BITCOIN

tebbins

Scottex99 said:

Yep at this stage Tebbins you’re just cluttering up your precious forum by replying to every BTC/Crypto thread with some random thoughts that seem to be falling out of your brain.

You don’t get it, you refuse to get it, that’s fine, nobody that pro crypto cares what you do. We’ve all give reasonably good answers to people asking how to invest or where to stake etc, the rest of the time is trying to explain the potential value of crypto to you which is a useless endeavor pretty much, although Darren has done an excellent job.

We’re all prepared for the volatility, for the blow off top, for the rapid gains and losses and what they mean for us personally. What are you planning to do when BTC hits $150k-250k and the whole industry market cap is catching up with Gold? You might want to start planning because, on this side WAGMI.

Oh you too then.
I am not going to be able to contain my smugness when this bubble implodes.

RolandFlagg

All bubbles burst, but as Peter Lynch once said:

“Far More Money Has Been Lost By Investors Preparing For Corrections, Or Trying To Anticipate Corrections, Than Has Been Lost In Corrections Themselves.”

Scottex99

Haha please tag me right here. What level should we set for it categorically not imploding? $100k? $250k? Or if you’re then going to claim that it could reach those levels and still go to 0, how about it’s still around after a certain time? 1 year? 2 years?

You can choose, please be my guest.

I’ve already said I’m giving money to charity on this same thread when we hit $100k so I’ll be around for that, I’ll give you a shout too, see how you’re keeping.

GL

Linton

darren232002 said:

Linton said:

From your description Sushi and AAVE are companies which could make a profit and distribute dividends.  If Sushi and AAVE were quoted cpompanieds (I dont know whether they are or not) you could calculate a P/E and Yield.  

So we are agreed that some crypto assets can be assessed on P/E measures. I believe this was the original point of contention wasn't it when you implied that no crypto could have earnings?

In an earlier post, you stated that:

Linton said:

 Yield is dividend/price

This is how to calculate yield on a stock; yield more generally is a measure of return in proportion to what was invested. 

Linton said:

You cannot claim that somehow Bitcoin is doing it.

You can earn a return on Bitcoin in a few different ways. By this, I do mean a direct return on the asset itself by capturing a variety of arbitrage spreads. However, it does require some knowledge and last time it was a painful conversation so I don't wish to repeat it. As Adyinvestment stated, its probably best done by giving your money to a company that specialises in doing this for you and taking a cut. This obviously incurs counter party risk and lowers your yield though. Some people choose not to pursue this and accept 0% on their Bitcoin because 'not your keys, not your coins.' 

Linton said:

You cant work out a reasonable price of gold from the  profits a gold miner makes and you cant work out a reasonable price for Bitcoin from the P/E and Yields of the companies that happen to "process" it.  

I've never claimed this at all. Bitcoin price models aren't based on the yield generated by the asset. I keep pointing out that its a strawman argument to say 'Bitcoin isn't a stock.' Like, obviously it isn't. It isn't trying to be. If you judge children by their ability to juggle, you'll end up with a load of clowns and no scientists.

The fundamental use case of Bitcoin is of providing a store of value as hard money. That it can do that and provide an opportunity to capture a yield currently is quite nice. But this yield will probably trend to zero over time as markets become more efficient and liquid.

I am afraid the discussion is a bit pointless as you are using technical investment terms when it appears you dont understand what they mean.

Why this is important is that shares mean ownership of an underlying asset, in this case a company.  If you own all the shares you own the company.  Both Yield and particularly P/E relate the price of the share to characteristics of the company - they help keep stock market prices broadly honest as it becomes obvious if the price is far too high or far too low.

The underlying company has 3 values:

A ) Market capitalisation - share price X number of shares
B ) Potential value as an ongoing business.
C ) Book value - what you would get if all the company's assets (property, office equipment, patent rights etc) were sold minus debts.

If A becomes less than C then it is worth someone's while buying all the shares at a premium to the current price so that the company can be asset stripped
If A becomes less than B then it is worth someone's while buying all the shares at a premium to the current price to gain ownership of the whole company.  You may have heard that Morrison's is being taken over for this reason.


