Topic: Bitcoin is NOT a replacement to the Stock Market/ traditional investments (Read 545 times)

We all know that the original intention behind the creation of bitcoins is not to serve as a means to invest one's money, but necessity has made it so. Bitcoin and crypto at the moment has created an opportunity and an option for the purpose of investment, it is not a replacement to the traditional stock market and the likes, but another option for investment. If viewed as a replacement to traditional investment, it is a misconception that needs correcting.

People should know at least about fractional purchases which could really be done neither they are dealing with Bitcoin or other traditional investment like stocks and forex.What matter most here is that you do able to
diversify you investment which could potentially give out profits, i dont believe that volatility isnt needed considering that these are the main factors on why we do earn but in overall aspect
it all matters with the potential of the project you are really investing on and if it does really have that demand then expect that significant rise.

No, this is a very common misconception and simply not true.  Many stocks can be purchased for a few dollars, same as mutual funds or ETFs.  Bitcoin is at 38k per coin, but yet you can still buy $25 worth or say $100 worth.  Same thing applies with other traditional investments like stocks.  Many stocks aren't very expensive per share plus you can buy fractional shares. You can buy a gram of gold for less thank $100 dollars.  Now sure land isn't cheap, but that's a more outside the box exception. If money is tight then purchasing bitcoin or other cryptocurrencies is the exact type of investing you should NOT be doing.  Volatility is not needed for profits either.  It can be helpful or desirable in certain cases, but it's not needed.  

When we talk about the traditional investments we have to consider the fact that the investors does need a huge sum of money to start in that direction. Very often do we have to forget about the idea of investing because the people do not have a certain amount of money saved especially during the covid. For me I do consider bitcoins as an investment, a long term plan because I cannot sit and purchase stocks and other things like gold and property. I do think it's important to differentiate it but at the same time it is dependent on your personal usage as well. The volatility is something essential as well since without Volatility we won't be able to see profits as well. It's all about the timing .

After seeing someone on twitter state (who have now blocked me lol ) "Life Insurance is a scam, dump it and buy bitcoin". This is one of the most idiotic things I've ever seen written.  They are two entirely different things all together.  Life Insurance is for safety and protection against death.  Bitcoin is a volatile digital currency..they can't replace each other.

I wanted to reiterate the importance of knowing that bitcoin and other cryptocurrencies are NOT a replacement for the stock market and other financial products.  I fear that there is a growing number of people who simply don't understand this. It is completely reckless to only be invested in bitcoin and or just cryptocurrencies. 

Above this post GMaxwell made a great post and would highly recommend reading it.

Diversity is key to managing the human side of investing as well.

The joke of a bad trader is that they buy high and sell low.  Who does that?  Someone who is over invested and ends up trading emotionally.

When you have a collection of investments and some of them go down-- you just go "oh well", maybe you even buy the dip, if that's what you're planned to do.

If you are diversified and things crash -- you may find yourself in a panic worried about losing even more. You can't buy the dip because you have nothing else.

Diversification might lower your gains in the theoretical future where every single choice you made was not only a good one but an amazing rocketship that vastly outperforms your other investments.  But what you get from being diversified is tremendous protection from getting wrecked that allows you to stay the course and make decisions which are more intentional and less likely to leave you with regret.  If you pick a real rocketship you'll be happy with your gains even if you only got half as much of it.

Lets consider two fictional investors: Bob and Arnold.

The year is 2011 and Bob is an American.

Bob comes from a family that didn't have a lot of money, so Bob never got into traditional investments because he didn't really understand them.  But Bob was still prudent with money: He's saved up some $35,000 in a savings account after his living expenses with income from a number of years supporting computers at a local business.  Bob hears about Bitcoin on slashdot and initially dismisses it but after an article about Silk Road is published he starts reading -- he's hooked. He knows that this is going to be BIG.  So Bob does something unboblike: In June 2011 he takes his entire savings plus takes on a bit of debt too and sinks it into Bitcoin:  He purchases 2000 BTC at $20/coin and stashes it safely in his wallet.

Within a week the price has rocketed up to $30.  Bob's $40k investment is now worth $60k. Bob feels like a god.

