Crypto and Real Estate

Specialist · Indianapolis, IN · Member since 2021 · 312 posts · 282 votes

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?

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Scott TrenchPro Member

Rental 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.

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Zachary Inman
OP
Specialist · Indianapolis, IN · Member since 2021 · 312 posts · 282 votes
4y
Quote from @Jon Martin:

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.

Crypto's biggest selling proposition is also its biggest disadvantage: decentralization. Sure, you can live out your libertarian fantasy, but having no oversight cuts both ways.
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Jonathan R McLaughlin
Rental Property Investor · Boston, Massachusetts (MA) · Member since 2016 · 2k+ posts · 2k+ votes
4y
@Zachary Inman yea, it has never been clear to me what problem the existence of crypto solves.
And I believe the celebrities who made those commercials for it got paid in dollars :)
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Zachary Inman
OP
Specialist · Indianapolis, IN · Member since 2021 · 312 posts · 282 votes
4y
Quote from @Jonathan R McLaughlin:

@Zachary Inman yea, it has never been clear to me what problem the existence of crypto solves.
And I believe the celebrities who made those commercials for it got paid in dollars :)

Haha that is so true. Crypto is only valuable in how it can transferred to cash.
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Carlos Ptriawan
Member since 2019 · 7k+ posts · 4k+ votes
4y
Quote from @Jonathan R McLaughlin:

@Zachary Inman yea, it has never been clear to me what problem the existence of crypto solves.
And I believe the celebrities who made those commercials for it got paid in dollars :)

Crypto is basically the anti-establishment movement.
So they want the money to move from the old greedy pro-establishment institution to the new greedy anti-establishment institution lol :-)
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Chris SeveneyBusiness Member
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Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes
4y
@Zachary Inman
Great point. Great discussions can be had when people have mature conversations. Unfortunately in todays world most discussions are more like two three year olds fighting over a toy and people enjoy insulting each other versus having legitimate conversations
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Zachary Inman
OP
Specialist · Indianapolis, IN · Member since 2021 · 312 posts · 282 votes
4y
Quote from @Chris Seveney:

@Zachary Inman
Great point. Great discussions can be had when people have mature conversations. Unfortunately in todays world most discussions are more like two three year olds fighting over a toy and people enjoy insulting each other versus having legitimate conversations

Very true! The internet is one of the biggest contributors to this; easier to "otherize" people.
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