write on this forum how much they treasure those bonds they purchased in 2001 and loving that 3% return; if they could only buy more! In all seriousness, I love the concept of crypo currency but the risk and fees keep me from the exchange. I think I would buy crypto if there wasn’t a fee for every transaction type. I probably won’t be able to resist the itch when the ETF is approved. Right now, there doesn’t seem to be a practicality to crypto except for speculation and dreams of ditching those Ibonds for billionaire status.
Admirer of the great John Bogle
helloeveryone
Posts: 1285
Joined: Sun Sep 04, 2016 5:16 pm

Re: When would you buy cryptocurrency?

Post by helloeveryone »

sid hartha wrote: Wed May 12, 2021 6:39 am When it's part of a Vanguard Total Market ETF or Target date fund.

that was my thought. when crypto or a crypto related company makes a vanguard index fund. unless they sell crypto watches or crypto pendant since I do own gold but only in jewelry fashion. Oh and I think we own silver in the form of some earring my wife owns.
gougou
Posts: 1317
Joined: Thu Sep 28, 2017 7:42 pm

Re: When would you buy cryptocurrency?

Post by gougou »

When I need to use it for transactions.

When it starts paying me a reasonable amount of interests or dividends for holding it.
The sillier the market’s behavior, the greater the opportunity for the business like investor.
e5116
Posts: 867
Joined: Mon Oct 05, 2009 11:22 am

Re: When would you buy cryptocurrency?

Post by e5116 »

helloeveryone wrote: Wed May 12, 2021 3:36 pm
sid hartha wrote: Wed May 12, 2021 6:39 am When it's part of a Vanguard Total Market ETF or Target date fund.

that was my thought. when crypto or a crypto related company makes a vanguard index fund. unless they sell crypto watches or crypto pendant since I do own gold but only in jewelry fashion. Oh and I think we own silver in the form of some earring my wife owns.
There are several companies that have forayed in the crypto actually. Tesla for one. Maybe that doesn't represent the appropriate "market cap" though. I, for one, have not taken the plunge into crypto yet....but am considering it. Many financial institutions (BNY Mellon, Chase, Visa, Mastercard) are seemingly going to be involved in crypto in some capacity even if they don't own it outright. So, you could argue that it's already part of a Vanguard Index Fund, but indirectly and in a very very small percentage.
User avatar
watchnerd
Posts: 13614
Joined: Sat Mar 03, 2007 10:18 am
Location: Gig Harbor, WA, USA

Re: When would you buy cryptocurrency?

Post by watchnerd »

helloeveryone wrote: Wed May 12, 2021 3:36 pm
sid hartha wrote: Wed May 12, 2021 6:39 am When it's part of a Vanguard Total Market ETF or Target date fund.

that was my thought. when crypto or a crypto related company makes a vanguard index fund. unless they sell crypto watches or crypto pendant since I do own gold but only in jewelry fashion. Oh and I think we own silver in the form of some earring my wife owns.
Tesla is in the index.

They're accepting payment in crypto and, I gather, hold some on their books.
Global stocks, IG/HY bonds, gold & digital assets at market weights 75% / 19% / 6% || LMP: TIPS ladder
H-Town
Posts: 5905
Joined: Sun Feb 26, 2017 1:08 pm

Re: When would you buy cryptocurrency?

Post by H-Town »

TheLaughingCow wrote: Wed May 12, 2021 2:55 am For those who own no crypto. Under what conditions would you consider exchanging some USD for crypto?

Edit: This is a thought experiment. The point is to challenge Bogleheads' existing beliefs. At one point bonds were considered a safe investment and common stocks were regarded as excessively risky. Yet today the family who held stocks for the last 100 years is substantially richer than the family which held bonds. I do not want to be so attached to dogma that I miss fundamental shifts in the way the world works.

There is a point at which everyone would hold crypto, Boglehead or not. For example if your salary were paid in crypto, and the dollar was worthless, you would have no choice. I am asking, at what point would you decide there is some merit to holding some crypto "just in case" it really is the next big thing?

If you're going to answer "never", please just don't respond. This post is for people who don't own crypto, who can genuinely imagine a situation where they might need to get some. Saying you would rather starve to death than swap to a new economic system and use crypto is disingenuous and goes against the spirit of the question.
Why would I buy something that I don't see any value in it?

