UKH

Does anyone know what sort of returns an actual legit crypto-trading fund has been getting over the last few years?

(As opposed to the ridiculous percentages claimed by a whole world of scams out there).

I'm interested to know because the number of people in my life who try to persuade me that returns of 100% per year and more (sometimes much, much more) are totally attainable by this very legit crypto-related thing has been growing recently. I tried to google the answer to this but absolutely nothing from a source I'd call reliable came up and I'm interested to know if there is in fact so much dumb money out floating around in crypto that a smart trader can actually get insane returns in that marketplace? (of if it's all just scams)

Bitcoin prices are on an upswing at the moment, so all the people who've been quiet for a while crying into their deeply red crypto portfolios, are suddenly out bleating about how clever they are trying to get a bull run going. 

PS crypto tokens are all *****cks. Blockchain has some niche uses, but ultimately you're better in a casino than 'investing' in crypto currencies.

I do know some people that made genuine money out of it, driving Lamborghinis and retiring early.....but that time is well past....ship has sailed, etc.

Start up a crypto trading exchange...?

I don't think so. Even if my morals would stand it, I like not being in prison too much!

In the words of Dirty Harry . . .

Ok, let me try putting this another way:

If I stick my money in a bank account I can get 5% or so.

If I stick my money in a very broad stock market fund I can get 7% or so (on average).

If I invest in a crypto fund, what should I expect to get?

Don't dig for gold. Sell shovels.

https://www.google.com/finance/quote/NVDA:NASDAQ?window=5Y

I'm not aware of a crypto fund that pays a regular income, but I suppose one would protect you from an FTX / Bankman-Fried style disaster. All I can say is, do you feel lucky?

My understanding is the crypto currency is just a means of exchange, untraceable by the banking industry, and not an investment vehicle. Am I wrong?

If real gains are made, isn't it just that a new batch of 'investors' have bought the idea of an investment and don't intend to pay for goods/services using a crypto currency? And those holding crypto currency sell it to the new investors. A market driven by pure supply/demand.

If used as an investment vehicle, surely it's just a massive Ponzi scheme ?

Some would agree with that, in theory. Although the untraceable is somewhat flawed considering you need to move money in and out.

In practice though they are investment vehicles currently. Sod all use as an actual currency outside of if you need to do some ransomware.

For OP.

Since even the "best" ones are rather volatile.

If you get the timing right you can make large gains.

The flip side obviously being you can make large losses as well.

If you take bitcoin. If you had brought a year ago you would be in line for 100% profit but if you had brought this time in 2021 you would still be nursing a grudge.

For the newer variants. Even higher profits would be possible but equally so to would losing the lot when it turned out to be a scam. Someone who is lucky could have made a lot but many more would have lost the lot.

Yes, a means of exchange. No on the tracing - it's all public so tracing is actually more transparent than traditional banking, it's just that you can freeze the asset or get hold of it after it's been stolen.

Mainly I'd say yes.

Not necessarily any more than stamp collecting or fine wine collecting is a ponzi scheme. There are many things that don't have any real intrinsic value but people are still prepared to pay a lot for. And with crypto, you can do all the things you can in the stock market - go short, go long or buy complex derivatives.

I guess what I am wondering is whether there are people out there who manage to make consistent gains by means other than scamming, and what those gains look like in size terms.

Shafted

Timing the markets is a mugs game, but if you believe in the ethos of bitcoin chuck a few quid in and have a play. It's a very high risk/high reward system and definitely not a wise investment choice. The truth is no matter how many 'experts' give you advice, no-one knows if the value will go up or down.

My advice would be to just treat it as a bit of fun. Invest some pocket money into it, and have a play. BUT BE PREPARED TO LOSE THE LOT. 🙂

There aren't any legal crypto funds yet, as far as I'm aware.

Crypto tokens, like Bitcoin, will never give you a return. They will never pay dividends. They don't give you voting rights. They have zero utility whatsoever. They will only ever be worth what you can sell them for..... which makes their value entirely dependent on sentiment, fashion, and hype, and thus extremely volatile. There is a significant chance that any crypto token's value can rapidly drop to zero if trust in it evaporates (which happens frequently). Trading crypto is like penny stocks really, except if you pick a winner, you don't have equity in a valuable company, you just have a token you need you need to offload before the price drops again. 