Then the first Mtgox event happens.  The price drops. A little a first. Then more. $15.  A stream of negative news is published. $10 in August. $7 in September. Bob is making credit card payments and worrying about paying his electric bills. $4.50 in October. Bob can't see where he went wrong, the negative news continues, the the value of his investment keeps going down. Before the end of October the price breaks $3. Bob's investment is now worth $6000 and he's afraid. If it goes down much more he won't be able to pay off the credit card, he'll be wreaked-- if his car fails he won't be able to afford to fix it and he'll lose his job. He's already lost savings he worked for years to save.  Bob sells his Bitcoin at $3.54 netting $7k after fees.

He's devastated to lose almost all his savings, but relieved and he feels at least a little smart to have caught the spike back up to $3.54 as the price continues to slump through November, eventually hitting $2.15.

Bob tries to do everything he can to forget about this idiot investment.

Today, Bob's original position would be worth about $32 million dollars if he'd been able to hold onto it.  Bob's decision wasn't bad-- but he overextended himself and was ruined by volatility.

Now lets consider Arnold.

Like Bob Arnold also worked in IT support, same age, same pay, same expenses.  Arnold's family was decidedly upper middle class and although he's an American, his family talked about investments and personal finance around the dinner table as wealthier families are more likely to do. As a young adult he studied personal finance resources online once he had a bit of money to spare at his first job.

Arnold took his excess money but instead of a savings account he piled it into a diverse collection of traditional investments-- stock index funds and bond funds, mostly.  When the 2008 crash happened Arnold was shaken a bit, but he'd planned for that-- he exchanged some of his bonds for stocks, just like his investment plan said, and he continued buying stocks with the money left over after covering his bills every month.

By the time Arnold heard about Bitcoin in 2011, the stock market had recovered pretty much completely, increasing 1.829x from the January 2009 low.  Even though he saved the same amounts as Bob, because of his earlier investments, rebalancing, and continued investment during the slump when June 2011 came around Arnold had a bit over $50,000 in investments after taxes.  He boldly decided to set aside 20% of his investments -- $10,000 -- to invest in Bitcoin.   Why so much less?  He wasn't less excited than Bob but he understood risk management better.

He didn't want to miss out but was a little worried about buying into a rapid rise-- he's seen hype before with his other investments. But still, he found Hal's early speculation about the future price and couldn't argue with the logic-- he sunk $5000 in at $27.93 and got 179 Bitcoin.  He wasn't too shocked at the crash.  When the price hit $15 he re-evaluated his decision, Bitcoin still looked awesome to him: MTGOX's hack was an indictment of MTGox, not Bitcoin.  Around $10 he figured if Bitcoin was a good deal at $30 it was a good deal at $10, he was still under 20% in Bitcoin and bought $2500 worth-- 250 Bitcoins. In October the price dropped further then ticked up a bit. When Bob sold at $3.54 Arnold was one of his counter-parties-- and he bought another 706 BTC for $2500.

In December Bob has no Bitcoin and Arnold has 1135 at an average cost of $8.81/BTC, worth about $3400 at the market price of $3.   The price continues to sink and Arnold is sad and a bit embarrassed. He feels a bit foolish or at least wishes he'd held off buying a bit longer.  But he isn't worried or panicked.  He knew this was possible and he continues to expect the price to go back up, he thinks his prospects are still good for eventually coming out ahead.  All the reasons he was interested were still true, and hell-- all else fails it'll be an interesting story to tell his kids some day.

Arnold's position is still at a loss all through the first half of 2012. Arnold keeps on investing in his regular investments and spreads the word about Bitcoin. In July at a price of $9 he's finally back above break even and really starts spreading the word.  Bitcoin hits $13.31 and then bitcoinica is hacked and the price is $9 overnight. Arnold has seen an exchange hack before and isn't worried. The price continues to be depressed and floats around $10 until December 2012. By the end of January 2013 the price is $18 and Arnold has doubled his investment! Bitcoin is all over the news.  He only planned on keeping 20% of his investments in in Bitcoin but he's really excited and sees nothing but increases in the future... still his plan said to sell, so he reluctantly at least sells enough to cover his initial investment and he sells 400 (@25) for $10,000 leaving him with 735 BTC (worth $18375).

