BITCOIN

bugbyte_2

darren232002 said:

How about we move this forward a little....

If you are someone who believes this is the great unwinding of the ponzi, that the scam has been unveiled and this is the death of BTC; What things in the future would invalidate your thesis?

I would become a true believer if Bitcoin as a viable product found a use that justified its vast energy requirements. To do this its use would have to impact society in such a positive way that the consensus of the population believes its benefits outweigh its negatives. Think 'Flying'. This would therefore have to be a new use (as none already exist) or it would have to do whatever it does do 'better' than existing systems such as banking, and not already be superseded by other more efficient ways of doing the same thing. 

I would become a true believer if Bitcoin as an investment opportunity had a value that was supported by either fundamentals such as assets or paid a dividend / had the potential to pay a dividend. Personally, its energy use would still exclude it from my portfolio because I have an ESG approach. 

This thread exists partly because its fascinating to see how posters even on this page rail against s***coins but cannot see any synergy with Bitcoin or whatever they hold, and partly because of Matt Damon moments.

Scottex99

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.

Haha, no surprise it's you coming out with that. Aged well I see.

I got caught out with LUNA/UST. I knew it was Algo backed and most almost all algo backed stablecoins had failed but took my eye off the ball a bit after how big LUNA got and how much volume UST was doing (3rd biggest stable after USDT and USDC).

Had all my LUNA staked and couldn't have got it out in time anyway even if I wanted to dump it. Took a hit for about $35k but mainly just lost profits as had got in around $3-4. Still not checked the UST I have in various Terra network pools but I'd assume all of that is rekt too, you live and learn

Scottex99

bugbyte_2 said:

darren232002 said:

How about we move this forward a little....

If you are someone who believes this is the great unwinding of the ponzi, that the scam has been unveiled and this is the death of BTC; What things in the future would invalidate your thesis?

I would become a true believer if Bitcoin as a viable product found a use that justified its vast energy requirements. To do this its use would have to impact society in such a positive way that the consensus of the population believes its benefits outweigh its negatives. Think 'Flying'. This would therefore have to be a new use (as none already exist) or it would have to do whatever it does do 'better' than existing systems such as banking, and not already be superseded by other more efficient ways of doing the same thing. 

I would become a true believer if Bitcoin as an investment opportunity had a value that was supported by either fundamentals such as assets or paid a dividend / had the potential to pay a dividend. Personally, its energy use would still exclude it from my portfolio because I have an ESG approach. 

This thread exists partly because its fascinating to see how posters even on this page rail against s***coins but cannot see any synergy with Bitcoin or whatever they hold, and partly because of Matt Damon moments.

You're never going to be able to quantify it in traditional finance terms. There is no dividend because there is no company or entity behind it. It's a decentralised peer to peer cash network. 

I dont know a huge amount about mining and that space but from what I've read 50-60% of the energy used for it, comes from green sources anyway. Plus it's not like anybody cares about the energy used by banks in the global financial system which dwarves the use for BTC anyway.

It's a new use compared to fiat money because it's fixed supply, decentralised and gives users a potential sovereign way to control their wealth. Once I have BTC stored offline, nobody can take it from me. And as adoption grows and we go through the 4 year halveings, the fiat price of BTC goes up, in theory. Potentially to very high numbers. 

User232002

Deleted_User said:

I can only conclude that the point in all this is to win at debating things on the internet rather than to illuminate people about the merits or otherwise of Bitcoin as an investment.

I think I've made plenty of posts in this thread about the latter.

Deleted_User said:

But if we actually want to move the discussion forward then instead of fishing for comments that you can use as a sounding off point for the same slagging match we've had for the last 200+ pages, why don't we hear some genuine reasons why Bitcoin would be a sound investment at present. 

Price and value are two different things. The price is down over the last two weeks, but the value proposition is unchanged. Probably up actually given that in the last week Germany moved to make BTC/ETH exempt from CGT, China started to unban Bitcoin again and a large Brazilian bank put 1% of its treasury in to BTC.

