BITCOIN

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.

lozzy1965

mooneysaver said:

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!

So you're actually doing it right now and making 10c on every coin, for free - actually realising the 10c?

https://www.cnbc.com/2022/05/10/bitcoin-btc-investors-panic-as-terrausd-ust-sinks-below-1-peg.html

From near the bottom of this article:

He added that the problem with UST is that it’s largely “backed by faith.”

“It’s not fully guaranteed, it’s certainly not fully backed by reserves,” he told CNBC. “It was really just backed by faith in the issuer effectively.”

Zola.

https://twitter.com/DocumentingBTC/status/1522550224778108929

User232002

Malthusian said:

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

I really think you make stuff up in your head. It wasn't. Which is why I said I was using pre-pandemic prices before everything fell off a cliff. The FTSE was 21800 in late February, which seems a reasonable place to take a 'pre-march' number from.

Malthusian said:

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.

Interesting statement. How do people sell if nobody is buying?

Malthusian said:

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.

Firstly, I stated I was using pre-pandemic prices. So I have no idea why you consider using a pre-crash price from February as an 'overreach.'

Secondly, here are the prices of Bitcoin throughtout February and March of 2020. Please point to where Bitcoin was $8500 (thats £6800) in the 'post-crash period in March.' I'm struggling to find it. Of course, you've already stated that you've actually done some research in to this - so I do wonder what it says about your competence if such a thing does not actually exist.

Malthusian said:

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.

Ah, this old chestnut again. Bitcoin isn't zero sum and just because you keep repeating it doesn't make it so. The code, the network, the asset all provide real economic value. Good money is something that makes everyone better off.

At least we can agree on one thing - Bitcoin looks better than the indices no matter which date you use in Feb/March 2020.

Malthusian said:

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.

Laughable. Yes, Bitcoin is returning 10x the market, but those 2% dividends are going to make all the difference. 

Malthusian said:

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.

Firstly, money is money. Saying it doesnt outperform the markets is literally just factually incorrect.

Secondly, the mental circle jerking over what counts as 'real revenue' is embarrassing. You've literally just posted that people are willing to pay tens of thousands of dollars to conduct transactions on a blockchain and in the same breath denied that these blockchains have real revenue.

Below is protocol revenue from the last month. Do I really have to dig this out every single time? 

Malthusian said:

*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.

You stated (paraphrasing) 'why would anyone loan money to El Salvador at 6.5% when their bonds are trading at 24%.' This is a disingenuous comparison and El Salvador isn't paying 24% interest on their loans. If you buy that bond trading at 24%, can you articulate where that 24% is coming from? Who is paying it? Its not coming from El Salvador.

Malthusian said:

*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".

Ah, the new Malthusian posting style - post the same amount of incorrect takes but just caveat every post with 'If I'm incorrect...'

I'm sick and tired of holding your hand man. You have basically no financial acumen which is insane for someone who has nearly 10k posts on an investing forum. Yes, there are reasons why some parties may want to buy the El Salvador bond instead of buying BTC themselves. Its not a difficult thing to comprehend. 

Malthusian said:

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.

Again, how do you have a market where people are selling but nobody is buying? Seems difficult...

Another strawman argument. The 'get rich quick' caricature of Bitcoin from you again when pretty much all my posts talk about sustainable and sound monetary policy, fairer financial systems and wider financial inclusion. Serious Bitcoiners (and many other networks, like ETH imo) aren't here for quick pump and dumps or to make people rich quickly. The end goal is to restructure the entire financial system.

I'd rather a lot of the SHIB, DOGE, SAFEMOON and other stuff didn't exist. However it does, which is why the advice here has pretty much universally been "Buy BTC, Buy ETH and have a 5 - 10 year time horizon."

Malthusian said:

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.

Its truly adorable that you think people are selling BTC to buy NFTs. Just shows you don't have a clue.

The total value of every single NFT at its current market price is something in the order of several tens of billions. Bitcoin trades that amount pretty much every single day. 

User232002

Zola. said:

https://twitter.com/DocumentingBTC/status/1522550224778108929

Crashing upwards. I like this game.

Malthusian

The FTSE was 21800 in late February, which seems a reasonable place to take a 'pre-march' number from.

Which would be fine and dandy if you'd taken pre-March numbers for all three assets.

FTSE 250 Pre-Pandemic (March 2020): 21800

When the FTSE 250 was 21,800, i.e. late February, Bitcoin was around £9,600, not £6,800. Anyway, bored now. Anyone can check the numbers for themselves.

Ah, this old chestnut again. Bitcoin isn't zero sum and just because you keep repeating it doesn't make it so. The code, the network, the asset all provide real economic value. Good money is something that makes everyone better off.

Feel free to tell everyone where the money comes from when Punter A sells BTC that does not come from Punter B buying their BTC.

Paying a slice of that transaction to Punter C and calling it a "transaction fee" doesn't turn it into external revenue.

If you buy that bond trading at 24%, can you articulate where that 24% is coming from? Who is paying it?

Whoever sold the bond at a discount forfeited a share of future redemption capital, in exchange for being able to cash out now, rather than when the bond matures. If they sell at par they are essentially selling you El Salvador's future coupons just as El Salvador sold the same to them, while if they sell at a discount they're selling you that plus part of the return of their stake, in exchange for the ability to get out now. The redemption yield can be thought of as the coupon plus the annualised return of waiting to maturity to grab the original investor's forfeited stake. So the answer to your question is "El Salvador and the seller who took a haircut". The more you know!