I ended up with about 10 different crypto products — Ian
My profits are down from a few days ago, but I've still more than doubled what I put in, so there's that. — Michael
I thought one has profits only when one cashes out, sells the investment and makes in this case capital gains.My profits are down from a few days ago, but I've still more than doubled what I put in, so there's that. — Michael
Is it any different to owning shares (or really anything that isn't cold hard cash)? — Michael
From a trading perspective not so much. An obvious difference though is that share prices try to reflect the value of the company where it's usually clear that labour adds value. It is not clear what the value 1 Bitcoin = 12.000 USD reflects. A cryptocurrency price point appears to me as a pure supply and demand equillibrium without any relationship to economic activity at this point. Even for currency exchange rates, you'll see the underlying real economy of the different countries play an important role in setting those rates next to supply and demand. — Benkei
What I meant is that if owning X amount of some cryptocurrency which can be sold for £100 doesn't count as having £100, then surely owning X amount of some company's shares (or even something like land) which can be sold for £100 doesn't count as having £100. I can't use either to pay my rent or buy food (which I assume is the sort of thing ssu was referring to). — Michael
What I meant is that if owning X amount of some cryptocurrency which can be sold for £100 doesn't count as having £100, then surely owning X amount of some company's shares (or even something like land) which can be sold for £100 doesn't count as having £100. — Michael
ssu is correct. You cannot count as profit transactions which are not yet complete. Even as a business, I may have a $1 million contract, that doesn't count as revenue (and profit) until the dough actually is transferred into my bank account.My profits are down from a few days ago, but I've still more than doubled what I put in, so there's that. — Michael
ssu is correct. You cannot count as profit transactions which are not yet complete. Even as a business, I may have a $1 million contract, that doesn't count as revenue (and profit) until the dough actually is transferred into my bank account.
The reason why having a 50% increase in BTC or the like don't count as profits is because the transaction isn't finished - you haven't cashed out. In fact, you may be unable to cash out for whatever reason - exchange doesn't work, your Bitcoins get stolen, there's not enough liquidity to cash out your entire position, etc. So, for example, the Bitcoin founder has 1 million Bitcoins. Their value is around 14 billion USD. You reckon he should count that as profit? Of course not, because he cannot cash out such a large position - there's not enough volume to support it. — Agustino
Yes, assets you own do count towards your net worth.So I can't count it as profit, but I can count it towards my wealth? — Michael
Yes, your net worth is now X+Y. But that doesn't mean you've made a profit. Just that for one reason or another, the market value of the assets you own has increased.I was worth £X before I bought, I'm now worth £X + £Y. — Michael
So I can't count it as profit, but I can count it towards my wealth? That's just splitting hairs. I was worth £X before I bought, I'm now worth £X + £Y. — Michael
Is it any different to owning shares (or really anything that isn't cold hard cash)? — Michael
From a trading perspective not so much. An obvious difference though is that share prices try to reflect the value of the company where it's usually clear that labour adds value. It is not clear what the value 1 Bitcoin = 12.000 USD reflects. A cryptocurrency price point appears to me as a pure supply and demand equillibrium without any relationship to economic activity at this point. Even for currency exchange rates, you'll see the underlying real economy of the different countries play an important role in setting those rates next to supply and demand. — Benkei
Yep. And individuals don't have to mark-to-market their wealth. Corporations can have this sometimes ugly feature to do, that is that if their stock holdings take a dive, they have to report a loss (or vice versa) even if they don't sell.You cannot count as profit transactions which are not yet complete. Even as a business, I may have a $1 million contract, that doesn't count as revenue (and profit) until the dough actually is transferred into my bank account. — Agustino
Get involved in philosophical discussions about knowledge, truth, language, consciousness, science, politics, religion, logic and mathematics, art, history, and lots more. No ads, no clutter, and very little agreement — just fascinating conversations.