Cryptocurrencies

[rkbabang]

I thought it was time that Bitcoin had its own topic in the investments thread separate from other crypos.  It has a market cap over $160B which would make it a very large cap if it were a stock.

 

I came across this tweet and thought it was an interesting way to look at it.  I had never kept track of the yearly lows before.  The yearly highs are all over the place, but the lows show an upward trend.

 

 

Don't look at ATH's, look at yearly lows. That will tell you the growth in hodlers.

2012 - $4

2013 - $65

2014 - $200

2015 - $185

2016 - $365

2017 - $780

2018 - $3200

That tells you the growth in the people who won't sell at any price.

#btc #Crypto #Bitcoin

 

YTD the 2019 low was in early Feb around $3390

 

[Paarslaars]

Until there's a breaking point at which these people will sell...

[SnarkyPuppy]

Until there's a breaking point at which these people will sell...

 

Possibly my favorite part about bitcoin is those who continue to scream tulips/bubbles/scam over and over again without thought, as if blessing the "scammers and gamblers" who own bitcoin with their infinite wisdom. 

 

Will continue to do so as bitcoin transitions to a multi-trillion dollar mature non-sovereign censorship and depreciation resistant store of value?

[clutch]

Until there's a breaking point at which these people will sell...

 

Possibly my favorite part about bitcoin is those who continue to scream tulips/bubbles/scam over and over again without thought, as if blessing the "scammers and gamblers" who own bitcoin with their infinite wisdom. 

 

Will continue to do so as bitcoin transitions to a multi-trillion dollar mature non-sovereign censorship and depreciation resistant store of value?

 

It's not surprising at all. People say gold is in a bubble all the time.

[rkbabang]

Until there's a breaking point at which these people will sell...

 

Possibly my favorite part about bitcoin is those who continue to scream tulips/bubbles/scam over and over again without thought, as if blessing the "scammers and gamblers" who own bitcoin with their infinite wisdom. 

 

Will continue to do so as bitcoin transitions to a multi-trillion dollar mature non-sovereign censorship and depreciation resistant store of value?

 

It's not surprising at all. People say gold is in a bubble all the time.

 

Yes, and they pat themselves on the back every time gold has a significant drop in price as if they were correct the whole time.  Gold (and Bitcoin) will always have permabears.

 

[Convexity]

Interesting way to look at this; thanks for sharing.

 

I have always seen BTC as either a store of value or a medium of exchange.  Seems the exchange part of it doesn't work as it isn't accepted most places (and I think transaction volumes haven't been growing anything close to price).  This then makes value store prominent (as a gold alternative), which cannot be a stable thing with price volatility. 

 

Since volatility has been increasing the past few years in BTC, the value store argument also goes by the way side (at least for now).

 

So are we to believe that the die-hard never sell BTC crowd are long-term horizoned investors?  Or are they get rich quick people who refuse to let go?

[Saluki]

I think the gold analogy is off base because you can't say "gold is way overpriced, let's switch to brass or bronze."  Bitcoin is open source and although the blockchain/cryptocurrency model may be useful, if you can make another coin with the same software as bitcoin in a few minutes, I don't know why people would build  applications upon it if the price is too high.

[rkbabang]

I think the gold analogy is off base because you can't say "gold is way overpriced, let's switch to brass or bronze."  Bitcoin is open source and although the blockchain/cryptocurrency model may be useful, if you can make another coin with the same software as bitcoin in a few minutes, I don't know why people would build  applications upon it if the price is too high.

 

Why couldn't you switch to another metal.  Say Titanium?  Titanium isn't quite as malleable, but it could be made into many differently sized coins with modern metal working techniques easily enough.  Or silver, it is just as malleable as gold, the only downside is that it tarnishes, but you could keep it vacuum sealed.  Or copper, or brass, ...  The reason for using gold is that everyone has always used gold.  This "you can make a million copies or forks of the bitcoin blockchain" criticism, while in a sense true, is not really a downside.  Go and make a copy or a fork of bitcoin and see for yourself how hard it will be to convince anyone to value it.  It would be like creating a yellow metal alloy that was as pretty as gold and trying to convince investors that it is worth just as much as gold.  Your bitcoin copies/forks will be just like bitcoin with one exception, they won't be bitcoin.  They won't be on the bitcoin blockchain secured by the massive mining power on that chain.  It would be very easy for someone to 51% attack your new coin, so why would anyone use it?