If you buy Bitcoin now, I would say you are more or less guaranteed to be losing money this time next year, based on where we are in the cycle. 

Over any time frame longer than six months,  an S&P tracker is going to give better and less risky returns. 

Yeah, read about the Terra Luna / UST collapse on Google for an example of an alternative crypto that a lot of people thought was amazing / would herald a new age of currency, etc., and then it completely collapsed overnight wiping out "over $50bn" of value. 

I am sure someone profited out of it, perhaps illicitly, but don't know all the details.

Maybe f all, but given your stated returns on the other 2 options you're going to be investing in armaments and literally making a 'killing'.

That's interesting to know.

Yeah, the world of crypto is burgeoning with collapses and scams of all shapes and varieties, guess I'm wondering if there legitimacy anywhere in it at all.

What?

Are you a chat bot? Because that makes no sense.

Have you listened to 'the Missing Cryptoqueen' on BBC Sounds? Worth a listen to get to grips with crypto 

Broad stock market funds and banks invest in a diverse range of companies. If you look closely, you'll most likely find arms manufacturers in there. Like battery-farms, it's best not to think too much about what's happening. Most pension schemes are the same.

In another post you mentioned your morals. It's good to invest morally, but you'll get less return on your money...

Does it make sense now?

Yes, thanks.

I've never quite understood the moral argument. The only times you are directly giving money to 'immoral' companies is at the IPO or if the company subsequently releases an additional public share offering. Most of the time you're just buying the shares from someone else who owns them. How is this helping the company? Or am I missing something?

I'm not sure this is true. There are many 'legal' quant funds which invest in crypto, e.g. https://www.coindesk.com/business/2021/09/14/quantitative-trading-firm-jump... . I doubt you'll find any who take money from the likes and you and me though!

Agreed.

There are lots of people in jail, because they thought it was anonymous. Also, do you really want people to find out, in years to come, that you spent money on crack, hitmen and whores?

Now someone will be along to say you can buy all sorts of other things. But bitcoin etc are not a fiat currency, so the fact that you can buy a car, is more of a sales gimmick.

Its the ultimate capitalist investment. Crypto uses more energy than many small countries put together and it makes a select few rich. Everyone else is along for the ride, having been sold the dream.

Blockchain, as a technology, is good in certain use cases. Tracking supply chains, for example. As a currency, unless tied into a smart contract, not so much.

Cryptos big breakthrough on Wall Street is imminent and is why I disagree with Midgen when they say "If you buy Bitcoin now, I would say you are more or less guaranteed to be losing money this time next year"

The SEC is broadly expected to give the green light on regulatory approval of ETFs in BTC. Blackrock Fidelity and Invesco are all awaiting the go ahead to open. If approved, then there is a huge amount of institutional level interest, widely expected to inject 100's of billions of dollars into the funds. These will allow retail investors to easily access part of their investment portfolios to crypto via a reputable institution , rather than the wild west of crypto exchanges.

Obviously none of this is guaranteed, but it does seem likely. Considering the fall out from FTX implosion and other bad news events around crypto, it's holding up pretty well at $37k ($726b market cap). Personally i think we will see it move up north of $1 trillion again if and when the ETF approvals come through. As a guide, BTC peaked at $1.28trillion when a coin was worth $67k.

Personally I think good chance BTC will be north of $50k in a few months if the above happens.

https://www.cnbc.com/2023/11/13/spot-bitcoin-etf-approval-is-approaching-ex... 

(the last paragraph is key IMO)

So, continuing the theme of there being no actual compelling reason to invest in Bitcoin, other than perhaps a few more people might be in the market for it in future.

One day the demand for these useless tokens will evaporate in a matter of days and there'll be a staggering amount of wealth wiped out, or rather transferred from retail investors to the many market manipulators that are rife in crypto. 

It's not so much a moral argument as a moral dilemma. You have to ask yourself if you're comfortable with the fact that your financial well-being is dependant upon kids being buried under rubble or blown to pieces. 

If so, then you can carry on investing in these companies and sleep easy. If you don't want to be part of that order, you should take agency as to where you place your money.

