SoftBank Founder Masayoshi Son Lost $130 Million on Bitcoin (wsj.com) 131
Masayoshi Son, the billionaire founder of SoftBank Group, made a huge personal bet on bitcoin just as prices for the digital currency peaked, losing more than $130 million when he sold out, WSJ (paywalled) reported Tuesday, citing people familiar with the matter. From the report (alternative source): Mr. Son, who launched the world's biggest venture-capital fund on the strength of his long-term investing acumen, made the investment at the recommendation of a well-known bitcoin booster, whose investment firm SoftBank bought in 2017, the people said. The investment came at the peak of the bitcoin frenzy in late 2017 after the digital currency had already risen more than 10 fold that year. The exact size of the bet couldn't be determined, but bitcoin peaked at nearly $20,000 in mid December 2017 and Mr. Son sold in early 2018 after bitcoin had plummeted, the people said.
fundie mantra (Score:5, Funny)
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Buy high, sell low, that's the way I roll.
I wonder how many bitcoins the "well known booster" was holding when he talked Son into buying in. I would be willing to bet he cashed out a good amount at the $20k peak.
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Well, he cashed out over 130 million worth to Son, I'd call that a good amount.
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In fact, it's survivorship bias: Now you only cite the predictions that fit the outcome, because you forgot all the predictions that failed. But to paraphrase Stanislaw Jerzy Lec: Predition is hard, especially if it's concerned with the future. For every demise, you easily find a dozen arguments, that predicted the demise long be
but it's going up right now, so buy buy buy chumps (Score:5, Insightful)
bitcoin, soaking gullible people again and again, so hilarious
Somewhat... (Score:5, Insightful)
"losing more than $130 million when he sold out"
He actually lost when he executed a poor entry choice, he just realized the loss when he sold.
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Markets move up and down, he should have just held it. The 60% who lose are panic sellers.
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It says he sold in early 2018. That means he made at least twice as much as if he sold at any point since (including today).
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Your point being? He should have shorted his own position and then bought back at a different yet lower point?
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The point: if he'd followed your advice to hold, he would have lost at least twice as much as he did.
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That is the point. If he was still holding it, he wouldn't have lost anything yet.
Arguing against that is just to deny the flow of time. When you take whataboutism to the level of not understanding the sequence of events, that is rather pathetic.
When they say "buy low, sell high" they mean it literally. They mean if it isn't higher, don't sell it. It is actual correct advice, not a pithy statement that is only true when the price goes up. Human emotion makes it hard for most people to follow this advice, ev
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You're falling prey to the sunk cost fallacy. When you're evaluating whether to buy *or* sell an investment, the only question is whether you expect it to go up or down in the future. The price you bought it for is immaterial.
In general, "buy low, sell high" does tend to work, because diversified investments have a positive expected return. As you point out, it might help prevent some emotional investors from making bad decisions. A better strategy is to "buy, and forget about it." But bitcoin, particularly
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the world according to animal spirits (Score:2)
This same kind of literalism is responsible for naive faith in Martingales [wikipedia.org].
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He wouldn't have lost anything because he wouldn't have sold at any of the points between then and now. He chose a poor entry point, it is a tough thing to swallow but it means your money is tied up, not lost.
I do short and mid-terms trades on stock but only when I'm prepared to hold it long. If things trend the wrong way you just adjust the strategy converting your trade to a mid term or long term hold. He might have to hold for ten or fifteen years but for $130million dollars that certainly isn't beyond r
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"That's only true if you think it'll recover."
As I said. You shouldn't invest money you can't afford to lose and you also shouldn't buy something for a price you don't think is low.
"...but only when I'm prepared to hold it long"
It's true an investment might be tanking but most of the time the market is just fluctuating because it really has little relation to the merit of the supposed underlying asset. If the asset is worthwhile market declines are meaningless and will and must eventually recover. Such is t
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Nice non sequitur combined with an ad hominem. You bring so much value.