The government will come out and issue its own digital currency. Do you think the government will accept 1:1 exchange for bitcoin, dogecoin, etherium, etc.? No. They will have an exchange ratio for US dollar. Of course, then I will exchange my U.S. dollars with government-backed digital currency. It may be even easier to use and transact.

Imagine if you hold a bag of bitcoin, dogecoin, etc. when the government rolls out their version of digital currency. :twisted:
Time is the ultimate currency.
chinchin
Posts: 830
Joined: Tue Nov 14, 2017 7:02 pm

Re: When would you buy cryptocurrency?

Post by chinchin »

helloeveryone wrote: Wed May 12, 2021 3:36 pm
sid hartha wrote: Wed May 12, 2021 6:39 am When it's part of a Vanguard Total Market ETF or Target date fund.

that was my thought. when crypto or a crypto related company makes a vanguard index fund. unless they sell crypto watches or crypto pendant since I do own gold but only in jewelry fashion. Oh and I think we own silver in the form of some earring my wife owns.
Already happened.

https://bitcointreasuries.org/
not financial advice
User avatar
watchnerd
Posts: 13614
Joined: Sat Mar 03, 2007 10:18 am
Location: Gig Harbor, WA, USA

Re: When would you buy cryptocurrency?

Post by watchnerd »

H-Town wrote: Wed May 12, 2021 4:11 pm
Imagine if you hold a bag of bitcoin, dogecoin, etc. when the government rolls out their version of digital currency. :twisted:
Stable coins (coins pegged to the USD) already exist and co-exist alongside Bitcoin, Ethereum, Doge, etc.

Also, Fedcoin, Eurocoin, or Chinacoin may not be very interesting to people who don't live in those countries.
Last edited by watchnerd on Wed May 12, 2021 4:32 pm, edited 1 time in total.
Global stocks, IG/HY bonds, gold & digital assets at market weights 75% / 19% / 6% || LMP: TIPS ladder
bogledogle
Posts: 656
Joined: Wed May 07, 2014 4:34 pm

Re: When would you buy cryptocurrency?

Post by bogledogle »

watchnerd wrote: Wed May 12, 2021 4:27 pm
H-Town wrote: Wed May 12, 2021 4:11 pm
Imagine if you hold a bag of bitcoin, dogecoin, etc. when the government rolls out their version of digital currency. :twisted:
Stable coins (coins pegged to the USD) already exist and co-exist alongside Bitcoin, Ethereum, Doge, etc.
Are pegged coins insured out the crypto ecosystem? Do they come with an army backing them with drones and bunker busters 8-)
User avatar
watchnerd
Posts: 13614
Joined: Sat Mar 03, 2007 10:18 am
Location: Gig Harbor, WA, USA

Re: When would you buy cryptocurrency?

Post by watchnerd »

bogledogle wrote: Wed May 12, 2021 4:31 pm
Are pegged coins insured out the crypto ecosystem? Do they come with an army backing them with drones and bunker busters 8-)
No, just keys that are portable allowing the bearer to carry millions around on their person.

And also lose the keys.

There is no insurance whatsoever or any other consumer protections.
Global stocks, IG/HY bonds, gold & digital assets at market weights 75% / 19% / 6% || LMP: TIPS ladder
Van
Posts: 1007
Joined: Wed Oct 27, 2010 9:24 am

Re: When would you buy cryptocurrency?

Post by Van »

Whenever someone can explain to me why it has any real value.
User avatar
watchnerd
Posts: 13614
Joined: Sat Mar 03, 2007 10:18 am
Location: Gig Harbor, WA, USA

Re: When would you buy cryptocurrency?

Post by watchnerd »

Van wrote: Wed May 12, 2021 4:41 pm Whenever someone can explain to me why it has any real value.
Which 'it'?

There are many different crypto assets with different value propositions.
Global stocks, IG/HY bonds, gold & digital assets at market weights 75% / 19% / 6% || LMP: TIPS ladder
Zeno
Posts: 1042
Joined: Wed Sep 12, 2018 10:44 am

Re: When would you buy cryptocurrency?

Post by Zeno »

deleted
Last edited by Zeno on Sun May 16, 2021 4:12 pm, edited 1 time in total.
User avatar
midareff
Posts: 7711
Joined: Mon Nov 29, 2010 9:43 am
Location: Biscayne Bay, South Florida

Re: When would you buy cryptocurrency?

Post by midareff »

Maybe next lifetime. I'm tied up with companies that have a product they manufacture, distribute, sell or a service they offer and sell in this lifetime.