With the continued media coverage the price continues to increase and after the cypruss banking issues the price skyrockets.  By the beginning of April the price had shot up to $158.80 in just a few days.  Arnold's position was worth $112380, vastly beyond his investment plan of 20%-- and way more than he needed for substantial down payment for a house.  So he sold about half his position: 500 BTC, netting $76400 which he stashed in his ordinary investments, and left him with 235 BTC.

His timing was fortunate, although the price briefly reached $213 MTGox crashes under the load and the BTC price crashes along with it.  By mid month the price is $66-- about where it was before the cypruss news.  With his initial investment recovered plus a healthy return he decides to be a little crazy: he takes half the 76400 he just took out and buys 578 Bitcoin leaving him with 813 BTC and still enough returns for a down payment.

Over the following years Arnold trades a number of additional times, about once or twice a year-- selling when the Bitcoin starts to dominate his assets, and using a bit of the proceeds to buy back during crashes leaving too small of his portfolio as Bitcoin.  His sells aren't all at the peaks and his buys aren't aren't especially close the the bottoms but he does alright: A little better than someone who just held the whole way through, but the reasons he buys and sells isn't to try to make a lot of money, it's to manage risk.

Last week Arnold retired from his job: His boring investments boosted by infusions from Bitcoin sales are enough to support him and his family without him working. He owns his home. He has no debt. His kids college is already paid for. A few years ago got married and his wife just left a higher paying job for a lower paying one she liked more-- they don't need the extra money. He still owns 100 BTC which he hopes to pass onto his kids or at least will come in handy when there is a major meltdown. He spends his time raising his kids and windboarding. When covid came he felt ready: Heck, if he wanted to buy a clandestine respirator he knew he could pull it off with Bitcoin, even if banks would try to block that kind of transaction. Arnold has won the game.

So how can you be like Arnold? (1) Be born to a family that discusses investing so you have a head start there. (2) Invest prudently so you don't have to panic sell. (3) Don't be afraid to harvest gains. And most importantly, (4) find out about Bitcoin back in 2011, believe in it, and have extra money to invest.

But the thing is, -- Bob also found out about Bitcoin in 2011 and believed in it just as much as Arnold and had money to invest. But Bob didn't really understand investing, he wasn't diversified, and he over invested.

Bob didn't do anything particularly stupid, his ideas about Bitcoin would have paid off-- and he initially invested four times what Arnold invested!  But the investment wasn't financially prudent considering his overall conditions and he was much worse off for it.

Bob couldn't control the family he was born into, but there is a ton of good personal finance information available online, but he didn't find it and learn about it and that's what distinguished the two.

If Arnold's timing had been less fortunate he might have done a lot less well: But you can bet he wouldn't have anywhere near the regrets that Bob has. Every decision Arnold made would have been made using the best data he had at the time and none of them would have been forced by his situation.  Rich or Poor Arnold would sleep well. Even if Arnold lost his entire original investment he still would have been better off than Bob was even before Bob lost his savings on Bitcoin.  Arnold didn't make as much as the 32 million if Bob has successfully held through the whole way, but he made more than enough and unlike Bob, he didn't get wiped out.

If you invested like Bob but didn't have his bad luck and are much wealthier now-- great for you.  But just because a bad process worked once doesn't mean that it's a good process.  Plenty of people get lucky in investing and then lose everything because their results depended too much on their luck.

No one knows what the future will be for Bitcoin -- or other investments, for that matter--  but prudent practices were what distinguished Arnold and Bob not finding Bitcoin at the right time: they both did that.  Diversification and risk management are important for all conditions and all times.

Perhaps Bob never had anyone expose him to these ideas so he had no idea that he was missing something.  After reading this post, you don't have that excuse. Be like Arnold.  

