Profit for one investor means loss to the other one?

[virendarnagpal]

Whether it is true or not that in markets like Bitcoin (crypto) ; one person gains only when the other losses some thing.  Suppose one person bought one Bitcoin for $5000 in January 2017 and sells in June 2017 for suppose $10000 he gains $5000 by selling.  Now the purchaser in June 2017 @ $10000 sells it for $6000 in January 2018 and as a result  he losses $4000.  So it is clear from the example that the profit of seller in June which was $5000 includes the loss suffered by the person who bought it in June 2017 and sold in January 2018.
If there are some other reasons for this profit / loss factor, I request other members to please share their knowledge with the platform because my opinion may be on the basis of partial truth and there may be other factors responsible too.

[mk4]

The other person not necessarily ends up with a loss. What if the purchaser in June 2017 doesn't sell it for $6000, and instead waits for the future increase instead like $12,000 for instance, so he still wins $2000 in the end. There's more to that in the markets, and it's much much more complicated (I think). But yea, whether we like it or not they're gonna be losers in the markets. There's always going to be those people who FOMOs in and panic sells out.

P.S. Correct me if I'm wrong

[A.Delaney]

Anytime you sell for more than you paid. Your taking someone else’s money.

[Wheelige]

A buyer is only losing if, when they become a seller, they are found to be bag holding and are selling at a loss. The OPs example only takes into account a declining market. If instead there is an increasing market then the 2nd buyer will make a profit selling as well. That may seem like its just passing the buck down the line until there is a decline in the market. What if bitcoin finds stability in the end, and is used as an everyday currency. This means that the buyers may have slight fluctuations, like in every currency, but not swings. I have found a number of people that believe Bitcoin is a pyramid scheme because you need to have people buy your bags in order to make your money, but this doesn't take into account the use case of Bitcoin and the end goal, which doesn't necessarily need stability but which would be greatly assisted by it.

[pooya87]

no, not necessarily true.
things are a lot more complicated than just one buying at $5000 selling at $10000 and the other doing the reverse. maybe the first investor buy at $5000 and sells at $6000 and the second one buys at $6000 and sells at $7000 and both make profit.
it is not a game to have only 1 side winning and the other losing. of course there are always some who make mistakes and lose money but that doesn't still mean they have to lose in long term.

[joanshu]

Your concept is wrong profit for one does not mean it is a loss for the other investor.As you said in your statement if a person make investment for 5K USD in 2017 sell for 10K it is true that he will gain profit and if someone buy for 10K need not wait till January to sell off at loss in fact if that person did not have patience to wait for the market to grow he should have already sold his investments when it was at 20K USD instead of selling them off at loss

[cizatext]

Bitcoin trading come with it own risk and if you are not smart enough to calculate the market you may end up losing but when you are smart to know when to sell or hold then you will attain some level of profit, it also true that the lose of one means profit to another because if one does notblose the other will not gain.

[amishmanish]

Whether it is true or not that in markets like Bitcoin (crypto) ; one person gains only when the other losses some thing.  Suppose one person bought one Bitcoin for $5000 in January 2017 and sells in June 2017 for suppose $10000 he gains $5000 by selling.  Now the purchaser in June 2017 @ $10000 sells it for $6000 in January 2018 and as a result  he losses $4000.  So it is clear from the example that the profit of seller in June which was $5000 includes the loss suffered by the person who bought it in June 2017 and sold in January 2018.
If there are some other reasons for this profit / loss factor, I request other members to please share their knowledge with the platform because my opinion may be on the basis of partial truth and there may be other factors responsible too.

That is the greater fool theory. That is the case when people are trading without knowing the intrinsic value of something.

If the ability to own an innovation that allows you to make financial transactions free from third-party control and disturbances is not worthwhile to you, you should probably not invest in bitcoin.
If you think that bitcoin has the ability to make our society more open, our banks more compliant and wealth distribution better, then you are welcome to inform yourself about it and invest what you can afford to lose.

Bitcoin is the only crytpocurrency with this level of underlying infrastructure, tested under extreme conditions already and a huge community of adopters and developers. None of the others have even approached the scale of usage. Bitcoin has been there, done that.
As crytpo gains momentum, bitcoin will lead the charge. That is its intrinsic value and you should try to increase your holdings without risking your economic well-being.
We are at the cusp of great changes and its your responsibility to inform yourself and make an educated decision. In the greater fool theory, its the foolish who lose.

[HabBear]

The other person not necessarily ends up with a loss. What if the purchaser in June 2017 doesn't sell it for $6000, and instead waits for the future increase instead like $12,000 for instance, so he still wins $2000 in the end. There's more to that in the markets, and it's much much more complicated (I think). But yea, whether we like it or not they're gonna be losers in the markets. There's always going to be those people who FOMOs in and panic sells out.

P.S. Correct me if I'm wrong

This is spot on. And particularly so because at the time of the trade no one can know what the future holds. No one knows if they have just committed to being on the winning or losing end of the price performance and what makes one a loser of a weeks time (meaning the price goes down in the first week after the trade) doesn't mean that this person is a loser in a months time (because the stock price could go up after initially be down in the first week.)

[Kakmakr]

Is this not the basic building blocks of any commodity that are bought and sold on open markets? We are dealing with a market that are based on supply and demand. <prices will go up and down> It is the traders choice <nobody is forcing him or her> to sell at a profit or a loss.

