Crypto

[azda 973]

I remember not long ago there was a discussion about crypto, someone mentioned something about it going to zero. Now with Blackrock and several other hedge fund managers pumping their endless trillions into bitcoin I just wonder what his feeling is on it now.

I have been inactive buying as I've been making money in crypto, buying spot bags plus leverage trading, my biggest win to date was a 3000% gain on a 40x long trade that I did, don't get me wrong, I'm no guru, but no dummy either, learning is all part of the fun, just like it was when I started out collecting coins. I have a goal in crypto, I've doubled my input so far, but will be back when the frenzy calms down and I've had enough.

 

P.S, to whoever it was that thought it was going to zero, pension funds have been unlocked and are able to buy, that's where the trillions come from, I also expect bitcoin to hit 6 figures this year.

 

Ciao for now

[azda 973]

This I charted today, green box was the target, right now I'm still in the trade

[azda 973]

And the trade so far is still running

[Nonmortuus 848]

I have dabbled azda but don't know enough to make any serious investment/gamble. That said, with the current price jumps I'm up about 300% today but have been down by 50% in the past.

[Menger 79]

17 hours ago, azda said:

 

I remember not long ago there was a discussion about crypto, someone mentioned something about it going to zero. Now with Blackrock and several other hedge fund managers pumping their endless trillions into bitcoin I just wonder what his feeling is on it now.

 

I believe that was me. What I predicted was that Bitcoin would test zero before it became money (indeed it would never become money; and would test zero one day). I explained at some length what I mean by “money” (generally accepted means of exchange, like dollars) and my reasoning based on first principles behind the prediction.  I chose my words carefully. I never offered any view on what price action might occur before it testing zero - because I have no basis to make a prediction on that. I am certainly not surprised by recent price action. Tulips also were proffered as “money” and went to the moon before testing zero. I stand my my initial prediction. 

[VickySilver 775]

Well, I just don't essentially trust Bitcoin or the other [IMHO] knockoffs as their basis for value seems questionable at best. That having been said, I suppose if you get in and out on a gamble you might make out. Just not for me, but more power (and prayer) to those that do.

[Menger 79]

1 hour ago, VickySilver said:

 

Well, I just don't essentially trust Bitcoin or the other [IMHO] knockoffs as their basis for value seems questionable at best. That having been said, I suppose if you get in and out on a gamble you might make out. Just not for me, but more power (and prayer) to those that do

 

Agreed. It is that absence of intrinsic value (for want of a better word) that distinguishes it from gold or even fiat money (which has intrinsic value to fill teeth or settle tax liabilities and damages awards, as the case may be). Without something against which to benchmark premia or discounts, the market can only price on the basis of speculation of future prices based on past prices (which is what the technical analysis chart above in this thread is doing). That speculative price action is inherently unstable - which is fantastic for speculation but terrible for “store of value”, which is one of the requirements for something to be generally accepted in payment; i.e., to be “money”.  Without that benchmark, the speculation can take it anywhere - to the heavens or to hell … 

Edited March 14 by Menger

[Master Jmd 50]

8 hours ago, VickySilver said:

...as their basis for value seems questionable at best.

The basis for value of Bitcoin is for the most part simple supply and demand. Right now the price is up because a lot of people are trying to get in on the action both due to the recent introduction of SEC-regulated ETFs (which is a huge step forward) and the upcoming halving event which will decrease the rate at which new supply enters circulation.

Ultimately there's little difference between owning Bitcoin in a cryptocurrency wallet and having money available on a bank card - in both cases your money is represented digitally until the point where you choose to spend or convert it to paper money, however the latter is owned by banks whilst the former is owned by you (if you have your own wallet, at least).

A big thing holding Bitcoin back, and will hold Bitcoin back for the foreseeable future, is that governments cannot print their own as and when they see fit and for the most part have put up artificial barriers against its adoption (higher tax rates and in some cases state-funded smear campaigns).

Right now we're 15 years in and Bitcoin is more popular than it ever has been, and that I think is something worth celebrating as a technological feat regardless of whether you believe in it as a currency or not.

[Menger 79]

40 minutes ago, Master Jmd said:

The basis for value of Bitcoin is for the most part simple supply and demand. Right now the price is up because a lot of people are trying to get in on the action both due to the recent introduction of SEC-regulated ETFs (which is a huge step forward) and the upcoming halving event which will decrease the rate at which new supply enters circulation.