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In order to sell a security short, you first must borrow the quantity you care to sell. That means your broker must have and be willing to loan you the security. I don't believe any broker will loan you securities you are already in possession of and it's probably against the law (don't remember). Second off, there's no brokers that loan bitcoin, so you can't sell it short.
So selling bitcoin short without a futures contract doesn't happen.
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Or, he stopped further loss by getting the fuck out of this loser he should have never gotten into.
Proof! (Score:1)
There is a God(s)
I have a Blockchain Bridge to sell ya! (Score:1)
Is it me, or does the Bitcoin thing repeatedly set itself up as a 3 card monty where people in the know rake financial people over the coals?
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people in the know rake financial people over the coals?
Nobody is "in the know". There is no puppeteer pulling the strings.
Some people win, some lose. But there are more losers than winners because much of the money is going to the power companies.
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There are more losers than winners in literally every market. The winners profits come from the losers. It is no different in the foreign exchange, the stock market, etc. In order for someone to win somone(s) have to lose.
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Stock markets produce winners on average. In fact, it's easy to win with high confidence: make a diversified investment and hold it for a while.
Casinos, lotteries and con games redistribute wealth. Within a fairly small margin, the average take is break even.
Bitcoin has a very significant negative average because of the necessity to burn electricity.
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"Stock markets produce winners on average. In fact, it's easy to win with high confidence: make a diversified investment and hold it for a while."
False. You seem to be confusing bitcoin mining with the speculative price. Burning electricity only serves to set a floor on the cost much like the cost of diesel fuel helps set a floor on the gold market. But either can actually be overrun because there is more bitcoin and gold in the world than being mined and it recirculates. All having to pay an electricity bi
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"False. You seem to be confusing bitcoin mining with the speculative price."
Maybe English is your second language? The very sentence you quoted started with "Stock markets." Not discussing bitcoin.
The rest of your post is nonsense. You can confirm for yourself that the expected return in the stock market is positive. Just look at the historical price over some reasonable length of time (e.g. ten years) for any major index.
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You could try actually looking at the comment I replied to... especially since you wrote it. False and the stock information was for the quoted portion of your comment. The bitcoin comments relate to your bitcoin related comments.
Casinos, lotteries, and con's I didn't comment on because they are unrelated, there is a "house" and the game ensures the house wins. They have no relation to peer trading on open markets.
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True for mining, but at this point, mining is not practical. The main reason bitcoin is negative is because it represents nothing tangible of value (unlike stocks which represent shares in an actual enterprise), and there's no regulation to keep it from being used as a tool to defraud people. It's basically designed to be a volatile commodity.
Cryptocurrency is basically a Ponzi Scheme. Like some Ponzi Schemes,
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Bitcoin also requires burning electricity for processing transactions. You're correct though, pretty much any activity requires resources, but the expectation is that it produces some value that is greater. Bitcoin could do that, but it doesn't seem to.
Bitcoin is *worse* than a Ponzi scheme though. Most cons, including Ponzi schemes, are designed to be as efficient as possible. The victims lose lots of money, but the perpetrators gain virtually all of it. It's not fair, but very little wealth is destroyed.
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If crashing bitcoin is the best that China's got to retaliate with, then I would say that there has been no retaliation at all.
You're not very smart.
A Fool and His Money (Score:1)
A fool and his money are soon parted. Buying Bitcoin at $20K was not the foolish thing. The foolish thing was selling it at $3000 when it's obvious that Bitcoin will be $100,000 by the end of this year.
Idiot.
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And as you naysayers are busy complaining, I actually accumulated $250K worth of Ethereum between 90 and 110 bucks, and now I'm liquidating it out in the 170s.. making nearly $200K on the move.
What's your excuse?
My mate Dave down the pub's cousin's boyfriend put a quid on a six horse accumulator last weekend and won five hundred!
