It follows that, ultimately, the profit of the "speculators" (and also of "producers") is limited by the amount paid by "consumers".  If the "producers" somehow earn more money than the "consumers" pay, the difference must come from the pockets of "speculators"; who, as a whole, will then lose money.

The money M[22] due to trades among "speculators" may make some of them richer, but only at the expense of others; as a whole, it will not make them any richer.

INVESTING IN STOCKS

The money flow diagram for investing in stocks is the same as for a physical product, with one extra circle and three extra arows.  

Cicle (1) "producers" now represents the company. Circle (3) "consumers"  is the clients of that company who consume its products and services. Circle (2) "speculators", as before, is anyone who buys those products only for re-sale later.  

The new circle (0), "shareholders", represents all those who own or ever owned shares of the company.  

There is a new arrow [01] from (0) to (1) representing money that shareholders give the company in exchange for the shares. There is an arrow [10] from (1)  to (0) representing the money that the company returns to investors -- as dividends, stock buybacks, or any other meschanism,  And an arrow [00] looping from (0) to itself, representing the money that "shareholders" give each other when they trade shares among themselves.

We are now interested in the fortunes of  group (0), the "shareholders".  Can they make a profit? If so, where will that money come from?  What is the contribution of the [00] flow?  I will leave the answers as an exercise...

INVESTING IN CRYPTOCURRENCIES

The money flow diagram for a cryptocurrency is almost the same as the diagram for a physical item, with one minor difference.  

Circle (1) "producers" now represent the miners, who create coins and put them in the market.  Circle (2), the "speculators", is everyone who ever bought coins (or received them as payment for goods and services); including long-term hodlers, day-traders, and people who handle the coins only as payments for other stuff.

The small difference is that there is no circle (3).  Cryptocurrencies are not consumed or turned into something else.  Everyone who buys cryptocoins (or earns them) intends to sell them (or spend them) later.  

Thus the diagram for a cryptocurrency also lacks the [31] and [32] arrows. There are only two arrows: [22] looping from "speculators" to "speculators", and [21] from "speculators" to "producers".  

As before, the money flow M[22] due to "speculators" trading among themselves will not make them any richer, as a whole; it will only make some richer while making others poorer.  But the flow M[21] to "producers" will make the "speculators" as a whole **poorer**.

The fact that there is no arrow going *into* the  "speculators" circle from somewhere else illustrates the fact that there is no mechanism or source that could give money to the people who bought or earned bitcoins. But there is an arrow going *out* of that circle.  Obviously the "speculators" have lost money, are losing money, and will only lose money.

The only fairly reliable and meaningful number about the bitcoin economy is the amount of money M[21] that has flowed from "speculators" to "producers" (miners). Assuming that most mined coins were sold shortly after being mined, at the then-current market price, we can estimate M[21] as about 13 billion USD.

That is the amount that bitcoin speculators have lost so far, and their collective loss can only increase.  Right now, it is increasing by about 8 million USD every day.

So, financially, investing in cryptocurrency is as stupid as investing in a lottery, or pyramid scheme, or ponzi scheme.  It is essentially a "game"  that collects a lot of money from "speculators", gives a large chunk to the operators of the game (the miners), and then redistributes the rest among the "speculators", randomly and unevenly.