Ultimately there's little difference between owning Bitcoin in a cryptocurrency wallet and having money available on a bank card - in both cases your money is represented digitally until the point where you choose to spend or convert it to paper money, however the latter is owned by banks whilst the former is owned by you (if you have your own wallet, at least).

A big thing holding Bitcoin back, and will hold Bitcoin back for the foreseeable future, is that governments cannot print their own as and when they see fit and for the most part have put up artificial barriers against its adoption (higher tax rates and in some cases state-funded smear campaigns).

Right now we're 15 years in and Bitcoin is more popular than it ever has been, and that I think is something worth celebrating as a technological feat regardless of whether you believe in it as a currency or not.

Yes - the “price” is determined by supply and demand, but that supply and demand itself is determined by the (subjective) “value” to the people supplying / demanding.  In the absence of anything else (cannot be used to fill teeth or pay taxes, for example) that value will be based on the value as speculative instrument. This makes for volatile price action (just watch) which makes for a terrible store of value (grannies don’t trust it) which means it will not be generally accepted - and so cannot be “money” (generally accepted means of exchange).  The technology is fantastic. But the initial premise was that it would become “money”. That premise fueled the initial speculation. Now the speculation itself fuels the speculation. Not good. Speculation can go to infinity (or zero) if not tethered to reality by some reference value aside the speculative value itself.  The initial premise was wrong and one day the market will discover the price that properly reflects its worth. 

Edited March 14 by Menger

[Master Jmd 50]

47 minutes ago, Menger said:

In the absence of anything else (cannot be used to fill teeth or pay taxes, for example) that value will be based on the value as speculative instrument. This makes for volatile price action (just watch) ...

I've been following and have owned Bitcoin since 2013 so I'm well aware of the fluctuations it has. The filling teeth argument seems an odd point to make given that gold wouldn't be the first choice (I believe porcelain would) - a much better use of gold is in electrical circuits, which as far as I'm aware is the only major practical application it has right now.

Having followed Bitcoin for this long I'm well aware of the challenges it faces, however I've witnessed a lot of misinformation and a lot of misguided comments. A lot of those grannies you mention who don't trust Bitcoin are the same grannies who don't trust banks to hold their money in the first place. Grannies aren't paving the way for the future, and we've already seen a massive decline in cash usage (even before covid) since the turn of the millennium - it's only a matter of time in my opinion before the likes of foreign currency exchanges follow suit.

I don't really see where your "the initial premise was wrong" comment comes from given that a lot of companies do accept it in exchange for goods, which is exactly what money is. Most major auction houses accept Bitcoin as a payment method, and in January I used proof of my Bitcoin balance to secure a new mortgage through Nationwide.

I'm not going to try and convince anyone to buy Bitcoin as it's not my place to do so - I'm no financial advisor - but I do think Bitcoin has far-reaching future potential, and to be something most people in the developed world will have heard of is very impressive for something that didn't exist at the turn of the century. I don't think Bitcoin is going to go away any time soon.

[Menger 79]

2 minutes ago, Master Jmd said:

The filling teeth argument seems an odd point to make given that gold wouldn't be the first choice (I believe porcelain would) - a much better use of gold is in electrical circuits, which as far as I'm aware is the only major practical application it has right now.

Yes. Filling teeth was tongue in cheek. The point is that people speculate with gold - but it has a value to people (to fill teeth, make jewelry or Royal Mint gift sets).  That value (subjective as it is, in the same heads as the teeth, necklaces or commemorative tokens) is a connection with reality. That tether to reality stops the speculation of gold going to the moon, or to zero. It gives it relative stability - perhaps even enough to be money (so it can be used not only for exchange, but also for saving).  Bitcoin lacks that: so both the moon and zero are possible. Which is why not only the grannies, but also their grandchildren, will never trust it as a “store of value”, for their savings. The grannies and their grandchildren may both acquire bitcoin for speculation (it is perfect for that) but they will exchange it for dollars (or gold) if they want savings. 

For completeness - fiat currency (dollars, GBP) would suffer the same fate were it not mandated as the form of payment for taxes and damage awards. That mandate tethers fiat currency to reality - there will always be a demand for it (unless the mandate, or the regime behind it, ends). 

