Just because prices are high, doesn't mean that is a good investment.

[AicecreaME]

I have seen this kind of argument that just because the price of a commodity is high means that it is a great investment.

To a certain extent, a high price often means that investors have faith in the fundamentals of the commodity (For example, one of the most expensive shares in the American stock market is Berkshire Hathaway, which has consistently outperformed the S&P 500 since 1965).

However, there is the potential that high prices don't actually show genuine interest in a stock, but rather frenzied speculation on a commodity that has poor fundamentals.

A prime example of this happening was at the dot com bubble in the early 2000s.

What happened was companies that were, to be frank, pretty shit had managed to get multi-billion dollar evaluations because investors believed that the internet had fundamentally changed the business landscape forever.

As a result, people quit their jobs to trade full time, media stoked up the desires of getting rich and everyone believed that this gravy train will carry on rolling on and on forever.

Then the combination of increased interest rates, the majority of the aforementioned companies burning through cash and investors becoming aware of it all lead to the technology and by extension the entire economy to collapse while a few key members making big money.

This entire situation was the very exemplar of the title as companies that had billions of dollars turned out to be worthless at the end.

Be vigilant.

In short term, don't just follow the hype and do not FOMO. Not everything that you see going an uptrend in the market chart is worth the investment. Most of the coins in the market that are going up can be a really good form of investment but always do your own research about something that you'll put your money in. Make sure to check if that certain coin has a strong project ongoing or strong planned projects ahead that could establish the foundation of the coin. Check the white paper of it to ensure stability and reliability. If the coin does not exhibit a long-term goal, make sure to put that in mind too, otherwise, you'll lose money. Because there are coins that are just ideal for short-term investment or spot trading. If you fail to remember this, consider your money gone. Instead of "buy low, sell high" you might end up "buy high, sell low" just to get back some of your capital.

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[mu_enrico]

And with crypto, who the hell knows what the real valuation should be for any of them?  Your guess is as good as anyone else's.  I think the crypto market is probably the best example of an efficient market, because a coin is worth exactly what the market says it's worth at any given point.

Well, I would like to disagree.

In a perfectly efficient market, all information about a particular coin will be available to everyone in it.

This is in stark contrast to the actual information that most coins show, which is often very scant.

If crypto is an efficient market, then Bitconnect, OneCoin and all of those other scams wouldn't have got to the size they had.

You know EMH is just a theory; In reality, there's no such thing as perfectly efficient market where there's no overvalued and undervalued stocks. I think maybe semi-strong is the highest attainable form of efficiency in the US stock market.

Previously my point is to distinguish commodity vs stocks. You can see the quality (present) by its price tag since the stock market is "reasonably efficient." Try to do that in crypto and you'll get busted real quick.

Crypto market isn't even a weak form per the definition since up to this date I believe it's possible to earn excess return using historical data. Furthermore, publicly available information is not robust to the point that some of "the team" are anonymous, no accountability, etc.

[Kittygalore]

That won't apply to investing because assets appreciate overtime but at the same time, people are still investing in those so-called expensive investments, they're bound to grow, that's why you need to get in as early as possible.

[ethereumhunter]

But in crypto, if you invest in a high price coin, that price can get down anytime, and that will happen too with bitcoin. But the difference is bitcoin price can rise and make a new ATH while the altcoin needs longer to reach the new ATH. If you want to invest in altcoin, you need to wait for the big bear run so you can buy many good coins at the lowest price. But investing in bitcoin is worth doing, even if the price now is at $51k. We can only suggest you research before you do something with the investment.

[iv4n]

Just recently I saw about "greater fool theory":

The Greater Fool Theory is the idea that, during a market bubble, one can make money by buying overvalued assets and selling them for a profit later, because it will always be possible to find someone who is willing to pay a higher price.

Interesting logic, and when you give it a thought it's exactly about people who are just buying at high prices... what is expensive must be good, but that is not always the case! This headline reminded me of this, it's something that happens all the time, with many people... draw your own conclusions from that!

[Shenzou]

I think that you have a point, bitcoin and cryptocurrency have gained their popularity from the fact that its price is high and that same high volatile price is what got people hooked on it and investing millions of dollars in it, but this came at the cost of forgetting the true nature of what it is, because at first people invested in it for the concept and the fact that it is a new currency that will replace fiat, but now people do it just for the money and the profit and they don't care about it.

