Crypto and Real Estate
Specialist · Indianapolis, IN · Member since 2021 · 312 posts · 282 votes
Crypto and Real Estate
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Scott TrenchPro Member
Rental Property Investor · Denver, CO · Member since 2014 · 2k+ posts · 6k+ votesCryptocurrency, far from being a hedge against inflation as promised, is proving to be correlated with the stock market. When the market goes up, Crypto soars. When the market goes down, crypto plummets. When inflation soars, Crypto plummets (because it is a speculative asset, and when inflation soars, interest rates rise, which crushes speculative assets).
Hard to see how crypto will take over the world.
- Not a very good store of value.
- Not a good medium of exchange.
- Not a good unit of account.
Hence, not a part of my portfolio.
31 Replies
- Rental Property Investor · Columbus, OH · Member since 2017 · 3k+ posts · 3k+ votes4y
Quote from @Zachary Inman:
Large crypto lender Celsius filed for bankruptcy. This is huge news and a major blow to crypto. All investors, real estate or otherwise, of any experience level have something to learn from this.
A massive crypto investment firm goes under, and countless people are left with nothing. Those who invested on this platform are having a sobering realization: it's backed by nothing.
The institution, the assets, and their investments, which many put their livelihood into, only have a foundation of speculation and hype.
This is the first of many. Crypto, in its current state, is not the future. There is money to be made, but the same could be said for Dutch Tulips in the 16th century.Investing in tangible, cash-flowing assets with actual value is more important now than ever.
What are your thoughts, BP community?
The seller of my personal residence said she was going to use the money and invest it all into crypto. I asked her why she did not want to 1031 and she said that crypto was the future in her opinion. I have only invested when I had some extra cash and I did not care what happened to it.
- 4yScott TrenchPro MemberRental Property Investor · Denver, CO · Member since 2014 · 2k+ posts · 6k+ votes
Cryptocurrency, far from being a hedge against inflation as promised, is proving to be correlated with the stock market. When the market goes up, Crypto soars. When the market goes down, crypto plummets. When inflation soars, Crypto plummets (because it is a speculative asset, and when inflation soars, interest rates rise, which crushes speculative assets).
Hard to see how crypto will take over the world.
- Not a very good store of value.
- Not a good medium of exchange.
- Not a good unit of account.
Hence, not a part of my portfolio.
- Member since 2019 · 7k+ posts · 4k+ votes4y
my friend, dont you think people that's willing to buy my farts or my skin zoom picture is stupid, that's literally what crypto is.
For an investment to be valid, it has to be heavily regulated and underwritten a lot to avoid fraud.
Just because Elon Musk and Valley VC promoting it, doesn't mean it's a valid product. The bad thing about Silicon Valley is many times they're selling gimmicks to the public. - Atlanta · Member since 2022 · 708 posts · 639 votes4y
yeah, with no backing, the only people that make money are people that have it early and find
suckerspeople to buy it and then get out - Member since 2019 · 7k+ posts · 4k+ votes4y
Quote from @Trent Reeve:
yeah, with no backing, the only people that make money are people that have it early and find
suckerspeople to buy it and then get outThat's the definition of pyramid and Ponzi scheme.
- Specialist · Indianapolis, IN · Member since 2021 · 312 posts · 282 votes4y
@Steven Foster Wilson Yes, I agree. No harm in the high-risk, speculative part of your portfolio. But it's a problem when people go all in on things like this. This isn't the first get-rich-quick scheme, and it won't be the last.
- Specialist · Indianapolis, IN · Member since 2021 · 312 posts · 282 votes4y
@Scott Trench That's a great point. The stock market is already speculative as it is, moving up and down with market sentiment. Businesses at least back debt/equities, crypto is purely speculative. The only value is the assumption that someone will buy it for more later - aka the "bigger fool" scheme.
- Specialist · Indianapolis, IN · Member since 2021 · 312 posts · 282 votes4y
@Carlos Ptriawan Yep. A lot of silicon valley/vc in general is based on hype. Just because something has a lot of money doesn't validate it - a fool and money are easily parted.