[Menger 79]

36 minutes ago, Master Jmd said:

don't really see where your "the initial premise was wrong" comment comes from given that a lot of companies do accept it in exchange for goods, which is exactly what money is. Most major auction houses accept Bitcoin as a payment method, and in January I used proof of my Bitcoin balance to secure a new mortgage through Nationwide

Money means a “generally accepted” means of exchange. Like USD or GBP or JPY in their respective jurisdictions or (in the old days) gold or silver. Everyone accepted it - including those looking for savings. 
 

The fact some people, or even many people, accept bitcoin in payment does not make it “money” - for that it must be generally accepted in payment. 
 

I suspect most businesses that accept bitcoin in payment convert it to USD - because businesses need money not speculation.  
 

I think share portfolios have also be assessed as collateral for loans …. 

[Master Jmd 50]

A shared European currency was first thought up in the 1920s and even after the Euro started being discussed across Europe in the late 1980s it didn't take off until the early 2000s. That's a currency with a lot of country governments leading the charge that still took decades to come to fruition.

I think it's unfair to expect a worldwide digital currency that isn't politically lead - and is something governments have little to no control over - to be generally accepted as money 15 years after its inception. El Salvador became the first country to accept Bitcoin as legal tender in 2021 and I'm sure its only a matter of time before others follow suit, if not with Bitcoin but with some semblance of cryptocurrency.

At the end of the day, through direct transactions and third party conversion there is very little I can't buy anywhere in the world in an instant with Bitcoin in 2024, and that makes it much more desirable to me than precious metals and time-gated shares, and makes it much more desirable as a foreign exchange tool than any country's siloed currency.

I think Bitcoin's foundations are very strong and cryptocurrency in general will continue to grow in popularity throughout the century.

[TomGoodheart 373]

I know nothing about these things at all (and have no real interest in bitcoin). But I seem to remember that bitcoins need generating and there used to be a complaint (possibly false) that the power needed to do so was increasing, to the extent that the drain on resources and heat produced by the process was noticable.

In an era where we are slightly more aware of the environmental impact of our (global) actions, is this not a risk to the future of such things? At some point will governments start to restrict mining because it's having an effect on national environmental policies?

Just curious. 

[Menger 79]

1 hour ago, TomGoodheart said:

At some point will governments start to restrict mining because it's having an effect on national environmental policies?

More than the greenhouse gas hysteria, inflation is perhaps the greater theoretical risk: as I have explained, tethered only to speculative wim and not reality, nothing can stop bitcoin price action being chased to the moon (except that wim).  Bitcoin is produced at a cost linked to the cost of power - because  “mining” Bitcoin involves a process of running computers.   So it makes no sense to mine Bitcoin where the cost of power is greater than the value of Bitcoin mined. That is why much of the mining is done in China where there is abundant coal-fired (CO2 intense) cheap power.  But imagine if the price of Bitcoin did go to the moon - then “mining” bitcoin would pull in more power as it would become profitable do so in places where it was not before.  This would be inflationary. Imagine if Bitcoin went to infinity - it would make economic sense to dedicate all power production to bitcoin. Perhaps that is what AI will do.  The entire thing lifts itself up by its own bootstraps - until it stops … God help us. 

[Master Jmd 50]

1 hour ago, TomGoodheart said:

I seem to remember that bitcoins need generating and there used to be a complaint (possibly false) that the power needed to do so was increasing, to the extent that the drain on resources and heat produced by the process was noticable.

The impact is noticeable, but it's not as bad as a lot of news outlets portrayed it when the story was going around a year or two ago. It's hard to find comparable recent figures - and it's harder still to find figures that relate specifically to Bitcoin and not cryptocurrency as a whole - but I believe as of the beginning of March Bitcoin is estimated to be using around 145 TWh per year equating to around 84 Mt CO2, which is around 0.25% of the world's yearly output. This includes both mining and transactions.

In comparison, as of August 2023 gold uses 265 TWh per year (126 Mt CO2) and banking in general uses 263.72 TWh per year (though this figure is very hard to accurately calculate).