I don't see companies accepting payment in something whose value tomorrow morning isn't known.
Last edited by midareff on Wed May 12, 2021 4:49 pm, edited 1 time in total.
User avatar
watchnerd
Posts: 13614
Joined: Sat Mar 03, 2007 10:18 am
Location: Gig Harbor, WA, USA

Re: When would you buy cryptocurrency?

Post by watchnerd »

WyomingFIRE wrote: Wed May 12, 2021 4:45 pm Q: When?

A: Never

Why: I don't understand it in the same way that I understand paper towels, potato chips and underwear, and my brain cells have deteriorated to the point where I now lack the IQ to try to understand it
You can buy a Tesla with Bitcoin.

Your rich uncle overseas can transfer this Bitcoin to you in a way that completely bypasses normal banks and saves you wire fees.

And it happens very quickly, instead of taking days like a normal ACH or traditional transfer takes.
Global stocks, IG/HY bonds, gold & digital assets at market weights 75% / 19% / 6% || LMP: TIPS ladder
Zeno
Posts: 1042
Joined: Wed Sep 12, 2018 10:44 am

Re: When would you buy cryptocurrency?

Post by Zeno »

deleted
Last edited by Zeno on Sun May 16, 2021 4:12 pm, edited 1 time in total.
User avatar
watchnerd
Posts: 13614
Joined: Sat Mar 03, 2007 10:18 am
Location: Gig Harbor, WA, USA

Re: When would you buy cryptocurrency?

Post by watchnerd »

WyomingFIRE wrote: Wed May 12, 2021 4:53 pm I'm old and FI, and see no need to do those things.

I'm happy with my 2009 Toyota Tacoma; with luck, I can get another 200K miles out of it and never have to buy another car again.

I'm happy to let the youngsters figure the new stuff out.
Yes, a recent study showed the interest in crypto over the age of 55 is very low.

At 51, I'm borderline.

But I'm enjoying the experiment of putting money into it to force me to understand it better.

It helps me keep up with my nephews.
Global stocks, IG/HY bonds, gold & digital assets at market weights 75% / 19% / 6% || LMP: TIPS ladder
tomsense76
Posts: 1428
Joined: Wed Oct 14, 2020 1:52 am

Re: When would you buy cryptocurrency?

Post by tomsense76 »

Probably when crypto is able to hold an ETF. I could see some value in holding something like VTI outside a brokerage (just as some people hang onto paper I Bonds in a safe at home for example). To me this is the interesting thing about crypto; the ability to own assets in a decentralized fashion. I get the sense we are probably close to that point (and idk maybe some of the crypto enthusiast on this thread could make that happen), but am not engaged enough in the space to know exactly how close that might be
"Anyone who claims to understand quantum theory is either lying or crazy" -- Richard Feynman
User avatar
watchnerd
Posts: 13614
Joined: Sat Mar 03, 2007 10:18 am
Location: Gig Harbor, WA, USA

Re: When would you buy cryptocurrency?

Post by watchnerd »

tomsense76 wrote: Wed May 12, 2021 5:09 pm Probably when crypto is able to hold an ETF. I could see some value in holding something like VTI outside a brokerage (just as some people hang onto paper I Bonds in a safe at home for example). To me this is the interesting thing about crypto; the ability to own assets in a decentralized fashion. I get the sense we are probably close to that point (and idk maybe some of the crypto enthusiast on this thread could make that happen), but am not engaged enough in the space to know exactly how close that might be
There has been discussion about using NFTs to create bonds.
Global stocks, IG/HY bonds, gold & digital assets at market weights 75% / 19% / 6% || LMP: TIPS ladder
shans2000
Posts: 67
Joined: Thu Aug 30, 2018 3:16 pm

Re: When would you buy cryptocurrency?

Post by shans2000 »

I will buy when Vanguard has these ETFs - Crypto 500 (Includes the top 500 Crypto currencies), Total Crypto (Includes ALL the Crypto currencies) and International Crypto (Focused entirely on crypto currencies popular outside of USA). I will then arrive on my Crypto allocation strategy based on age and risk tolerance.
Mike Scott
Posts: 3579
Joined: Fri Jul 19, 2013 2:45 pm

Re: When would you buy cryptocurrency?

Post by Mike Scott »

I will buy crytpo when I start buying individual stocks (aka never) or when it becomes a required and necessary currency because of the market (not likely anytime soon). It is already in the total market index I own but so are some other things I'm not all that keen on.
Freefun
Posts: 1237
Joined: Sun Jan 14, 2018 2:55 pm

Re: When would you buy cryptocurrency?

