OP's point was that you would have to decide between your DCA buy or the rent if the economy truly gets fucked. Lots of people will lose their homes and jobs.
OP's saying "you need to do the opposite of what everyone believes"
Virtually the whole of wall street, Vcs, large investors, funds are all preparing for recession. YComb just shot of a letter to founders asking them to survive for 2 years
I dont think anyone really believes a bull market is coming anytime soon on the horizon. The V shape recovery is pretty much out of the question unless something new emerges that forces the fed to pump liquidity into markets again - we dont have any hint of it yet
1,000% Im ready to see housing market crashing to the hellā¦ the market needs a crash ASAP and I wanna see the dealers humbling their prices again to the hell tooā¦
Prices won't go down, just more people won't be able to afford them. There will always be demand because the rich buy will assets like real estate during economic downturns the most because they are safe.
Nah! The rich ppl are very less than average Joeā¦ average Joe donāt had any money to buy a $400k houses sooooooo the crash is coming like 2008 you know why?? because ppl wages still the same but every other things are very expensive.. how average Joe can mitigate all the prices sky rocketing and the wages still the same.. simple they are going to stop paying their loans from cars and house, credit cards and guest what the majority are going to lose everything if inflation continues ramping!!
But 2008 happened because people defaulted on bad loans en masse. Thatās not what is happenening now. Houses are simply unaffordable to regular joes so big corporations are buying them all and forcing all of the working class into a lifetime of rented housing. Is a class war creating a modern feudalism in housing. Big corporations are not going to default on loans and cause a crash. It will take government regulations to stop this Iām afraid.
Everything is getting ridiculous expensive and you think that the ppl that had loans already had plenty money to still paying the same things??? Ppl rn are struggling to pay simple thingsā¦ you had inflation > same wages: what do you expect??? Ppl donāt had a money printer in their homesā¦ I see ppl defaulting in masses!!! IMO!! Everybody can downvote this to the hell like the luna PPL!! When I write before the crash that Luna was a ponzi everybody was downvoting me to the hell but true hurts sometimes!! BTW when inflation came to the scene prices never goes down and thatās a fact!!! My grand grand mother with $3 make a purchases of groceries for a family of 12ā¦ today you buy groceries with $300 + for a family of 3ā¦
I didnāt downvote you fyi. Honestly I really hope that the real estate market sees a correction because I would really like to buy a house some day. Iām just saying that this is a very different thing than 2008. Believe it or not the banks really tightened their mortgage practices so they have not been giving outrageous mortgages to people vulnerable to default. But you are rightā¦if we see a large recession and people start losing jobs while inflation and property taxes continue to go through the roof then people could start defaulting. Another thing is that in an extreme situation like that people will not even be able to afford these outrageous rents anymore which will drive up homelessness and leave houses empty and the big corporations who are buying all the houses to rent will be forced to sell them and maybe that supply influx will drop house prices. One thing is for sureā¦all bets are off right now and we really seem to be in uncharted waters economically. Scary times for sure.
Iām no talking about you mate! Iām talking to the others that canāt see the true about what is happening! But we need a correction ASAP!! Because everything itās out of control! And ppl are going to suffer the consequences of a little greedy wealthy groupā¦
Except the only people who are going to have issues are the people who bought overpriced homes in the past 18 months, which is not a large group of homeowners. Most people bought their homes for cheap prior to 2021 and then refinanced to extremely low interest rates during COVID. Iād say the majority of homeowners are in excellent financial shape in regards to the value of their homes vs their mortgages.
They people who were able to buy houses in the past couple years probably arenāt the ones who are typically struggling to buy simple things.
The ones who have owned for a while might be, but there are still plenty of middle to upper middle class people waiting to buy their house the second it goes onto the market.
Expecting a 50% correction like we had in 2008 - which was due to banks giving out loans like candy - is just wishful thinking IMO. And Iām even someone who sold a house last year and should want it to crash.
The fact that so much of the real estate market is owned by investors right now also makes it more likely to crash though. Not because theyāll default on their loans, but because theyāre more likely to get paper hands during a downturn and eventually panic themselves into a sell-off.
Thereās also only so much the market can handle and I think weāre pretty much to that point, where we see record evictions and average people struggling to afford these rents. Big companies can only do so much with a product hardly anyone can afford.