I recommend checking out non-bitcoin centric personal finance venues. Bogleheads is good.  A lot of these people are sceptical of Bitcoin:  They don't want people becoming Bob (or worse).  You can get enough Bitcoin koolaid here, good decision making requires balance.  You own Bitcoin because you think it will be useful and profitable for you, perhaps because you feel it hedges against particular risks to the economy-- but you own other things because that isn't guaranteed and so you want advice that will apply to futures where Bitcoin doesn't do well, so its fine to get it from people who think it won't.  If you're not an American the resources are a little less readily available, unfortunately I can't provide good advice there.  My favourite stock brokerage is Interactive Brokers, and they do have a lot of non-US customers.

As an aside-- Buying into in other cryptocurrency things is not diversification.  Altcoins are highly correlated with Bitcoin, and to the extent that they aren't perfectly correlated it's mostly in the form of increased downside risk.  When Bitcoin drops they often drop harder and recover slower. You might own them, but don't think they're diversifying your holdings.  It's also easy to suffer from outright scams--- ICOs, Defi, "guaranteed" returns in HYIPs, or whatever.  Bob's story wasn't happy but people sometimes do a lot worse. I could go into the story of Chuck who lost it all mutiple times over trying to replicate Bitcoin's 2013 rise with altcoins then again and again attempting to recover his losses, or Dana who's first exposure to investing was /r/wallstreetbets and is currently in jail after embezzling her employers funds in a crazy options trade---- but those are stories for another time.

Bitcoin can also be a type of investment but is different compared to stock market and it can't be replacement.
Also I think that Bitcoin as am investment is available to broader range of people and it's more convenient and I would even say easier to understand and to participate. But it's still very risky and you still need some knowledge and principles of crypto market to know how to deal with it
Having in mind that is good to diversify the risk and use multiple types of investment is good to combine investing in Bitcoin and in stock market.

Who all are using this for transaction how much percent of users and investors are using this for transaction purpose across the globe?? Any guesses?

I think it may go on 0.1% this is the reality, I agree the plan of BTC was not to make investment scheme but the atmosphere changed people's mind and many worked out on this. Sometimes you need to go beyond the rules to deserve some rewards I think that's how BTC grown.

I agree with most of what you said but I strongly disagree with this first statement. An investment is "the action or process of investing money for profit". That quote according to google comes from Oxford Languages. So bitcoin is clearly an investment.

Apart from that, I don't think many people think bitcoin is a replacement for stocks, as it has been pointed out.

Anyway, I share you general view that a good investment portfolio has to be diversified with short, mid and long-term assets.

First you need to understand with the skyrocketing transaction fee and huge delays in getting the confirmations, Bitcoin will never get acceptance as a currency. It will be used mainly as a speculative investment asset. I can't guarantee you anything, but what if it ends up like the Apple stock (which went up from $0.30 in 2003, to $120 now)?

Bitcoin becomes so popular all over the world and many people overrated this one over stocks thinking that it could replace it which is something that couldn't happen in the future. Bitcoin is only a good alternative for stocks and good for investment especially for the long term but to the point that it can replace stocks or fiat currency then I don't think so. There are still many people that cannot access cryptocurrency or even know some knowledge about it so I don't think that it would replace fiat wherein all people are now using.

Platinum is a much harder metal to work with and has different properties than gold, hence why gold is used more that platinum in many circumstances. 


Baseball and Pokemon cards are a game but have become an investment.  Old time cars were used for transportation but have become an investment.  The dollar is a currency but has become an investment.  I said INHERENTLY not an investment.  

If it was designed to be a  micro payment before and now it turned to be an investment, isn't it  a good idea or an improvement that for the past years bitcoin is now as good as we think and we can even make it as an investment whether for long term or for short term in is both good, but yes it is not a replacement for stock market. it's volatility may be the reason why and some other things. Tradional investment is not the same with crypto investment.

I agree with you but it depends to the appetite of the investor. And as I've said, I've dealt with other investments but not with the said asset but still relying with bitcoin because it's the most reliable.

I have observed the stocks and I know that it's also a good investment but I have my own factors which I think, instead of going on it, I'll invest more with bitcoin and other assets that I like. I'm still applying the principle of baskets and eggs.

