BITCOIN

mooneysaver

Wish I had some more fiat to take advantage of Terra giving away free money!

For those who don't know UST is a algorithmic stablecoin pegged to the USD, which has dropped in value due to a glitch. Currently you can buy it at 90cents, although it has been under 70cents. Even though its guaranteed to be redeemable for a dollar.

This is the crypto equivalent of buying a £10 note for £5. Now just to decide whether to spend these sweet gains on SFM or ETC.

User232002

alidai said:

Well done for plucking some suitable dates out of the air and not responding to the specific -10% in the last message which doesn’t even need a calculator

Haha - "Suitable dates." Bitcoin outperforms the markets from basically any date outside the past 16 months. You're welcome to check this. As this thread ages, its going to be great to point out to all the posters who are so vehemently against it what they could have achieved if they had bought some on the time stamp.

Would you prefer the asset that 10x's and then collapses by 50% (Bitcoin) or the asset that 2x's and then declines by 20%?

lozzy1965

mooneysaver said:

Wish I had some more fiat to take advantage of Terra giving away free money!

For those who don't know UST is a algorithmic stablecoin pegged to the USD, which has dropped in value due to a glitch. Currently you can buy it at 90cents, although it has been under 70cents. Even though its guaranteed to be redeemable for a dollar.

This is the crypto equivalent of buying a £10 note for £5. Now just to decide whether to spend these sweet gains on SFM or ETC.

A guarantee is only as good as its backer.  There are plenty of stories about people losing investments that were 'guaranteed'.

What's stopping you churning your money now?  Buy at 90 and redeem for 100.  Repeat.

mooneysaver

lozzy1965 said:

What's stopping you churning your money now?  Buy at 90 and redeem for 100.  Repeat.

Nothing! Like I said, literally free money!

User232002

Ah, you love a Malthusian post that completely ignores the previous discussion because he has, again, been shown to be comprehensively incorrect (y'know, about the terms of the Bitcoin bond that he knew didn't share profits with investors).

My inkling is that, like quantum cryptography and risk free hedging strategies, you actually have no clue how the bond market works and the difference between yield and interest. Probably explains why you ignored me pointing it out twice.

Malthusian said:

53% dump lol.

Do you think this is going to rile me or in some way makes you correct? You do realise that many of us have been telling you that Bitcoin will collapse by 50, 60 or 70% again after its 10x'd and we have been saying that since the beginning of this thread. This isn't an unexpected dip or unexpected behaviour.

Malthusian said:

The funny thing about the "Well obviously El Salvador and Central African Republic would be the ones adopting Bitcoin, because they've been disenfranchised by the current monetary system" shtick, is that it's essentially the reason why crypto holders consist predominantly of the low-skilled middle class, embittered divorcees and people who buy things because they were advertised in a football stadium, but with the zoom level changed from the micro level of individuals to the macro level of countries.

Skint people want to get rich quick so they buy crypto. Skint countries want to get Dubai quick so they adopt crypto as legal tender, build volcano brodomes and wait for the crypto wealth to start rolling in.

Meanwhile while they are trading points between each other and trying to fend off the IMF, wealth continues to flow to those who own the means of production (Marx wasn't wrong about everything). El Salvador is not skint because it's being oppressed by a global economic conspiracy. It is skint because its income consists mainly of selling cheap clothing and remittances from expats who made it to the USA. "Bitcoin to $400,000" isn't a solution, it's a lottery ticket.

That's a whole lot of sweeping generalisations you're making there, leading you in to a narrow world view all predicated on top of each assumption. The caricature you have is completely false.

Of everyone I know in my social circle that owns Bitcoin, none of them are divorced or low-skilled employees. I, and many of those I know in this industry, are not skint people trying to get rich. I'm sorry for banging on about my degrees again, but you have to know that the fiat system is very lucrative for someone who has a fistful of STEM qualifications. I'm in my mid thirties and I'll almost certainly be able to retire before I get to 45. My lifestyle will not change even if Bitcoin 10x's from here. The sheer number of people leaving TradFi to come over to crypto probably don't fit that stereotype either and the fact that the talent pipeline from universities has shifted from banking to crypto speaks volumes.

Malthusian said:

Telly not knowy not telly derp. March 2020 was the height of the pandemic (at least from a market perspective), not pre-pandemic.

The real crash happened towards the end of March with the S&P bottoming on the 23rd March. By 'March' I was using the prices immediately prior to everything falling off a cliff, which should have been really obvious because the S&P wasn't at 3400 at ANY point in March. So much for provoking you in to doing actual research...