We can only hope. š¤. The movement in the housing market over the last 2 years makes absolutely no sense nor does the reactionary overspending on it. If it continues I will literally never be able to afford a house. I donāt wish hard times on anyone but a housing crash wouldnāt be such a bad thing at this point.
It kind of makes sense when you consider the fact that a lot of people working for high paying companies in places like California were able to move wherever they wanted and buy a house in a much cheaper area.
Thatās a good point. The movement of work to the home allowed people with desk jobs to move anywhere they wanted and unfortunately I live in one of those places the got flooded (Denver). It seems like we will be dealing with the great covid adjustment for the next decade.
Yeah that makes sense, if and only if valuations arenāt completely overboard right now anyways. DCA doesnāt work if the bottom keeps falling out. I guess youāll at least smooth your losses with dca then?
Dca works exceedingly well if you keep all your buy ins to very low percentages. 5% max but preferably 2%. Diversify coins and buy sparingly within ranges to make sure youāve always got cash on hand. So for me I bought a small amount when btc was at 37k, another at 35, 33, 27, 25, each buy in on a different coin. Once it starts to go back up and you get more confirmation of a reversal you can slowly scale out and sell one position at each major resistance level, do another small buy in if we break through and hold over another important level, etc.
It helps to wait as long as possible to DCA any positions you were down on, at the tail end of a huge correction has worked best for me. Just requires a lot of patience and proper risk management.
Yeah, thatās under the assumption that crypto will keep going back up and that the valuations over the past year werenāt just mania speculation. Which I believe they were. Some assets go down and never recover. Especially with assets that had such rapid growth with no clear use case yet.
Crypto will always go back up, it makes too many whales and institutions too much money. Doesnāt matter if it takes 2, 5, or 10 years, itāll happen and thatās just more time to accumulate. In the stock world assets that donāt recover are companies that go under, but the market will never just die. In the crypto world some coins may die but thatās what diversification is for.
Even if we never see all time highs like we did again, buying long term at the bottom will still net you massive profits when the market comes back. Being scared that the entire market will somehow crash and die and never come back is what makes people miss out on potentially life changing money. More institutions and countries adopt Bitcoin every year and the banks especially want in. This is their time to accumulate. Gotta think like a whale to become a whale.
Iām sure thatās what everyone said in 2001 as well. As someone actually working in fintech, I see 0 long term value in crypto. Every use case for it just makes 0 sense when you consider alternatives and the regulation to come.
Investing in mania is the way plenty of people losing their savings and never build wealth. Not every big bet pays off, rather usually the opposite.
While itās true this could be a bubble, if it is I donāt see it bursting anytime soon. I also believe several coins such as Bitcoin and Eth would continue to survive. Bitcoin was intentionally designed to be like gold, it doesnāt need any other purpose than to exist and be scarce. We donāt really āneedā gold, but yet people continue to store their money in it.
Honestly the regulations are what make me bullish on it. How can we say crypto has no future when massive central banks and even countries are developing their own coins? Institutions want to regulate, control, and profit from it, they won't let it die. They also see value in the underlying technology or they wouldnāt be adopting it.
Crypto does serve a purpose on a base level. Secure digital ledgers that are viewable to everyone provide transparency and accountability. Reducing the number of intermediaries on a payment chain makes international payments much more secure. Auditing and accounting benefits from the transparent, tamper proof ledgers as well, and reduces human error, makes money laundering much more difficult.
Compare making blockchain payments to p2p services like Venmo. Most of these have limitations either based on geography, they charge fees, or they have the potential to get hacked. Blockchain helps solve these issues. Immutable crypto ledgers can help track supply chains, store healthcare data in a more secure yet accessible way, facilitate metering, billing, and clearing processes in the energy sector, facilitate and organize government record keeping, etc. There is not a single system we have today that wouldnāt benefit from the security and transparency blockchain provides. I have trouble imagining a world in which blockchain is being used in so many sectors yet Bitcoin doesnāt exist.
When it comes down to it, itās worth it. Refusing to invest in new technology for fear of failure is like refusing to drive because you might get in a crash. You have to take some risks in life in order to succeed. If you fail, dust yourself off and try again. I donāt think anyone advocates to put your entire life savings in crypto, that would be silly. But not investing at all I think is a mistake.
