Bitcoin

[mr noble]

Both posts above are spot on.

It seems that it is expected that the entire market cap of Bitcoin and other cryptocurrencies must be available in real time, but that's not the case with anything financial. I suspect even when fiat money was backed by the gold standard, there was probably never enough gold in the UK to cover all the GBP in the system.

[Raffe]

No. You are completely missing the point.

For starters, you keep changing your story what bitcoin is. An asset or money?

Years ago, we were told that bitcoin was the money of the future. However, we now know that it won't ever be. It's transactions are painfully slow to confirm and very expensive. No way it will ever have a chance as payment system against the thousands of modern Fintech solutions available.

By now most of the evangelists have abandoned the money story and we are now told that bitcoin is an asset to protect against inflation. The problem with that is that assets better have value or how can they protect against inflation. I will argue that bitcoin is the most rampant inflationary asset ever: it appreciates in value without any reason. The comparison against securities doesn't hold, as securities are a certificate proving your fractual ownership of an underlying asset (a company when we have shares, a debt claim when we have bonds, a part of a diversified portfolio when we have funds). Bitcoin is neither, it is just the certificate but it's empty, there is no underlying. When I say that, the evangelists say: "but the Dollar". Problem is, we just established bitcoin ain't no money, it's an asset. If you want to protect against inflation, buy real estate, buy land, buy ownership in a diversified portfolio of companies earning money and paying dividends. Why would bitcoin protect against inflation? Yes, there is finite supply, but why would people buy it in the first place? It's only a belief system, the moment the belief stops, there is zero value left. That does not apply to real estate or equities: when belief stops, there is still intrinsic value. The valuation of the asset may have been wrong, but there is value. Explain to me where the value in a crypto computer file is.

No matter how you spin it, you have to settle for money or asset - and I say it lacks critical property of both.

And please don't use price as proof. I didn't want to own bitcoin when it was $1 and I don't want to own it now. Does that mean I have been proven wrong? No, it doesn't. I was short Wirecard for a long time and it cost me a lot of money until the bubble finally burst. You can also use pets.com as an example. Where the investors in the company proven right by its ballooning share price? They certainly thought so - until the price corrected and the company filed for bankruptcy. You can use any other bubble as an example: tulips, the south sea bubble, railroads - the price seemed to prove the cult investors until it didn't anymore. The same will happen with bitcoin.

And now I am meeting friends for a bicycle tour in the sun.

[Passenger]

What he said. It's the madness of crowds same as it ever was.

[PJdB]

TZ opinion: Is BitCoin a pyramid scheme?

[Passenger]

More a cult or popular delusion I think.

No maybe on balance it is, heck of a good confidence trick whatever.

[mr noble]

No. You are completely missing the point.

For starters, you keep changing your story what bitcoin is. An asset or money?

Years ago, we were...........

I don't think I/we were missing the point. The question was "where is all the value?"


I think all of us on here agree in most part with all of your post above, there was no questioning that.


Maybe BTC and others need to be categorised somewhere between the two choices. It doesn't fit either fully, only partially.



Anyway...when it all come crashing down and does indeed go to zero (I think it will do too, for the record) I think the whole project will be hailed as the greatest Ponzi scheme ever, and Satoshi Nakamoto, whoever he is, will be hailed as a genius.

I think it's got a long way top go yet though. Years or decades, rather than weeks or months.

[mr noble]

This is an interesting chart from the last bull run.

It shows how, during the 2 year run up, there were a number of large scale pullbacks of 20-40%. I think during each one, many people said “this is the end” & “this is madness” but it carried on, until it stopped.

If this bull run is going to end up a similar size to the last one, we’re only half way through it.

Crazy times.

[Montello]

Anyway...when it all come crashing down and does indeed go to zero (I think it will do too, for the record) I think the whole project will be hailed as the greatest Ponzi scheme ever, and Satoshi Nakamoto, whoever he is, will be hailed as a genius.

I think it's got a long way top go yet though. Years or decades, rather than weeks or months.

I think Nakamoto et al have already made a huge impact ...

The question is who has the balls to ride it given the risks of an implosion. I’m sure many are speculating with the same mindset as you but there is also a huge army of believers... I suspect I’m underestimating the size of this army and so am expecting the collapse sooner rather than later ... it has to come one day but that could be a long way off ... or Monday.

I’m a keen observer but will only be investing indirectly.

[mr noble]

I’m a keen observer but will only be investing indirectly.

Does that mean you’re going to buy ARB or MSTR?

[Montello]

Does that mean you’re going to buy ARB or MSTR?

No, it means I have some S&P500 trackers which means I hold some Tesla and hence some Bitcoin...