- Specialist · Indianapolis, IN · Member since 2021 · 312 posts · 282 votes4y
Quote from @Carlos Ptriawan:
Quote from @Trent Reeve:
yeah, with no backing, the only people that make money are people that have it early and find
suckerspeople to buy it and then get outThat's the definition of pyramid and Ponzi scheme.
At least with a pyramid scheme, you get some knives or face wash out of it lol
- Rental Property Investor · Columbus, OH · Member since 2017 · 3k+ posts · 3k+ votes4y
Quote from @Zachary Inman:
@Steven Foster Wilson Yes, I agree. No harm in the high-risk, speculative part of your portfolio. But it's a problem when people go all in on things like this. This isn't the first get-rich-quick scheme, and it won't be the last.
I could not agree more. But you cannot convince everyone.
- Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes4y
Quote from @Zachary Inman:
Large crypto lender Celsius filed for bankruptcy. This is huge news and a major blow to crypto. All investors, real estate or otherwise, of any experience level have something to learn from this.
A massive crypto investment firm goes under, and countless people are left with nothing. Those who invested on this platform are having a sobering realization: it's backed by nothing.
The institution, the assets, and their investments, which many put their livelihood into, only have a foundation of speculation and hype.
This is the first of many. Crypto, in its current state, is not the future. There is money to be made, but the same could be said for Dutch Tulips in the 16th century.Investing in tangible, cash-flowing assets with actual value is more important now than ever.
What are your thoughts, BP community?
This conversation is like trying to get one political party on the other bandwagon - its not worth the conversation as you are not going to change the persons mind.Those that believe in crypto are 100% all in and those who do not are 100% out (at this time).
The one comment I do make is when people talk about US getting off of the gold standard, while yes its a fiat currency its backed by a country that owns quite a bit of land, and is sitting on a nice oil and natural gas reserve as well as it has hundreds of millions of tax payers.
7e investments53 Reviews - Member since 2019 · 7k+ posts · 4k+ votes4y
Quote from @Steven Foster Wilson:
Quote from @Zachary Inman:
@Steven Foster Wilson Yes, I agree. No harm in the high-risk, speculative part of your portfolio. But it's a problem when people go all in on things like this. This isn't the first get-rich-quick scheme, and it won't be the last.
I could not agree more. But you cannot convince everyone.
the problem is not about convincing, but when big investment blowup there's a spiral effect everywhere. For example, some of the early investors with Celcius / Blockfi are pension funds.
- Investor · Las Vegas, NV · Member since 2020 · 153 posts · 136 votes4y
@Zachary Inman, you hit it on the head. I have some money in Crypto (not a self-proclaimed crypto expert), but a majority of my wealth is in real estate and brick and mortar businesses. The more we get into fluffy stuff like crypto, NFTs, the metaverse, etc, the more it makes me lean into tangible assets.
Do I believe in Crypto as a viable investment in the near future? Yes. Are there a lot of good-intentioned people holding the bag once something pumps and dumps, like NFTs? Sadly, yes.
The people who I feel for are those who do not have strong conviction in what they're doing and are persuaded to put their money into something they don't know much about (like crypto, NFTs, etc) and they can't afford to lose that money in the first place. They get preyed on a lot by flashy headlines on social media.
- Member since 2022 · 1k+ posts · 1k+ votes4y
Quote from @Zachary Inman:
Large crypto lender Celsius filed for bankruptcy. This is huge news and a major blow to crypto. All investors, real estate or otherwise, of any experience level have something to learn from this.
A massive crypto investment firm goes under, and countless people are left with nothing. Those who invested on this platform are having a sobering realization: it's backed by nothing.
The institution, the assets, and their investments, which many put their livelihood into, only have a foundation of speculation and hype.