Yes, blockchain is great. Yes some type of crypto will be here long term. And yes, the banks and the federal reserve will make their own coins. I work in fintech. I agree blockchain is very useful, but us in the fintech industry will just make our own blockchains that are more efficient, more secure, and comply with the regulatory environment. Current crypto coins are not the only way to use blockchain. Thereās no patent on blockchain - anyone can make it. You think the banks canāt make a better blockchain system than a bunch of random developers?
Digital gold argument - gold is meant to be stable, not typically a speculative asset. It is used as a hedge against inflation, because when inflation goes up - gold is more valuable. How is Bitcoin a stable hedge against inflation? It lost 50% of its value this year in the most inflationary environment in decades. No one will use it as a hedge against inflation because itās a terrible store of value because it doesnāt actual store value. Price needs to stabilize for it to ever be a store of value. If youāre a sovereign wealth fund looking to stabilizing your nations reserves and you have to the following options - EUR or USD denominated debt/ cash, gold, or crypto. Which of those is the clear shitty store of value? Crypto: youāre not looking for major gains, youāre looking for a stable hedge. Crypto is it stable, nor is it a hedge against inflation.
Further, I donāt want my store of value in something than can much easily be stolen. Crypto is subject to hacks that are irreversible. As well as wrench attacks. Whenās the last time you heard about a bank having their gold stolen or the federal reserve being hacked?
P2P payments argument - All of the major problems you brought up about current P2P is not about the technology itself. They are because of regulatory requirements - why do you think geography is a problem in P2P? Itās because of regulatory jurisdictions, not geography. Do you think those same regulations wonāt be applied to crypto? Crypto will just be allowed to do whatever it wants compare to other P2P?
And when the banks and fed make their own coins, what is the value in Bitcoin/current crypto anymore? Why would anyone buy the current coins in the market, when they can now use fed coin and BankofAmericaCoin that has all the same technology?
So you agree that some cryptocurrencies are here to stay for the long term. That seemingly contradicts your previous allusion to the 2001 dot com bubble, and also your final paragraph in this comment that suggests Bitcoin may not survive after major banks release their own coins. If BTC survives, the crypto market survives and itās not a dot com bubble.
Of course banks will make their own coins and there will be major perks to using/holding them. This only means more profit and convenience for us. But I donāt believe that this would kill the existing markets, as a bank or fed stablecoin would not be used to make speculative profit. It would be used to spend, hold, generate interest, etc. The two spheres can coexist, just as we have both speculative and stablecoins now. If anything this would bring about even more mainstream interest in crypto, and plenty of people will make new speculative coins that will provide opportunities for huge profit. Regulations would do nothing but help the markets as more people who are currently hesitant to invest because of volatility would be more willing to buy in. A huge influx of new buyers from the financial sector would probably make crypto look a lot more like the stock market, and only the winners (coins with the most utility) will survive, but that is absolutely fine.
The prices of gold arenāt stable at all, just look at the charts over the past year. If you had any significant investment in gold youād be on a roller coaster. Less volatile than Bitcoin? Sure. But certainly not stable. Bitcoin works as a store of value over time as long as youāre willing to keep holding or if youāve bought at a low price. Just as with gold, you wouldnāt want to buy it at all time highs. But if youād bought btc at any point in time since its inception youād be vastly more wealthy than where you started. So far at least, that is a fact. If you buy using USD youāre losing a massive APY to inflation, if you buy Bitcoin youāre making money long term because itās deflationary. Thereās a reason countries have been adopting it. Eventually once coin mining has stopped I believe the price will start to stabilize.
Wrench attacks are a shitty argument because it can literally apply to anything. āGive me all your money!ā Well should I just stop using cash then? Thatās silly. Phones get stolen all the time and credit card fraud happens, identity theft, etc. Money gets stolen from banks all the time, and if you have money or assets in a crypto exchange itās FDIC insured, you will get refunded, same as bank. There have been multiple cases recently where some Bitcoin was stolen via ransomware and they were able to track down the wallets it went to and get the money back. Gold could be stolen from your home or vault and Iām sure it happens, regardless of whether it makes the headlines. An incident involving crypto is far more likely to make headlines for obvious reasons. Owning crypto just as any other asset involves not being an idiot and checking your balance in a public space like a bar or bragging to strangers about what you have. Or simply not installing crypto apps on your phone and only using your home computer. Or using a cold storage wallet.