If you are riding the Bitcoin wave expecting implosion... how do you know when you get off?

[Raffe]

Agree, the collapse could be tomorrow or after we hit $250k next month or next year.

What I learned during my dealings with Tezzler is not to bet against cults until there is a trigger that changes something substantial in the equation.

I am looking to buy a dip to $42k in BTC.

[Montello]

What I learned during my dealings with Tezzler is not to bet against cults until there is a trigger that changes something substantial in the equation.

Tesla continues to run as does Bitcoin ... big question is .., what is the trigger?

[mr noble]

Agree, the collapse could be tomorrow or after we hit $250k next month or next year.

What I learned during my dealings with Tezzler is not to bet against cults until there is a trigger that changes something substantial in the equation.

I am looking to buy a dip to $42k in BTC.

Say again??? Raffe is planning to buy Bitcoin?


Well I’ll be darned.

[demonloop]

I am looking to buy a dip to $42k in BTC.

And the existing cult members will welcome you with open arms :-)

(The initiation is yet to be disclosed to you, but we’ll arrange that later)

[KingKitega]

The one issue I have with bitcoin is.. if it really did hit $500k/$1m - can you imagine the what the world would be like? Technogeeks would literally rule everything and it would be the biggest wealth transfer in the history of mankind. I just can't imagine government and the vast majority of the public that don't own crypto letting and accepting this happening.

Also, if governments believe in bitcoin, wouldn't it be just so easy (à la tether) for central banks to just print money out of thin air - as they do anyway - and buy up all the bitcoin they can?

Blockchain however is a technology I have more belief in. Web 3.0 is fascinating and could be the next evolution of the internet.

[Raffe]

Tesla continues to run as does Bitcoin ... big question is .., what is the trigger?

? Looked at news and prices recently? Tesla has peaked three months ago and has a lot more downside.

Say again??? Raffe is planning to buy Bitcoin?


Well I’ll be darned.

And the existing cult members will welcome you with open arms :-)

(The initiation is yet to be disclosed to you, but we’ll arrange that later)

I have owned BTC on multiple occasions in the past. I trade flows, try to buy cheaper than I sell (or the other way around).

I still think it will go to zero, doesn't mean I can't buy it when it's oversold and likely to bounce.

[Passenger]

The one issue I have with bitcoin is.. if it really did hit $500k/$1m - can you imagine the what the world would be like? Technogeeks would literally rule everything and it would be the biggest wealth transfer in the history of mankind. I just can't imagine government and the vast majority of the public that don't own crypto letting and accepting this happening.

Also, if governments believe in bitcoin, wouldn't it be just so easy (à la tether) for central banks to just print money out of thin air - as they do anyway - and buy up all the bitcoin they can?

Blockchain however is a technology I have more belief in. Web 3.0 is fascinating and could be the next evolution of the internet.

Respectfully look around, the geeks already won.

[demonloop]

I trade flows, try to buy cheaper than I sell (or the other way around).

Whilst we disagree (in good spirit I hope) about bitcoin, I’m genuinely envious of your knowledge of markets/trends/ etc

[Montello]

? Looked at news and prices recently? Tesla has peaked three months ago and has a lot more downside.

Their market cap is still more than Toyota, GM, Mercedes etc all added together. A long way to go to get to anything remotely sensible.

[Raffe]

Their market cap is still more than Toyota, GM, Mercedes etc all added together. A long way to go to get to anything remotely sensible.

...and I am foooooooooooooooooooooooooookin short their stock for the next sell-off to $200 (which is still far too rich for that turd of a company).

[Montello]

...and I am foooooooooooooooooooooooooookin short their stock for the next sell-off to $200 (which is still far too rich for that turd of a company).

But you said you’d learned not to bet against cults ...?

[Raffe]

But you said you’d learned not to bet against cults ...?

...unless there is a trigger, I said.

The whole thing is unravelling, step by step. Yesterday Cuomo aired a piece on CNN on prime time about the FSD fraud. China is putting a lot of pressure on. Earnings call on Monday - Q1 wasn't good.

Lots of nails into the coffin.

[Montello]

...unless there is a trigger, I said.

The whole thing is unravelling, step by step. Yesterday Cuomo aired a piece on CNN on prime time about the FSD fraud. China is putting a lot of pressure on. Earnings call on Monday - Q1 wasn't good.

Lots of nails into the coffin.

But ... diamond hands bro ...

[Raffe]

But ... diamond hands bro ...

I am much more worried by the continuous attempts to manipulate the stock price by gamma squeezing through the purchase of short dated call options. But the last two rounds were running into heavy selling, so I have the hope this is coming to an end soon.