Well we have to understand that bitcoin in the beginning was not design to be an investment instrument, it was a micro-payment, an alternative. However, we have seen it growth, we have seen Mt. Gox in it's infancy and we can say it is evolved as a investment. So I would say that it is already touted now as one of the best assets right now, hence it become an investment as what we know right now. But as replacement to stocks? Nah, I don't think it will, perhaps another options outside of the traditional global markets.

Although not everyone could have access, just like your note says, it's still best to know and understand those different types of investments you may have in the future. No one knows what could happen to use in the future, but the ideal thing to do is know what to do in the long run. Maybe they could follow your 3 Buckets of advice. Some will don't but what matters is you know what you are doing. It's hard enough to earn money, and it's harder to experience to lose it to something you don't understand. If you know Bitcoin well enough that you could earn money, then do it, and if not, it's better to understand and learn more first before dwelling on it again.

If I could add to that, I think one thing you could be missing out on is the emergency funds. You will never know what could happen in the future as well. Not everything can be solved with insurance, etc. Mostly, it would still come out of your pocket.

Thanks for sharing your opinion on this, OP. It's never going to replace the stock market, but it would work together, hand in hand, to make the investor richer.

IMO, Bitcoin still is an interesting investment due to the benefit of its volatility for investors. But I wonder if its market value will still be profitable as an investment if ever it will achieve global acceptance. Because probably it won't, since it will be used in daily transactions, the logic behind this is that, people will not use it in daily transactions if its market price is still volatile right? because there will be advantages and disadvantages from doing so. And if that's the case, and going back to the topic, Bitcoin is a temporary investment and not a total replacement to stock market investment.

Bitcoin has basic features that allow it to be used for different purposes. One might argue on the normative level what Bitcoin is supposed to be and how it SHOULD be used. The arguments will vary, and the discussions can be endless. But regardless of that, in reality Bitcoin is what we make of it, how we use it. So since lots of people are hodling it, it's an investment; since some people use it to pay for goods and services, it's money; as some businesses put their funds in it, it's an asset. We should look at the facts, and I agree with those who pointed out that since Bitcoin used as an investment, it IS an investment.

i found a simillar reply of yours on this thread -> https://bitcointalksearch.org/topic/--5288668  . i also replied to that . i never tried investing in stocks and on other kinds of investment before but if ever i did and if all doesnt go well in the plan , i will imediately replace them with btc . its up to the person if what he likes and there is no sacred rule that you cant treat btc simillar to other investment assets . btc is more better than them because there was a bonus feature on btc that you cant find on any other investments .

We might not know, most of the companies right now are putting their reserve fund to Bitcoin. It will be very much different as the stock market also dictates the performance of a company but in cryptocurrency, it is very much different, they launch ICO's and campaigns but it was too easy for investors to come in and out of the market. Volatility is also too huge and in the sense of businesses putting assets to Bitcoin, it will be a combination of many companies in one which means that we can expect a lot in Bitcoin. And when the "bull run" comes, even if the projects who launched ICO's are performing very well, investors could FOMO Bitcoin and sell their tokens to ride the bull. Crypto is much complex and hard to understand compared to Stocks, perhaps, it will be the future of stocks, an upgrade which is much accessible and risky.

Bitcoin was created to be a currency and from the best of my knowledge, Satoshi's intention wasn't to make bitcoin's price go up but to make the currency accepted/used by many. But the price shot up all the way from 0.8$ to an ATH of $20K. When people think of this, they look at it as some sort of investment. Bitcoin's primary goal is to be a digital currency that doesn't have an intermediary (like the banks). However, we can call it an investment too.

I can't completely agree with this argument. Nowadays, Bitcoin is being used as an investment asset. At this point, it would not be fair to claim that it will replace traditional investments, but I have seen enough evidence to state that there is a small net outflow from traditional assets to Bitcoin. And this may accelerate considerably in the coming years, as Bitcoin gains more acceptability.

On a side note, I don't see those people who treat Bitcoin as an investment considered it as a replacement for traditional investment.

It's just that in terms of accessibility and convenience, crypto is way more reachable to them. I do have both crypto and stock investment and on the latter, before I was able to deposit (talking about the financial broker based in our country), I need to submit my KYC thru mailbox (seriously), several printed copies were also asked. Unlike in crypto, read the basics, understand the risks, learn the securities, familiarize with the exchange interface, then it's a good to go.

