BITCOIN

User232002

lozzy1965 said:

Hey guys, the above series of posts really smacks of lies, damned lies and statistics!  Am I the only one who thinks this?

Fair point. I'll summarise;

Equities crashing back to the levels they were at 2 years ago. Bitcoin still up 3x.

Thrugelmir said:

Sounds like a desperate King Canute trying to stop the waves coming up the beach. While many people cut their losses and sell out having got their fingers seriously burnt. 

My god. How many times does it need to be pointed out that posts in this forum don't affect an asset that trades tens of billions daily.

Michael121

BTC is not up 3x it depends what you bought in at. Some of you jumped on at 20k after seeing it going parabolic and was saying were see you at 100k. Others said they was in since 2018 if i remember correctly so more than likely have a cost average above 10k.

Compare the market to BTC from buying in 2018 and the risk reward don't look so great anymore. Of course a nice lump sum at the bottom of 2020 has seen a very nice return, but you could have done that in individual stocks as well. 

Its like you lot like to quote how BTC was more than a 100% annualized return, at the end of the day none of you were in it to capture those returns until long after everyone's nan heard about it.

Frequentlyhere

Just to add a voice to the chorus, calling Bitcoin zero sum is doing it a favour. Even if we ignore the impact of the miners and permanently lost tokens, it's clearly not going to add a net benefit to market participants.

There's no money coming in aside from greater fools. There's no yield. If you need some sort of external validation of this though, the FT have comprehensively debunked the notion:

https://www.ft.com/content/26283f09-c3df-4c7e-814c-65083b063d8a
https://www.ft.com/content/83a14261-598d-4601-87fc-5dde528b33d0

The 'argument' against of "The code, the network, the asset all provide real economic value. Good money is something that makes everyone better off" just doesn't make any sense. It's not debunkable because it's not even addressing the point, it just calls it 'good'.

I don't know why this is a contentious point, Well, I suppose it isn't for anyone who's looking at this rationally. It doesn't itself make bitcoin a bad thing as all FX trading is zero sum. I can only make money trading GBPUSD if someone else is losing, and the real winners, as with crypto, are the ones facilitating the trading.

Adyinvestment

Frequentlyhere said:

There's no money coming in aside from greater fools. There's no yield.

I get 6% yield on my Bitcoin - I could get more but I prefer the safer options

Malthusian

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.

So how's that free money working out?

"Stablecoin" brodollar TerraUSD dumps to 20 cents (although it's recovered to 68 cents at time of writing, not that that helps those who sold their "free money" at 20 cents)

In addition to popcorn, the Terra collapse provides a valuable lesson in economics.

While some stable tokens, like Tether and USD Coin, are meant to be backed by assets to maintain their peg, Terra relies on financial engineering.

The Terra protocol allows traders to take advantage of an arbitrage opportunity when TerraUSD weakens below the value of a dollar. They can “burn” one TerraUSD for $1 worth of Luna, making a profit and taking a TerraUSD out of circulation when the token’s price slips below the dollar, or do the reverse when the TerraUSD strengthens.

To those who were distracted during their A-level Economics lessons by the girl with the close-fitting white shirt, this appears to make sense. Price is a function of supply and demand. Supply down = price up. Therefore, if you can create a mechanism that rewards people for reducing the supply (burning tokens) until the price reaches the desired level, the price is guaranteed to go up. What could go wrong?

If you answered "that price is a function of supply and demand", have an 8-bit picture of a cookie. Unlike sheeple paper dollars, which are backed by the fact that they can be used to pay a US tax bill and the US courts treat them as valid payment of a US debt, Terra brodollars are backed purely by the hope that some unspecified person will pay you 100 real cents for them later, who in turn is hoping the same thing. Greater Fool Theory doesn't just apply to trying to hodl Bitcoin to $400,000. It still applies if you are trying to sell a "stablecoin" you bought at 99 cents for 100 cents.