I guess I just think everyone should be aware of what role they are playing in terms of human suffering and act accordingly. Lots of people seem to invest their money blindly without ever considering the systems they are contributing to.

But they will buy free-range eggs/offset a flight and sleep more easily for it.

It's well documented that most people invest in bitcoin as a hedge/digital gold rather than as a currency for all the valid points already mentioned up thread that it's extremely limited as a currency. So the compelling reason for some is the fact it cannot easily be debased like fiat. ERGO - when more money piles in it's value goes up. Also custody of it is simple and vitually costless. I have ledger S with coins on it. Off exchange, no reliance on third party custodian, I can carry it across borders, size of a cigarette lighter and can hold billions of $ on it (obv mine doesn't lol). No electricity/No internet - sure, not much good to me but I don't buy into the prepper doomsday scenario 

"One day the demand for these useless tokens will evaporate in a matter of days....." One day Rodney we will be millionaires - sensible part of any investment portfolio IMO if you fancy a bit of risk.

It was rather hilarious someone I know trying to convince people Bitcoin was an inflation hedge as it's value was plummeting while inflation was skyrocketing. Some hedge that.

Rather depends on money going in doesn't it? But the only reason money goes in.....is the vain hope that more more will go in in future. That is not a sound basis for investment, that is wishful thinking.

Custody of my current account is simple and costless. For all practical intents and purposes transferring money around the world is trivial.

Not having a custodian take care of my assets is a massive negative. I do not want to be responsible for the security of my savings. I do want comeback and protection if I am the victim of fraud or my assets are otherwise compromised.

Much more sensible IMO to invest in actual real things with tangible, easy to understand value propositions beyond "well I hope someone will swap this for more money at some point in future".

Where is this documented? Since outside of a few true believers most cases I have seen is speculating on the price going up as opposed to a hedge.

Well unless someone finds a bug in the code or the people controlling it change the rules.

Its also not really a great argument considering it cant really be used as a currency so comparing it against one is odd.

Now try trading it. I would also suggest the fact so many people use the centralised exchanges would indicate most people dont find it either simple or costless (especially when the exchange nicks their cash).

The best rule when it comes to crypto is this: If someone is talking up the benefits of crypto, find out if they are invested in crypto tokens like Bitcoin. If they do, then you can safely ignore everything they say, just the same as if someone was trying to convince you to invest in company X, while they hold a large stake in company X, but even more so because the only way they can get a return on their investment, is by convincing more mugs to buy in.

I don't disagree with pretty much everything you have said.

Re custody - i was really comparing BTC to it's main competitor in the space - gold. Very hard to travel with $1m of gold, deliver $1m of gold, and the bearer of gold is really the owner, like bearer bonds - so security is a massive headache. A ledgerS is tiny and has a complex security protection making it almost completely worthless to anyone who doesn't have the access codes. A definite advantage.

Concerning my fiat currency that I use to buy stuff and get paid in - couldn't agree more, current system works

Inflation hedge - technically it should work quite well as an inflation hedge. The reason it has tanked is for other reasons - FTX implosion for example. Its a fledgling asset class with inherent risks due to lack of regulation - no doubt about it. Over time things should improve as it becomes more mainstream (ETFs) so....

"But the only reason money goes in.....is the vain hope that more more will go in in future. That is not a sound basis for investment, that is wishful thinking." I disagree with this to a degree. I invest in BTC because it has a hard stop on supply. So I think there will be  more fiat money sloshing about chasing the same amount of BTC, so it's price should rise over time.

Its definitely not for everyone though and why I would only ever suggest it as a fraction of your "investments" or not at all if you have limited tolerance of risk.

https://www.youtube.com/watch?v=RFSBWrAllzw&t=1s&ab_channel=Cinemuc...

I own a few bitcoins. I also own (most of) my house and a car, a motorbike, a dog , lots of stuff. I’m certainly not trying to get anyone to invest in BtC , but am happy to explain why I do. I did say this in my last post - “ Its definitely not for everyone though and why I would only ever suggest it as a fraction of your "investments" or not at all if you have limited tolerance of risk.“ 

I will go further and say that one of the reasons it is so volatile is a lack of liquidity. There are a couple of reasons , one good, one less so. The good is that more people are buying and holding (the digital gold play) the bad is that the person who invented BTC (Satoshi) is thought to have 1.1million coins. If he/she ever decided to sell then the price would crater. Very little is known about these coins and where they are. Is Satoshi alive and well? If these coins have been lost then how will that impact the value? 
 

