> In early November, Adrian Butkus, a 43-year-old father of two, put $600,000 — much of his life savings — into an account at BlockFi, a cryptocurrency trading firm. BlockFi had marketed the account as risk free, yielding 6.5 percent interest, more than Mr. Butkus could get anywhere else.
I'm glad he lost his money. It's like the Madoff people, people get greedy and somehow just assume they are smarter than everybody else. If it continued to go up, they'd be gloating about the returns they were getting and how great they were doing. They are basically criminals whose crime caught up with them. Just losing their money (which was mostly imaginary anyway) is the least punishment they deserve
[This was a serious reply but apparently not well received. The only other time I got voted to -4 this fast was when I poked fun at Rust users :) ]
Seems like you’re focusing your anger on the wrong target. Wouldn’t it be better to live in a world where you could be a bit foolish and not lose your life savings at a crucial time?
That doesn't make sense to me. If I took my life savings and bet it on a roulette system where I kept doubling down, and then lost and complained that i didn't know it was risky, should someone feel bad for me? A greedy ignoramus (lots of them) put their money into a ponzi scheme and lost it. That's not something that should be encouraged, or softened. People should learn that their actions have consequences.
There’s a reason roulette tables are illegal in most parts of the US. Being unintelligent should not be a justification for a life of misery. If we’re lucky, many of us will get older and lose some cognitive ability. I hope society maintains such safeguards into my twilight years.
You could argue the opposite. The accredited investor rule excluded a significant portion of the American population from participating in economic growth over a 20 year period. They are consenting intelligent adults, why does the government need to police their prowess over what asset classes they can participate in?
Note, I’m not arguing for wild Wild West rules, but it goes both ways.
Because many people do not have anything that could be described as “prowess” when it comes to money. Is it an a priori fact that the government should help? No.
How is exclusion helping for a largely non binary but on average positive integer?
And it gets even harder to defend if you slice thinner: are penny stocks ok for grandma to own or just individual Fortune 500 stocks? Or no stocks at all just indexes? Etc.
Further, surely you wouldn’t argue the same for lottery tickets right? That the consumers can’t understand the math and/or can’t calc the probability ex ante therefore the government should preclude them from participating due to low “prowess” (ignore the positive tax base component).
I’d be okay with a “drivers license” type regulation than a minimum net worth threshold regulation which just increases inequality in the long run and creates greater divisions in society.
Edit: it’s weird I can work at riskyStartupXYZ as a 22 year old but not easily “bet on it” succeeding, even though the later implies much less risk.
It's hard to have sympathy when their "foolishness" involves undermining the existing financial system because they don't like the government and they believe taxation is theft.
The irony is that they now have no problem going to the government (specifically the courts) and asking for help to get their money back. It's only government waste if it's not directly helping them.
Sucks to lose that much money (though he's likely young enough to recover from this loss -- I had to very nearly start over, for different reasons, at about that age).
Contrariwise, he was an idiot to make that "investment".
6.5% isn’t totally out of this world. He got scammed basically. Index funds are sold to us at 8% “guaranteed” return by the wise and conservative investors. I certainly hope he can recover some of the funds from these ponzi “entrepreneurs”
Edit: also as a reminder they had plenty of big backers lending them credibility in addition to funding https://blockfi.com/investors
You're catching down votes because your comment comes across as mean spirited. Yeah, this guy was greedy and dumb, but it really sucks for his kids. Others might also ask, if not for BlockFi, would he have pissed away his life savings?
Moreover, your comment shows the kind of hubris of someone who thinks they could never fall for any scam.
"Investing" in BlockFi was dumb, but it's funny in the year 2022 seeking negative real interest rates (roughly -2%) is supposed to be the obvious tip it must be a scam.
The fiscal policies at the fed and federal government really sent people chasing wild risk just to almost (but not even) break even.
> Others might also ask, if not for BlockFi, would he have pissed away his life savings?
Wild comment to make about someone who saved up $600k. You don't save up that much if you are the kind to "piss away" money. Expecting 6.5% return is not greedy. S&P 500's average return is around that
He got the money from selling his house.
And 6.5% is very cunning in that it's not significantly above what a bank would offer on a deposit (7-8% and even more are available in EU at least) but it's also not preposterous like 38% available right now on Hex. So I'm guessing he thought he was smart and NOT greedy by going with a lower return in exchange for perceived safety.
Not every country in the EU (27 countries) is also in the Euro area (19 countries) - some still have their own currency.
Interest rates for commercial banks are probably a little under the national banks' rate, which in turn is dependent on the inflation.
That's my point. When I said, "Moreover, your comment shows the kind of hubris of someone who thinks they could never fall for any scam. " I meant that its clear the guy was scammed and the OP is being arrogant and mean.
Upvoted. Adrian Butkus had near a million bucks in liquid assets, plus, one imagines, a house and all that, and is therefore near the top of the top of world wealth, and he pissed it away like an idiot. Let's not write any more sentences about this clown. Let's write things about honest poor people who could use some help.
Ordinarily this would be victim shaming / blaming. Though the endgame of crypto is dystopian. A reversion to centralized command economies where the gatekeepers of economic activity are early adopters.
Understand what you are putting your resources into, and how it measures against Kantian categorical imperative. It is difficult to be sympathetic to someone harmed by something that is harmful when universal.