[Montello]

I am much more worried by the continuous attempts to manipulate the stock price by gamma squeezing through the purchase of short dated call options. But the last two rounds were running into heavy selling, so I have the hope this is coming to an end soon.

How do you know about all the call options in place, are these all a matter of public record.

[Raffe]

How do you know about all the call options in place, are these all a matter of public record.

Yes sure, all listed options data is public.

[Raffe]

Taleb knows:

[Passenger]

Thanks for posting that Raffe. 'It's like Tulips', mind you at least you could always plant those and have some chance of nice flowers.

Only a matter of time now.

[Raffe]

Nice overnight range. Hit $47k and then bounced to almost $53k within a couple of hours.

Reminder that nothing ever is easy or a straight line, even more so for BTC traders.

[Bangers]

ETH has remained strong during the recent BTC pull back. Looks set to challenge new highs soon.

[Itsguy]

I have small bet on VET, among others. LVMH are working with it to track the supply chain and ownership of authentic luxury goods and distinguish them from fakes. You scan the QR code, and if it’s been copied from somewhere else the system immediately knows something’s not right. Genuine use cases and coins that don’t destroy the environment seem the most interesting at the moment.

[Raffe]

I have small bet on VET, among others. LVMH are working with it to track the supply chain and ownership of authentic luxury goods and distinguish them from fakes. You scan the QR code, and if it’s been copied from somewhere else the system immediately knows something’s not right. Genuine use cases and coins that don’t destroy the environment seem the most interesting at the moment.

There are lots of interesting applications of blockchain - I just don't get why that would mean the price of a token should go up?

Usually technology gets cheaper with adoption, in blockchain-land it gets a lot more expensive because people are buying up tokens. How does that only remotely make sense? The fact that LVMH uses this token for a specific application doesn't change the fact that it has zero utility for you. Why would you own it, other than to speculate that LVMH needs to buy it from you? What would keep LVMH from launching a private version of this token and then it becomes completely worthless over night?

[Itsguy]

There are lots of interesting applications of blockchain - I just don't get why that would mean the price of a token should go up?

Usually technology gets cheaper with adoption, in blockchain-land it gets a lot more expensive because people are buying up tokens. How does that only remotely make sense? The fact that LVMH uses this token for a specific application doesn't change the fact that it has zero utility for you. Why would you own it, other than to speculate that LVMH needs to buy it from you? What would keep LVMH from launching a private version of this token and then it becomes completely worthless over night?

I appreciate that this is a virtual reality trading game played with real money and no rules, where you can turn your winnings into NFTs that are worth whatever you happen to think they are. I’m just trading (in an incredibly small way for fun) on the sentiment of this alternate market, which creates bubbles around anything that sounds clever. Unless I’m missing something, I’ve only been at this a week...

[Raffe]

I appreciate that this is a virtual reality trading game played with real money and no rules, where you can turn your winnings into NFTs that are worth whatever you happen to think they are. I’m just trading (in an incredibly small way for fun) on the sentiment of this alternate market, which creates bubbles around anything that sounds clever. Unless I’m missing something, I’ve only been at this a week...

Best of luck.

[Itsguy]

Best of luck.

Indeed - arguably investing in bubbles on the assumption you can get out in time is a poor strategy, unless you’ve pulled out your initial stake, in which case it becomes a form of entertainment. I will continue to rely on ISAs, but alt coins are more fun, until they’re not.

[Passenger]

I have small bet on VET, among others. LVMH are working with it to track the supply chain and ownership of authentic luxury goods and distinguish them from fakes. You scan the QR code, and if it’s been copied from somewhere else the system immediately knows something’s not right. Genuine use cases and coins that don’t destroy the environment seem the most interesting at the moment.

Isn't there a lot of energy wasted mining these things, so bad for the environment...I don't know just wondering... Wouldn't it be better for the planet/ environment/ the human race IF we stopped pretending these little sort've deckchair type rearrangements will make any difference, I mean really until we address the isssue of how much needless stuff we consume and the energy costs associated, then we're just kiddidng ourselves on , aren't we...anyhow bit've a digression sorry.

Best of luck.

[Itsguy]

Isn't there a lot of energy wasted mining these things, so bad for the environment...I don't know just wondering... Wouldn't it be better for the planet/ environment/ the human race IF we stopped pretending these little sort've deckchair type rearrangements will make any difference, I mean really until we address the isssue of how much needless stuff we consume and the energy costs associated, then we're just kiddidng ourselves on , aren't we...anyhow bit've a digression sorry.

Best of luck.

