Canadian Money Forum banner

1 - 20 of 69 Posts

·
Registered
Joined
·
260 Posts
Discussion Starter · #1 ·
I've read that allocating 1% in cryptocurrency is reasonable. Is this even worthwhile, or just writers trying to get clicks?

I guess no one wants to lose their shirt on cryptocurrency. But let's say you allocate 1%, I guess if you participated in the recent run-up, that might have been worthwhile. But short of a several-fold increase, this probably has very little effect on one's portfolio.

And since it's so speculative, I'd say it's pretty much gambling. But in that case, the only way to really take advantage would be to go big or go home. Anyone agree?

I've been playing with the idea of buying something (at the behest of a friend...yeah, I know) but find myself hesitant to put, I don't know, even up to 1% of my portfolio. For the record, I also don't gamble at a casino. But..FOMO?
 

·
Registered
Joined
·
5,082 Posts
If you don't know anything about it then I agree it's gambling

There's several CAD stocks that might be a way to get your 1%. BITF and HUT are supposed to get listed on NYSE. VYGR and GLXY are also good but hard to value.

There are also BTC ETFs and soon ETH ETFs. The VYGR app is really good and pays 5-10% yield but not in Canada yet
 

·
Registered
Joined
·
284 Posts

·
Registered
Joined
·
20,517 Posts
I've read that allocating 1% in cryptocurrency is reasonable. Is this even worthwhile, or just writers trying to get clicks?
1% is a harmless allocation but I would not buy some arbitrary koin. There is absolutely no way to know if Bitcoin will "still be a thing" in 5 or 10 years.

If you really want to have some portfolio exposure, I think you're better off using something like Horizons HBLK which are blockchain company stocks. The benefit here is that HBLK should be agnostic to whichever koin eventually catches on.

Myself: no, I don't have any of these in my portfolio, because I already have plenty of tech sector exposure in the S&P 500 plus a position in XIT. If crypto koins and all the infrastructure really keeps growing like crazy, I'm going to get a piece of that through tech stocks anyway.
 

·
Registered
Joined
·
6,987 Posts
1% fits well within the 5-10% highly speculative portion of a portfolio.

I hold 0% invested in cryptocurrencies, because I don't understand/agree with the valuation case that supports their current price.


I do have some Litecoin, to try purchasing stuff online (it's pretty cool)
Ethereum because I want to try a smart contract.
Dogecoin, because it was fun tipping people on reddit.

In short, I think it's a really interesting technology, but a dumb investment. (today)


To echo James, if you really think that cryptocurrencies are going to be important in tech, why not just buy a tech company and let them manage and navigate for you.
Paypal or MSFT are IMO more able to navigate this market than I am.
 

·
Registered
Joined
·
1,288 Posts
I don’t believe in cryptocurrency and never will. I think it’s crazy to invest in something so speculative. For those reasons, I wouldn’t invest one cent in crypto....not even if I found the penny on the floor!
 

·
Registered
Joined
·
3,084 Posts
Cryptocurrency is not investible, but is very attractive to a lot of young investors especially. There is definitely a large class of them emerging with crazy risk appetite. The last time I saw such high risk tolerance and confidence was clearly in the late 90's. The comparison is direct and very relevant - I lived it and can see the same thing happening, and maybe even worse. Some people are being wiped out, clean to zero, then go and find another $1-10k to leverage up literally the next day and play again. In the 90's, usually people learned their lesson after zero-izing a 5 figure account and gave up.
 

·
Registered
Joined
·
6,987 Posts
Oh, just a note, Dogecoin, which is literally a joke coin went up 100x recently.
So that 1% portion of your portfolio could have doubled it.

Though I'd have reduced the position along the way. Just as I trimmed my Google position.
 

·
Registered
Joined
·
195 Posts
I think it also depends on how much your 1% is in dollars. For example, if your total investable assets are $100k, allocating 1% to crypto, or any asset class, is just a distraction. Get exposure through a tech fund or etf that you can allocate a larger percentage to.
 

·
Registered
Joined
·
687 Posts
One of the biggest mistakes retail investors make is putting to much money on the table. As the saying goes the retail investor is not allowed to make money in the markets. Risking to much on a trade causes too much stress to have discipline.
 

·
Registered
Joined
·
20,517 Posts
Oh, just a note, Dogecoin, which is literally a joke coin went up 100x recently.
So that 1% portion of your portfolio could have doubled it.
There is an online effort called 'Doge Day' with the aim of manipulating the price up to $1 today (Tuesday).

Dogecoin is currently worth $65 billion CAD, which makes it more valuable than:
  • CIBC
  • CP Rail
  • BCE
  • Manulife
  • Suncor
The crypto koins are just gambling toys. And yes that applies to Bitcoin too. Some of them might have interesting promise, yes, but at the moment they are all toys for gambling and speculation.

And money laundering, plus drugs and weapons sales. There isn't much other use for them.
 

·
Registered
Joined
·
4,017 Posts
I can't understand crypto.
It's literally nothing.
No sales. No product. Too volatile to be a real currency... I mean, I just don't get it.

There is literally nothing about it that makes sense. Sure, the tech is cool. Blockchain makes sense.

But even still... Just because blockchain technology and smartcontracts make sense... Why does someone need to "own" the coin? The coin itself is pure trash lol
 

·
Registered
Joined
·
6,987 Posts
I can't understand crypto.
It's literally nothing.
No sales. No product. Too volatile to be a real currency... I mean, I just don't get it.

There is literally nothing about it that makes sense. Sure, the tech is cool. Blockchain makes sense.