But hey, you're welcome to pick any date in February or March and run the numbers and you'll get the same result with BTC returns being an order of magnitude higher.

Malthusian said:

Your £6,800 figure for Bitcoin is from near the bottom of the market (either halfway down the flash crash of around 10 March, or around 26 March in the recovery) 

Incorrect. Bitcoin bottomed on March 13th at approximately £3000, way below the figure I quoted. On both of the dates you cite Bitcoin was trading considerably below £6800. The absolute highest value of BTC throughout all of Feb & March 2020 was £8500. My £6800 figure is more than twice as close to the absolute top in that time period than it is to the bottom.

Lets not pretend that I'm cherry picking a bottom for BTC here - I picked the price immediately before it started to dive off a cliff (same as I did with the S&P) because coherent data actually matters to me. If you want to run the numbers for the absolute bottom of both to current levels, Bitcoin still wins.

Malthusian said:

Let's go with 26 March. Since that date an investment in the FTSE 250 is up 36%, and for the S&P 500 59%. You can easily verify this on Morningstar. This is of course still below the 267% return someone who bought Bitcoin at the same time and sold it today would make (despite the current dump). Which would be great if anybody did.

Amazing that you can recalculate the S&P figures but aren't interested in re-calculating the Bitcoin figures...



On March 26th, Bitcoin was trading at $6700 and its currently trading at $31600 for a comfy return of 372% (or, in bro speak, a 4.72x). 

But yes, keep banging on about a 53% drawdown as if I care...

Malthusian said:

See, it can be dangerous to provoke people into doing actual research.

Needs Improvement. C+

Malthusian

mooneysaver said:

For those who don't know UST is a algorithmic stablecoin pegged to the USD, which has dropped in value due to a glitch. Currently you can buy it at 90cents, although it has been under 70cents. Even though its guaranteed to be redeemable for a dollar.

Guaranteed to be redeemable for a dollar unless it continues to "glitch" and you can't find anyone else willing to pay 1 real dollar for your computer dollar, including whoever is backing this "guarantee".

The future of money!

What are the aLgOrItHmS doing? Are they on strike? High speed frequency trading computers on conventional markets can make money out of arbitrage opportunities of fractions of a cent. Never mind 90 or 70 cents, they should have been piling into UST at 99.9 cents in order to immediately take advantage of the guarantee, which would in turn have pushed the price back up to 100 cents within moments.

User232002

Malthusian said:

Interval entertainment!

Bros spend £11,000 in transaction fees to buy £9,000 computer game land plots

The pretend gold rush overwhelmed the Ethereum bLoCkChAiN, which meant that another bro spent $3,300 in transaction fees to buy this 8-bit clip art picture of a goat in a bowl of soup, priced at $25.

The future of money!

Does it hurt you to know that people value transacting on an open blockchain so much and/or despise the fiat system so much that they are willing to part with tens of thousands of dollars to do so?

You also have to love owning an asset that when people decide to collectively spend a couple hundred thousand dollars in processing costs that value accrues to your assets too. Very nice.

Malthusian said:

Yes, I know, "the thread title says Bitcoin, what's this got to do with Bitcoin". Simple. Every $ that goes into trying and failing to buy 8-bit clip art pictures is a $ that can't go into Bitcoin to be cashed out by the disenfranchised. The proliferation and fragmetation of crypto money games helps to explain why Bitcoin is in a 53% dump, despite the turmoil on real asset markets and the headlines about nuclear war and the cost of living crisis, which in theory makes this the ideal time for a pump.

Err... nope. Bitcoin is in a slump because TradFi people bought it believing it to be a tech play and as interest rates rise they are dumping it in line with other tech stocks. Its incorrect and undoubtedly a mistake on their part, but this was also pointed out here at least 6 months ago.

Your thesis is easily falsifiable because 99% of these other 'crypto money games' were in existence in October when BTC was at its all time high. Why did they not prevent BTC going up then but they are now suddenly responsible for BTC going down?

mooneysaver said:

Wish I had some more fiat to take advantage of Terra giving away free money!

For those who don't know UST is a algorithmic stablecoin pegged to the USD, which has dropped in value due to a glitch. Currently you can buy it at 90cents, although it has been under 70cents. Even though its guaranteed to be redeemable for a dollar.

This is the crypto equivalent of buying a £10 note for £5. Now just to decide whether to spend these sweet gains on SFM or ETC.