Somewhere up the line, someone handed over 100 cents or close enough for tokens that were generated for near-free by pushing a button. (Certainly for less than $1 worth of electricity or Luna wouldn't exist.) That money taken off the table has to be balanced by money put on the table. Where does it come from? Well, until this week, TerraUSD hodlers would have said "nowhere because new people are always being born". Reality has just shown that it comes from people dumping TerraUSD that they bought at ~$1 for whatever they can get after the bottom falls out. 

The future of money!

"But we have also," continued the management consultant, "run into a small inflation problem on account of the high level of leaf availability, which means that, I gather, the current going rate has something like three deciduous forests buying on ship's peanut."
"So in order to obviate this problem," he continued, "and effectively revalue the leaf, we are about to embark on a massive defoliation campaign, and...er, burn down all the forests. I think you'll all agree that's a sensible move under the circumstances.”

Thrugelmir

The Lehmans moment of Crypto Currency. Investor support melts away .......

Hexane

Thrugelmir said:

The Lehmans moment of Crypto Currency. Investor support melts away .......

Ouch!

Just looked at the price, had to double check it wasn't in GBP.... no, really all that way down even in USD.

[Deleted User]

Coinbase is trying to calm investors after it seems their share price fell 23% and there were fears of bankruptcy, in which case it has been suggested that the customers could been seen as creditors and their crypto would be gone.

https://www.ft.com/content/50c1e24d-4b28-42fe-bb29-e9d13aa01909

Madness, thank god I sold all my coins a couple of weeks ago just before they crashed again. Although maybe a good time to buy if you are brave!

User232002

Thrugelmir said:

The Lehmans moment of Crypto Currency. Investor support melts away .......

Hardly. Unlike Lehman, there will be no central bank printing money to save Luna and Do Kwon. The capital that was mis-allocated, blinded by greed, will be punished and the people that correctly allocated capital will remain. I'm really not sorry that UST/Terra has gone to zero; the consensus view was that it was always unsustainable, a complete ponzi and anyone could have verified this themselves with a modicum of research - algostablecoins have a long and colourful history of blowing up with remarable regularity. 

A lot of people have probably learnt the importance of decentralisation and POW today. Unfortunately, many people burned by this may not want to hear this - but the current fiat system is more akin to Luna than Bitcoin is. Even today HKMA are currently defending the HKD peg and this entire Luna episode is more or less analogous to the Soros / GBP trade in the 90s.

Malthusian said:

The future of money!

Please stop conflating crypto with Bitcoin. They are not one and the same. UST was always on borrowed time.

Zola.

darren232002 said:

Thrugelmir said:

The Lehmans moment of Crypto Currency. Investor support melts away .......

Hardly. Unlike Lehman, there will be no central bank printing money to save Luna and Do Kwon. The capital that was mis-allocated, blinded by greed, will be punished and the people that correctly allocated capital will remain. I'm really not sorry that UST/Terra has gone to zero; the consensus view was that it was always unsustainable, a complete ponzi and anyone could have verified this themselves with a modicum of research - algostablecoins have a long and colourful history of blowing up with remarable regularity. 

A lot of people have probably learnt the importance of decentralisation and POW today. Unfortunately, many people burned by this may not want to hear this - but the current fiat system is more akin to Luna than Bitcoin is. Even today HKMA are currently defending the HKD peg and this entire Luna episode is more or less analogous to the Soros / GBP trade in the 90s.

Malthusian said:

The future of money!

Please stop conflating crypto with Bitcoin. They are not one and the same. UST was always on borrowed time.

Thing is, everything is in the toilet. 
I work for a tech company, record sales in Q1, yet the stock price literally halved since November. Bitcoin is highly correlated with the Nasdaq at this moment in time, which is being hammered. 

As for all the sh*tcoins, well thats no surprise and people will learn one way or another from being rekt, than Bitcoin is the only one that matters.

I don't imagine there will be any big peaks again until the next halving after 2024. Im good with that!