[michellee]

I think that you have a point, bitcoin and cryptocurrency have gained their popularity from the fact that its price is high and that same high volatile price is what got people hooked on it and investing millions of dollars in it, but this came at the cost of forgetting the true nature of what it is, because at first people invested in it for the concept and the fact that it is a new currency that will replace fiat, but now people do it just for the money and the profit and they don't care about it.

indeed the main orientation about cryptocurrency is profit. until now there will be more people who view crypto as a tool for profit rather than as a currency. but that's the real fact and we have to be able to adapt to it. there will be more people who know about crypto, of course, more and more people will invest, and that means profits for early investors

If they can see the chance to make a profit, they will not lose that chance instead will trying to get involved. The more they can involve, the more the chances they can make money but they need to learn more to get that way. Although the price is too high to buy, if they decide to invest monthly or some certain time, they will have the chance to make a profit in the future. It is about how consistent they can invest in crypto so their profit will be bigger.

[Zanab247]

When the price is high, it mean so many things in the market. It mean it is time to invest in a particular potential project that has so much to offer in the future. The moment the price of bitcoin increase there are many sellers and few buyers in the market who will confirm the price to other investors that is good to invest or not.
Many professional traders who really understood investment, that when the price of bitcoin increase does not mean is a good investment until the end of the investment to see what will be the out come of the results. When the price is high and you purchase a coin, is either you make profit or loss in the investment.

[ninkdwi]

An asset in general having a price doesn't automatically mean good investment, but it doesn't automatically mean it's a bad investment either. It's simply just that solely looking at the price itself is a really bad metric to make decisions upon.

technically all depends on the assessment and research that we do.
It is true that any form that has value is not necessarily a good thing but it is also not necessarily a bad thing because it really depends on what is being done both in the project and in others.
but of course here when it comes to assets we must be able to really identify because that's the most important thing.

[fiulpro]

Price is definitely a very important factor when it comes to an asset, in general it's not the only thing to look for but you also have to understand the fact that it shows the overall economic health of the company.

Other than that there are few things that one can look for as well.

1. Profits
2. Graph
3. Sales
4. Market value
5. Growth rate
6. Legal issues
    
At the end of the day if the company is strong thus the whole price per asset would be strong as well, no doubt, I do think price is defiantly important, also the profit percentage can be calculated as well, you can look for a fixed amount of time in the past and then calculate the overall profit the people made and how the price rose.

Just do final - initial value and do it for fixed intervals, this way you would have much better idea of what you are getting into and would also be able to get a hang of the Volatility.

[el kaka22]

The amount of people who quit their jobs because they believe they will continue to make the type of profit they will make forever is way too high and it is very dangerous as well. People hate working nowadays, it is not like back in the day and we are not getting what we are worth, it is obvious that 90%+ of the world works for less than what they worth, and that is the biggest reason why we have so many wealthy people while having 100 million more than that poor people, for every billionaire there is 100 million people who are under poverty level.

So, people try to quit their job as soon as possible since it doesn't pay what they are worth, yet they do that as soon as they make some profit on crypto during bull run, and realize their mistakes during bear run and that is why it is such a huge problem, I do not know what could happen to prevent this, but it is definitely an issue in crypto.

[wxa7115]

Well.... Bitcoin and Crypto currencies has now been around since 2009 (12 Years) ..... so if this was one of those "Dot Com" bubbles... it had to burst a long time ago. The pre-bubble period of the Dotcom bubble went from 1995 to 1997, the actual bubble took place from 1998 until March 2000 and the bubble-burst from March 2000 until the low-point of the NASDAQ score in October 2002... +/- 6 years.  
Source : https://www.grin.com/document/197166

Berkshire Hathaway are one of the most desired shares in the world.. because one of the richest men in America owns most of it and stupid people follow rich people's recipe... but they never get it right, because they do not get the insider information that these rich people get.  

I think the point of the OP is to not fall into the FOMO that is present in all markets, especially this one, people see altcoins going up in value really quickly and they want a piece of the action as well without taking the time to think if that is what they should actually be doing.

Then the coin begins to go down shortly after their investment and they suffer losses they could have avoided if they just took the time to think for a few moments if what they were doing was right.

[Hydrogen]

Here is a chart of the inflationary dollar losing value over time.

Bitcoin is a deflationary currency. Which could mean natural forces dictate, it will trend upwards in value, opposite of inflationary assets like usd. Looking at a life history chart of bitcoin, it appears to represent the mirror opposite of the euro, dollar, bolivar, zimbabwe dollar and assorted inflationary currencies.

It could all come down to fundamentals. Printing increasingly larger quantities of something over time will devalue it, while printing increasingly smaller quantities of something will increase scarcity and value over time.

Of course there are rogue actors involved. China and central banks do not appear too fond of cryptocurrencies atm.

[Darker45]

Well, the most basic of all rules is that you do not invest in something you do not understand. Of course, you speculate, but it doesn't mean you do not understand it first. Speculation has to be founded upon informed analysis. Speculation is not merely wild guess. So a commodity or a stock, whether the price is high or low, has to be carefully scrutinized so that when you invest money in it, you are more or less sure that it will yield some ROI in the future.