This is the first of many. Crypto, in its current state, is not the future. There is money to be made, but the same could be said for Dutch Tulips in the 16th century.IMO the much bigger shoe to drop was TERRA/LUNA crashing. It was already in the Top 6-10 for most of 2021 and was considered one of the best tech-wise and most likely to be relevant after the upcoming bear market. . . .. And it literally went to ZERO. This was a major confidence blow to the crypto space.
I did pretty well with it in 2021, although I only put in around $8K. Managed to double it and rolled that into a DP for my first investment property. Saw the writing on the wall around early December when the days of epic gains stopped happening and it just started trending downwards. If you were still holding by late winter thinking that it was going to turn around, then you were delusional IMO. It was obvious that it was going to take a dump, especially with the rumblings about the stock market, inflation, interest rates, etc. 2021-21 were unusually good because there was so much printed cash floating around, and the smart money cashed out.
- Investor · Nyack, NY · Member since 2020 · 34 posts · 36 votes4y
@Zachary Inman I’ve made most of my money that I’ve put into buying real estate from crypto. Money is definitely to be made. Just with any new industry/asset … there’s going to be huge ups and downs and a lot will fail.
I’m big into crypto but not to a point where I think it’s the best asset
- Investor · Member since 2021 · 591 posts · 695 votes4y
Quote from @Scott Trench:
Cryptocurrency, far from being a hedge against inflation as promised, is proving to be correlated with the stock market. When the market goes up, Crypto soars. When the market goes down, crypto plummets. When inflation soars, Crypto plummets (because it is a speculative asset, and when inflation soars, interest rates rise, which crushes speculative assets).
Hard to see how crypto will take over the world.
- Not a very good store of value.
- Not a good medium of exchange.
- Not a good unit of account.
Hence, not a part of my portfolio.
@Scott Trench --definitely. Plus, the fact that it's correlated with stock markets, isn't a hedge against inflation, there are anonymous "whales" with enough crypto holdings to influence entire markets, AND crypto institutions that are backed by nothing can easily go under leaving the investors high and dry, all indicate that it is far from "de-centralized" (which was an often-cited supposed benefit).
***Now, excuse me while I duck and cover from the onslaught of rotten fruit being hurled at me by the crypto bros*** ;)
- Member since 2022 · 1k+ posts · 1k+ votes4y
Quote from @Leo R.:
Quote from @Scott Trench:
Cryptocurrency, far from being a hedge against inflation as promised, is proving to be correlated with the stock market. When the market goes up, Crypto soars. When the market goes down, crypto plummets. When inflation soars, Crypto plummets (because it is a speculative asset, and when inflation soars, interest rates rise, which crushes speculative assets).
Hard to see how crypto will take over the world.
- Not a very good store of value.
- Not a good medium of exchange.
- Not a good unit of account.
Hence, not a part of my portfolio.
@Scott Trench --definitely. Plus, the fact that it's correlated with stock markets, isn't a hedge against inflation, there are anonymous "whales" with enough crypto holdings to influence entire markets, AND crypto institutions that are backed by nothing can easily go under leaving the investors high and dry, all indicate that it is far from "de-centralized" (which was an often-cited supposed benefit).
***Now, excuse me while I duck and cover from the onslaught of rotten fruit being hurled at me by the crypto bros*** ;)
This is all correct. A lot of the market manipulation, especially as it pertains to whales which you mentioned, would he highly illegal if it were happening in stocks. However since it’s worldwide and still the Wild West, there’s no way to enforce it or even create a set of rules in the first place.
It’s a get in, make money and cash out play. Things were great in the last few years because of all the newly money circulating around and juicing the markets. Now the stock market in the doldrums it’s not a good time to be in the space. - Member since 2019 · 7k+ posts · 4k+ votes4y
All these company is lending people money with 10-20% interest rate, the collateral is from bitcoin that they claim will raise forever hahahaha lol
it just matter until the reverse is true. - Member since 2019 · 7k+ posts · 4k+ votes4y
Quote from @Leo R.:
Quote from @Scott Trench:
Cryptocurrency, far from being a hedge against inflation as promised, is proving to be correlated with the stock market. When the market goes up, Crypto soars. When the market goes down, crypto plummets. When inflation soars, Crypto plummets (because it is a speculative asset, and when inflation soars, interest rates rise, which crushes speculative assets).