But even still... Just because blockchain technology and smartcontracts make sense... Why does someone need to "own" the coin? The coin itself is pure trash lol
2 different arguments. As a currency, look at modern currencies, the only reason that the US dollar has value, is people think it has value.
It isn't a real value like gold.
Bitcoins value is a shared delusion, like peoples faith in national currencies. Arguably it's more sound because it isnt' as easily manipulated (nobody is able to quiety mint a few million BTC, governments print buckets of cash all the time).

The second is if you think there is value in a blockchain or smart contracts and that has value, you should accept that paying for that function (ie paying to manage the contract) is reasonable.
Since you pay for an ethereum network contract in ETH, there is some value there. You need to own the coin to pay for the contract.

My position is simple.
BTC and "currency" coins are a shared delusion, and I can't value them.
ETH and "platform" coins can be used to do something, therefore they have some non zero value, I can't value this yet.
 

·
Registered
Joined
·
1,288 Posts
Cryptocurrency will never work in society. As much as its designed to circumvent government regulations, it will never get adopted if it cannot be controlled. If it gets controlled, then it becomes obsolete.

Its a deceiving idea that someone invented and since society is full of followers, its gained traction - just like the fidget spinner!

Now with over 2000 cryptocurrencies in "circulation", what's everyone expecting?? This has to go down as the biggest hoax in modern history. If not, we have completely lost it as a society.
 

·
Registered
Joined
·
6,987 Posts
Cryptocurrency will never work in society. As much as its designed to circumvent government regulations, it will never get adopted if it cannot be controlled. If it gets controlled, then it becomes obsolete.

Its a deceiving idea that someone invented and since society is full of followers, its gained traction - just like the fidget spinner!

Now with over 2000 cryptocurrencies in "circulation", what's everyone expecting?? This has to go down as the biggest hoax in modern history. If not, we have completely lost it as a society.
I think you're wrong.
The internet was designed to be decentralized, it got controlled, and it's not obsolete.

What everyone is expecting is irrelevant. Lots of people can be wrong.

What I'm expecting is that the delusion of value will continue for some time on a few coins (BTC, LTC).
the delusion of value may or may not last on Doge.

I am also expecting that Cardano/Ethereum or other platform coins that can do something will continue to exist for some time.

I think many things will not be successful and will fail.
These things include blockchains, coins, national currencies, software programs, companies, products, technologies, stocks, bonds etc.

Remember we have thousands of stocks/companies, many will collapse, many already have. But some last. I think the best guess on whihc ones last are the ones that do something useful and solve real problems.
Interestingly I think that the reason some stocks/companies will continue is the same reason I think some blockchains/coins will continue.
 

·
Registered
Joined
·
1,288 Posts
I don't see the parallel of crypto to company stocks. Crypto is trying to be a commodity. If many will fail, then why would others succeed? Who will choose? And how will it be relevant if not regulated. Government is there to ensure order.....without it, it'll be complete chaos. Whether we agree with government or not, it does serve a purpose.
 

·
Registered
Joined
·
4,017 Posts
The thing that makes me laugh is that usually... you need USD to buy BTC and tthen BTC to buy Altcoins and then you need to transfer the Alts back to BTC and then back to USD so you can actually buy something in the real world.

USD is still king.

Also, the fact that different exchanges have different prices blows my mind.

Imagine if Canadian companies traded at vastly different prices or had mini "crashes" on certain exchanges?

In my opinion, lots of youth grew up with computers. They believe tech is the future and their future has been robbed of them. They are in this world with no money, poor job prospects and inflated asset prices. So why not "yolo" the small amount of money you've got? If you lose it, you're still poor. No change. But if that damn Dogecoin goes up, they could be a millionaire...
 

·
Registered
Joined
·
6,987 Posts
I don't see the parallel of crypto to company stocks.
I can see that.

Crypto is trying to be a commodity.
I don't agree with this premise.
How is ethereum, a globally distributed computer, trying to be a commodity?

If many will fail, then why would others succeed?
Because they're doing different things, in different ways, with different management, different ideas, and different market reactions.
Just like companies. Lots of soda companies have tried to compete with Coke and Pepsi, why did Coke succeed while so many others failed?

Who will choose?
The market.

And how will it be relevant if not regulated.
I don't understand the question.
My pickup soccer game isn't regulated, but it's still relevant.

Government is there to ensure order.....without it, it'll be complete chaos.
yes/no.
The governance of each blockchains is different. Some are authoritarian, some are democratic, some are committees.
In most cases the decisions and rules of the blockchain are public.

I'm not sure what role of the various world governments have.
I'd actually suggest that if each national and state government tried to regulate crypto, we'd end up with complete chaos, as they would likely end up with contradictory rules.

Whether we agree with government or not, it does serve a purpose.
Yes, but that's irrelevant to the point.

1. What I see is a technology that can do something.
2. Some people have made things out of this technology.
2a. Some of these things might be useful.
3. I think useful things might have value.

That's it, that is my entire blockchain argument.
I think that we can all agree on point 1, 2 and 3 is obvious.
You seem stuck on part 2a, that's fine.

Personally I'm past all that and I've moved on to figuring out how useful these things are, and I don't know yet.
 

·
Registered
Joined
·
5,082 Posts
The thing that makes me laugh is that usually... you need USD to buy BTC and tthen BTC to buy Altcoins and then you need to transfer the Alts back to BTC and then back to USD so you can actually buy something in the real world.

USD is still king.
Decentralized exchange volume has already surpassed major exchanges. No USD required. The creator is the Mark Zuckerberg of this decade that people haven't heard of yet. Social media is nothing by comparison

USD is king until it isn't. The US is in a debt spiral and the only way to keep the party going is to print more USD. Few have realized this while many give it little thought. There is no reason something better can't replace it

There's a perfect podcast for CMFers with a "bond expert" who worked at RBC on the investor podcast. According to him people are talking about BTC today exactly the way people talked about bonds decades ago
 
1 - 20 of 69 Posts
Top