Bitcoin Forum

I have been investing my bitcoins and litecoins in some online companies via websites like bitfunder or btct.co and I can't help but wonder why the prices are so high for shares. Most of the companies with a couple of exceptions have a yearly return of about 5%, so why the hell would you invest in them anyway ? You are better off buying a little asic usb miner and running it until you make 30% back and sell it. I am curious why others think this is, imo I think it shows coin hoarding to the point that people just want a place to put them. Idk just my 2 cents. Curious to hear what others think.

In my ignorance, most tiny startup companies seem like a bad deal... or a very random one. However, a few people with inside information (probably friends of the founders) might know something we don't and think it's a really good investment.

That's one possibility anyway.

Thinking the same thing here. I think a lot is family and friends buying in.

true, but many of the companies don't even really have room for massive improvement. Take mining companies for example. The percentage most of them take is so small, they can't afford to buy the hardware to outlast the difficulty changes, so what you end up having is a dividend that slowly depreciates. And yet, people line up to buy these stocks. I feel like people just don't know that they're overpaying dramatically.

You better spread the word then, people need to know the truth!   :o

lol i can sense your sarcasm, but its not my place to. Ill just buy the good investments. I was just wondering if there was an underlying reason purely for curiosity sake.

There's nothing wrong with a dividend depreciating.  If someone paid you $500 a day for absolutely nothing, and gradually knocked off $10 a day, would you really care?  I sure the fuck wouldn't.  I'll stay in until I'm right down to $0/day.

It's probably worth point out that 5% return ON BITCOINS is amazing. If I could buy a low-risk asset that would give me 5% return on bitcoins... I would invest all of my bitcoins. The reason I haven't done this is that almost all of the options are very high risk... so may as well try for something that has high returns.

As with most assets people are buying future earning potential.  Most (excluding PMBs) have plans to increase yields.  Some of them have quite a few BTC and other assets that increase the price and thus lower yields.

BitFinex gives yearly returns of around 8% APR compounded hourly.

The risk is that BitFinex not disappear.

I remember everyone was so excited when Pirate the dick and his little band of assholes were giving such great returns on their investment. It ended up, like so many at the time, to be a scam. If you look at investment history here, like everything that was listed on GLBSE, small returns start to look pretty good.

I agree a 5% yield is fine for a low risk investment, however every bitcoin related stock is considered high risk at this point in time, just because of the risk the stock exchanges themselves hold.

seems your new to being an investor.
i personally deal with contracts based investment (partnerships) rather then using the crowdfunding sites like the ones mentioned in this thread. but here is my input

1) compared to fiat investing which requires bank accounts and regularly being taxed capital gains and/or income tax dependant on country. bitcoins offer a more choice and less stress method to invest.

2) compared to fiat investing, the % return is higher through bitcoin.

3) bitcoin is a whole economy. so getting away from thinking mining is the only way to make profit is a smart thing. especially if you dont want to be waiting upto a year just to get mining equipment. which causes your funds to be locked in, losing value.

4) knowing your helping bitcoin projects grow which will in the future enhance the value of every bitcoin you hold, is worth more then just the % return you get.

Not new to investing, and the % return is not higher than fiat investing compared to the risk. Cheaper blocks of Berkshire Hathaway or even just the S&P would get you a higher return than a 5% dividend, not to mention the risk is monstrously less. What you have for bitcoins is an expectation the value of bitcoins would increase along with the dividend. I agree it is less stressed, but if im taking a risk Im sure as hell not doing it for 5%. Not to mention eventually the price of the mining stocks you buy wont sell. People will buy in now, hold it and then try to sell it when the company isn't making any money and no one will buy, which ends up losing all the money made from dividends anyway. Im not really talking about legit companies with actual plans to expand and set up bitcoin infrastructure, im manly talking about all the stinker companies that people are buying up like hotcakes at the moment.

ah.. yea the 'stinker' companies.. i see your point.. i stay away from those.

but as for the more legit companies.. comparing the FIAT investments of similar return. having tax deductions straight off your profit hurts your re-investment amounts. where as keeping the return as bitcoin, your free to reinvest the full amount back into new ventures. and only having to claim tax when/IF you convert to FIAT.

what i have seen in the past though is that people buying these stinker shares dont hold them for a year. they only buy in just before the date to be eligable for the next dividend, get the dividend and then move onto another venture, then return ready for the next dividend.

thus instead of getting 12 monthly dividends by holding in one company for a full year. they can manage upto 48 monthly dividends if they time it right over 4 ventures. which is normally only worth doing on 'stinker' companies that you dont care about the long term future of.

Imo there are a lot of people who don't do the math on the Mining shares with fixed MH/s.

I understand what you're saying, I think some of the ASIC companies I know of are doing it just for a hobby really I know on this forum and don't really have much of a stake in it. What we need are some real companies that have plans, I know Kenilworth have gotten me interested because they're actually planning on doing mining and exploration in the real world.

Simple risk analysis in most cases.

Why not earn divs on bitcoins that you would otherwise hold on to? If you're confident bitcoin will hold its value, the only risk is the price of the shares dropping.

Other times it's about buying hashing power (which, at the moment, can work out a fair bit cheaper than buying and running mining equipment). Either way, you'd be taking a bet on future ROI.

just for fun, maybe as a practice

invested only 1BTC over several Investments, what i win on one Side i lose on the other Side,
so im confident by End of the Year it is probably 0 Win 0 Loss

but the early Bird Stuff delivers for sure most Profit.

Why aren't the winklevoss douchebags helping out Bitcoin if they love it so much. They invested only $ in Bitinstant for profit but they could make a Bitcoin company with all their money and sell shares helping out the whole community. I bet they don't even have a wallet. Giving money to Charlie only helps Charlie. Help us all and protect your investment. List a your own Bitcoin company and trade it openly.

 :-* Unprofessional business > meet <  Unsophisticated investor. ???

If there's a day where Bitcoins have an established strong foundation and starts to have a steady deflation, even an 1% dividend would be fantastic; definitely better than Coca Cola. Actually businesses no longer have to turn a profit to be viable. By that time though, I guess simply having BTC1 of savings would qualify somebody as rich.

Bitcoin is moving away from being community owned. The venture capitalist are buying most of the critical infrastructure of Bitcoin. None of us has any shares in this company and we are losing ownership of the Bitcoin community as a whole. Essentially, it's a 1% attack.

More and more companies should do what ASICMiner did and offer shares to the community before the other big money players come in.

Thoughts?

Agreed. I bet many people on this forum will look back in ten years and say to themselves, "shit, I helped start the next big PayPal and didn't get a damn thing for all my effort." Just wait until the proof of work system is taken in house by some giant investor that wants to secure their investment. The little guy that helped start it all will be left out in the cold unless they fork it and start Bitcoin v2.

Good question. Im not sure why as 90% of them never return your investment. You would do far better just buying BTC.

The problem is you aren't getting something for nothing.  You're paying an upfront share fee so as difficulty increases but your mining power stays constant, it takes longer and longer to recoup your initial outlay much less make any gains.  Granted, the potential share price appreciation needs to be accounted for as well.

Bitcoins are low risk now?   This forum is great for lols.

i disagree, bitcoin companies, ones that add value to the community (goods/services) instead of just transfer it (mining/gambling/trading) are barely breaking even. Well, legitimate ones that is.