Hard to see how crypto will take over the world.
- Not a very good store of value.
- Not a good medium of exchange.
- Not a good unit of account.
Hence, not a part of my portfolio.
@Scott Trench --definitely. Plus, the fact that it's correlated with stock markets, isn't a hedge against inflation, there are anonymous "whales" with enough crypto holdings to influence entire markets, AND crypto institutions that are backed by nothing can easily go under leaving the investors high and dry, all indicate that it is far from "de-centralized" (which was an often-cited supposed benefit).
***Now, excuse me while I duck and cover from the onslaught of rotten fruit being hurled at me by the crypto bros*** ;)
It is not correlated to the stock market.
It's correlated to *cheap money*. When interest rate is low, people is just re-investing their money without much DD, including to crypto and tech stock. Once the music stopped, both (tech) stock market and crypto are expected to reduce its valuation.
The thing is at the very least, some tech companies are producing actual cash flow.
What happen today is pretty much expected. - Investor · Member since 2021 · 591 posts · 695 votes4y
Quote from @Carlos Ptriawan:
Quote from @Leo R.:
Quote from @Scott Trench:
Cryptocurrency, far from being a hedge against inflation as promised, is proving to be correlated with the stock market. When the market goes up, Crypto soars. When the market goes down, crypto plummets. When inflation soars, Crypto plummets (because it is a speculative asset, and when inflation soars, interest rates rise, which crushes speculative assets).
Hard to see how crypto will take over the world.
- Not a very good store of value.
- Not a good medium of exchange.
- Not a good unit of account.
Hence, not a part of my portfolio.
@Scott Trench --definitely. Plus, the fact that it's correlated with stock markets, isn't a hedge against inflation, there are anonymous "whales" with enough crypto holdings to influence entire markets, AND crypto institutions that are backed by nothing can easily go under leaving the investors high and dry, all indicate that it is far from "de-centralized" (which was an often-cited supposed benefit).
***Now, excuse me while I duck and cover from the onslaught of rotten fruit being hurled at me by the crypto bros*** ;)
It is not correlated to the stock market.
It's correlated to *cheap money*. When interest rate is low, people is just re-investing their money without much DD, including to crypto and tech stock. Once the music stopped, both (tech) stock market and crypto are expected to reduce its valuation.
The thing is at the very least, some tech companies are producing actual cash flow.
What happen today is pretty much expected.
...and some tech companies actually produce a usable product with demonstrable value...such innovative thinking! - Specialist · Indianapolis, IN · Member since 2021 · 312 posts · 282 votes4y
@Chris Seveney True, you aren't going to change anyone's mind by stating a viewpoint on a forum. However, it's important to present dissenting viewpoints without judgment, even to those who aren't going to change their minds through one conversation. You never know what idea or comment will move the needle, even a little. Radical opinions should share ideas, or both sides will become more radical.
- Specialist · Indianapolis, IN · Member since 2021 · 312 posts · 282 votes4y
@Juan V Lopez That's a good reminder: never invest in something you know nothing about.
- Specialist · Indianapolis, IN · Member since 2021 · 312 posts · 282 votes4y
@Jon Martin Absolutely. "smart money" (aka, those who exit before the dump) are usually savvy investors or those who pumped the coin or NFT in the first place - then the ones left with nothing are those who jumped on the hype.
- Specialist · Indianapolis, IN · Member since 2021 · 312 posts · 282 votes4yThere's certainly money to be made! Regardless of the underlying fundamentals of an asset class, if someone is willing to buy it for more than you paid, then the line moves up.
Quote from @Brian Cerezo:
@Zachary Inman I’ve made most of my money that I’ve put into buying real estate from crypto. Money is definitely to be made. Just with any new industry/asset … there’s going to be huge ups and downs and a lot will fail.
I’m big into crypto but not to a point where I think it’s the best asset
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