But whatever it is, either stock or crypto, what matter is, we should really prioritize to at least have an investment at any type. It's good that we are securing our future rather than to rely on a few options of source of income.

Bitcoin is not a replacement to the Stock Market but the stock can be tokenized 
bitcoin is not an investment instrument, but people said "invest" in bitcoin.
for me, bitcoin currently become a speculative investment.
like they don't really see at the fundamental, they see at technical and graph only.
but, once a good fundamental analysis is out, they will be crazy about it.

maybe I am bad at this point, but I am not hodling bitcoin.
I exchanged some of my crypto into fiat to buy stocks or invest in something for self improvement. lol it is a must!

The increased demand and the limited supply is the reason for the rise in the value of bitcoin. The value of bitcoin will grow with time, bitcoin isn't an investment. The core reason for which its been developed is different, but things changed in between due to its tremendous growth. This has made people prioritise it aas an investment.

In my country the vast majority of people aren't invested in stocks. At best they're in life insurance with some stock exposure.

The reason being people want safe investments, nothing that can go down.

So if these people own some BTC, it's kind of an improvement. They might go from BTC to stocks !

I totally agree with this, Bitcoin is not replacing.
But about saying Bitcoin is not an investment, I am still confused and don't know why it is said so.

What about this?
We put our funds in Bitcoin and hold it as an investment for a certain period for the sake of getting more income or profits in the future. I think this is also one of the investments.
But well yeah, once again, the definition may be different for each person here.

Source: https://www.investopedia.com/terms/i/investment.asp

And stocks are NOT a replacement for Bitcoin!


Obviously I'm biased but in my opinion cryptocurrencies -- in small, deliberate holdings -- can serve as both a hedge and a potential moonshot in any portfolio in a way that no other asset can.

Small caps or specialized funds? Potential moonshots (albeit on a smaller scale), not really a hedge though.

Gold and precious metals? Decent hedge but not much moonshot potential.

Real estate and venture capitalism is out of reach for most people and funds that give you access to either will smother most potential gains with their fees or keep the gains while leaving you with the losses.


It's possible to invest in cryptos responsibly, just as it's possible to invest in stocks incredibly irresponsibly. All in all it just comes down to proper risk management and investing sanely.

Bitcoin is not a traditional investment, stock market is centralized while bitcoin is not, therefore they have their own market and there's no way the decentralized market will take over in the investment world, the centralized market which is back by the government will still remain as the most invested market due to its security and proper regulation.

We are just getting a small pie of investments but it's already a success for Bitcoin.

I certainly believe that Bitcoin will remain volatile, what we are seeing now which is a pump could soon result to some big massive dump.

Bitcoin was made to be used both - technically and economically. Technically - where new developments will take place any moment and add up more for the better of btc and its users and Economically - where btc is seen as a safe haven investment and a store of value hand in hand. It is said that anything that has a lot of demand will get its worth more and more expensive. Nothing can be expensive than trust and when investors are trusting btc to be their all-in-one asset to invest their portfolio in and sit back and wait, I think there is nothing wrong even in seeing btc as a replacement to stocks because investors are losing their confidence out of stocks and that whole confidence is shifted into btc.

Agree!
I would rather to have that stressful situation rather than missing out the opportunity for some possible recovery in case those other investment of yours are going on reds.
You would definitely had that chance of recovery since you can patch up on what you had lost.

When dealing with stocks then profits arent really that high basing on the lot size that you had put and since its volatility isnt really that high compared to crypto then
you would really be having that kind of slow or gradual loss into your portfolio unlike here where within a snap it can blow out your entire capital.

It is better to invest in both of them, because as we all know the price movement in crypto itself is very significant, of course this must also be aware of how much risk we can get when using it.

It is stressful but there's always the good side of it. Whenever the other investments you have plummet, you always have the other investments which will make you recover. There could be times that all of them are going to bleed but as an investor, you know what exactly what to do if that time comes. I agree that engaging in both or as many as you can which will not compromise your productivity of monitoring it and managing it is still a better decision.