So there is a solid lower value to a share price, provided of course the company does not go bust.  Crypto currencies dont have this benefit.  A Bitcoin could reasonably be worth 0.01 times or 100 times its current value in the near future.  There is no measure of whether it is undervalued or overvalued.

adindas

Good to see that the discussion is going to a much higher level now No more people are saying that BTC is a scam because Warren Buffet and Charlie Munger are saying so.

Those who are posting the performance of BTC on MSE are doing P&D.

TimSynths

adindas said:

Good to see that the discussion is going to a much higher level now

No more people are saying that BTC is a scam because Warren Buffet and Charlie Munger are saying so.

Those who are posting the performance of BTC on MSE are doing P&D.

Still glad I bought mine in Q1.

Linton

adindas said:

Good to see that the discussion is going to a much higher level now No more people are saying that BTC is a scam because Warren Buffet and Charlie Munger are saying so.

Those who are posting the performance of BTC on MSE are doing P&D.

If it is a scam it must be the most brilliant scam ever pertpetrated.  Just consider....

1) Guilt free massive returns especially for early adopters
2) The belief that you are cocking a snook at the establishment.
3)  friends across the world
4) A freemasonry of a secret language incomprehensible to outsiders
5) A bit of technical whizz.

what's not to like!

Anyone who engineered all of this must be a top rank economist, psychologist and software engineer.

User232002

Linton said:

I am afraid the discussion is a bit pointless as you are using technical investment terms when it appears you dont understand what they mean.

Would you like to point out which terms you are referring to and specify your definition of them?

I would like to point out that, in the post you quoted, I did not use the words 'share,' 'market capitalisation,' 'potential value,' or 'book value.' I'm assuming you are referring to the use of the word 'yield.' So, would you like to post your definition please?

Linton said:

Why this is important is that shares mean ownership of an underlying asset, in this case a company.  If you own all the shares you own the company.  Both Yield and particularly P/E relate the price of the share to characteristics of the company - they help keep stock market prices broadly honest as it becomes obvious if the price is far too high or far too low.

The underlying company has 3 values:

A ) Market capitalisation - share price X number of shares
B ) Potential value as an ongoing business.
C ) Book value - what you would get if all the company's assets (property, office equipment, patent rights etc) were sold minus debts.

If A becomes less than C then it is worth someone's while buying all the shares at a premium to the current price so that the company can be asset stripped
If A becomes less than B then it is worth someone's while buying all the shares at a premium to the current price to gain ownership of the whole company.  You may have heard that Morrison's is being taken over for this reason.

For gods sake man, how many times do I have to say it; Bitcoin is not a stock. Please stop trying to analyse it as such.

This is just irrelevant tangential information. I'm not interested in discussing book value with you because Bitcoin isn't a stock.

Linton said:

So there is a solid lower value to a share price, provided of course the company does not go bust.  Crypto currencies dont have this benefit.  A Bitcoin could reasonably be worth 0.01 times or 100 times its current value in the near future.  There is no measure of whether it is undervalued or overvalued.

Wait, wait wait... So there's a 'solid lower value' but it comes with an asterisk attached? So that means... that there is no solid lower value right?

Is this your ultimate point; that Bitcoin is a bad investment because it could potentially go to zero? All that to get to here?

Bitcoin collapsed by 50% a few months ago. Plenty of people showed up to buy it at $30k which is 50% higher than its previous cycle ATH. $30BN+ of Bitcoin is traded every single day. The market isn't exactly small or illiquid and there is a colossal amount of demand. What makes you think that demand is going to disappear?

mark55man

if anyone says BTC can go to zero is a reason for not investing then ask them about Enron and more recently Carillion (* other bankrupt companies are available *)  - although to be fair - most investors mainly invest in index funds and that's much less likely to crater

Michael121

@Daz Linton's point is he can't value gold/BTC but he can value a gold mining company to some degree.

It has nothing to do with it going to 0 everyone has punt money just not on something they cant put odds on or value. Maybe you have the secret sauce and can value it or maybe you just think the same as anyone else and think the ceiling is golds mcap, but where is the floor?