 

[Saluki]

I think the gold analogy is off base because you can't say "gold is way overpriced, let's switch to brass or bronze."  Bitcoin is open source and although the blockchain/cryptocurrency model may be useful, if you can make another coin with the same software as bitcoin in a few minutes, I don't know why people would build  applications upon it if the price is too high.

 

  The reason for using gold is that everyone has always used gold. 

 

This is something that Mises espoused in The Theory of Money and Credit, but not to get too nerdy but the alternate theory is that money is a system of clearing and settlement of societal obligations because reciprocity only works in very small bands and there is no other way (pre-writing) of deciding who owns what to whom so we use money and we owe it back to society. Other people use other kinds of money.  If I tried to buy a house from a Yap tribesman with gold, they wouldn't take it, preferring instead their far superior giant rocks with a hole in the middle. 

 

So, if you think about Bitcoin as as using the underlying blockchain technology to build secure applications on (like for transfering title to property or managing digitial permissions), instead of as money, I wonder why I would pick the most expensive version of something to underly applications if the others are exactly as secure. If you think about it as money (in the alternate clearing and settlement theory) why would a society switch from one system to another? Do you know of any country that has done so besides in an economic collapse where they knock a few zeroes off the bills and rename the currency? 

 

I don't own bitcoin but I wouldn't short it either.  To me it's genuinely something where it's too early to tell. 

[Investmentacct]

I think the gold analogy is off base because you can't say "gold is way overpriced, let's switch to brass or bronze."  Bitcoin is open source and although the blockchain/cryptocurrency model may be useful, if you can make another coin with the same software as bitcoin in a few minutes, I don't know why people would build  applications upon it if the price is too high.

 

Nassim Nicholas Taleb attributes this to Lindy Effect of Bitcoin. New coins/models will need to go through similar time, sovereignty, anti-fragility tests.

[SnarkyPuppy]

Interesting way to look at this; thanks for sharing.

 

I have always seen BTC as either a store of value or a medium of exchange.  Seems the exchange part of it doesn't work as it isn't accepted most places (and I think transaction volumes haven't been growing anything close to price).  This then makes value store prominent (as a gold alternative), which cannot be a stable thing with price volatility. 

 

Since volatility has been increasing the past few years in BTC, the value store argument also goes by the way side (at least for now).

 

So are we to believe that the die-hard never sell BTC crowd are long-term horizoned investors?  Or are they get rich quick people who refuse to let go?

 

Please provide evidence to support your claim that volatility has been "increasing over the past few years"

[SharperDingaan]

I thought it was time that Bitcoin had its own topic in the investments thread separate from other crypos.  It has a market cap over $160B which would make it a very large cap if it were a stock.

 

I came across this tweet and thought it was an interesting way to look at it.  I had never kept track of the yearly lows before.  The yearly highs are all over the place, but the lows show an upward trend.

 

 

Don't look at ATH's, look at yearly lows. That will tell you the growth in hodlers.

2012 - $4

2013 - $65

2014 - $200

2015 - $185

2016 - $365

2017 - $780

2018 - $3200

That tells you the growth in the people who won't sell at any price.

#btc #Crypto #Bitcoin

 

YTD the 2019 low was in early Feb around $3390

 

You might want to consider that the 2018 value of $3200, is actually a hodler who bought at 19K+ ... and ain't never giving it up, if it means selling at a loss! Nothing to do with any kind of increase in inherent value.

 

SD

 

[Fat Pitch]

I think the gold analogy is off base because you can't say "gold is way overpriced, let's switch to brass or bronze."  Bitcoin is open source and although the blockchain/cryptocurrency model may be useful, if you can make another coin with the same software as bitcoin in a few minutes, I don't know why people would build  applications upon it if the price is too high.

 

  The reason for using gold is that everyone has always used gold. 