Absolutely not.

This algo ponzi probably needs to die. Sorry UST people, we thank you for your memes and the cheap Bitcoin that LFG is about to paper hand but UST never had a sustainable interest rate mechanism. If you bought UST and didn't know the obvious danger you shouldn't be near a crypto exchange.

HCIMbtw

I took some profits from a global equity fund last week and began stepping up some DCA contributions to BTC yesterday

$32k was my trigger to start, will continue to DCA for the next few months 

I think it is totally reasonable to expect a retraction to the 200 week moving average in price, circa $25k and could wick further than that briefly 

I'm treating this as buying opportunity.. catch those falling knives 

Malthusian

And the price of the FTSE 250 was at 21,800 during which period in March, again?

Nobody cares about intraday price movements of tokens in March 2020, for the simple reason that hardly anybody bought in while Bitcoin was dumping in March 2020. And even fewer people bought in during very short intraday dumps. That was why it was dumping.

It was only entertaining in this specific case because you overreached and quoted a price for the FTSE 250 that quite clearly dated from the pre-crash period in February 2020, while the Bitcoin price was picked from the post-crash period in March 2020, which anyone can trivially verify.

And using a consistent date, as I did, would still have made Bitcoin look "better" than the FTSE 250 and S&P 500 to anyone willing to ignore the fact that the FTSE 250 and S&P 500 aren't zero sum games. But never mind, maybe next time.

The most glaring error from an investor's perspective was not mixing up your cherry-picked prices, but forgetting about dividends in quoting the supposed return of the equity indices.

Bitcoin does not outperform the markets. It underperforms any investment that generates a real return using external revenue. The return of a security is the return across all investors, which means the average return of Bitcoin is zero. Punters' money in == punters' money out.

The real crash happened towards the end of March with the S&P bottoming on the 23rd March. By 'March' I was using the prices immediately prior to everything falling off a cliff, which should have been really obvious because the S&P wasn't at 3400 at ANY point in March.

Everything fell off a cliff around 21 February. You know, the date that you used for the FTSE 250 21,800 starting price. The S&P 500 had already shed 13% of its pre-crash level by St David's Day on its way to its mid-March bottom. Don't feel bad, most of us have shaky memories of those months.

*edit* I've ignored this point so far because it was boring, but since it's now been brought up three times: feel free to quote any of my posts where I mixed up coupon and yield.

If I buy a newly issued brobond at 6.5% plus 50% of any increase in BTC* and hold to maturity, my return is 6.5%pa plus 50% yada yada in the absence of default.

If I buy an existing El Salvador banana bond which currently trades at a 24% yield, my return on the same basis is 24%pa.

That is what investors are interested in. Coupon is essentially irrelevant in the case of second-hand bonds (except to calculate the yield), and only relevant in the former case because for a newly issued bond being bought at par, coupon and yield are the same thing.

So the question is why 6.5% plus half the return of Bitcoin, when if I want to take a punt on El Salvador's credit worthiness I could get 24%pa, or if I want to take a punt on Bitcoin to $400,000 I could get double the return from Bitcoin itself (the 6.5%pa being chump change).

*Yes, I happily stand corrected on that front, but my post caveated the case where I was incorrect, and asked why I would want half the Bitcoin upside plus 6.5%pa when I could have all the Bitcoin upside by buying Bitcoins instead. The response was "do your own research bro".

Malthusian

darren232002 said:

Does it hurt you to know that people value transacting on an open blockchain so much and/or despise the fiat system so much that they are willing to part with tens of thousands of dollars to do so?

No. I find it mildly amusing.

Err... nope. Bitcoin is in a slump because TradFi people bought it believing it to be a tech play and as interest rates rise they are dumping it in line with other tech stocks. Its incorrect and undoubtedly a mistake on their part, but this was also pointed out here at least 6 months ago.

That explains why the suits are selling their tokens (which seems a great shame, given the excitement that greeted every statement from the likes of JP Morgan or BlackRock that they were hodling tokens), but not why the disenfranchised masses aren't rushing to take advantage of being able to get rich quick at a discount.

Your thesis is easily falsifiable because 99% of these other 'crypto money games' were in existence in October when BTC was at its all time high. Why did they not prevent BTC going up then but they are now suddenly responsible for BTC going down?

Because the NFT fad hadn't taken off, and people weren't selling BTCs to buy monkey clip art in sufficient numbers. Zero sum money games are random, same as fashions, wars, religions and all other mass social movements.