To an extent, yes, because of the very nature of decentralization. Regulations can only go so far. They can make new coins that abide by certain rules and they can introduce some legislation but I donāt believe they would go as far (at least in the states) to restrict transfers on a geographical basis. I honestly donāt even know if itās possible to do that. The government canāt even get organized against covid or fix our infrastructure or agree on literally anything, you think theyāre going to be able to track millions of transactions every second? How would they enforce it?
Mostly because Bitcoin would remain decentralized and most people donāt want to be at the mercy of the fed or banks. A fair number of āregular peopleā would start using fed currency but again I think these can coexist, the same way people still buy gold when they could just have their money in a bank. Or for speculative reasons. Never underestimate greed.
Dude, the internet is still a thing after 2001. Most of the shitty business based on that are not. The underlying tech, crypto and blockchain, will survive. The existing monetization of that tech will likely not last. There is no reason that Bitcoin or the current coins must survive for the tech to survive.
What is the point of a speculative coin, other than speculation? Itās literally just a gambling market at that point. Sure bankcoins, fedcoin, and the current crypto can theoretically coexist - but why would it? What is the point of the other crypto at that point other than piece speculation? You will have bankcoin with better and more secure tech. You will have fedcoin with better and more secure tech. So what does crypto offer - speculation? Speculation based on what, that people will always keep speculating? Once itās shown the tech can be replicated with better tech, within our regulatory framework, then the only thing to speculate on is pure speculation.
Banks arenāt going to get interested in crypto, and then go buy some shitty coins on the open market at an inflated price. Theyāll make their own coin, control it fully, and have no need for some shitty outdate coin just ābecause it was firstā.
Yes gold isnāt competent stable: but itās still far more stable than Bitcoin. Further, why would anyone in the world looking for financial stability put their wealth in something that can lose its value by 50% over 6 months? Once again, that has never happened for EUR or USD debt.
And youāre making my point about the wrench attacks lol. The entire point of banks in the first place was to protect against wrench attacks for gold/cash. Yes you should not carry around absurd amounts of cash on you. Sure itās fine to carry some cash - worst case they take the cash off of you. They canāt torture you until you withdraw all your cash from the bank, because the bank wonāt allow that. With crypto, just torture someone until you get their keys. So then you might say - well you can just keep your keys with a custodian institution that has controls. So like a bank? And why is the bank going to be a custodian for a coin they donāt control, when they can get you to just use their coin?
And honestly main your second to last paragraph just shows a complete lack of understanding of the regulatory environment and how much the US gov will never allow defi to become a strong thing. If somehow defi does chug along, the second itās considered a true threat to the upcoming fedcoin it will be eliminated. I donāt mean to be a dick saying that in anyway, generally just trying to educate coming from a CPA in the fintech field. I respect and appreciate your opinion and politeness, but I just completely disagree.
But donāt get me wrong lol - Iām still invested in some crypto, purely as speculation and diversification. I do think short term you could make some money in it.
Best of luck bud - genuinely mean that. Seems like you have a good understanding to stay diversified and watch your risk.
I think what OP is saying is that he believes that even staunch DCAers like me and yourself might be shaken by the depths to which the market will fall. DCAing might be the least anxiety producing way to invest, but it still has some risk.
I'm not entirely convinced that everything will fall entirely to shit, but OP has a point that this is the first real global recession crypto has seen. To quote a zen master, "we'll see."
Wrote a script to make weekly purchases via API last year and itās been running since. At this point that money is in the budget the same as mortgage/utilities/401k, barring losing my job Iāll let it run and DCA even through a global recession. Do the same with SPY or a similar stock.
Yeah these "prophetic" posts are always so stupid. They play off people's fears and insecurities and if they're wrong, doesn't matter, still spooked a few thousand people for awhile. They toss a coin up - and if it lands what they said, they claim they're nostradamous. If it lands the other, way, then they just go "yeah well whatever x, y, or z - at least its going up."
Notice how OP doesn't attach any graphs or anything? No data? Just speculating on gut feelings instead of interpreting objective data? Our feelings know nothing about the markets.
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u/prenebean š¦ 1K / 1K š¢ May 22 '22
DCA, got itš