People buying bitcoin with their hard earned dollars, even though they don't understand it and feel in their hearts that something is wrong, would do well to remember James Cordier of OptionSellers fame, now out with a new book.
James preyed on old folks who didn't understand options, luring them in by talking up the potential for outsized returns. He appealed to people's greed.
If you were in the industry and traded nat gas, you could scream from the rooftops that shorting nat gas by naked selling call options was a widow maker trade, and "investors" wouldn't listen because they were making great returns.
One fine day, James blew up. Worse - the managed accounts held negative balances and his clients had to put up additional collateral beyond what they had invested. Many people got wiped out.
There are people on FinTwit who are taking out credit card loans to buy bitcoin and encouraging others to do the same. 'Cos fiat - like natural gas - always goes down in value.
There is no point in talking sense into these folks. Best I can do is provide some facts and logic, which I know from experience isn't enough to overwhelm greed at the prospect of getting rich quick.
MicroStrategy (MSTR) is the new OptionSellers. History repeats because, as Einstein reportedly said:
"Two things are infinite: The universe and human stupidity; and I'm not sure about the universe."
Some say they'll get out before it blows. Terra Luna investors thought the same, before it went to zero in a matter of 5 days. Risk happens fast.
Waiting until the bubble bursts is as foolish as dancing on the deck of a sinking ship until the last lifeboat starts filling up.
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Good Trading!
Kashyap