One of the people interviewed portrays himself as a "seasoned investor."
Seasoned investors don't place all of their chips on high-risk schemes, whether it's trading penny stocks or crypto.
Another man who dumped $600k onto the bonfire said he did so in November, months after the dominoes started to fall. Did people actually believe anonymous Internet people claiming that "now is a great time to buy" or the "flight to quality" advice?
People get caught up in the market. Try being the guy who bought Amazon @ $135 in 1999 in 2000/1.
The market was signaling to many folks that this was legit. Known investors like AnderseenHorowitz were investing. Deloitte has a practice around it. Talk if ETFs entering the market are bad. FTX is attaching itself with branding relationships with Major League Baseball.
To people not getting it, it looked sort of like porn to VHS tapes back in the day. Crypto was built on Russian hackers and drug dealers, and going legit with Wall St.
I was surrounded by a bunch of people who made a lot of money on crypto. I still feel like an ass for losing much of and failing to capitalize on my $100 buy back in 2010. I netted a few thousand bucks instead of.. a lot more. But on the flip side, I think I’d feel guilty for profiting over the exploitation of others had I been able to cash in.
I assume that being desperate means needing to increase your money fast, crypto isn't really that kind of market unless you're in a highly volatile period which no one can really know or time.
Also, I would assume people speculating tens or hundreds of thousands aren't really desperate, they could just...keep the cash and insure themselves e.g.
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[ 2.1 ms ] story [ 122 ms ] threadI'm glad he lost his money. It's like the Madoff people, people get greedy and somehow just assume they are smarter than everybody else. If it continued to go up, they'd be gloating about the returns they were getting and how great they were doing. They are basically criminals whose crime caught up with them. Just losing their money (which was mostly imaginary anyway) is the least punishment they deserve
[This was a serious reply but apparently not well received. The only other time I got voted to -4 this fast was when I poked fun at Rust users :) ]
There's a difference between ignorance and stupidity
But would the world be a little bit nicer if they only lost, say, half of their life instead of all of it? Seems so to me.
Note, I’m not arguing for wild Wild West rules, but it goes both ways.
Is it practical? Seems like it.
And it gets even harder to defend if you slice thinner: are penny stocks ok for grandma to own or just individual Fortune 500 stocks? Or no stocks at all just indexes? Etc.
Further, surely you wouldn’t argue the same for lottery tickets right? That the consumers can’t understand the math and/or can’t calc the probability ex ante therefore the government should preclude them from participating due to low “prowess” (ignore the positive tax base component).
I’d be okay with a “drivers license” type regulation than a minimum net worth threshold regulation which just increases inequality in the long run and creates greater divisions in society.
Edit: it’s weird I can work at riskyStartupXYZ as a 22 year old but not easily “bet on it” succeeding, even though the later implies much less risk.
The irony is that they now have no problem going to the government (specifically the courts) and asking for help to get their money back. It's only government waste if it's not directly helping them.
Sucks to lose that much money (though he's likely young enough to recover from this loss -- I had to very nearly start over, for different reasons, at about that age).
Contrariwise, he was an idiot to make that "investment".
Edit: also as a reminder they had plenty of big backers lending them credibility in addition to funding https://blockfi.com/investors
He put his money in crypto. That is not being scammed. Thats just … nope
If you ever see someone selling a product with these features they are outright lying to you and are probably going to rip you off.
look up historical CD rates.
As they say.
Moreover, your comment shows the kind of hubris of someone who thinks they could never fall for any scam.
The fiscal policies at the fed and federal government really sent people chasing wild risk just to almost (but not even) break even.
Wild comment to make about someone who saved up $600k. You don't save up that much if you are the kind to "piss away" money. Expecting 6.5% return is not greedy. S&P 500's average return is around that
You should mention for which currency this holds, not mention a whole continent.
It’s mentioned in the article
Understand what you are putting your resources into, and how it measures against Kantian categorical imperative. It is difficult to be sympathetic to someone harmed by something that is harmful when universal.
Seasoned investors don't place all of their chips on high-risk schemes, whether it's trading penny stocks or crypto.
Another man who dumped $600k onto the bonfire said he did so in November, months after the dominoes started to fall. Did people actually believe anonymous Internet people claiming that "now is a great time to buy" or the "flight to quality" advice?
https://www.coindesk.com/markets/2021/03/03/the-decoder-have...
The market was signaling to many folks that this was legit. Known investors like AnderseenHorowitz were investing. Deloitte has a practice around it. Talk if ETFs entering the market are bad. FTX is attaching itself with branding relationships with Major League Baseball.
To people not getting it, it looked sort of like porn to VHS tapes back in the day. Crypto was built on Russian hackers and drug dealers, and going legit with Wall St.
I was surrounded by a bunch of people who made a lot of money on crypto. I still feel like an ass for losing much of and failing to capitalize on my $100 buy back in 2010. I netted a few thousand bucks instead of.. a lot more. But on the flip side, I think I’d feel guilty for profiting over the exploitation of others had I been able to cash in.
Ugh. Why? There's a difference between risking savings, retirement funds, and money you will need for shelter.
Really show how limitless is human greed.
Also, I would assume people speculating tens or hundreds of thousands aren't really desperate, they could just...keep the cash and insure themselves e.g.
The stories are sad but should be educational and not reinforce moral hazard: your money, your investment, your risk tolerance.