Crypto stocks in VTSAX?

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Ryan_Colorado
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Crypto stocks in VTSAX?

Post by Ryan_Colorado »

I have no interest in speculating on crypto currencies or the traded companies that might be behind them. I don't understand them enough. But I'm wondering if there's a point where the rise of crypto-tech and currency will start to have a broader market influence. Thinking banking stocks, transaction-related hardware, and online markets where crypto will become a more broadly used currency. Are we headed there? Are we already at that point?
bogivan
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Re: Crypto stocks in VTSAX?

Post by bogivan »

Yes, my thread You are Probably Invested In Bitcoin Now was/is trying to track the percentage of current exposure you get to Bitcoin within VTSAX.

Now that Coinbase should be doing an IPO next year, that should be another large chunk of exposure to crypto - assuming VTSAX eventually starts holding some shares.
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retired@50
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Re: Crypto stocks in VTSAX?

Post by retired@50 »

bogivan wrote: Thu Dec 17, 2020 5:27 pm Now that Coinbase should be doing an IPO next year, that should be another large chunk of exposure to crypto - assuming VTSAX eventually starts holding some shares.
I think Coinbase is more like a banker, charging for the exchange into and out of crypto currencies.
Coinbase is available in 32 countries, has served over 20 million customers and exchanged over $150 billion in digital currency.

The company doesn't makes its money directly from Bitcoin, but from fees incurred when users buy or sell their currency through its Conversion Services.
When buying digital currency, fees are added to the amount entered to arrive at the total for the order. For example, if a users enters $100 USD as the amount to buy, and the fee is 1.49 percent, their total would be $101.49. That total would be charged to their payment method and they receive their $100 worth of Bitcoin.

When selling digital currency, Coinbase fees are subtracted from the amount entered to arrive at the total. For example, if a user enters $100 USD as the amount of Bitcoin to sell, and the fee is 1.49 percent, their total would be $98.51. Their $100 worth of Bitcoin would be removed from their Coinbase account and $98.51 would be credited to the selected payment method.
Source: https://vator.tv/news/2018-05-18-how-co ... make-money

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nisiprius
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Re: Crypto stocks in VTSAX?

Post by nisiprius »

Ryan_Colorado wrote: Thu Dec 17, 2020 5:22 pm I have no interest in speculating on crypto currencies or the traded companies that might be behind them. I don't understand them enough. But I'm wondering if there's a point where the rise of crypto-tech and currency will start to have a broader market influence. Thinking banking stocks, transaction-related hardware, and online markets where crypto will become a more broadly used currency. Are we headed there? Are we already at that point?
How would we know, why would it matter, and what would a prudent index investor do about it?

Are rare earth minerals starting to have a broader market influence? 3D printing? How did the discovery/development of the fast Fourier transform in 1965 influence the stock market? Did bubble memory have a market influence? How did much market influence to communications satellites have?

If the crypto fans are right, crypto will just make everything better and all indexers will benefit. If the crypto fans are wrong, they won't benefit from crypto but they may benefit from some other technology they don't even know the name of, and they may already be holding the stocks of the companies that will be the big winners from it/
Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness; Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.
Topic Author
Ryan_Colorado
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Re: Crypto stocks in VTSAX?

Post by Ryan_Colorado »

I guess it's ultimately a question of niche vs market driver. In 1991 there were three oil companies on the DOW, and now there is only 1. There's more banking-related stocks in the DOW now too. (Admittedly the DOW might not be a great example).

Bogivan - I'll read that thread. I'm not advocating action or some sort of investment movement. I just think it's curious and interesting.
drumboy256
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Re: Crypto stocks in VTSAX?

Post by drumboy256 »

Lol, I mean, of all companies to be worried about.
Promise is one thing. Fulfilling that promise is quite another. - Sir Alex Ferguson
cogito
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Re: Crypto stocks in VTSAX?

Post by cogito »

What many of these companies like Paypal and Bitcoin are doing is actually very savvy. They negotiate with the exchanges to book large quantities of Bitcoin, announce a big move into the crypto space, which drives up the price quite a bit, and then they sell it back to their own customers at an inflated valuation. I'm guessing this can go on for a while.
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