For this reason I’m more interested in systems designed to do the same thing without consuming all that power. I can’t see why all the money currently in Bitcoin wouldn’t migrate to something that simply works better in the long term. There are several projects designed to do just this. There is also genuine utility in smart contracts in Etherium, which drives demand for the gas needed to run the system, and again there are other altcoins designed to do the same thing more efficiently. My feeling is that Bitcoin itself is inefficient and not particularly useful, it just happened to be first.

[Passenger]

For this reason I’m more interested in systems designed to do the same thing without consuming all that power. I can’t see why all the money currently in Bitcoin wouldn’t migrate to something that simply works better in the long term. There are several projects designed to do just this. There is also genuine utility in smart contracts in Etherium, which drives demand for the gas needed to run the system, and again there are other altcoins designed to do the same thing more efficiently. My feeling is that Bitcoin itself is inefficient and not particularly useful, it just happened to be first.

Hmmm interesting, thanks for the reply.

[proby24]

An interesting and robust discussion on the merits of Bitcoin.

As a quick disclaimer I have been trading crypto assets since early 2017. My background is in options trading (FX and more recently Commodities). As always, do your own research and I would suggest everyone takes a very long hard look at this space, it is revolutionary. It will literally change the world, on a scale we have not seen since the invention of the internet.

Peter Thiel, of Paypal, list cryptocurrencies alongside AI as the biggest game changers for the foreseeable future. I agree.

If anyone is genuinely interested in learning more about the space I am happy to point you in the right direction to learn more.

Finally, I have had (interesting and robust) discussions with many people over the last 5 years on this subject. But it doesn't take much to convince a 20 year old of the merits of a digital currency and/or digital store of value. They live in an increasingly digital world, in fact, we all do. Much harder to convince them of the merits of gold, which is immobile and has large storage costs.

[Montello]

An interesting and robust discussion on the merits of Bitcoin.

As a quick disclaimer I have been trading crypto assets since early 2017. My background is in options trading (FX and more recently Commodities). As always, do your own research and I would suggest everyone takes a very long hard look at this space, it is revolutionary. It will literally change the world, on a scale we have not seen since the invention of the internet.

Peter Thiel, of Paypal, list cryptocurrencies alongside AI as the biggest game changers for the foreseeable future. I agree.

If anyone is genuinely interested in learning more about the space I am happy to point you in the right direction to learn more.

Finally, I have had (interesting and robust) discussions with many people over the last 5 years on this subject. But it doesn't take much to convince a 20 year old of the merits of a digital currency and/or digital store of value. They live in an increasingly digital world, in fact, we all do. Much harder to convince them of the merits of gold, which is immobile and has large storage costs.

What’s interesting in the Bitcoin revolution is the desire for people to store their capital in a non-yielding asset.

Typically people invest their capital in companies and property being the two main ones, only a few people invest in commodities such as gold. But event those who do that may only have 5-10% of their portfolio in gold as a hedge.

With Bitcoin seems many of the younger generation are piling all their capital into Bitcoin when they really ought to be owning yielding assets ... this strikes me as a pure act of speculation on the latest get rich quick mania.

I’m sure crypto currency will be a significant thing ... but most of my capital is held in assets and I guess it doesn’t really matter which currency of means of exchange they are valued in and the nature of the denomination of the yield ... if conventional money is dead then my assets will end up being denominated in some other token.

But speculating in the tokens themselves just seems like an extreme version of FX trading for beginners.

[Raffe]

What’s interesting in the Bitcoin revolution is the desire for people to store their capital in a non-yielding asset.

Typically people invest their capital in companies and property being the two main ones, only a few people invest in commodities such as gold. But event those who do that may only have 5-10% of their portfolio in gold as a hedge.

With Bitcoin seems many of the younger generation are piling all their capital into Bitcoin when they really ought to be owning yielding assets ... this strikes me as a pure act of speculation on the latest get rich quick mania.

I’m sure crypto currency will be a significant thing ... but most of my capital is held in assets and I guess it doesn’t really matter which currency of means of exchange they are valued in and the nature of the denomination of the yield ... if conventional money is dead then my assets will end up being denominated in some other token.

But speculating in the tokens themselves just seems like an extreme version of FX trading for beginners.

Moon, bro.

[JasonM]

I wonder if EMP terrorism will become a thing, wipe out the big wallets.

[proby24]

What’s interesting in the Bitcoin revolution is the desire for people to store their capital in a non-yielding asset.

Typically people invest their capital in companies and property being the two main ones, only a few people invest in commodities such as gold. But event those who do that may only have 5-10% of their portfolio in gold as a hedge.

With Bitcoin seems many of the younger generation are piling all their capital into Bitcoin when they really ought to be owning yielding assets ... this strikes me as a pure act of speculation on the latest get rich quick mania.

