Crypto worth it?

[RealSteel99]

I've been buying a few stable dividend stocks on the stock market, and I randomly started thinking about crypto investment. I know not much about it except the core concept of cryptocurrencies, I'm looking to do not much (maybe $20 as an experiment), what coin to buy, how, and will I earn anything? Should I buy volatile ones like ETH and BTC or tether, USDC, etc? Any help appreciated. 

[Boomy Beatle]

Don't take any investment advice from strangers on the internet, except for the fact that nobody can see the future.

[Kisai]

43 minutes ago, RealSteel99 said:

I've been buying a few stable dividend stocks on the stock market, and I randomly started thinking about crypto investment. I know not much about it except the core concept of cryptocurrencies, I'm looking to do not much (maybe $20 as an experiment), what coin to buy, how, and will I earn anything? Should I buy volatile ones like ETH and BTC or tether, USDC, etc? Any help appreciated. 

Crypto is just a money pit. A fool and their money are soon parted as so they say.

 

The direct reason why not to invest in cryptocurrency is because there is nothing underpinning it. Zero. If people decide to stop trading BTC or ETH one day, whoever is still holding it, has lost any liquidity to dispose of it. There has to be a greater fool to unload crypto to.

 

With stocks and bonds, there is always the "Book value" of the asset. I'll give you two examples. 

If you have an investment in Apple, it pays a dividend and the book value has constantly gone up. Any time Apple has a bad year, the book value goes down a bit, but the dividend still pays out.

If you have an investment in a REIT, it pays a dividend, but the book value represents the value of the underlying real estate assets. So if a building burns down, or the management team mismanage it, the book value can rapidly decrease, but the dividend will still a fixed amount until they change it. 

 

Dividend payouts are entirely at the whim of the company. A company that pays dividends is a "successful" company that basically has more money than it knows what to do with, and one of Warren Buffet's investing strategies are to only invest in dividend paying companies that increase their dividends and book value over time. If a company cuts it's dividend or never increases their dividend, then it will constantly be questioned by wall street analysts if the company can continue to payout, which usually leads to it's book value falling off a cliff since dividends are often rated by % of the book value. So if you have a dividend stock that pays out 9%, that is like twice that of what you can find in bonds, which tend to top out at 3-4%.

 

And as per usual, this is not investment advice. My opinion is that people who see crypto as investments have done no research, and are just seeing it for what it is, which is pure gambling. The house always wins with gambling.

 

 Collecting cards (MTG, Pokemon, Baseball/Hockey cards) or other collectibles (beanie babies, amiibos, labubu's, funko pops) is the same risk. If you legitimately play MTG/Pokemon card games, then who cares, the rare cards are not likely to be circulated for play. But buying the cards without any goal of playing the game, is exactly the same thing as gambling in crypto. You are betting that there will be someone willing to buy it at a future date, and there is no guarantee it will be worth anything minutes after you bought it.

 

Stocks and bonds have a book value, so even if the company that issued it fails, you will still have pennies on the dollar when the company is liquidated. But crypto has nothing at all. So you never want to be holding crypto, and even if you want to dabble in it, never put money in it that you wouldn't just set on fire in the first place. Like don't be taking out loans or buying crypto on margin. Don't bet your car/house on crypto.

 

[Psittac]

The typical philosophy is that if you don't have the crypto in your wallet it's not really crypto that you own.  So when you purchase from an exchange you're basically buying faith that the exchange has alotted that crypto to you, but again until you actually withdraw your crypto into your own wallet it's just a number on that exchange.  This is what I remember from a few years ago.  I've never purchased crypto only mined it and last I knew there wasn't any profitable gpu or cpu crypto mining going on.  Even my kaspa asic never paid for it's self, but that's ok I knew it was a speculative coin.  Same with the copious amounts of ravencoin I mined, another speculation.  In the end of the few coins I've owned the only ones worth anything are BTC and ETH, however I didn't get into many of them though.  Currently etherium is stake based so all decisions on the chain are decided by nodes of investors or something like that.  When you couldn't gpu mine it I lost all interest so I would look into it yourself.

 

One thing that you should know is that crypto is a zero sum game, meaning that for one person to make money someone else has to lose it, or something like that.  Basically there isn't anything for value appreciation other than hype of the coin.

 

Another reason I never got further into crypto is that the transaction fee's are brutal and actually trading crypto from your wallet isn't feasible because any amount of gain is eaten by the transaction fee.  If you want to trade you need to do it on an exchange.  Again I never traded, only did some coin swap, but that's the understanding I walked away with.

 

My time in crypto was mining it to hold and see what happens.  So no purchasing, no trading, and no exchanges.  To give you an idea of why I have the views I do.

[Timme]

12 hours ago, RealSteel99 said:

Should I buy volatile ones like ETH and BTC

What exactly do you expect from investing in crypto? Are you entering with the expectation of multiplying your money over a few years, or are you more enticed by the quick money day-traders make?

[RealSteel99]

38 minutes ago, Timme said:

What exactly do you expect from investing in crypto? Are you entering with the expectation of multiplying your money over a few years, or are you more enticed by the quick money day-traders make?

a long term investment kind of thing

[05032-Mendicant-Bias]

13 hours ago, RealSteel99 said:

I've been buying a few stable dividend stocks on the stock market

Question an investor should ask when reading the word "dividend:

"Where does the money from the dividends come from?"

 

In crypto, given that regulators aren't allowed to prosecute fraud, there is the tendency to either print out of thin air, and/or dilute other holders to print dividends.

[Needfuldoer]

2 hours ago, RealSteel99 said:

a long term investment kind of thing

Invest in an index fund, not a GPU hoarders' plaything.