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Hmm 2.5% annual fee for exposure to ethereum?

I've been dollar cost averaging ETH in anticipation of ethereum 2.0

I like the concept of staking crypto as an alternative to mining
 

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Discussion Starter #3
Priced in Bitcoin Ethereum looks like it will rally for the next few years. Bitcoin using a parabol (sp?) looks like it is going to 150,000 around April 2023. Etherium based on price pattern looks like it could make someone a fortune in the next few years.

@ 115 & change today
 

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Apparently one share of ETHE represents roughly 0.1 ETH meaning 0.1 x $279 = $28 value in a share.
The share price is $116, so that is a 314% premium to NAV

This isn't a way to invest in Ethereum. You're basically just trading on the popularity of the shares and gambling on on the premium to NAV. Even if ETH stayed totally flat going forward, you could lose 76% if the share price drops down to fair value.

If ETH fell 50% and the premium disappeared, that would be 88% drop in your shares.
 

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If ETH fell 50% and the premium disappeared, that would be 88% drop in your shares.
Imagine the money that could be made James if if it continued to go up 4x every month!

Someone makes money, but you can be sure it's not your average investor/gambler.
 

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Discussion Starter #6
Apparently one share of ETHE represents roughly 0.1 ETH meaning 0.1 x $279 = $28 value in a share.
The share price is $116, so that is a 314% premium to NAV

This isn't a way to invest in Ethereum. You're basically just trading on the popularity of the shares and gambling on on the premium to NAV. Even if ETH stayed totally flat going forward, you could lose 76% if the share price drops down to fair value.

If ETH fell 50% and the premium disappeared, that would be 88% drop in your shares.

Your missing what I see on the charts. I see the odds are high of Ethereum going to all time highs based on looking @ the charts nothing else. I see Bit coin going to 150,000 with Ethereum greatly out performing Bit coin. Paying 4 times premium I do not care since I do not know how to buy Ethereum safely. I do not feel comfortable with the ETN either though the risk/reward is huge on this one.

When Elliott wave international recommended buying Bit coin @ 6 cents I wanted to buy but did not know how. I see Ethereum & Bit coin going a lot higher & @ the peak in a few years the premium could be sky high as emotions run higher since institutions can play this one
 

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If you see the vulnerability of centralization in a world of government/cyber criminal/3rd party interference you might start to see the potential of ethereum. It provides a decentralized blockchain for anything.. not just crypto currency. Rather than a few centrally controlled points of failure, decentralization makes a lot of sense for security, reliability etc

Those validating and enabling decentralization are rewarded in crypto currency. For now that means mining (electricity and processing power) but ethereum 2.0 will introduce proof-of-stake (internet connection and staked ether) Basically you could lock up 32 ETH (about $10k now) and earn say 5% increasing passively with the underlying value and demand like dividends.

Bitcoin is rather finite and rigid. It doesn't do anything besides cypto currency. It isn't being adopted for anything new, it is just being bought and sold. It isn't evolving/improving and rather gets slower and more expensive to process. If/when future tech mines all the remaining BTC there is no longer incentive to validate the transactions to fuel the blockchain.
 

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Coinbase Visa debit card announced today

Mostly in EU countries for now. What is interesting is the EU does not assess capital gains based on fiat currency value between the time of exchange and spending.

What a novel idea. I mean if I exchange CAD to USD and then buy something a year later.. I don't claim capital gains on its underlying value in CAD

EU and US already have crypto currency regulations that allow banks to legally exchange/hold it. Canada lurks in the crypto dark ages
 

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I understand the idea, m3s, but beware that 'crypto currencies' have also been a pump-and-dump scheme in the last few years. The pump-and-dump is fed largely by social media and alternative platforms, mainly among younger people.

For a while, BTC (illiquid and manipulated) was pumped, got a huge number of people on board, ending in disaster.

Now it appears ETH and its proxy ETHE are being pumped, again with a similar story to the earlier BTC pump story. As with bitcoin in the last pump-and-dump, movements like this are not sustainable and it's just a matter of how long the rally goes before it --- again --- ends in disaster. Sure, ethereum could double or triple but the problem remains: this needs to be expertly traded and cannot be a long term buy & hold.

Pump & dump schemes always come along with an interesting story.

ETHE is up 16% today
 

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I feel like the .com bust is a better analogy. When people started to see the internet's potential in the 90s the stocks blew up and those who didn't understand piled on with FOMO. After the bust I remember the layman saying they didn't understand how Google makes any money into the 2010s and yet now we have FAANG stocks. The average person didn't really understand the value of the internet for decades.

I don't think crypto is just young people although like the internet they seem to understand and spread the vision better than the majority who are used to fiat currency (or those who were used to life without internet during .com) We are talking hundred billions in market cap in multiple currencies even after the bust. Sure there are momentum traders and manipulation no different than any other market really

And no I wouldn't go all in ethereum but with most of my stocks at all time highs I'm just curious of these alternative side quests. The vast majority of crypto currencies are like the vast majority of 90s internet companies imo. You have to separate the wheat from the chaff like anything. It's unclear what will be the FAANG of cryptos but how would you like to have bought a few FAANG shares 20 years ago?
 

