Of course you can just hold and make a killing in the right asset. Amazon in 97' was $1. Amazon in 99' was $100. It never paid a dividend.
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Of course you can just hold and make a killing in the right asset. Amazon in 97' was $1. Amazon in 99' was $100. It never paid a dividend.
But people have living expenses. Holding doesn't generate any passive income unless there are dividends and this means it's the highest risk choice. Holding all your ETH in Ethereum itself puts the fate of your wealth entirely in the current price of ETH. Also you cannot grow your wealth or generate income from your wealth that way. And also currently ETH is inflating daily, so holding it in ETH is lossy.
Wealth tends to go where it can increase.
Good point. However, most ICO's are ERC-20 based which means they rely on Ethereum to run the DAPP. No token has paid dividend yet and few will. Many have chosen burn method. ETH inflation is less than Bitcoin due to ice age. Also, few miners want to sell since ETH will be required to stake forcing the prices up even higher. Ethereum is best token to hold in my opinion and I been saying that since last year. Until we see some ridiculous run up to $200-$250 theres little reason to sell ETH. I am betting it trades at least to a 20 billion market cap.
Of course but the price of ETH can go down while those tokens may be going up. People who find themselves millionaires because ETH went up are going to have to put it into ICOs because there is currently no where else. Proof of stake might change things though.
One reason people wont sell their ETH is because the taxes are so high for cashing out to fiat. This gives people the incentive to stay in the Ethereum ecosystem as long as they can and only sell when they need to live from it.
Let me ask you, if you could get 8% interest on $500,000 would you choose that or would you cash it all out into fiat, pay 40% tax possibly, and then put it into stocks or real estate to get less than 8% interest? The market in Ethereum doesn't seem irrational because there isn't any better alternatives than ICO except to hold, and there is no low risk opportunities yet.
Of course I'm not a game theorist or expert so I could be wrong so take it as my interpretation of people's motives.
Yes, I understand your points. Just that miners of ETH know staking will lock up many Ether so few wanna sell now. I can see though from ETH ICO investors that bought at .50 cents they might wanna take a few ETH off the table and buy realestate or something very stable to diversify but there's also a whole other group that got in below $10 after the DAO hack that are not selling. The adoption of especially ETH (crypto in general) is really happening so its kinda like selling out in early 98' before Internet really took off in 99'. People who understand the tech know this is a chance in a lifetime to make bank as adoption takes place. Off topic: As investor in Steem I could not be anymore disappointed. I am not sure what they are doing but they need get there act together ASAP. The market is up 10X yet Steem can't even go up 100% . What are they doing here?
If Steem were a business ask yourself what the Steemit employees are doing to add value and increase the share price? In terms of adding value this would mean increasing revenue so that revenue is greater than expenses.
It does not seem to me that they know how to do this and as a result the price of Steem is under $1. In addition, there aren't many users of Steemit and after a year of development it still doesn't compare even partially to Reddit or Voat.
So if you thought Steem was an investment perhaps you thought wrong? It's just a game and Steem tokens are not real money. Steemit employees are under no legal or moral obligation to commit to raising the price of the Steem tokens and the founders of Steemit have been powering down, where the co-founder Dan has left the project entirely.
I've been powering down ever since Dan started powering down and pulling his involvement back. When Dan left the project I now choose to wait and see on Steemit. If the price goes up then great, but I see no use for Steem Power because the interest level is too low to be considered attractive. They had something with the 100% interest, or even 10% interest on the Steem Dollars, but without this interest Steem Dollars and Steem Power become "ugly".
I hope Peerplays avoids making the same mistakes. Don't change your original agreement with your stakeholders. If you promised 100% interest or 10% or whatever it was, then stick to it. If you promised a certain set of rules when people bought or earned their way in to last for at least 2 years or some set period of time then stick to that period of time. I knew when they were willing to change these rules of the initial agreement that all rules about the project were flimsy and could be changed without justification if enough people can be convinced.
This is fine but if I agreed to hold Steem Power specifically because of the old rules then when those rules change so does the attractiveness of Steem Power. The Steem Dollar is still useful but not as useful as it was with higher interest. Steem missed an opportunity to capture billions of dollars because Tether and other solutions are all centralized and wouldn't scale for store of value. In addition no solution currently exists to give 10% interest, or 5% interest, on any asset that I know of, and for this reason wealth has no where to go.
If an Ethereum long term holder wants to buy real estate they have to cash out into fiat. When they do this they have to pay all kinds of taxes whether it's 10% if they wait 1.5 years, or it's up to 40% as income tax. There is no legal clarity here either. REITs aren't the worst investments as they can generate 8% in interest yearly from various rents, but that income only will come after a person cashes out, pays their taxes, which means much more paperwork, hiring accountants, etc.
If it is a significant sum of money, as in millions, then I would see why someone would take 500,000 and pay whatever accountants to get into real estate. If it's less than that then the ICOs might be a better opportunity in the short to medium term, and a lot easier. It's easier to send ETH to a smart contract than to cash out, hire accountants, pay whatever the taxes will be, research REITs or even more risky buy a house, and then have to learn the real estate business. Personally if it were me I would diversify after a certain threshold but I can totally understand why people in a certain range of ETH, such as 1000-5000, are just going to hold and wait a bit longer. Those who have 10,000 ETH probably can cashout at any time as they are millionaires right now or close to it.
At what point would you cash our your ETH? How much ETH and at what price? And into what exactly? What would be so important that you would pay 40% tax to cash out?
Many will hold b/c they think its going much higher. Even ICO investors from the crowdsale. Some flipped in Aug. 2015 for a quick 300% gain at $2. Sometimes just doing nothing is better than anything at all. As for Steemit they need to get communities launched yesterday.
Yes it can be profitable to hold at times but there is competition. So the longer you hold the more risk you're taking. Also if you don't diversify and you lose, you lose totally!