Tbf, for a lot of people, high risk is the only way they can expect to grow their savings to the point they can ever retire or anything. I know I'm in higher risk (not cryptos high risk) than I'd like, but if I don't then I might as well not save because the purchasing power of money is shrinking a lot faster than the 2% per year they claimed.
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Doesn't matter how much you earn or how much you save if the spending power of your savings plummets faster than you can put it away. Inflation hasn't been 2% in a lot of places no matter what they claim.
I've been strongly against cryptos because they aren't the thing that they claim to be. They don't meet the definition of it a currency in any way, so all they are is a speculative investment. I'm not saying that anyone should put their money in cryptos, I didn't because I don't believe in them. You could have made a lot of money on pets.com stock too, right up until you lost it all. The only way that people make money off of a crypto is by having more people invest in crypto, making it the definition of a Ponzi scheme. Virtually nobody buys these things because they intend to use them as anything but a place to maybe make more money.
What I'm really saying here is I get it. In the broken financial environment that has been created, holding dollars means losing buying power. In that case, people have to take more risk just to keep their heads above water. People watch the value of new vehicles skyrocket. People watch the value of homes skyrocket. People watch their rents skyrocket. People watch the cost of heating their homes skyrocket. People watch the cost of food skyrocket. In an environment like that, even if you're making good money and putting a bunch of it away, you're losing it all to the inflation tax unless you do something to keep it from shrinking.
I've been strongly against cryptos because they aren't the thing that they claim to be. They don't meet the definition of it a currency in any way, so all they are is a speculative investment. I'm not saying that anyone should put their money in cryptos, I didn't because I don't believe in them. You could have made a lot of money on pets.com stock too, right up until you lost it all. The only way that people make money off of a crypto is by having more people invest in crypto, making it the definition of a Ponzi scheme. Virtually nobody buys these things because they intend to use them as anything but a place to maybe make more money.
What I'm really saying here is I get it. In the broken financial environment that has been created, holding dollars means losing buying power. In that case, people have to take more risk just to keep their heads above water. People watch the value of new vehicles skyrocket. People watch the value of homes skyrocket. People watch their rents skyrocket. People watch the cost of heating their homes skyrocket. People watch the cost of food skyrocket. In an environment like that, even if you're making good money and putting a bunch of it away, you're losing it all to the inflation tax unless you do something to keep it from shrinking.
A currency does 3 things: it must be a store of value, a medium of exchange, and a unit of account. I'd argue that no crypto succeeds on these counts.
As a store of value, it's highly speculative nature makes it a poor store of value. You might store a years wages then see it double, but then see it cut in half, and thats just from year to year. I previously listed the value of Bitcoin in USD, and it was all over the place -- way up, way down just from one year to the next. By contrast, right now the official inflation rate isn't even 10% and it's a massive crisis the world's financial machinery are actively working against. This will also be important in a moment with regards to being a unit of account. People have argued with me that the value of a thing in US Dollars isn't relevant, but it is relevant because you can use a certain number of US dollars to buy a thing, so the number of US Dollars you can get for some crypto doesn't just represent dollars, it represents the stuff you can buy with dollars.
As a medium of exchange, it's poor. To start with, virtually nobody takes it. You can't pay your power bill or your water bill or your gas bill or your car payment or your mortgage with it. You can't buy food with it. Somewhere there might be someone who takes it for this or that, but overwhelmingly you can't use it for trade. You can't pay the government their taxes with it. Often, the closest that crypto gets to being used as a medium of exchange, is someone uses US Dollars on one side of a transaction, transfers the equivalent amount of cryptocurrency, and then the person on the other side of the transaction sells that crypto for us dollars. Next, its still slow. One department store would completely saturate the Bitcoin network, forget about all the transactions in all the businesses out there. As well, eventually it'll become expensive since once Bitcoin stop being distributed the miners will have to charge service fees to justify their existing and their large capital expenditure.
