2921

In actual news, it looks like Terra/Luna’s plan to prop up their stablecoin by devaluing their non-stablecoin is working. The stablecoin is back up to 91 cents (after going down to about 69 cents), and all they had to do was crash the price of the other coin from $87 last week to $26 now, a 70% drop.

2922

Not really, that’s just proof that the last 30-50 years (depending on what you’re counting) of deregulation were a fundamentally bad idea. You’re right that it’s kind of a logical extension in the free-for-all, no rules admitted, but it’s a broken direction that is just extending the unsustainability of the whole system.
And, BTW, blindly investing was always a fools game that needs luck to do better than index funds. Promoting more of it isn’t good by any perspective.

2923

You can make clothes from cotton, and you can make clothes from wool, so goats are cotton plants.

2924

It is not the same because the stock market is regulated - a point you seem to be ignoring.

2925

I am not ignoring it at all. I just don’t hold much in that regulation. I had played around with stocks enough to know that there are people who have information and systems I do not have access to and yet we are playing the same game. There are plenty of pitfalls for the average investor.

2926

I used to work with a young guy who was convinced that bitcoin would soon take over as everyone’s means of doing business. Of course he also believed that drivers licenses and insurance were not really required by law and that he knew people who had talked their way out of citations by quoting some weird first amendment jargon to the cop that pulled them over.

Fact is people accept the bitcoin info just as people accept the Trump crap. People are gullible.

2927

I mean, that’s not all they’re doing. They’ve burned all of their reserves. Also, in conventional finance, a MMF “trading” at 91 cents on the dollar would be considered a disaster.

2928

And I was too optimistic anyway :) Stablecoin back down to 78 cents (and dropping precipitously) while the Luna coin is down to $15.

2929

But the difference is, the stock market backs actual companies with assets and value. Bitcoin has neither, and it’s only backing is sucking the electrical grid dry and blowing up global warming. How can you possibly compare the two?

2930

Gold has value because it’s easily worked, has a nice shiny color people have liked for millenia, conducts electricity easily, and is a noble metal (which makes it useful for various things.) And also because people say it does.

Government fiat currency has value because there are a variety of laws mandating its use for various purposes, e.g. government procurement, legal fines, etc. but most importantly for tax payments. And also because people say it does.

The notion that gold and government fiat currency have no underlying base value is incorrect … but yet is constantly, frantically repeated by crypto advocates, because they want you to think gold and fiat are “just like” crypto, i.e. have a value 100% driven by animal spirits that could go to zero tomorrow.

2931

Some of that matters, but primarily because it is a relatively rare metal, and is not chemically active. It doesn’t burn, corrode, oxidize, or degrade over time if left e.g. in a vault. This is necessary for a store of value.

2932

…and in the distance, a not-insignificant number of NASDAQ-listed companies within a 400-mile range of Palo Alto nervously tugged their collars and tried to smile confidently.

2933

That’s an interesting facet I hadn’t really thought about.

2934

The real problem is saying people are willing to put money into it.

What one should say is that “people” are willing to put money into it.

2935

You don’t have to be the fastest investor, you just have to be faster to get out than the poor sucker behind you being chased by the bear market. e.g. the collapsing China real estate market.

2936

As I have said countless times, some people invest because of what they think the stock is going to do not because of any underlying asset. TSLA’s value is insane, its market cap tops all the US major car manufacturers combined (at least it did). If it loses that positive sentiment, the underlying asset isn’t going to mean much to you anymore. If I bought in at $1200 and its value drops to $600, those underlying assets don’t do me much good. Heck, Tesla could be sitting on news they are going to have to file for bankruptcy next month.

Another example is penny stocks. Stocks under $5/share that tend to be very volatile. People invest in them because they think they might explode, the underlying value of the company means almost nothing. It could go to $.05 tomorrow and the person will lose almost everything. It’s a risky bet on what they think could happen.

Point is, you can lose everything on a stock, underlying asset or not.

That isn’t why it’s worth what it is though. It’s worth so much because gold bugs buy it because of this idea that it’s a safe investment because there are piles of it sitting somewhere. If it was valued for what it is worth for its uses, it wouldn’t be as high as it is.

I remember when I had to watch Fox News all day every day in my military days, the number of gold ads was insane. It’s hyped with that crowd as bad as crypto is with the younger crowd.

2937

There’s a big difference between speculation in an asset that actually exists vs one that’s an ephemeral dream of digital goldbuggery and exists solely to fuel said speculation with no other utility beyond being unregulated to more easily enabling criminality and abuse.

2938

Eh, considering how most commodities are traded (no one takes delivery or ever touches the physical commodity they trade contracts in), it’s only a little different.

I think cryptocurrencies are a nonsensical way to generate rare commodities of value, but whatever. I don’t want to forbid people who like it from doing it. I do want to tightly regulate the markets to see if there’s any real value once all the scams are sleaziness are prevented.

2939

There is a difference to you, to others there isn’t. I didn’t invest in penny stocks because of any underlying value, I was doing it to get rich quick. Constantly looking for news that something might happen. Unfortunately, the big players have a huge advantage in that area and I found out the tough way.

If I wanted safe investments I would buy assets that represent that.

2940