We do always have that common investment line;

"Dont put all your eggs in one basket"

This is why i do always consider on putting up some funds in stocks and at the same time i do put also in forex and then lastly is on crypto.
It might quite be a stressful thing yet handling multiple investments isnt easy as it sounds.Why would need to replaced if you can
engage with both?

Well, these two are definitely conflicting ideas. It either is or isn't. If Bitcoin has become an investment, then it is.

So what's the point here? Bitcoin is an investment, cryptos are investments as well as real estate, precious metals etc. An investment portfolio can be entirely made out of cryptos, because you just admitted (I think) in the previous quote that Bitcoin has definitely become an investment.

Well, any 2 assets you take are two completely different things - and that includes assets that are part of the same category (say copper and gold).

I'd advise to check and calculate interest rates vs annual inflation as well. Many times, the interest rate ends up to be actually lower than the annual devaluation of your sum.

Honestly, I would say this isn't necessarily true. Besides Bitcoin's ATH (which is only $4k from today's price), you'd be on a profit no matter when you've invested in BTC since its inception. People lose money because they are greedy and unexperienced, and they're being controlled by emotions. My crypto portfolio has done very, very well so far. Bitcoin's price crashes do not make for bad investments. Gold crashes as well, so does silver, so do stocks. It's all about you choosing the right time to cash out, hodl or invest.

Before investing in anything, you have to do research. If everyone who invested in BTC did proper research about its past and had not pushed themselves into extreme greed waiting to become rich, things would've looked different. I'm not saying someone should invest their life savings into cryptos, but if you can't help but be led by market FUD and stuff like that, then take some time and educate yourself before you put your life savings into something. The idea itself that you have spent a life saving bucks and randomly invest it all into something you have never studied in your life is very stupid.

I don't recommend for anybody to replace their stocks with cryptos. It's always the best to have them both. But for someone that likes to take risk more than I could, I'm good to crypto only combination.
I have other traditional investments but not with stocks anymore. But if somebody decides to go all for crypto, he has to make sure that he knows what he do.

Traditional investments in the stock market have always set a pattern, have a history, their downfalls and have risen from the deep, unlike Bitcoin, the stock market moves very slowly, investments tend to pay off mainly after approximately 8-10 years old, on the other hand, bitcoin possesses volatility, and volatility is the ingredient that the stock market does not have.

If we think about the future, bitcoin is the best option, it may be that in the present and after 5 to 10 years, the stock market for many is the salvation, but the Bitcoin market can achieve Financial Freedom quickly, without waiting so many years.

Simply put, investing is an activity that is investing in the hope that someday the capital will provide more benefits because it is invested in a valuable asset / item. be it a kind of gold, copper, silver, bitcoin, be it antiques, property or land. as long as there is a reciprocal of what is planted.
I think it makes sense that bitcoin, another cryptocurrency, is said to be an investment. Why? It is clear when referring to the meaning of investment. maybe you know better than I do, or you know better. but I ask permission to speculate. because for me it depends on how someone implements it. If someone aims to invest their money with bitcoin at a price of $ 10,000 then the next time the bitcoin price becomes $ 15,000, then there is a reciprocal benefit, which is around $ 5,000. the law automatically falls into the investment category.

I think only a fool would take bitcoin/cryptocurrency in that way! I know there are some puritans who definitely think in Similar line but they are just fools, you can't really consider them! Probably they are the one, who have a portfolio build only on cryptocurrency!

It is obviously true that bitcoin was introduced as a currency but it has indeed emerged as an investment. It's because of the regulatory hurdles bitcoin is facing around the world which left us with a very limited number of merchants who actually accepts bitcoin as a payment method. I am sure, this issue will be resolved eventually but as of now it looks great as an investment only!

Yeah no one should have 100% crypto (or at least not many).

I can still argue platinum is better for industrial practices than gold but jewellery is still dominated by gold and diamonds.

My personal portfolio is about 75% crypto and 25% stocks with around 12 months of expenses in a bank account just in case... (im at a higher risk due to age I wouldn't recommend this - and also I haven't rebalanced since the 8k region when it was 50:50).