Deleted_User said:

This isn't because I think it's a "scam", but because it's fairly obvious to me that a lot of the momentum behind Bitcoin during its steep price rise was driven by sentiment and that's clearly turned over the last few months (people are now tripping over themselves to point out that crypto has become "boring" and the developments of the last few weeks, though not directly related to Bitcoin, will undoubtedly knock a lot of casual investors' confidence in anything crypto).

You probably shouldn't be investing in things due to 'momentum' or 'sentiment.'

Deleted_User said:

Arguing that something isn't a scam is a pretty low hurdle to clear, what I'd like to know is why Bitcoin represents a sound investment for someone like me who is open to the idea but has a healthy scepticism about gibberish on the internet. I would far rather be rich than right so I'd genuinely love you to prove me wrong.

Money is an economic good that humanity uses to solve a problem; the co-incidence of wants. If I am a Blacksmith and you are a Butcher, I can trade my metal for your meat. However, since you only need one sword then perhaps I would have to trade my metal for bread from a baker and then trade with you for meat. In this example, bread is the money that we use to facilitate trade. Certainty and belief in the money you use unlocks human productivity. It allows me to specialise knowing that I can use the money I earn to secure all my other wants and needs. It also allows me to over produce and acquire wealth that I can keep for the future.

Some things are better money than others. Bread is an awful money because it degrades too quickly to be useful. Over time, humanity has used many things as money; sea shells, glass beads, paper, certain rocks or metals such as Gold. We can identify traits that make things better money; fungible, divisible, scarce, verifiable, durable (as identified above) etc

Money is a winner take all competition and nobody can not opt out of this competition. Its in societies interest to facilitate co-operation by settling on the best solution for the greatest number of people; a Schelling point. When Europeans with glass making facilities showed up in Africa in places that used glass beads as money they could trade on very favourable terms with items that cost them essentially nothing. When Germany and many European countries switched to a gold standard (historically, it had been Silver that was the standard for central banks). China and India remained on a silver standard. The price of gold appreciated rapidly over the ensuing period in silver terms. In both the above cases, people that followed the crowd and denominated their wealth in glass beads or silver saw their wealth evaporate.

In the modern world, our money is bad (see the traits of good money and compare it to USD or just look at how much the USD has devalued over the last century) which has led to the financialisation of other assets. The RE market in China runs at a 50 to 1 price to income ratio because there is nowhere else to park wealth in the Chinese economy (their stock market isn't run for shareholders benefit and capital controls prevent the majority from diverting funds outside of the country). The same problem exists, albeit to a lesser degree, in the western world. The money has not always been bad, but key dates for this divergence would be 1914 (the BoE buy 2/3 of the governments war bonds with printed money because the British people don't want to finance WWI), 1933 (The US orders its citizens to turn over all gold; in order to introduce soft (fiat) money it was necessary to artificially remove the competition) and 1971 (the world call the US' bluff on gold convertibility which leads to the petrodollar system where oil is priced in dollars in exchange for US military support). I could make a broad argument that the frequency and brutality of conflict in the 20th century has largely been enabled by the persistence of bad money but that is superflous to this point.

Our current monetary system is the USD. Russia has just been kicked off this because the US didn't like their actions. Russia, China and India, at least, have become very aware that participating in a monetary system where a rival can just take $600B of your accumulated wealth probably isn't in your best interests. Russia / China have been reducing exposure to US assets for much of the last decade. However, none of these 4 can trust an alternative system with a rival at the helm - they need a trustless system that works openly for all of them. Gold is heavy, therefore slow and costly, thus isn't fit for conducting international trade. 

So, the world has bad money. Good money makes things better for society and we also need an open protocol that enemies can use to transact with each other. Reason what money is from first principles and what the traits of good money are and you land on Bitcoin being the best solution currently available. That it is also a trustless, permissionless, decentralised protocol enables the latter as well. Then, the fact that money is a competition which you can not opt out of leads to Bitcoin accruing the monetary premium that is currently present in Gold, to start with, and then RE, stocks and everything else. 

Knowing this and acquiring it before others get there leads to a healthy return.

User232002

Thrugelmir said:

Another dip would hardly be a surprise. Given the far broader clouds hanging over almost every asset class. The great reset will continue for some considerable time. A new era for investors. With the punch bowl of cheap money taken away. 