As a unit of account, it's useless. "How many Bitcoin to buy that house?" -- from hour to hour to that number will fluctuate wildly. One month you might buy a new Tesla with one Bitcoin, the next month you might buy a used Corolla. This means you can't sell your product priced in Bitcoin. When Tesla sold their cars using Bitcoin, you'd get a price that was only valid for an hour. You can't agree on a wage since from hour to hour or week to week the equivalent goods that wage will buy will vary wildly. You can't budget based on bitcoin. You can't borrow or lend in Bitcoin (and borrowing or lending is more than just going to the bank -- if you were to get that power bill in Bitcoin, you were provided power by the power company on the assumption you'd pay later, meaning they're in a sense giving you a loan. On the other hand, maybe the power company says "we are only going to give you power if you prepay", in which case you are giving the power company a loan.)
So given these three things, cryptos aren't really good for any of them. What they are very good for is giving somebody your Fiat currency, getting some, and then at a later date hoping that you can get more fiat currency back. That's what the multi-billion dollar crypto industry actually is. The number of people using cryptos for trade of any kind besides for Fiat currency is vanishingly small. Sort of like the number of women who end up buying penis shaped "neck massagers" and actually use them to massage their necks -- it's technically possible, but everyone knows that's not what they're being used for.
As a store of value, it's highly speculative nature makes it a poor store of value. You might store a years wages then see it double, but then see it cut in half, and thats just from year to year. I previously listed the value of Bitcoin in USD, and it was all over the place -- way up, way down just from one year to the next. By contrast, right now the official inflation rate isn't even 10% and it's a massive crisis the world's financial machinery are actively working against. This will also be important in a moment with regards to being a unit of account. People have argued with me that the value of a thing in US Dollars isn't relevant, but it is relevant because you can use a certain number of US dollars to buy a thing, so the number of US Dollars you can get for some crypto doesn't just represent dollars, it represents the stuff you can buy with dollars.
As a medium of exchange, it's poor. To start with, virtually nobody takes it. You can't pay your power bill or your water bill or your gas bill or your car payment or your mortgage with it. You can't buy food with it. Somewhere there might be someone who takes it for this or that, but overwhelmingly you can't use it for trade. You can't pay the government their taxes with it. Often, the closest that crypto gets to being used as a medium of exchange, is someone uses US Dollars on one side of a transaction, transfers the equivalent amount of cryptocurrency, and then the person on the other side of the transaction sells that crypto for us dollars. Next, its still slow. One department store would completely saturate the Bitcoin network, forget about all the transactions in all the businesses out there. As well, eventually it'll become expensive since once Bitcoin stop being distributed the miners will have to charge service fees to justify their existing and their large capital expenditure.
As a unit of account, it's useless. "How many Bitcoin to buy that house?" -- from hour to hour to that number will fluctuate wildly. One month you might buy a new Tesla with one Bitcoin, the next month you might buy a used Corolla. This means you can't sell your product priced in Bitcoin. When Tesla sold their cars using Bitcoin, you'd get a price that was only valid for an hour. You can't agree on a wage since from hour to hour or week to week the equivalent goods that wage will buy will vary wildly. You can't budget based on bitcoin. You can't borrow or lend in Bitcoin (and borrowing or lending is more than just going to the bank -- if you were to get that power bill in Bitcoin, you were provided power by the power company on the assumption you'd pay later, meaning they're in a sense giving you a loan. On the other hand, maybe the power company says "we are only going to give you power if you prepay", in which case you are giving the power company a loan.)
So given these three things, cryptos aren't really good for any of them. What they are very good for is giving somebody your Fiat currency, getting some, and then at a later date hoping that you can get more fiat currency back. That's what the multi-billion dollar crypto industry actually is. The number of people using cryptos for trade of any kind besides for Fiat currency is vanishingly small. Sort of like the number of women who end up buying penis shaped "neck massagers" and actually use them to massage their necks -- it's technically possible, but everyone knows that's not what they're being used for.