What's your excuse for not achieving a 50,000% rate of return?
money went to a bit smarter persons (Score:1)
children of milionaires often loose money in stupid ways
This situation isn't that different... (Score:2)
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That's some poor analysis. When the major indexes are down everything trades down whether it has any sane relation or not. It's pretty rare for bad news for intel to not bring down AMD as well even though it is good news for AMD. Why? That's easy, people have no idea what they are buying and selling.
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Actually, printing your own currency is legal, as long as:
1. You don't make coins (that power is reserved for the US Mint)
2. You don't try to pass it off as U.S. currency
3. You don't use it as a method to try to avoid taxes
Now, having said that, since your private currency won't be legal tender, you can't force anyone to accept it as payment for anything. It will rely solely on the willingness of people to accept it instead of U.S. legal tender.
I have a hard time myself wrapping my head around why Bitco
Considered by whom? (Score:2)
> I have a hard time myself wrapping my head around why Bitcoin, given its reach, isn't being considered a currency.
Considered by whom? Some people think it's a currency.
Currency is:
1. A store of value and
2. A generally accepted medium of exchange
"Store of value" means I can get paid today and use $currency to set aside money to pay my rent next month. I can set aside some currency each month for Christmas, knowing I'll need $1,000 for Christmas stuff. I can set aside $83/month and Christmas is
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Interesting point. I can see arguments on both sides of this. I fully agree that it's not a "store of value" any more than say, stock certificates are.
However, it does have a much larger base that do consider it an accepted "medium of exchange" than other commodities and/or securities do. It would be a whole lot easier to find a merchant that would accept Bitcoin than it would to find one that would accept shares of Apple stock or grams of gold as payment.
Now, having said that, it's almost nonexistent as
Stocks aren't currency (Score:2)
> Interesting point. I can see arguments on both sides of this. I fully agree that it's not a "store of value" any more than say, stock certificates are.
> However, it does have a much larger base that do consider it an accepted "medium of exchange" than other commodities and/or securities do
Stocks are not currency, so I'm not sure why you are making that comparison. Pretty much any stock fund is a better store of value than Bitcoin, but not enough to be a currency. You buy stocks WITH currency, and e
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Thanks for the clarification (Score:2)
Thanks.
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Actually, printing your own currency is legal, as long as:
1. You don't make coins (that power is reserved for the US Mint)
2. You don't try to pass it off as U.S. currency
3. You don't use it as a method to try to avoid taxes
Now, having said that, since your private currency won't be legal tender, you can't force anyone to accept it as payment for anything. It will rely solely on the willingness of people to accept it instead of U.S. legal tender.
I have a hard time myself wrapping my head around why Bitcoin, given its reach, isn't being considered a currency.
1. is false. It is understandable that you might be confused, especially if you consume "conservative media," because of the issues with the "NORFED Liberty Dollar" the incomplete reporting that is associated with that sort of political act. But the problem isn't just "coin + group that isn't the US Mint." The problem is that the coins appear to be legal currency in a bunch of ways; they say USA on them, they use the dollar sign next to a numerical denomination, they have images similar to real US currency,
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Betting on currencies (e.g., exchanging currencies) is a big part of the financial sector, and it represents a bet on the economy and/or monetary policy that is denominated in that currency.
True, but at the moment, betting on Bitcoin is more like betting on commodities futures, given that Bitcoin isn't being regulated legally as official currencies are.
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There are goods and services that are denoted in BTC; there is an economy that is denoted in BTC. The monetary policy is built into the protocol, and is a matter of the code that is running.
Seriously, man. You need to start thinking more abstractly.
You need to start thinking less abstractly. Abstract anything enough, and you can classify anything as anything.
As far as "Bitcoin's monetary policy = the code that is running", try running that by anyone with a basic education in economics. Clearly you don't know what "monetary policy" means.
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With a commodity you have the option to take delivery and make it into a product.