Bitcoin does use power and is using increasingly more power as it scales up, but the challenges faced by Bitcoin are quite a bit different than those faced by gold - Bitcoin can be mostly powered using renewable energy sources. From what I can gather doing some quick Google searches, only around 15% of gold is mined using renewable energy, whilst the figure is above 50% for Bitcoin.

 

Edited March 15 by Master Jmd

[Menger 79]

8 hours ago, Master Jmd said:

think it's unfair to expect a worldwide digital currency that isn't politically lead - and is something governments have little to no control over - to be generally accepted as money 15 years after its inception

Certainly I never expected that, for the reasons I have given in this thread and in this forum before.  But that was indeed the basic premise behind the initial launch, hype and speculation.  Now the speculation itself seems to have taken over as the reason for the speculation (bootstraps) - nobody anymore claims to acquire bitcoin as a better, less traceable, inflation resistant, convenient form of “money”, but because they hope to cash in for (real) money at a higher price. 

Edited March 15 by Menger

[Menger 79]

8 hours ago, Master Jmd said:

think it's unfair to expect a worldwide digital currency that isn't politically lead - and is something governments have little to no control over - to be generally accepted as money 15 years after its inception

Certainly I never expected that, for the reasons I have given in this thread and in this forum before.  But that was indeed the basic premise behind the initial launch, hype and speculation.  Now the speculation itself seems to have taken over as the reason for the speculation (bootstraps) - nobody anymore claims to acquire bitcoin as a better, less traceable, inflation resistant, convenient form of “money”, but because they hope to cash in for (real) money at a higher price. 

Edited March 15 by Menger

[blakeyboy 1,603]

Explain this to me please this, bitcoin people : 

 if, for example, you made £1K from buying and selling a bit coin,

 

 

who has lost £1k?

 

 

[Menger 79]

46 minutes ago, blakeyboy said:

 

Explain this to me please this, bitcoin people : 

 if, for example, you made £1K from buying and selling a bit coin,

 

 

who has lost £1k?

 

Nobody has lost £1k.  
 

Same as if you bought a pre-decimal coin from Peter and the sold it to Paul for £1k profit. 
 

Peter wanted the money you paid him more than the coin; Paul wanted the coin more than the money he paid you.  Otherwise, neither transaction would have taken place. 
 

It is a win-win-win situation. 😊

Of course - there is buyer’s remorse. But that is another matter … 

[blakeyboy 1,603]

I suspected that was the case, because the coin was very rare, or in unusually good condition,

 but I can't believe that something invented last week, that doesn't exist, is such a lure for people.

How or why 'mining' happens is a mystery too.

 

When it all collapses into a Malthusian nightmare, and people are jumping off tall buildings like they did 100 years ago,

then I'll understand a little more.

[Kipster 157]

Noone will ever convince me that the crypto world wasn't created by Putin to destabilise financial institutions in the West. 

A quote attributed to Mayer Rothschild:

"Give me control of a nation's money supply, and I care not who makes its laws".

There is a worldwide spiderweb of criminality at the highest levels in Russia, linking the literal godfather of Russian organised crime, Semion Mogilevic, to Putin and his emissaries. Cyber crime is his meat and veg, and he plays the very, very long game...

 

[Master Jmd 50]

3 hours ago, blakeyboy said:

I can't believe that something invented last week, that doesn't exist, is such a lure for people.

Don't underestimate the younger generation's ability to buy things that don't exist: Counter-Strike skin sells for $400K, probably the most expensive gun in videogame history.

Ever since its inception the main argument against Bitcoin is the whole "it's a bubble, it's going to burst", but so far this hasn't happened, yet rather amusingly price corrections act to bolster this belief that some people have.

From an investment standpoint, Bitcoin's price history looks something like this:

2009-2011
Bitcoin goes from having no value at all to around the $1 mark by April 2011. News of it breaking the $1 barrier sends the price up to $15.
The first "It's a bubble, it's going to burst" comments are heard.
Price corrects itself down to $3.50, and the first "Haha, told you so!" comments are heard from the bubble commenters, despite the value now being 3.5x higher than it was before the price rise.

2012
Price slowly climbs from $4.70 in January to $13.45 in December.

2013
Price continues to climb to $120 until October when price shoots up to a high of $1,120.
"It's a bubble, it's going to burst" comments become rampant.

