This is a real beginner's post, as I'm a beginner speaking to fellow beginners:
I've seen some questioning of the great Shiba on this here subreddit over the last few days, so I just want to come out and say it:
My retirement will be invested in Dogecoin.
Even though crypto is a 'currency', it's more like a product. It has cost of production, supply, and demand. Fiat currencies do not necessarily follow these rules, as the USD definitely has unlimited supply (federal reserve \*loaning\* the money for these new stimulus checks), demand is government-mandated, and the ratio of value to cost of production is way out-of-whack (a penny costs $0.0199 to make, a dollar costs $0.045).
You've heard it before: "ThE oNlY rEaSoN a DoLlAr Is wOrTh AnYtHiNg Is BeCaUsE pEoPlE bElIeVe In It!"
The same is true for stocks. This week I made $120 on QuantumScape, a company that won't produce a product for another 5 years- others lost a lot. You can't tell me they earned their multi-billon dollar valuation. The market is crazy- it'll probably grow, but it's really not a lot of growth for the risk.
So you can go find a bunch of articles that all say that, but let's agree: Bitcoin sucks. It's expensive, hard to mine, no fun, and a bunch of no-fun old people are ruining it for the rest of us. It's $38,000 right now. Why?
Two reasons (and you can find this elsewhere as well):
1. People think it's worth something
2. cost to produce.
If you look up bitcoin miners at current price, you'll find they make a decent profit per year, but at a lower bitcoin price, many could actually LOSE money vs the electrical costs to run them. Tie this in with the cost to acquire a bitcoin miner (+maintenance/upgrade fund), and you could either find yourself making either a slim profit or none at all. While bitcoin is valuable, everyone wants to mine it. When it's not worth as much, not as many people want to mine it. This helps it maintain value, as miners need to make a profit. Supply shouldn't...