So it isn't like a commodity at all. The only thing generated is entropy, and since it was already generated and you didn't have a heat exchanger hooked up when they "mined" it, you can never take delivery of the entropy and get any use out of it.
It is a lot more like a pyramid chain letter than a commodities market.
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Betting on currencies is a very small part of the financial sector; the vast majority of money that goes into the "money market" is simply liquid assets being parked there. As such it does not represent any sort of "bet" but instead the reality that managed currencies in large economies will average low positive inflation.
Some people do bet on currency arbitrage. But on average they lose money. The arbitrage that is actually being exploited is based on the relative difference in value of stocks vs inflation
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Right into the hands of other people that are filthy rich, and have better timing than this guy.
Common mistake, didn't hodl (Score:3)
Bitcoin is all about hodl. there's zero reason to end your position.
Tulips prove bad investment (Score:2)
Oops
How else will Russia and North Korea finance operations?
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Why do you mention Tulips?
It's a classic economic argument, used in many failed economies, particularly the Dutch Tulip craze, the British South Seas craze, the French American craze.
Monetary specie of exchange that tend to fail are almost always cloaked in their transmission from originator to creditor.
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And you might want to ask yourself if you're missing something.
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Considering that most bitcoin supporters/creators have a very high technical background and are on the high end of the IQ spectrum along with many VC and investment firms
Even given your amusingly generalised assumptions, this would only be relevant if intelligent people were somehow immune from greed and (metaphorical) shortsightedness.
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Because he's an idiot who heard about the "Dutch Tulip Craze" on the internet and didn't bother to fact check if it is real history or just some bullshit myth.
And since it never happened, it is a myth, the people who look it up usually stop talking about it, and the people who never look anything up keep repeating it. And since ignorance is more popular than knowledge, the growth of the competing beliefs is very predictable. Sad, but predictable.
It takes a person like me who doesn't like "parties" to speak
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A near-anonymous frictionless [wikipedia.org] currency is ideal for pariah states wishing to bring money into Europe/USA/Canada. Crime syndicates can park illegal assets in as an alternative to money-laundering -- which is around a trillion dollar per year industry internationally [europa.eu].
Russia is both of these.
Umm... (Score:3)
(Billionaire does something dumb and loses large amount of money but is still a billionaire)
Am I supposed to feel sorry for him? As someone living more or less paycheck to paycheck I don't.
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Rich person makes bad investment, loses money. Film at eleven.
() --- the amount of non-whitespace between the parens shows how much I care and sympathize.
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You're supposed to feel relatively more important because of his loss, even though to him they're probably just small numbers.
Nobody rocks a pink tie like Masayoshi Son; don't expect him to have experienced undignified emotions merely from the loss of a hundred million dollars.
If you have $130 million.... (Score:1)
...you don't need to gamble in Vegas or gamble on Bitcoin. You're done. Enjoy life and move on.
Lost or lost? (Score:2)
I wonder how much bitcoin is "lost" due to people losing wallet passwords.
"Huge" is relative (Score:3)
I don't think "huge personal bet" really applies here. My quick wiki search says that Mr Son is worth ~$24B which means his $150M bet represented 0.6% of his worth.
For reference, this is the same percentage as a person worth $1M spending $6,250. I'm pretty confident Mr Son made this loss back within 1-2 months in interest or dividends alone.
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Uh...if you think that it's not easy for him to get his hands on $150M in minutes, you're an idiot. Yes, liquidity is different than cash-in-hand, but someone with $24B net worth is certainly savvy enough to have plenty of money that isn't locked up in some sort of awful 30-year bond.
Secondly, "us proles" aren't playing a game with percentages. Yes, it's a lot of money to you, or me, or most anyone else...but that's the only reason why the story looks at all remarkable; because the author relies on "the mas
Lost some quarters in the couch (Score:1)
...and that was about the same percentage as Billionaire Son's loss.