Here is a graphical explanation of the differences between investing in physical items, investing in stocks, and investing in crytpocurrencies. It uses simple diagrams to show the flow of money between various groups of people involved in those activities

INVESTING IN PHYSICAL GOODS

First, let's consider investing in physical stuff of some specific kind -- like gold or any other commodity, art, cars, houses, etc.

Draw three circles, labeled (1) "producers", (2) "speculators", and (3) "consumers".  

The "producers" circle (1) represents all those people or entities who make the stuff and put it on the market (like gold miners, farmers, artists, or real estate developers). 

The "consumers" (3) are all those who buy the stuff and take it out of the market, mostly permanently, either by destroying it (like eating food, burning matches), or using it to do some other service (like driving cars, living in homes), or turning it into some other product (like gold into jewelry, or steel plate into cars).

The "speculators" (2) are all those who buy the stuff as an investment, only for the purpose of re-selling it later in the same market.

The diagram also has arrows between the circles representing the flow of *money* between those groups of people.  

Thus there is an arrow [31] from circle (3) to circle (1), representing the amount M[31] of money that "consumers" give to "producers" when buying the stuff directly from them.  Likewise, there is an arrow [32] from (3) to (2) representing the money M[32] paid by "consumers" when they buy from "speculators" instead.  

The other arrows in the diagram are [21] from (2) to (1), and a loop [22] from (2) to itself, representing the money flows M[21] and M[22] when "speculators" buy the stuff from the "producers" or from other "speculators", respectively.

Then it is easy to see that the "speculators" as a whole will become richer during some time period only if M[32] > M[21]: that is  the money that "consumers" give to "speculators" in that period is more than the money that "speculators" pay to"producers". The difference M[32] − M[21] is the money that the "speculators", as a whole, gained (if positive) or lost (if negative) in that period.

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 (that is, M[21]+ M[31] > M[31] + M[32], which means M[21] > M[32]), the difference must come from the pockets of "speculators"; who, as a whole, will then lose money.

This is of course a very banal observation.  But the diagram may help one to see, for example, that the "speculators", as a whole, will not get richer by trading among themselves (the [22] loop arrow); because, in each trade, the money gained by one is always equal to the money lost by the other.  Such trades may make *some* "speculators"  richer, but only by making other "speculators" poorer.

Before we go on, we must clarify that in the money flow we must include the money equivalent of any other goods or services that are bartered for the stuff in question.  If we are analyzing the money flow of investing in gold, for example, whenever Alice pays Bob with gold for a stuffed panda or a fence painting job worth $2000, we must count that in the "gold economy" diagram as equivalent to a transfer of $2000 in money from Bob to Alice (not the other way around).

On the other hand, we must *not* include in the money flows the presumed value of the stuff itself. We are interested in whether the "speculators" make a profit or not; and the "speculators", by definition, derive no benefit from owning the stuff.  They can only make a profit by selling it for money, or bartering it for other goods and services that they actually use or consume.

Finally, for the analysis to make sense, the amounts of money transferred must be expressed in some unit with a well-defined and stable purchasing power, such as "constant dolars" (US dollars adjusted for inflation to some arbitrary fixed year).  The numbers would be meaningless if the unit of "money" was something with highly variable value, like gold or Beanie Babies.

MONEY FLOW OF INVESTING IN COMPANIES

To analyze the money flow of investing in a company, we must add another circle (0), "shareholders", that represent everyone who ever owned shares of it -- including long-term investors, day-traders, and anyone in between.  In this diagram, the "producers" circle (1) reprsents the company as a fiscal entity.  There are additional money flow arrows [01] from (0) to (1), [10] from (1) to (0), and [00] looping from (0) to itself.

The arrow [01] represents the money that investors give the company in return for shares of it, at its creation, or at additional share issuances.  The arrow [10] is money that the company gives to its share holders -- as dividends, through share buybacks, or any other mechanism.  And [00] is the money that is transferred betwen "shareholders" when they trade shares among themselves.

Again, this diagram mainly shows the banal fact that the "shareholders" (0) make a profit only if and when the money M[10] that they get from the "company" (1) is geater than the money M[01] that they gave it.  The money flow M[00] due to "shareholders" trading shares with each other do not make them, as a whole, any richer or poorer.  Such trades may make some individual shareholders richer, but only by making others poorer.

The diagram should also make it clear that the the return flow M[10] from the "company" (1) to "shareholders" (0) can be positive only because of the flows M[21] and M[31] that it receives from the "consumers" of its products or services, directly or through the "speculators" 

That diagram should also help one see the difference between investing in stocks or physical goods, and investing in cryptocurrencies.