Post by Freefun »

I’m waiting to invest in VTHDI.

(Vanguard Triple Hedged Dogecoin Institutional)
Remember when you wanted what you currently have?
User avatar
retired@50
Posts: 12821
Joined: Tue Oct 01, 2019 2:36 pm
Location: Living in the U.S.A.

Re: When would you buy cryptocurrency?

Post by retired@50 »

watchnerd wrote: Wed May 12, 2021 4:48 pm You can buy a Tesla with Bitcoin.
Not anymore.

Source: https://finance.yahoo.com/news/bitcoin- ... 39231.html

Regards,
If liberty means anything at all it means the right to tell people what they do not want to hear. -George Orwell
2pedals
Posts: 1988
Joined: Wed Dec 31, 2014 11:31 am

Re: When would you buy cryptocurrency?

Post by 2pedals »

It makes me feel queasy to even think about it.
User avatar
watchnerd
Posts: 13614
Joined: Sat Mar 03, 2007 10:18 am
Location: Gig Harbor, WA, USA

Re: When would you buy cryptocurrency?

Post by watchnerd »

retired@50 wrote: Wed May 12, 2021 6:10 pm
watchnerd wrote: Wed May 12, 2021 4:48 pm You can buy a Tesla with Bitcoin.
Not anymore.

Source: https://finance.yahoo.com/news/bitcoin- ... 39231.html

Regards,
Hilarious.

I don't know what Tesla is going to do now with all the BTC on their balance sheet.
Global stocks, IG/HY bonds, gold & digital assets at market weights 75% / 19% / 6% || LMP: TIPS ladder
Marseille07
Posts: 16054
Joined: Fri Nov 06, 2020 12:41 pm

Re: When would you buy cryptocurrency?

Post by Marseille07 »

watchnerd wrote: Wed May 12, 2021 6:11 pm
retired@50 wrote: Wed May 12, 2021 6:10 pm
watchnerd wrote: Wed May 12, 2021 4:48 pm You can buy a Tesla with Bitcoin.
Not anymore.

Source: https://finance.yahoo.com/news/bitcoin- ... 39231.html

Regards,
Hilarious.

I don't know what Tesla is going to do now with all the BTC on their balance sheet.
Maybe they already sold BTC before making the announcement.
User avatar
watchnerd
Posts: 13614
Joined: Sat Mar 03, 2007 10:18 am
Location: Gig Harbor, WA, USA

Re: When would you buy cryptocurrency?

Post by watchnerd »

retired@50 wrote: Wed May 12, 2021 6:10 pm
watchnerd wrote: Wed May 12, 2021 4:48 pm You can buy a Tesla with Bitcoin.
Not anymore.

Source: https://finance.yahoo.com/news/bitcoin- ... 39231.html

Regards,
The question I now have is:

What's Elon up to?

It's not to promote Doge (it's POW, also).

Maybe the Doge-father bit convinced him he can start his own coin, that meets his stated criteria.
Global stocks, IG/HY bonds, gold & digital assets at market weights 75% / 19% / 6% || LMP: TIPS ladder
User avatar
Hayden
Posts: 1533
Joined: Tue Apr 16, 2013 5:13 pm

Re: When would you buy cryptocurrency?

Post by Hayden »

I will consider it when there is an ETF.
chinchin
Posts: 830
Joined: Tue Nov 14, 2017 7:02 pm

Re: When would you buy cryptocurrency?

Post by chinchin »

Marseille07 wrote: Wed May 12, 2021 6:15 pm
watchnerd wrote: Wed May 12, 2021 6:11 pm
retired@50 wrote: Wed May 12, 2021 6:10 pm
watchnerd wrote: Wed May 12, 2021 4:48 pm You can buy a Tesla with Bitcoin.
Not anymore.

Source: https://finance.yahoo.com/news/bitcoin- ... 39231.html

Regards,
Hilarious.

I don't know what Tesla is going to do now with all the BTC on their balance sheet.
Maybe they already sold BTC before making the announcement.
"Tesla will not be selling any Bitcoin"

https://twitter.com/elonmusk/status/139 ... 43203?s=21
not financial advice
Marseille07
Posts: 16054
Joined: Fri Nov 06, 2020 12:41 pm

Re: When would you buy cryptocurrency?