I think also some of this problem is due to quite a few companies in the stock markets not paying dividends and making themselves speculation assets. I'm also not entirely sure why people would rather go for those than go for something that'll return you 5% in dividends a year plus have an average 4% growth than growing by 9/10% a year.

Bitcoin and cryptocurrencies in general is a great alternative for stocks and traditional assets, but certainly not something that one can go 100% on if they aren't well-versed on trading and handling their finances. I also find it quite irresponsible for most people biased on bitcoin to literally just tell people--especially the noobs--to just buy bitcoin and nothing else. Oftentimes this is what leads to people losing their money because they aren't that knowledgeable enough to weigh the risks associated with this move, therefore spelling disaster in their finances should crypto goes down the drain. Though of course, you cannot blame those who made their fortune on bitcoin and crypto alone to recommend buying such instead of traditional assets. It's how 'success stories' are crafted, after all, and you need to have those floating around in order to have more people buying the same bags as you do.

Yes, I see people all the time stating cryptocurrency is a replacement for stocks. ( ex https://bitcointalksearch.org/topic/m.55456951 )

“More people losing money with stocks than with crypto”.. there’s no comparison here. Two entirely different things and the stock market has far more money in it, been around far longer etc.  A weird statement to make coming from someone who says they realize there’s a difference between the two.

Edit: this post is more so for those who don’t understand the financial world very well. Not those who do.

Does anyone even say that Bitcoin is a replacement for stocks? I never heard such thing. But how can you argue that Bitcoin is not an investment, if people invest in it?


Bitcoin is a currency/commodity, of course it's not backed by real world business, just like gold and oil aren't backed by them too. Bitcoin is a risky investment, but so are stocks, especially those with smaller capitalization or if a trader decides to use leverage and other instruments. I can even be sure that more people lose money with stocks than with crypto, since stocks are more popular.

I think it's important to first note that inherently bitcoin is NOT an investment.  Now of course like all other forms of currency, it has become an investment, and or something you can "trade".  With the bitcoin price rise of late, where a lot of people have been doing well making money, I thought this was a perfect time to discuss this.

When I see people say their investment portfolios are solely made up up cryptocurrencies I cringe.  The stock market is made up of stocks ( companies that have gone public and issue shares ).  Stocks are backed by actual businesses.  These business offer a service or tangible good.  Bitcoin/cryptocurrency is simply digital currency.  Bitcoin is not  backed by an actual real world business producing goods and or services and that's the important difference people need to understand.  

This is similar to the "Gold or Bitcoin" discussion.  Gold is a physical asset, it is used for jewelry, used for electronics etc.  It has real world physical aspects.  Now it does have some similar features.  Both are considered "assets".  Both have become investment "hedges"...but inherently they are two completely different things.

A proper investment portfolio should really have 3 aspects ...short , mid, and long term "buckets".   Short Term would be things like your checking account.  Mid Term would be things such as savings accounts ( pro-tip..always use online banks such as Ally Bank for savings accounts.  They offer MUCH higher interest rates than traditional brick and mortar banks such as Chase/Bank of America etc), online trading accounts such as TD Ameritrade/E-Trade etc.  Long Term would be things such as your IRA/401k etc.  

Now as long as you have these 3 Buckets established, then "investing" in bitcoin/cryptocurrency can make sense.  It's important to try and throw in some of those "home run" type investments in your portfolio.  These types of investment you go in to with the realization that they are volatile and could easily lose it's entire value quickly.  However they can certainly help your portfolio tremendously when they "hit".  Normally you want to keep around 5-10% of your portfolio in assets such as these.  

Now of course all of this depends on ones net worth, salary, current and future budget etc.

As a licensed Investment Advisor by trade I say all this with well over a decade of experience.  I see too many people with unrealistic expectations and thoughts on bitcoin and cryptocurrency as an investment.  Yes Bitcoin and many crypto coins have performed well and people have an continue to make good money from it ..but that DOESN'T mean it's a replacement for traditional investments.  Countless people have already lost their life savings by treating cryptocurrencies as traditional investments and will continue to.    

Note: I realize not everyone has access to traditional types of investments.