Shawn Huckabay No one has certain knowledge of future prices, it's...
· Comment — Archer T. Ships replied to Shawn Huckabay's comment. · View on Facebook · Markdown source
Shawn Huckabay No one has certain knowledge of future prices, it's true. A corn field planted with the expectation that corn will sell at $10/bushel might come ripe when it's actually selling at $6/bushel. Storms, fire, blight, etc can all wipe out one's crop. Investing involves risk of loss, and typically the higher the potential return, the higher the risk of loss. An angel investor stands to make a lot more by investing when it's just two guys in a garage, but they also face much greater risk of loss than investors in later rounds. In mature markets, such as corn, there are so many market actors that most of the informational edges have been found and exploited. It's therefore very difficult to consistently earn higher returns than the market as a whole. However, crypto is a very immature market. The use cases for crypto are still being explored, adoption is still very small, the regulatory environment is still uncertain. People widely disagree about its prospects and value. There still exist a lot of informational edges upon which a smart, well-informed person can make reasonable bets. One can ask: Is the government going to slow down the rate of increase of spending? ("No") Is the government going to raise taxes sufficient to cover the cost of its spending? ("No") How is the government going to cover the gap between spending and taxes? ("Historically, by inflating the money supply.") Were the actors responsible for the 2008 financial collapse held responsible? ("No") Did anything change in government or industry to prevent such a collapse from happening again? ("No") What happens when another such collapse happens again? ("Histoircally, the government closes down the banks, imposes capital controls, seizes savings, imposes onerous reporting requirements, inflates the money supply even more, etc") Can crypto be inflated at whim by the government? ("It depends, but there are many that have a fixed inflation rate"). Is crypto easier to use than dollars? ("Potentially, yes") Is crypto less costly than banks? ("Potentially, yes") Can crypto be spent anywhere in the world? ("Anywhere there is an internet connection.") Can crypto be seized by the government? ("Not easily, if you keep your funds in your own wallet.") Can the government spy on your transactions? ("Not if you use a private crypto, such as Monero.") Can the government prevent you from buying crypto? ("Not easily.") How much will each bitcoin be worth if it becomes a currency on the same scale as the dollar? ("Over $1 million per bitcoin.") The rate at which people realize the above information is highly variable. Early adopters who don't lose their head's due to the volatility stand to make a good return when the rest of the market arrives at the same conclusion.