Post by Marseille07 »

chinchin wrote: Wed May 12, 2021 7:03 pm
Marseille07 wrote: Wed May 12, 2021 6:15 pm
watchnerd wrote: Wed May 12, 2021 6:11 pm
retired@50 wrote: Wed May 12, 2021 6:10 pm
watchnerd wrote: Wed May 12, 2021 4:48 pm You can buy a Tesla with Bitcoin.
Not anymore.

Source: https://finance.yahoo.com/news/bitcoin- ... 39231.html

Regards,
Hilarious.

I don't know what Tesla is going to do now with all the BTC on their balance sheet.
Maybe they already sold BTC before making the announcement.
"Tesla will not be selling any Bitcoin"

https://twitter.com/elonmusk/status/139 ... 43203?s=21
I missed that, thank you.
User avatar
watchnerd
Posts: 13614
Joined: Sat Mar 03, 2007 10:18 am
Location: Gig Harbor, WA, USA

Re: When would you buy cryptocurrency?

Post by watchnerd »

chinchin wrote: Wed May 12, 2021 7:03 pm

"Tesla will not be selling any Bitcoin"

https://twitter.com/elonmusk/status/139 ... 43203?s=21
From the Twitter feed:
Why would you tweet this!!! bitcoin has now gone down and i have lost $104,000! i put my life savings into it thinking it would make me rich... crypto is a scam, im never buying bitcoin or anything again. THANKS ELON!
Global stocks, IG/HY bonds, gold & digital assets at market weights 75% / 19% / 6% || LMP: TIPS ladder
gjurgensen
Posts: 3
Joined: Wed May 12, 2021 7:10 pm

Re: When would you buy cryptocurrency?

Post by gjurgensen »

As soon as someone convinces me that a cryptocoin has any inherent value and that it can rationally be expected to appreciate in the very long-term.

The very best-case scenario I can imagine for these cryptos is that they act sort of like gold (and I'm not about to "invest" in gold either).

If you are planning to hold cryptos for the short-term, then you are trying to time the market, and I think bogleheads understand why that is bad. If you are planning on holding for the long-term, why do expect a non-productive asset to continue to appreciate indefinitely? Why not just put that money in equities? It seems like people are just performance chasing, and giving in to the FOMO.
50% VTI | 20% AVUV | 20% VXUS | 10% AVDV
Karamatsu
Posts: 1447
Joined: Mon Oct 27, 2008 2:42 am

Re: When would you buy cryptocurrency?

Post by Karamatsu »

After some consideration, I suppose there are three situations in which I might buy cryptocurrency: (1) if I wanted to purchase something anonymously, (2) if I wanted to purchase something that could only be purchased in cryptocurrency (or where cryptocurrency was the most efficient medium of exchange), or (3) as a vehicle for investment or speculation. The three are related by still somewhat different.

Making a truly anonymous purchase using cryptocurrency requires acquiring the cryptocurrency anonymously in the first place, and right now, with KYC rules, that's difficult. When I looked into this last year (doing a project on illegal payments) the only ways to do it required using an intermediate medium of exchange, then paying large premiums over the market rate (15-20% was not uncommon), or taking difficult-to-quantify risks by meeting shady people in shady places to do in-person transactions. So to make this attractive the crypto world would have to reduce the transaction costs and eliminate the legal barriers to anonymous exchange. Otherwise the only people willing to pay the premiums for anonymization will be criminals or miners.

I have never seen anything I wanted offered for sale that could only be purchased with cryptocurrency, or where it was even an attractive option, but who knows? There could be something. Generally the commission on foreign exchange of fiat currencies is 0-1% over the spot rate. If cryptocurrency transactions were brought down to that level, it would become just another currency and far more usable. For wider adoption, though, the value should also be relatively stable over, say, a 12-month period, so currency purchased today, say, would have the same purchasing power this autumn. Otherwise, if everything is a spot transaction, why bother? So reduce the transaction costs and assure purchasing power stability.