 

This is something that Mises espoused in The Theory of Money and Credit, but not to get too nerdy but the alternate theory is that money is a system of clearing and settlement of societal obligations because reciprocity only works in very small bands and there is no other way (pre-writing) of deciding who owns what to whom so we use money and we owe it back to society. Other people use other kinds of money.  If I tried to buy a house from a Yap tribesman with gold, they wouldn't take it, preferring instead their far superior giant rocks with a hole in the middle. 

 

So, if you think about Bitcoin as as using the underlying blockchain technology to build secure applications on (like for transfering title to property or managing digitial permissions), instead of as money, I wonder why I would pick the most expensive version of something to underly applications if the others are exactly as secure. If you think about it as money (in the alternate clearing and settlement theory) why would a society switch from one system to another? Do you know of any country that has done so besides in an economic collapse where they knock a few zeroes off the bills and rename the currency? 

 

I don't own bitcoin but I wouldn't short it either.  To me it's genuinely something where it's too early to tell.

 

Why would you build applications on top of Bitcoin outside of finance? The value proposition is the security of the ledger, monetary policy and rapidly growing liquidity. This is software eating away at the legacy financial system.

[rkbabang]

I think the gold analogy is off base because you can't say "gold is way overpriced, let's switch to brass or bronze."  Bitcoin is open source and although the blockchain/cryptocurrency model may be useful, if you can make another coin with the same software as bitcoin in a few minutes, I don't know why people would build  applications upon it if the price is too high.

 

  The reason for using gold is that everyone has always used gold. 

 

This is something that Mises espoused in The Theory of Money and Credit, but not to get too nerdy but the alternate theory is that money is a system of clearing and settlement of societal obligations because reciprocity only works in very small bands and there is no other way (pre-writing) of deciding who owns what to whom so we use money and we owe it back to society. Other people use other kinds of money.  If I tried to buy a house from a Yap tribesman with gold, they wouldn't take it, preferring instead their far superior giant rocks with a hole in the middle. 

 

So, if you think about Bitcoin as as using the underlying blockchain technology to build secure applications on (like for transfering title to property or managing digitial permissions), instead of as money, I wonder why I would pick the most expensive version of something to underly applications if the others are exactly as secure. If you think about it as money (in the alternate clearing and settlement theory) why would a society switch from one system to another? Do you know of any country that has done so besides in an economic collapse where they knock a few zeroes off the bills and rename the currency? 

 

I don't own bitcoin but I wouldn't short it either.  To me it's genuinely something where it's too early to tell.

 

Why would you build applications on top of Bitcoin outside of finance? The value proposition is the security of the ledger, monetary policy and rapidly growing liquidity. This is software eating away at the legacy financial system.

 

Yes.  And how is "the price" "too high"?

 

1 Satoshi = $0.0000935957

 

1 US cent = 207 Satoshi.

 

Wow pennies are expensive!

 

[JRM]

If I invest $1 in Bitcoin (theoretically) how much of that dollar goes to support criminal activity or subversion?

[SnarkyPuppy]

If I invest $1 in Bitcoin (theoretically) how much of that dollar goes to support criminal activity or subversion?

 

I'd imagine your biased leading question can be answered the same way as the following question:

 

If I invest $1 in USD (theoretically) how much of that dollar goes to support criminal activity or subversion?

 

I have a follow-up question for you:  Can you please articulate in clear terms with evidence how Bitcoin is supportive of criminal activity in a greater manner than physical cash?  Please address in your answer the manner of which Bitcoin by definition is publicly traceable forever and physical cash is not publicly stored on a ledger/can't be traced. 

[Gregmal]

If I invest $1 in Bitcoin (theoretically) how much of that dollar goes to support criminal activity or subversion?

 

Probably quite a bit less than when you fill your car with gas or pay sales tax to the state you live in, or federal taxes, or pretty much anything else you spend money on. Tip your waitress? Many do drugs. Your $20 ends up paying for dope. This is a stupid way to look at something.

[bluejoseph]

This is a stupid way to look at something.

 

Or a something way to look stupid?

