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Can Anyone Explain How Crypto is More Speculative Than Stocks?

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by COINS NEWS 163 Views

I frequent crypto, stock, and ETF subs. There seems to be a common argument that “crypto is based on the greater fool theory.” Buffett is a huge proponent of that point of view and he’s quoted all the time.

My problem understanding this viewpoint is how stocks increase in price. Stocks only go up in price if someone is willing to buy the share you’re selling. That’s literally what causes crypto to go up.

I’ve found stocks using stock screeners (Finviz) that would be considered a value investment by any metric, yet they have 0 volume. The company is profitable, has a great profit margin, has a good dividend, very little debt, right around book value, p/s, etc. with enough cash to pay down all debts.

Yet, some of these stocks are impossible to buy or sell because there’s 0 volume. The argument that this stock is a “productive asset” and therefore the “smart” investment doesn’t hold water when you can’t buy or sell any of the shares.

If you can’t trade a stock and therefore can’t profit off it, then the fundamentals aren’t what gives it value. How could it even be considered valuable if you can’t exchange it for something else of value?

The fact that those shares can be bought and sold for a profit is what gives them value—essentially the same thing everyone bashes crypto for.

Am I missing something here?

Edit: Like 90% of the replies are regarding volatility. There are popular stocks that are just as volatile as some crypto. But what does volatility have to do with the argument that crypto is based on “greater fool theory” with 0 intrinsic value? If the entire value of stocks comes from them producing something or being a portion of a valuable company, why are there stocks with better operating margins, better returns on investment, etc. with 0 volume that can’t even be bought or sold? How valuable would your BRK.A shares be if you literally couldn’t sell it?

submitted by /u/Grilledcheesus96
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