I have around half of my life savings invested in crypto, and I'm adding more to my portfolio every week. Gains of 100% in a year are easy to make, I have made these sort of gains in just a couple of months recently. You need to know what you are doing though, and understand the whole crypto world, as well as the 4 year cycle and be ok with the levels of risk. It is certainly not for everybody. 

Oh dear. 
 

How long have you been buying crypto to make 100% gains. 

I'm not sure how he's done it but BTC is up $11k in 2 months, almost 50%. Ethereum is up 33% over the same period. Solana is up over 100% from $22 to $50 over the same period. There are loads of others as well. 

Somewhere between -200% and +200%.

Ignore all the predictions. Nobody knows if it's going to change trajectory or not.

You make it sound like there's a secret or an understanding to predict crypto. There isn't.

Sure you can have strategies to limit your loss, but that's all you can do.

When the market collapses, all those who say they know what they are doing are suddenly caught with their pants down.

If your only ability to make money is strategies to limit loss and let the wins run, you might as well invest in leveraged options on the the stock exchange. Same wild swings to take advantage of, but you can also research what you are buying and make an educated guess instead of playing crypto roulette.

I know you have always been a fan...but you are hiding the FTX situation etc etc  in your numbers. Alot of people have got badly burnt through these sort of extravagent and wild claims.

You do yourself no favour by playing to that.

Its roulette on an App, where people become addicted into looking at their phones constantly.It plays to that psychology.

I do wonder if there were no mobile phones /apps whether cyrpto would have ever got off the ground.

He said in the last couple of months - I was just pointing out that it wouldn't have been hard to see those returns in the last couple of months. I mentioned the FTX implosion above. Nothing to hide there. Interestingly - Solana (FTX token) has massively outperformed while the administrators have been offloading 100's of millions of coins into the market to claw back losses over the last few months. You would expect that supply hitting the markets for sale would have crushed the price even more, but it didn't and the price rose. I don't know why because I was expecting it to go the other way. 

But if your point is that you would have lost money if you got involved shortly before FTX went up in flames to now - I agree  

I think ‘number go up’ is the appropriate crypto term!

You do not grasp the way it is being sold to people over apps as a get rich quick scheme  with no downsides.

When you see how its sold to basically an ignorant  public by sponsoring football and social media influencers for example surely anybody with a reasonable amount of financial coomon sense can figure its not good or that you are being " had".

Right - but now you are talking about the spivs who are peddling the get rich quick schemes who will skim off the top regardless what happens. You get the same types in precious metals, gambling websites, spread betting/cfd's etc. Wouldn't touch any of them with a your barge pole. I'm not against more stringent regulation and transparency around those activities. TBH the ETF's should eat into those crooks lunch when it becomes far simpler for retail investors to get exposure through  reputable investment firms. Gambling advertising in football is off the charts in my opinion, ridiculous.

It does seem to have benefited, like meme stocks, from the stuck at home unable to spend cash in other ways pandemic years.

Its a shame cryptocurrencies are interesting technologies with some niche uses but it has now been turned into,as you say, a game of roulette which renders it useless for its original intended uses.

The question is has tether faked it until it made it or is it still waiting to fail.

But you fail to recognise how many people have in effect been sucked into this and so this in turn affecting cryoto prices 

the price is not being driven by the points you make. It’s being driven by classic Ponzi schemes  or scams and people believing it’s a quick rich scheme. 

^^That's the only thing anyone has ever said which has made any sense about crypto investing.  Aside from that, no-one has ever been able to tell me when someone should buy or sell crypto - there is no rhyme or reason to its value, unlike other stocks whose value generally varies in step with the economies.  The logic of bitcoin being a finite resource also makes sense in terms of its value going up, but no-one seems to be able to define that value - once all the coins have been mined what will the value be, and what will it do after that point in time?  Indeed, what will happen to its value once the initial availability of ETFs subsides.  The finance industry are keen to be crypto fund managers because they will be getting their cut irrespective of the fund performance, and the additional investment it will bring from people not currently in the markets is money in their pockets.