re: Why is crypto crashing?

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It’s “supposed” to be a currency.

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Is it? Try not to think of some of these things as only trying to replace the dollar, even if some people want that. It's much more than that. Maybe that's where some of the marketing has gone wrong or the message has been preached by the more libertarian side of the movement. Some people see it that way, and that's fine. Satoshi would probably agree them. I and many others look at it differently, and I think Satoshi would agree with us too.

It helped me to come around to it by thinking of various chains as software programs. Let's take Bitcoin. Bitcoin (the system) is essentially a piece of decentralized peer-to-peer transaction software. Whereas Bitcoin (the token) is the coin used to transact on that system in addition to the reward for contributing computational power to the system.

So yeah, to an extent, some of these things can be considered a currency, but don't pigeonhole it to that. Try and look at the bigger picture and separate out the system from the token. I'm not investing in the token. I'm investing in the system. Just like someone would invest in Adobe because they think Photoshop is going to be awesome and make Adobe (and shareholders) a lot of money, I'm investing in a crypto chain because I believe that chain will be the best in it's market and make me money.

TL;DR: Drop "currency" from "cryptocurrency" to try and see it from another perspective.

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Can someone offer a guess?

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Taxes would be my guess.

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Probably to avoid paying taxes as he will have to do when converting to USD. Technically he would have to pay taxes either way but sending a payment to you with bitcoin isn’t going through any KYC type company so he could easily get away with not paying taxes

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Gold is money. A one ounce gold coin is worth about 2K, but has a US dollar denomination written right on it - it says "fifty dollars"

If your guy wants your car for $20,000, he should convert his bitcoin to ten gold coins, hand those to you, and pay taxes on the money he spent: 20 x $50 = $1,000

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what if the day after you purchased it the artist died and the art's value went up 25%? the seller would be pissed. what if the day after you purchased it the artist got #metoo'd and the value dropped 25%? the buyer would be pissed. the art, the USD, and crypto is only worth what people perceive they are worth.

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The art is the investment. As an investment, It is supposed to have an element of risk. Investments are subject to value fluctuations and oftentimes wild fluctuations.

Currency, while also an investment, is currency and is suppose to be more stable. It’s used to buy stuff after all. That’s why I gave the example.

Here’s another example that might shine a big light on it-

Let’s say own a car dealership. You sold 10 cars yesterday for $ 1,000,000 in value all bought with crypto currency. Today thaf very same crypto currency lost 25% of its value. The dealer is holding the bag for a lot of money because he has to pay the manufacturer. Pretty stupid move eh?

Let’s say you sold your house for $1,000,000 and took crypto for it and it dropped 25% in one day after you sold it. Let’s say it dropped 25% the day after you accepted the offer! Ha! What a bad decision! You’re under contract and have yet to even get paid and the currency you accepted is tanking.

Cryptocurrency is akin to the Iraqi dinar or Venezuelan bolivar. The fluctuations makes it a bad choice to accept as currency and investment is pretty risky.

So these are just a few example of the risk of taking crypto for currency. I hope they open some eyes.

The other interesting aspect of crypto is that for each US investment in the currency, the exchange is made with US dollars. Why is that?

Bottom line with crypto currency-
It’s risky. Very very risky.

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It is explicitly called cryptoCURRENCY

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I must have missed in the Bitcoin white paper where Satoshi called bitcoin a "cryptocurrency." Many argue that the term "cryptocurrency" shouldn't be used, and I'm one of those. It's misleading in that the technology is so much more than that.

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What is needed is an electronic payment system based on cryptographic proof instead of trust, allowing any two willing parties to transact directly with each other without the need for a trusted third party.

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-From the bitcoin whitepaper

You are failing to understand the difference between the network/system and the token/coin. Bitcoin is a network and it's also a coin. Some people speculate on the coin, while others speculate on the network.

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Investments by their nature need to have value backed by something meaningful,
Useful, intrinsic value. Seems to me that crypto has value only on the “perceived” level

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Early on, some people didn't see the value of the internet, so they didn't invest in things like Amazon or Google. The same thing is happening with crypto. Some people see where the technology is going and are investing in it while others don't see the value of it and dismiss it. Most crypto projects will not succeed, but a few will and they will go on to be the dominant players in Web3.

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Bottom line with crypto currency- It’s risky. Very very risky.

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I 100% agree with you on this. That's why it's part of a diverse portfolio for me.

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Let’s say own a car dealership. You sold 10 cars yesterday for $ 1,000,000 in value all bought with crypto currency. Today thaf very same crypto currency lost 25% of its value. The dealer is holding the bag for a lot of money because he has to pay the manufacturer. Pretty stupid move eh?

Let’s say you sold your house for $1,000,000 and took crypto for it and it dropped 25% in one day after you sold it. Let’s say it dropped 25% the day after you accepted the offer! Ha! What a bad decision! You’re under contract and have yet to even get paid and the currency you accepted is tanking.

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lets use those same situations, but change out crypto for USD. and lets say tomorrow biden says he wants to take out the saudis, they react with OPEC by discontinuing trading in the USD. the USD crashes 25%. HA what a bad decision! your under contract and have yet to be paid and the currency you accepted is tanking.

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The other interesting aspect of crypto is that for each US investment in the currency, the exchange is made with US dollars. Why is that?

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it isn't necessarily the case. but it can be if you want to because use of the USD for private purposes is voluntary.
I exchange cryptocurrencies for cryptocurrency.
I could also buy crypto with CAD, rubles, euro if I wanted to.

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It is explicitly called cryptoCURRENCY

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That's like saying a sawhorse is a horse because it has the word "horse" in it

Cryptocurrency is its own class of asset. There just aren't a lot of similarities between it and actually currency in practice.

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lets use those same situations, but change out crypto for USD. and lets say tomorrow biden says he wants to take out the saudis, they react with OPEC by discontinuing trading in the USD. the USD crashes 25%. HA what a bad decision! your under contract and have yet to be paid and the currency you accepted is tanking.

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This is the function of Crypto in concept but so far not in practice.

Pull up the charts for BTC, ETH, and any other 8 cryptos you like and compare them. The market is too connected within the space itself, then you look at overall financial markets and those charts will look fairly similar to the crypto ones. Until the crypto market disconnects from the financial markets, and then individual cryptos perform more on their own merits than on hype, it will not be that hedge against the government doing stupid stuff that it can/should be.

I think its fine owning crypto, but the smart people in the markets are in it like 5-15% of their portfolio at most while a lot of us smaller retail people are in it 50%.

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Can you name a time in the past year thaf this has happened?

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not to the USD but similar has happened to other 'stable' currencies this past year and has happened in the US in the past.

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When you counter a reasonable and real point with the absurd, you kind of make my case…

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its not absurd. whats absurd is blind faith that the USD is permanently stable. because the fact is its stability is only due to voluntary agreement. all it takes would be OPEC finds a more beneficial 'petrodollar' agreement with a different country to prop up their currency. or another covid19 printing 15 trillion USD. the USD is currently being devalued, it just may not be on your dramatic and arbitrary 1 day timeline. but it already stands if you sold your house right before COVID it would take another 20% or so USD buy the same house back.

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The fact that so many are now pivoting away from it being called or used as currency is proof that this is nothing but a tulip craze.

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its a tulip craze that lasted long enough for governments to decide how to tax and classify it in the financial system, and for local governments to start their own mining operations.

if it were a tulip craze it wouldve been over years ago, but here we are.