 

Alex Danco had an interesting article on Bitcoin as Facebook's crypto straw-man. The idea being that Bitcoin lacks the anti-money laundering, know your customer (KYC) features that regulators and legislatures pretty much insist on. Facebook's payment transfer Libra will contrast positively by offering the wholesome solution. "The problems with open and decentralized means the solutions are big and closed." - https://alexdanco.com/2019/06/19/facebooks-crypto-strawman/

[roughlyright]

Hello All,

 

  In this commentary, I sent to partners I talked about $LEO token. In the interest of full disclosure, I am long. I am trying to understand where I am going wrong in my thinking and get the feedback from the group here. In my view, this is a good value investment.

 

Roughly right

LEO_token_valuation.pdf

[Convexity]

Interesting way to look at this; thanks for sharing.

 

I have always seen BTC as either a store of value or a medium of exchange.  Seems the exchange part of it doesn't work as it isn't accepted most places (and I think transaction volumes haven't been growing anything close to price).  This then makes value store prominent (as a gold alternative), which cannot be a stable thing with price volatility. 

 

Since volatility has been increasing the past few years in BTC, the value store argument also goes by the way side (at least for now).

 

So are we to believe that the die-hard never sell BTC crowd are long-term horizoned investors?  Or are they get rich quick people who refuse to let go?

 

Please provide evidence to support your claim that volatility has been "increasing over the past few years"

 

I took daily prices since 2010 and calculated an annual coefficient of variation.  That figure has trended up the past few years.

[JRM]

If I invest $1 in Bitcoin (theoretically) how much of that dollar goes to support criminal activity or subversion?

 

Probably quite a bit less than when you fill your car with gas or pay sales tax to the state you live in, or federal taxes, or pretty much anything else you spend money on. Tip your waitress? Many do drugs. Your $20 ends up paying for dope. This is a stupid way to look at something.

 

It seems like subversion is the primary utility function of Bitcoin, whereas normal banking transactions are at least traceable.  The market cap of Bitcoin is in the billions, the market cap of the USD (or even gold) is in the trillions.  I would take the bar bet that you're wrong, but I can't back it up.

[Gregmal]

What I meant to communicate(poorly) is that writing something off because of the perception that it adds something negative, isn't always wise and really doesn't have much to do with whether one can make money in this situation. I am not a BTC expert and think its kind of gimmicky. The attraction I see for people is regaining anonymity. The government has gone so overboard invading peoples privacy, and strong arming foreign countries who used to have favorable banking laws, to the point where it is ridiculous. Sure, there is a criminal element that benefits from this, but as I mentioned before, there are criminal elements to everything, everywhere. So its not a deal breaker when making an investment.

[clutch]

I think the gold analogy is off base because you can't say "gold is way overpriced, let's switch to brass or bronze."  Bitcoin is open source and although the blockchain/cryptocurrency model may be useful, if you can make another coin with the same software as bitcoin in a few minutes, I don't know why people would build  applications upon it if the price is too high.

 

I expressed this earlier, but the value of bitcoin is in its history, which will always be unique.

 

I can make an exact replica of the Paul Newman Daytona but nobody will pay me millions for it. Then why is the original watch worth $17.8 mil? It's the history behind it, not the physical features of the watch. It's the same scenario with bitcoin.

 

If you look at these things with a purely utilitarian view, nothing will make sense.

[Fat Pitch]

I bought into the presale of LEO tokens since I saw the mispricing. Now I think the market is correctly valuing these tokens when you factor in DOJ pending action. If you feel comfortable completely ignoring the regulatory risks then this is basically a 20x PE unregistered security with start up growth and instant liquidity... not a bad deal.

 

The one take away is the pending S curve growth from decentralized exchanges once privacy/scalability rolls out. The upside from BTC/ETH is probably the best risk adjusted bet in this entire space.

[Fat Pitch]

You'll see the value of Bitcoin once it reaches 1-2 Trillion in market cap. Massive amounts of capital can freely flow globally without much price slippage and no middle men telling you can't do that.

 

If I invest $1 in Bitcoin (theoretically) how much of that dollar goes to support criminal activity or subversion?