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You have to separate the wheat from the chaff like anything. It's unclear what will be the FAANG of cryptos but how would you like to have bought a few FAANG shares 20 years ago?
I think tech stocks actually provide a valuable lesson in why it's so hard to invest in tremendously volatile securities, even if they actually end up performing the best.

Here are two charts, starting in 1999. First, here's the S&P 500 total return: http://schrts.co/DVrEkbkK
Now compare that to the chart of QQQ, for the NASDAQ index: http://schrts.co/IJiwZadC

The QQQ performed better long term, especially in recent years with the resurgence of the tech economy. But it was tremendously volatile! Look at that roller coaster ride. First the QQQ investor had tremendous gains for 2 years, followed by a catastrophic crash. The price then remained depressed for a long time, and only started surging again in the last few years.

I think that's pretty hard to invest in. Even if we assumed the ability to forecast the future, and know that tech stocks would be amazing going forward, QQQ was still very very tough to hold. It experienced roughly 83% maximum drawdown, which is a catastrophic loss along the way.

And in fact we know that many people ditched their tech stock investments. During the dot com bubble years, tech mutual funds were all the rage. In subsequent years, investors pulled money out of them. We know that in reality, investors don't just stand still and "ride out" severe volatility like that. There are few people on earth who can handle those kinds of movements.

My point is... even if you knew with certainty that crypto currencies had a bright future, I suspect you will still have a very hard time investing in them due to these things like sharp drawdowns.

I would guess that 90% of investors are not going to be able to handle the volatility of crypto currencies, any more than they could handle the volatility of QQQ/tech stocks, emerging markets, energy stocks, gold miners, etc.

Plus in real life, there is uncertainty about whether crypto coins have ANY future at all. Are they the "next big thing" or just a stupid fad that will fizzle out and never be heard from again?

I have 0.05% of my net worth in crypto coins
 

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I see it as a financial adventure into the wild west

Not really excited to pile all contributions into more stocks when most of my holdings are hitting all time highs. Bonds/emergency fund/pension etc bases already covered. I would hate to see someone risk the farm on crypto without understanding it's a complete gamble at this point

I don't believe Canadians have access to any low fee crypto exchange like US, EU, Asia countries etc. Mainstream financial institutions in many developed countries are adopting crypto and it's already being used for fast/secure international transfers. Canada seems to be behind the curve

Staking ethereum potentially this summer is what has my curiosity now. Mining is basically burning electricity into digital value but staking only requires a normal computer running 24/7. If it works it will differentiate ethereum and a reason to buy/hold/contribute to health of the blockchain

Just something different from counting the dividend increases
 

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Not really excited to pile all contributions into more stocks when most of my holdings are hitting all time highs. Bonds/emergency fund/pension etc bases already covered.
But consider that, since stocks trend upwards over time, they will (by mathematical necessity) spend a significant amount of their time at, or near, all time highs. Look at the S&P 500 chart for example: http://schrts.co/fZUTrDGK

Throw a dart and pick a day randomly. Because the whole thing is trending up, many (maybe most?) days you randomly pick will be near highs.

I'm too awake at 1 am, so let's try this out with 10 random dates chosen between 1990 and today, using random.org. I honestly only took a single stab at this and am showing the original random 10 dates I got. Then for each one, I've posted a stock chart of what the world looked like at that time (about 10 year)

Random dayChartEvaluation
1991-09-18yahoo chartall time high!
1996-05-27yahoo chartall time high!
1997-11-21http://schrts.co/ADijcpifall time high!
2001-06-26http://schrts.co/VVnIQxqsin a correction
2002-08-29http://schrts.co/EhvUvrPGin severe correction
2004-11-18http://schrts.co/mscUQnfSa moderate level
2007-12-13http://schrts.co/ebfTZzqcall time high!
2014-02-07http://schrts.co/ZvxxKcxaall time high!
2015-04-07http://schrts.co/UcXaPAbIall time high!
2017-08-07http://schrts.co/XgGRqJsSall time high!

This actually makes the point better than I expected. I threw 10 darts at the stock index, and 7 of them landed at times when the stock market was at all time highs. Look at the charts linked; that's the world an investor saw at that point in history.

In other words it's pretty normal... and expected... to see everything at all time highs. I don't see any reason to avoid stocks just because they are at all time highs.
 

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I feel like the .com bust is a better analogy. When people started to see the internet's potential in the 90s the stocks blew up and those who didn't understand piled on with FOMO. After the bust I remember the layman saying they didn't understand how Google makes any money into the 2010s and yet now we have FAANG stocks. The average person didn't really understand the value of the internet for decades.
While the analogy is reasonable, what's to say that ETHE or BTC or whatever other random coin in 1999's Google, and not 1999's pets.com?
 

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Nobody has a crystal ball here. I agreed it's a gamble at this point. However since the 2017 bust we are now seeing regulations and early stages of adoption. The internet wasn't exactly mainstream in the 90s either

If you don't see a difference between BTC/ETH (ignore ETHE..) or Google/pet.com then you're just shooting in the dark. If you research some stand out already but that doesn't mean something better doesn't come later
 

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ETH is down 10% today which is where it was a few weeks ago. I'd like to see it back at Jan prices really

ETHE I don't know what that is or why it's 3x more volatile. Leveraged?
 

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Discussion Starter #19
ETHE was 25 & change in January. It is more volatile then ETH i.e., ETHE 52 week high was 610.00 with 52 week low 21.50
 
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