2014
Price falls from all time high down to $500.
Despite being 2-5x higher than it was before the price rise, "Haha, told you so!" is heard from the bubble commenters.

2015
Price stabilises between $300 and $600.

2016
Price steadily climbs from $300 at the beginning of the year to $900 at the end.

2017
Price continues to climb all the way to $13,380 by the end of the year.
"It's a bubble, it's going to burst" comments have commonplace throughout the year.

2018
Price sharply corrects down to $10,000 before slowly falling down to $3,413 by the end of the year.
Despite being 11x higher than it was before prices started climbing, "Haha, told you so!" is heard from the bubble commenters.

2019
Price bounces back and stabilises between $7,000 and $11,000.

2020
Price remains steady at around $9,000 until it begins to climb rapidly and ends the year at $28,993.
"It's a bubble, it's going to burst" comments become rampant.

2021
Price continues to rise to an initial all time high of $58,783 in March, then $61,359 in October.
The price here is fluctuating between $31,000 and $61,000, which percentage wise is no different from what happened in 2015, but with two extra zeroes at the end of the value.
The bubble comments continue throughout this entire period.

2022
Price sharpy corrects down to $19,925 by June, then $16,528 in December.
Despite being 2-3x higher than it was before the price rise started, "Haha, told you so!" is heard from the bubble commenters.

2023
Price bounces back a little to between $25,000 and $30,000 until the end of the year where it starts climbing up to $42,500.
"It's a bubble, it's going to burst" comments start slowly appearing again.

2024
Price continues to sharply rise up to a new all time high of $73,000 in March.
<- You are here.

My historically-informed prediction is that Bitcoin will continue to climb for a few months before correcting itself down to around the $50,000 mark. The bubble commenters will be out again with their "Haha, told you so" comments despite this figure being more than double what it was before the price rises started in 2023, and the cycle will continue.

Right now I think the only remorse felt in the Bitcoin community is from those who listened to others telling them not to put any money into it and those who sold several years ago for much lower prices than we see now.

I was fortunate enough to get into Bitcoin back in 2013. I'm not someone who plays the market and tries to predict when I should buy or sell more, instead I've been steadily buying since I first learned about it and honestly have no regrets. I've used Bitcoin on and off to pay for various things, ranging from fast food to 5 figure trading card auctions. I've never regarded myself as an investor with Bitcoin, and don't think I'd be too bothered if the value did one day fall to zero - but I can't see that ever happening at this point.

My only real regret with Bitcoin is listening to my parents advice in 2013 and placing half of the money I was going to put into Bitcoin into a company that specialised in fracking - and on that I'm down 98%. 🤦‍♂️

Edited March 16 by Master Jmd

[azda 973]

On 3/13/2024 at 6:42 PM, Menger said:

I believe that was me. What I predicted was that Bitcoin would test zero before it became money (indeed it would never become money; and would test zero one day). I explained at some length what I mean by “money” (generally accepted means of exchange, like dollars) and my reasoning based on first principles behind the prediction.  I chose my words carefully. I never offered any view on what price action might occur before it testing zero - because I have no basis to make a prediction on that. I am certainly not surprised by recent price action. Tulips also were proffered as “money” and went to the moon before testing zero. I stand my my initial prediction. 

Doubtful it will see zero with hedge funds now entered into the area. In fact one CEO hedge fund manager got booted for not entering inTO THE BTC ETF, but now it will never go to zero as there’s trillions, not billions available.

[azda 973]

On 3/14/2024 at 11:56 PM, Menger said:

Yes - the “price” is determined by supply and demand, but that supply and demand itself is determined by the (subjective) “value” to the people supplying / demanding.  In the absence of anything else (cannot be used to fill teeth or pay taxes, for example) that value will be based on the value as speculative instrument. This makes for volatile price action (just watch) which makes for a terrible store of value (grannies don’t trust it) which means it will not be generally accepted - and so cannot be “money” (generally accepted means of exchange).  The technology is fantastic. But the initial premise was that it would become “money”. That premise fueled the initial speculation. Now the speculation itself fuels the speculation. Not good. Speculation can go to infinity (or zero) if not tethered to reality by some reference value aside the speculative value itself.  The initial premise was wrong and one day the market will discover the price that properly reflects its worth. 

Actually, in some places you can pay your taxes with bitcoin 🤓