Investment is contributing something of value in order to create something of greater value. I can't think of any investment I'd be interested in that requires, or even accepts, cryptocurrencies, but it's kind of like the case above. The main difference is that investment tends to be long-term, so I'd want more guarantees. The touted advantages of cryptocurrencies are also their weaknesses here. I would want there to be an international legal system capable of enforcing contracts and ownership rights, or in short, all of the protections we have now via the SEC and various securities, banking, and commodities trading laws. This extends to the management of the currencies themselves (no 51% attacks), as well as the management of exchanges (registration of currencies just like securities, so my assets would remain mine even if the exchange vanished overnight, like Mt. Gox did). Given all that, I suppose the question is what cryptocurrencies could do that can't already be done with dollars? There would need to be some competitive advantage versus other forms of stored value, along with all the things mentioned above. Speculation is another matter, and in this respect cryptocurrencies seem to be about on par with D-rated junk bonds: no guarantees, but if you're lucky enough to buy low and sell high, you can make a lot of money. But this is Bogleheads, not DayTraders R Us. Before I'd invest in anything like that I'd want it to be at least investment-grade.

If you could construct a cryptocurrency and an exchange in such a way that it could get an investment-grade rating from Moodys and S&P, that might start to look interesting, though with all the usual caveats about how those services are sometimes little more than a pay-for-play arm of the advertising industry.

Anyway, stuff like that. The main thing to start with would be to eliminate all the profiteering, at which point I'm not sure if there would be anything left?

There are also several scenarios in which I might come to own cryptocurrency without exchanging it for fiat currency. The most obvious would be if someone gave me some as a gift. Another would be if I were to mine the cryptocurrency myself or as part of a group. This latter would naturally involve expenditure of fiat currency (hardware, energy, possible contribution to setting the world on fire, etc), but still no direct exchange.
User avatar
unclescrooge
Posts: 6265
Joined: Thu Jun 07, 2012 7:00 pm

Re: When would you buy cryptocurrency?

Post by unclescrooge »

watchnerd wrote: Wed May 12, 2021 4:48 pm
WyomingFIRE wrote: Wed May 12, 2021 4:45 pm Q: When?

A: Never

Why: I don't understand it in the same way that I understand paper towels, potato chips and underwear, and my brain cells have deteriorated to the point where I now lack the IQ to try to understand it
You can buy a Tesla with Bitcoin.

Your rich uncle overseas can transfer this Bitcoin to you in a way that completely bypasses normal banks and saves you wire fees.

And it happens very quickly, instead of taking days like a normal ACH or traditional transfer takes.
Actually, you can't buy a Tesla with Bitcoin.
https://finance.yahoo.com/news/bitcoin- ... 39231.html

Elon Musk said on Wednesday that Tesla would stop accepting Bitcoin in car purchases.

I received a money transfer from my Mom from abroad. It happened the same day. Fees were 1%, which are less than the daily volatility in Bitcoin.
User avatar
Wiggums
Posts: 7050
Joined: Thu Jan 31, 2019 7:02 am

Re: When would you buy cryptocurrency?

Post by Wiggums »

One tweet today by Elon Musk and Bitcoin dropped 15.5%. Cryptocurrency is too unstable to be used like the dollar at this stage.
"I started with nothing and I still have most of it left."
User avatar
watchnerd
Posts: 13614
Joined: Sat Mar 03, 2007 10:18 am
Location: Gig Harbor, WA, USA

Re: When would you buy cryptocurrency?

Post by watchnerd »

unclescrooge wrote: Wed May 12, 2021 7:34 pm
watchnerd wrote: Wed May 12, 2021 4:48 pm
WyomingFIRE wrote: Wed May 12, 2021 4:45 pm Q: When?

A: Never

Why: I don't understand it in the same way that I understand paper towels, potato chips and underwear, and my brain cells have deteriorated to the point where I now lack the IQ to try to understand it
You can buy a Tesla with Bitcoin.

Your rich uncle overseas can transfer this Bitcoin to you in a way that completely bypasses normal banks and saves you wire fees.

And it happens very quickly, instead of taking days like a normal ACH or traditional transfer takes.
Actually, you can't buy a Tesla with Bitcoin.
https://finance.yahoo.com/news/bitcoin- ... 39231.html

Elon Musk said on Wednesday that Tesla would stop accepting Bitcoin in car purchases.

I received a money transfer from my Mom from abroad. It happened the same day. Fees were 1%, which are less than the daily volatility in Bitcoin.
It *was* true.... ;)
Global stocks, IG/HY bonds, gold & digital assets at market weights 75% / 19% / 6% || LMP: TIPS ladder
User avatar
Watty
Posts: 28859
Joined: Wed Oct 10, 2007 3:55 pm

Re: When would you buy cryptocurrency?

Post by Watty »

When would you buy cryptocurrency?
Not until the question of WHY is clear to me.

If you take away the speculation that one cryptocurrency or another will go up in price and make you rich I just don't see any reason why I should buy any.
Locked