Everything, including Bitcoin, will be down only for at least a few months more. But the punch bowl is being temporarily removed to be refilled, not taken away.

Interest rates won't go up to anything approaching a reasonable level because things would break; bankruptcies, unemployment and shortages. If the Fed/BoE/ECB wanted to hike 4% in one go tomorrow I'd be fully onboard with that even though I've said here before that responsible central bank monetary policy is actually the greatest threat to Bitcoin. I think we are at the point though where 'responsible' policy makes things so bad that it basically causes a riot and is politically unsustainable - so we are locked in to this death cycle and eventual rise of its replacement.

This leads back in to my point somewhat; If I had come here in April / May 2020 and said 'In two years time, inflation will be 8% and interest rates only at 1%' many people would have said that was impossible. You have to make statements that test your own hypotheses because otherwise you're just going to continually walk around and make excuses for your own biases. I'm not suggesting you make predictions, but its important to define where your outliers are.

I would say "The fed will not sustain interest rates at 3% or above for 6 months or longer at any point within the next 5 years." Given that the market is supposedly pricing in an EoY interest rate of 2.5% last time I checked, making such a statement about an outcome just slightly beyond that seems pretty definitive.

bugbyte_2 said:

I would become a true believer if Bitcoin as a viable product found a use that justified its vast energy requirements. To do this its use would have to impact society in such a positive way that the consensus of the population believes its benefits outweigh its negatives. Think 'Flying'. This would therefore have to be a new use (as none already exist) or it would have to do whatever it does do 'better' than existing systems such as banking, and not already be superseded by other more efficient ways of doing the same thing. 

Not specific. Not measurable. Please try again.

Consensus on technical issues by the population is irrelevant. Most of the population can't pass GCSE Mathematics, but you are expecting them to weigh up a technical nuanced topic in a balanced way and come to a correct conclusion. Impossible.

Consensus also impossible to measure. Brexit won the vote but yet I'd say there is very little consensus over what Brexit should look like. And that's even when you have figures from a national referendum.

A few years ago, it might have been reasonable to say;

"I'll believe in Bitcoin when its an asset held on the balance sheet for greater than 5% of the treasury by an S&P500 company." Or "I'll believe in Bitcoin when a country makes it legal tender."

Things that at the time a Bitcoiner would have wanted, but a non-Bitcoiner would have contended to be impossible.

bugbyte_2 said:

I would become a true believer if Bitcoin as an investment opportunity had a value that was supported by either fundamentals such as assets or paid a dividend / had the potential to pay a dividend. Personally, its energy use would still exclude it from my portfolio because I have an ESG approach. 

No Bitcoin proponent is suggesting it can or will pay a dividend though. There's a phrase about judging a fish by its ability to fly. I would however like to thank you for saying 'I'll believe in Bitcoin if X, but actually I still wouldn't because of Y though.' as that kinda proves my entire point around the emotional blindness.

You need to come up with something that a Bitcoiner thinks will happen that you don't think will happen, and that would be so far out of your expected realities that it would cause you to re-evaluate your hypothesis. 

Price could be a part of that. For example, "If Bitcoin gets to $1M I will accept that I may have been wrong." But you also need to be reasonable with that because I don't think BTC would get to that price level for a long long time; there is no point in finding out you're wrong when everybody else has already realised that (as would probably be the case in this example).

bugbyte_2

darren232002 said:

"I'll believe in Bitcoin when its an asset held on the balance sheet for greater than 5% of the treasury by an S&P500 company." Or "I'll believe in Bitcoin when a country makes it legal tender."

Things that at the time a Bitcoiner would have wanted, but a non-Bitcoiner would have contended to be impossible.

To take just one point. Elon Musk brought into Bitcoin because he could manipulate the price with one tweet and make shedloads of (real) money. To think otherwise IMHO is very naive. El Salvador's Bitcoin experiment has had zero uptake from investors. I am not saying either of these things are not significant, but its not seismic. 