I’m sure crypto currency will be a significant thing ... but most of my capital is held in assets and I guess it doesn’t really matter which currency of means of exchange they are valued in and the nature of the denomination of the yield ... if conventional money is dead then my assets will end up being denominated in some other token.

But speculating in the tokens themselves just seems like an extreme version of FX trading for beginners.

But BTC and other assets are yielding assets.

Currently BTC and ETH are yielding 5-6% with major platforms like BlockFi and Nexo.

Stable coins like USDC (USD backed crypto) yields 8-10%.

I stake Polkadot on Kraken and receive 12% yield.

I also have a few GBP sitting in my HSBC saving account, I believe that is 0.005% at the moment.

[demonloop]

But BTC and other assets are yielding assets.

Currently BTC and ETH are yielding 5-6% with major platforms like BlockFi and Nexo.

Stable coins like USDC (USD backed crypto) yields 8-10%.

I stake Polkadot on Kraken and receive 12% yield.

I also have a few GBP sitting in my HSBC saving account, I believe that is 0.005% at the moment.

Always great to hear different ideas and thoughts, be sure to drop into this the thread from time to time!

[Montello]

But BTC and other assets are yielding assets.

Currently BTC and ETH are yielding 5-6% with major platforms like BlockFi and Nexo.

Stable coins like USDC (USD backed crypto) yields 8-10%.

I stake Polkadot on Kraken and receive 12% yield.

I also have a few GBP sitting in my HSBC saving account, I believe that is 0.005% at the moment.

How can a stable coin like USDC yield 10% when real USD yields effectively 0%?

To get the 10% there must be some risk involved, no one is paying 10% yield with no risk to capital.

Please explain the risks.

[tertius]

I wonder if EMP terrorism will become a thing, wipe out the big wallets.

How would that work?

[mr noble]

How can a stable coin like USDC yield 10% when real USD yields effectively 0%?

To get the 10% there must be some risk involved, no one is paying 10% yield with no risk to capital.

Please explain the risks.

It all works the exact same way it does with "real" money. Lending, credit cards, loans, you name it. Just think of all the ways to make a yield from GBP but replace the GBP with BTC.

Good article here. https://www.thisismoney.co.uk/money/...ocurrency.html



The whole strategy that Michael Saylor at Microstrategy MSTR has in mind, is only partly based on an increasing Bitcoin price. He intends to make many multiples of the profit for the company by earning a yield from his huge Bitcoin holding.

That is where his company's holding could become massive, not just in the sense of the value of holding nearly 100,000 bitcoins, but from the absolutely enormous earning potential from using that holding like/as bank capital.


ETA...

I'm still quite a big a Bitcoin sceptic, but the more I've learned over the last year, the more it seems almost inevitable that some form of Crypto will become very mainstream.

Microstrategy is quite a risky play just now, and most people think the share price of that company will only increase as the value of Bitcoin does, however, if (a big if) BTC does become used much more widely as a yield generating decentralised store of value, then the MSTR share price could go really bonkers.

[mr noble]

To add.....the Binance crypto app is about to add Microstrategy shares to its platform, meaning that all the kidz will be able to buy fractional shares in the company.

So it's probably a pretty good day to buy some MSTR stock.



Binance is also adding Apple and Microsoft share tokens to their platform in the next two weeks.


https://www.binance.com/en/stock-token




ETA - MSTR token is already live, along with Coinbase and Tesla. To the moooon!!

[Montello]

It all works the exact same way it does with "real" money. Lending, credit cards, loans, you name it. Just think of all the ways to make a yield from GBP but replace the GBP with BTC.

The implication of the post was the Bitcoin deposits give yields traditional cash didn’t.

What you are describing are returns for risks ... that’s fine but you don’t need to convert your capital to Bitcoin to indulge in risky activities to create yield. It’s the underlying risk that creates, hopefully, the return not the denomination of the means of transfer.

[Itsguy]

Usually technology gets cheaper with adoption, in blockchain-land it gets a lot more expensive because people are buying up tokens. How does that only remotely make sense?

A good point, and as it happens VET attempts to solve exactly this problem. Using two tokens, it’s set up so that when VET rises, it also buys more work, keeping the price of the service it provides stable over time for a company using the network. So the price of the token goes up because it’s actually more valuable in the real world, and you see a return on the investment because you’re helping to create a distributed supercomputer that actually does something useful. Or at least that’s the theory, I can’t pretend to understand this well enough to know if that actually makes sense. If you feel like reading 100 pages of white paper, it’s here, and you can tell me what’s wrong with it!