However, I cannot speak the same of the crypto market. A meme coin, for example, whose development has been pretty much stagnant could suddenly rise simply due to a tweet. The crypto market sometimes defies logic.

[geegaw]

I think that you have a point, bitcoin and cryptocurrency have gained their popularity from the fact that its price is high and that same high volatile price is what got people hooked on it and investing millions of dollars in it, but this came at the cost of forgetting the true nature of what it is, because at first people invested in it for the concept and the fact that it is a new currency that will replace fiat, but now people do it just for the money and the profit and they don't care about it.

But those concepts have been blurred by investment thought, we've abandoned an innovative monetary theory of the future, we're just thinking about profits and when the meaning no longer retains an original shape, it will degenerate to the will of the investor. and although the original definition may have deviated from reality quite a bit, the value of bitcoin is no longer in the range of a currency but at least it shows that a very high price is very good, this meaning may not be for all investments, but it is a criterion for evaluating an investment

[LUCKMCFLY]

Well.... Bitcoin and Crypto currencies has now been around since 2009 (12 Years) ..... so if this was one of those "Dot Com" bubbles... it had to burst a long time ago. The pre-bubble period of the Dotcom bubble went from 1995 to 1997, the actual bubble took place from 1998 until March 2000 and the bubble-burst from March 2000 until the low-point of the NASDAQ score in October 2002... +/- 6 years.  
Source : https://www.grin.com/document/197166

Berkshire Hathaway are one of the most desired shares in the world.. because one of the richest men in America owns most of it and stupid people follow rich people's recipe... but they never get it right, because they do not get the insider information that these rich people get.  

I think the point of the OP is to not fall into the FOMO that is present in all markets, especially this one, people see altcoins going up in value really quickly and they want a piece of the action as well without taking the time to think if that is what they should actually be doing.

Then the coin begins to go down shortly after their investment and they suffer losses they could have avoided if they just took the time to think for a few moments if what they were doing was right.

They are very accurate and important opinions to digest, however it should be noted that when investing in the stock market, in real estate, there is a factor called time, under which most investors trust despite the fact that many things can happen in the market. future and it can all go down.

In the investment of Bitcoin and cryptocurrencies the whole concept changes, only the fact that BTC is taking around 3-4 years in its accumulation period + another period of bullish trend and / or re-accumulation to finally reach the distribution phase It is usually faster than any other market, apart from the ingredient of volatility.

Considering that a Stock Market investor can wait 8-10 years to see profits, the investor in BTC or crypto sometimes only has to wait 1,2 or 3 years to see a big profit.

[xSkylarx]

That won't apply to investing because assets appreciate overtime but at the same time, people are still investing in those so-called expensive investments, they're bound to grow, that's why you need to get in as early as possible.

Exactly, you either arrive early or late in investing so you got to do what you got to do in the time that you've invested you're money in, it's our fault after all that we've invested in something too late and now we risk loss because people at that point are going to sell to take some profit.

That is, indeed, why people are interested in it. However, due to the expensive price, I believe it will be quite difficult to purchase one as an investment, but if you are truly interested, it will be excellent for retirement. I'm not saying it's too late or anything, but the price isn't as low as it once was. Those who purchased it at least four years ago were fortunate because the price was significantly lower than it is today.

[perfect999]

I have seen this kind of argument that just because the price of a commodity is high means that it is a great investment.

Personally, I don’t think that having a high price is what makes an asset to be worth investing in. Before you start investing in any asset you have to face the fall understand what it is all about and no everything about it before you can consider it. The price doesn’t really matter that much because the developers can decide to just start from any price for the asset.

An asset can be worth less than $1 maybe due to the supply, and still be much better than an asset that has a price of over $100and even $1000. Take the cryptocurrency market as an example, you will see some coins that has a high price but a lesser market cap than those with a lesser price.

[pjwaffle]

That is not to say when low prices mean a good investment. That's why finding a good investment is sometimes so difficult, it's like predicting the future. What is trend identification?. What features will the project have or will the team be enthusiastic about continuing to develop in the future, new roadmaps and methods this will be difficult to find real projects and I don't think high prices mean a good investment .

[tabas]

That is not to say when low prices mean a good investment. That's why finding a good investment is sometimes so difficult, it's like predicting the future. What is trend identification?. What features will the project have or will the team be enthusiastic about continuing to develop in the future, new roadmaps and methods this will be difficult to find real projects and I don't think high prices mean a good investment .

It is difficult if you don't follow the trend. But if you've been a follower of the trend then that means that you're good as you are in determining what you must invest.
It's true that high price doesn't give assurance to tell that an investment is good. But if we're going to relate that with bitcoin, it's a different thing. There's always the separation and differences with crypto and traditional investments.