Bitcoin and Crypto Talk (Merged)(includes NFT)

UncleTrvlingJim said

Obvious answer is it's speculation. Drivers for it's value going up is uncertainty in the US, potential inflation, things like that.

It's a market I don't understand very well, so I stay away from it. I think we'll see a fair number of swings as people figure out how to appropriately price it.

Click to expand...

Yes, it's speculation. Most of the money being put into bitcoin isn't being put in it to do anything with it, it's just going in on the grounds that people will keep putting money in so it's a good investment. In terms of intrinsic value deriving from its real and potential functionality, the problem bitcoin has there is that every functional purpose it has can be done more efficiently or effectively by alternative cryptocurrencies, or that the added features using a cryptocurrency offers aren't necessarily worth the overhead to alternative or conventional approaches in the first place.

So it's largely a perception of value, and the problem with that is that if the primary reason people are putting money in is in expectation of other people putting money in it later, that can collapse if and when the momentum shifts to taking money out rather than putting it in and the perception of value then starts to swing (as it has previously). But that doesn't necessarily mean it will, or that it can't reach a point of relative stability. As long as enough people hold the notion that bitcoin has value, then it will continue to have value. As the first and overwhelmingly largest, it has a lot of built in momentum boosting that perception of value. That can surge and ebb with coverage and investments. But having said that, in the long term, I think it's going to wind up closer to tulips than, say, gold.

So beyond a small amount of cryptocurrencies I've already got, I also stay away from it. There's certainly opportunity for making money, but I'd say it's closer to gambling than anything else. So maybe 'winning' money would be more accurate.