One of the key risks of crypto is regulatory. China cracked down on all crypto activities not too long ago, primarily because it was getting ready to issue its own digital currency. Other major economies are likely to do the same when they issue their own CBDC (Central Bank Digital Currency). US will probably be the last major economy to issue such a currency for a variety of reasons, but it will have to do so eventually.
I can’t speak for Zimbabwe’s currency. The dollar is a fiat currency and does not have intrinsic (probably a better term than inherent that I used initially) value per se. As legal tender of the United States however it has calculable value as our tax dollars are expected to be paid in USD. Maybe @EconPop can expand on currency theory.
Ford and Tesla absolutely have intrinsic value. They both have tangible assets, including loads of cash. All of those assets divided by the number of outstanding shares result in a number called Book Value. As of the moment I’m typing Ford’s is $8.68/share and Tesla’s is $27.11/share.
I’m not saying there can’t be a market for things with little or no intrinsic value. We’ve done that forever with gold. The problem is the greater fool theory is the only thing that props up the price. There’s no objective metric to base valuation around for cryptocurrencies. Buying crypto is like buying baseball cards.
This, in my mind, is the biggest risk to crypto. Oddly, that was Ray Dalio’s main complaint too. I guess FOMO got the best of him. Blame Prime at zero.
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Interesting example as Tesla share price is currently $1,060. So trading at 39 times book. I would suggest that is just as speculative as almost any asset class or individual investment you could find.
I recently bought a small amount of crypto just for fun. I’m not a gambler and would consider myself risk averse, but a millennial in my office convinced me to buy in. The majority of my investments are in index funds. If I make some money, great. If not, then that’s okay too. I also love that the market is 24/7.
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Oops, my user name isn’t my profession. I chose it because my son intended to major in Economics at the time I joined CC. Mostly I’m just a bum - Maybe I should rename myself BumPop?
I’ve read a lot about economics, economic and social, and theories and papers and such, but I’m just an amateur. I’ve read a bit on digital currencies. I wouldn’t presume to know enough about it to try to give any meaningful advice.
BTW, you nearly gave me a heart attack when you mentioned F at $8.68. It’s actually in the $15-$16 range for the past few weeks. A lot higher than the $5 I bought it at in 2020. 
EDIT: Oops, I just realized you weren’t listing the actual stock price. Nevermind me.
I generally leave others people’s investment to other people. There are so many strategies that work and so many that fail, and sometimes the same strategy works and fails. Now, if you want advice on your fantasy football team, I’ll give you all the questionable advice you can handle.
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I certainly think it is. I own it indirectly through an index fund, but I don’t buy any individual stocks anymore.
First, sorry I made that assumption. 
My strategy is pretty simple, save hard, diversify widely, and hold for a long time. That has a very robust track record of success for wealth building.
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I’m laughing because I’m recalling Ron Paul giving his audience what it dreamt of on a campaign stop: phrases in a blender, punctuated by “Austrian economics” and “gold standard”, not that the assembled had any clue what these things were. Boy, were they happy.
The dollar has the value accorded to it by the phrase and, so far, the fulfilled promise of “by the full faith and credit” (of the US government). Which is substantial.
There’s a fond belief among many SV types that the nation-state is, like, so yesterday – and it is. But what’s next is supranational government, not digital anarchy (or the benevolent dictatorship genuinely imagined by a contingent of those SV types – the idea here is that the smart people (we won’t get into how that part’s decided) should just run everything, a riff on the technocracy of the '30s that eventually brought us Vietnam). In the meantime the same SV types don’t seem to notice that the ground under their feet, the thing that makes the space for their enterprises and protects them and gives them customers, is the nation-state.
Engineers, good for lots of things. Governing doesn’t seem to be one of them.
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This could be misinterpreted though I like the quick transition.
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Plus, could you imagine the volatility of a currency tied to a relatively scarce and easily manipulatable thing like gold? Think inflation is bad now?
It is today. There was a time when it Wasn’t Worth A Continental. 
Fiat currencies are fine, depending on who is doing the…um…fiating. The US is not Zimbabwe nor the mysterious Mr. Nakamoto.
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Totally. All you can do is stack the odds. When it comes to bets I’d place on Zimbabwe vs crypto, though…boy, that’s a toughie. Some of the crypto crews have very stable governments and economic infrastructures behind them, but you can bet on them to do something large-scale stupid, and no good likelihood that their countries would bail them out unless their investment banks were in deep. On the other hand, you get fragile/unstable and a different kind of stupid. So I guess it’s really a question of battling stupidities, which one you mind less.
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Like the dollar until 1971…
If you are unfamiliar with FX markets or this history it’s worth the time to read this. Particularly as inflationary pressures are starting to build and our balance of trade imbalances are highlighted by cargo ships lining up off our coasts.
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It’s been mentioned here but not much–aren’t any of you or your family who are investing at all concerned about introducing a new level of environmental threat? Can we really afford to push climate change that much further for some individual (possible) gain?
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This article offered the most thoughtful and balanced response I had previously seen produced…
https://www.google.com/amp/s/hbr.org/amp/2021/05/how-much-energy-does-bitcoin-actually-consume
Well – I think the argument HBR’s making here is pretty specious. Essentially it’s a “yeah, but is it worth it, and what kind of energy, anyway?” This is coming from a poorly-thought-out notion that so long as it’s renewable, it’s fine. But “renewable” is only one part of what we need to do, something lost on people who’re like “great, let’s just blanket the place with solar/wind/etc. and we can keep amping on up.” Renewable comes at other environmental costs, and end of day there’s a limit to the amount of energy we can pull away from other systems. Keep in mind that the energy’s doing something now, and when you capture it, it stops doing that other thing.
That’s a very large amount of energy to consume for disruption.
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Says the person living in a first world country who has already reaped the benefits of excessive consumption. As the author points out the perspective is different “If you are one of the tens of millions of people using it as a tool to escape monetary repression, hyper inflation or capital controls”.
It is a matter of perspective.
No one here is in that category.
And that sounds like a pretty specious, “it’s not us, it’s just purely benevolent for OTHER people” curtain to hide behind.
Also, arguing, “well we’re already using a ton of energy, so hell with the climate anyway” is problematical. Let’s remember we are not the only ones who will be threatened by climate change, it’s more likely going to be those millions of people you are referencing.
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I don’t invest in cyrpto-currencies but my son started mining Ethereum in high school using a robust gaming desktop he built with his friend. He did ok considering he didn’t put any of his own cash into it. Our electric bill definitely increased though. My wife was afraid he was going to burn out his new computer or burn down our house! You could hear some type of fan or processor in the computer running in overdrive all the time.
I saw this as I came in from hanging laundry on the line.
I think you’re arguing at cross-angles here. It’s precisely the rich countries that need to reduce consumption. By a lot. Fast. While we got here by tearing it up, that’s not going to work again; there isn’t enough atmosphere for us to get away with it. So growth has to come in other ways. Pumping huge energy into currency games run by rich-country people is not helpful in that effort.
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Everyone in our country has reaped the benefits of consumption. Some more some less but with few exceptions a poor American is far better off then all but few who live in third world or repressive countries.
So only rich countries should stop participating in Bitcoin? Are Bitcoin mines based primarily in the US? Please explain.
“ I saw this as I came in from hanging laundry on the line.”
Lots of countries where people have neither laundry nor line😀