Some people buy bitcoins on credit and if the price does not increase or double it's value, then they are forced to sell those coins at a loss, because they have to pay back that credit. <The choice to take that risk was on their shoulders>

[BrianBrianBrian]

Are you familiar with pyramid scamming? They are quite the same, though I think bitcoin is more appealing for the people.
Because they both have the chance to earn, it just differs on how much.
So, the main deciding factor in this kind of business is how willing are you?
How willing are you to wait, how willing are you to invest and take risk, and etc.
Besides, our system is build in that kind of system. Laborers works hard for a low wage while their bosses earns a lot for their work.
Make sense right? 

[vv181]

It's just hows the ways its work. Trading is a non-zero-sum game, if there's a winner there must be a loser. At some points, it does not matter how good the traders is they will have some losses. Its no way the traders will always have a profit.

[equator]

Whether it is true or not that in markets like Bitcoin (crypto) ; one person gains only when the other losses some thing.  Suppose one person bought one Bitcoin for $5000 in January 2017 and sells in June 2017 for suppose $10000 he gains $5000 by selling.  Now the purchaser in June 2017 @ $10000 sells it for $6000 in January 2018 and as a result  he losses $4000.  So it is clear from the example that the profit of seller in June which was $5000 includes the loss suffered by the person who bought it in June 2017 and sold in January 2018.
If there are some other reasons for this profit / loss factor, I request other members to please share their knowledge with the platform because my opinion may be on the basis of partial truth and there may be other factors responsible too.

I dont agree with you are this is partially right, what if the another user who bought in june 2017 @ $10000 sells it for $17000 in December 2017 itself that means he is also in profit. Who is greedy will only mostly make loss but who takes profit in short will always be in gain. So your theory wont work for almost everyone only for greedy traders it suits it.

[pawanjain]

The other person not necessarily ends up with a loss. What if the purchaser in June 2017 doesn't sell it for $6000, and instead waits for the future increase instead like $12,000 for instance, so he still wins $2000 in the end. There's more to that in the markets, and it's much much more complicated (I think). But yea, whether we like it or not they're gonna be losers in the markets. There's always going to be those people who FOMOs in and panic sells out.

P.S. Correct me if I'm wrong

I would say you are a little wrong here. This is actually a matter of Time complexity where one has to bear the loss of the equivalent profit made by the other. So in one case, the OP is right. If there is no buyer then you will not be able to sell your bitcoins at all and vice versa. As the future chain continues where the person from future keeps buying at higher rates, everybody makes profit but as soon as he sells at lesser rate ( for example: panic sellers) that amount is lost and indirectly reaches the person who bought it at lesser rate. So yeah, it is complex and yeah, one has to loose money so that the other can make a profit out of it(but as long as the price is going up , everybody makes profit).

[Mystica101]

I strongly disagree with this one, because if you're an investor and bought crypto at low price you'll sell it on your desired price where you'll gained profit and you have no plan of selling it if you'll lose more than you bought. Your only best plan to do is to hold it until you'll get back what you have spend and ofcourse a little or more profit from it but in trading your opinion is applicable I guess.

[krishnaverma]

Some people do loose money especially as it has evolved now. People investing at current levels have more chances of getting burnt than those who took the risk at initial stages. The only solution I see to this is to invest for long term. If you are waiting for at least 6 months after investing, Bitcoins will not disappoint you. 

[Pasadoble]

So moral is that when you are buying in low price you should hold and sell in the high price. If the second person would sell coins in the end of December, he/she would get profit,  or if he would not sell and wait until February when price at least the same as it was when he was buying. So it is about making wise decisions

[richminded]

It’s hard to say that but I think investing or trading is really a cycle. Yes, one will loss and the other one takes profit. But for me, It doesn’t matter if I make profit and someone loss Its not my problem anymore because I am just doing what’s on my strategy so if people make loss, then the problem is with him.

[penig]

You dont realise a profit or loss until you sell something.  Profit for one investor means a cost for another, which may be a profit or loss in the future. If something has utility, then there may never be any loss, or a purchaser may evaluate their gain in ways other than simplistic $ profit/loss.  i.e., buying food, transportation or shelter.

[bug.lady]

Whether it is true or not that in markets like Bitcoin (crypto) ; one person gains only when the other losses some thing.  Suppose one person bought one Bitcoin for $5000 in January 2017 and sells in June 2017 for suppose $10000 he gains $5000 by selling.  Now the purchaser in June 2017 @ $10000 sells it for $6000 in January 2018 and as a result  he losses $4000.  So it is clear from the example that the profit of seller in June which was $5000 includes the loss suffered by the person who bought it in June 2017 and sold in January 2018.
If there are some other reasons for this profit / loss factor, I request other members to please share their knowledge with the platform because my opinion may be on the basis of partial truth and there may be other factors responsible too.

You are perfectly right that transacting is a game with negative expected return. Why is that? Because the only sure winner is the exchange or broker who takes profit from percentage or constant fees. Bitcoin is still different, but if you take forex, than the next winners are big corporate investors who have their infrastructure enabling them a very fast access to that market, they can make arbitrage or take positions increasing liquidity which give them profit because they are the very first to do it. The rest of investors don't have those opportunities, they are to slow, and in the long run they lose (negative expected return).

In bitcoin the expected return is still negative, but with current influx of money into bitcoin you can bet against the increase of the price (aka hodl). It may be a good bet, I admit. But chances are, of course, that you will lose. In that case the winners will be the guys who sold when it was still high and maybe will buy on the next deep.

Remember, that the expected return is negative, what means that it is not "when you win somebody must lose", but rather  "somebody must lose some more when you win", and of course, "when somebody wins you lose some more".