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[Rogerdodger]

As Will Rogers said,

"Buy a good stock and when it goes up, sell it.

If it don't go up, don't buy it."

 

In some ways, crypto is similar to buying stock. In other ways it is totally different.

In reflection, it's appeal is similar to GOLD and yesterday's "Gold Bugs" are now buzzing about Crypto.

But what is the real value of either one, beyond it's perceived value?  What is the P/E of Gold or Crypto?

 

Here's my take on bitcoin.
It is like opening an account with a broker that only deals in one particular bitcoin.
But your total account goes into the broker's stock, not into the stock market.
Kind of like putting all of your money into SCHW, Charles Schwab's own stock, not the market itself.
Except that normal brokers provide a service. And an actual broker has earnings, thus a P/E, a Price based on Earnings.

What is the P/E on a crypto?

The bitcoin broker does nothing except take your money.
When more people buzz about it on Facebook and Tick Tock, et al,  the perceived value goes up but not the actual value.
When negative news comes, out the perceived value goes down as well as the bid.
The value of your "investment" is total dependent on a pyramid, not on any product or service.

What is the P/E on a crypto coin? Zero. So how do you estimate it's VALUE... Some billionaire's internet meme Doggie promotion?
So if a guy on Saturday Night Live mentions the particular coin, it's bid up, then collapses overnight like a Bernie Mad off house of cards.

The greater fool theory.
And unlike a real broker, your account is not insured or protected from being hacked or other criminal activity.

 

Here are five Bitcoin fraud cases that have happened, and what you can learn from them.

1. Bitcoin Savings & Trust Investors in BS&T were promised returns as high as 7% per week, but what really happened is that more than 265,000 bitcoins were stolen via fraud.
2. Bitcoin Gold  Scammers were able to fraudulently acquire more than $3 million in Bitcoin.
3. BitKRX  BitKRX was a South Korean Bitcoin exchange, and completely fake. Nobody truly knows how much was stolen.
4. My Big Coin  Accused of "misappropriating over $6 million from customers by, among other things, transferring customer funds into personal bank accounts, and using those funds for personal expenses and the purchase of luxury goods."
5. Cryptocurrency Clipboard Hijackers  This is code that monitors the Windows clipboard for cryptocurrency addresses. When it detects one, it swaps the intended address of the transaction with one that the ‘hijackers’ control, essentially send that money elsewhere.

For all cryptocurrency’s high-tech gloss, many of the related scams are just newfangled versions of classic frauds
Cryptocurrency fraud has taken a quantum leap in recent months. The Federal Trade Commission (FTC) received nearly 6,800 complaints of cryptocurrency investment scams from October 2020 through March 31, up from 570 in the same period a year before. Reported losses grew 10-fold to more than $80 million.

 

 

What Is a Pyramid Scheme?

A pyramid scheme is a business structure that pays for recruiting new members or distributors not for selling actual product or service.

Edited by Rogerdodger, 07 August 2021 - 02:11 PM.