A word usually has more than one meaning. It all depends on the context. Words trigger emotional reactions. Negative or positive. The word “speculation” is used in the financial world. it is definitely one of the most controversial. The speculator ???? usually he seems unprincipled to be greedy. On the other hand is a “speculative” ?? It’s a bandit den. The â ???? Speculationâ ???? it is in contrast to the â ???? Investmentâ ????. Investing is a much more noble activity. Hence, it is practically an insult to the sensitive to say that Bitcoin is a speculative asset. Is Bitcoin Really a Speculative Asset?
In his books, Ben Graham, the father of fundamental analysis, has depicted speculation and investing as opposing practices. Here we’re talking specifically about stocks. Graham said a stock should be viewed as productive business. What’s the approach? Well, a company generates income. This is the production. An investor buys a company because he wants to enjoy that income. In fundamental analysis, the study of income is extremely important as it shows us the value of the company. The ideal investor never sells his company. And it recovers its investment with production.
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According to value analysts, when it comes to stocks, the speculator is not buying for production. You are actually buying today to sell at a better price in the future. Your intention is to make money from the eventual sale of the company. And he’s not very interested in keeping the business for the income. Let’s say we buy a property to live in. In this case, we buy the property primarily based on its value in use. From a business point of view, this property is actually a liability. Let’s say we buy it in order to rent it out and earn a steady income. In this case we speak of a productive value. That makes the property an investment.
Suppose we buy a property now to make money on its increase in value over time. In other words, we don’t buy property to live in. And we don’t buy it to put into production. We buy it with the intention of selling it at a better price at a later date. In this case, could we say that we are “speculating”? in the real estate market.
Why do speculators have such a bad reputation? Suppose many people buy real estate for speculative purposes. So what we have is a bunch of empty buildings. These speculative purchases drive up market prices. And apartment hunters suffer from this inflation, which is mainly caused by speculators. The reporter receives the note and sees the chance to cause a stir: “Thousands of families homeless thanks to speculators”. This is the connection between speculation and immorality.
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Is it bad to buy a property with the intention of selling it later for a better price? I mean, is it bad to speculate in the real estate market? Of course not. Let’s talk about art now. The art market is essentially a speculative market. While it is true that many collectors buy art for its aesthetic and historical properties, the truth is that auctions are applauded not when the work is revealed but when the sale price is announced. A work of art is a non-productive asset. And its use value is controversial. Their value is symbolic and aesthetic rather than useful. That said, collectibles as assets are inherently speculative. Is the art market immoral?
I decided to write this article to clarify the term “speculation”. In my writing, I usually refer to Bitcoin as a speculative asset and thanks to this practice, I often receive angry messages from crypto roles. My intention in using the term is not to discredit Bitcoin. It’s easy to note that most of us buy Bitcoin with the expectation that the price will increase over time. That said, Bitcoin is not a farm, a gem, or a factory. It’s code that represents a rate of change. And we owners expect its price to rise in order to allow our equity to grow. It’s that simple. It’s not the end of the world. Calm down, cryptocurrency.
A reader wrote to me on my Twitter account (@GusGo): “It’s not speculative, it’s volatile. If it were speculative, it would have an indefinite trajectory. This is not the case; in the long term it is increasing by an average of 200% per year. This is because it is replacing gold as a store of value.
Obviously, this reader misinterpreted my use of the term “speculative”. For example, gold is also a speculative asset. In fact, any distressed asset bought with the intention of selling it at a better price in the future automatically becomes a speculative asset. The observed increase of an average of 200% per year. claims that it is a speculative asset that offers very good returns. That’s why I like Bitcoin so much. The term â ???? Store of valueâ ???? it is used for psychological reasons. In other words, it sounds more prestigious than “speculative”. But let’s face it, it’s a euphemism to please the sensitive. It’s not sex. It makes love. It is not death. It’s about switching to a better plane.
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The next time I write that Bitcoin is a speculative asset, I’ll include a flower emoji at the end to loosen things up a little. I hope this won’t break a glass. What’s the problem with wanting to make money? I confess that I love it when the price of Bitcoin goes up. Personally, I don’t see a problem in that. Saying that Bitcoin is my store of value doesn’t make me cleaner. And saying that I’m buying bitcoin for speculative purposes doesn’t make me a bad guy. Basically it’s semantic variations.
The code is not eaten. The code does not produce. The code didn’t see me. The only thing it offers me is an exchange fee. When the price comes down, I buy fewer things. And the rate goes up, I’m buying more things. For me this power is â ???? buy more thingsâ ???? I am quite interested. I buy bitcoin to grow financially. To be able to meet my needs, give me the life I want and indulge myself in luxuries when I want. Bitcoin is a means to an end. The end is my life When changing the speculative asset ???? for a ???? Store of valueâ ???? makes you happy, go on. Potatoes, potatoes.