Just out of interest, I can tell you why Kingfisher shares are worth 254p. Can you please tell me why 1 Bitcoin is worth £24K and not 240K or 2.4K or 2.4p? If it is just 'thats what the market deems' than that is just sentiment, and sentiment can untether rather quickly.

Scottex99

And if Kingfisher shares are 2.54p or 2540p tomorrow, you can also tell me why?

Zola.

https://simpleflying.com/emirates-bitcoin-payment/

User232002

bugbyte_2 said:

To take just one point. Elon Musk brought into Bitcoin because he could manipulate the price with one tweet and make shedloads of (real) money. To think otherwise IMHO is very naive. 

Bitcon trades billions every day and as we seem to point out repeatedly even Elon can't move such a market by meaningful percentages. This idea is rooted in the belief that the only people buying Bitcoin are fringe and its still a large pump and dump scheme. Hell, perhaps there is something in there; "I'll believe in Bitcoin when its liquidity surpasses that of the Gold market. Or the market for treasuries of X country."

But, lets examine your hypothesis further. You seem to be saying that Elon is (1) capable of manipulating the price of BTC and (2) will do so such that his profit is greater than zero before (3) selling and realising that profit. Lets assume this to be the correct. Well, Tesla currently still own 90% of the BTC they bought at an average cost price of $32,000. If your hypothesis is correct, then the correct way to express that given that Bitcoin last week was at $25,000 and even now is at $29,000 would be to buy it. You don't even have to express an opinion on how much profit Elon is willing to run it to, since it is currently below his cost price.

And if you think the probability of (1) or (2) is < 100% then you might wish to revisit your original statement above that implies that believing either is less than 100% would be 'naive.'

bugbyte_2 said:

I am not saying either of these things are not significant, but its not seismic. 

It is very easy to hand wave these things away after the fact, which is why I am attempting to have this conversation in the first place. I am fairly certain that if we had this discussion in 2017 at the height of the bull run many people would have said that it was certain that Bitcoin would never be a reserve asset or legal tender for a country. 

But still, where is the limit? If a country in the 20 - 60 GDP rankings (I'm thinking Norway, Singapore, Saudi or UAE type countries) was to purchase it as a central bank asset would that change your opinion? I'm sure if the USA announced tomorrow that the dollar was being ditched for Bitcoin as legal tender you would be forced to accept you were wrong, but it would be pointless to realise such a thing from an investment POV so late, so we are looking for the first signal that renders your hypothesis incorrect.

What if a major energy producing nation was to start to price their energy exports in BTC? I think that's coming within the decade and probably within 5 years.

bugbyte_2 said:

Just out of interest, I can tell you why Kingfisher shares are worth 254p. Can you please tell me why 1 Bitcoin is worth £24K and not 240K or 2.4K or 2.4p? If it is just 'thats what the market deems' than that is just sentiment, and sentiment can untether rather quickly.

You believe you can do this, but you can't scientifically do it. Economists love to believe they are physicists or mathematicians, but they aren't. What you have are various models that evaluate factors that may influence the price, for example using P/E indicators, but these models can not definitively state that the exact P/E or price for X company should be 14.78 and that anything over or under that is incorrect.

There are various models that describe factors that influence the Bitcoin price; network hash rate (the more hashes, the more secure the network, the more value it can sustain), active wallet addresses (more people using the network means the network should have a higher value), value transacted over a given time period (more value sent over the network shows that more people are using it for settlement). Personally, I'd rather just evaluate the probability of Bitcoin succeeding multiplied by the price of BTC if it were to succeed. 

bugbyte_2

Scottex99 said:

And if Kingfisher shares are 2.54p or 2540p tomorrow, you can also tell me why?

Yes.

Kingfisher has a very good PE ratio, dividend yield, little debt and an established trading record in a stable market compared to other FTSE companies - not all rosy, see report below. Kingfisher also turned out to be quite defensive in the last blip, but this is tempered by the market sentiment that 'bricks and mortar' are out of fashion, therefore putting it in value territory. If it was worth 2.54p the dividend yield would be insane, and it would within seconds revert to the 250p mark. If it was worth 2540p it would crash back down to the 250p mark as everything else would be better value.

Again, what makes Bitcoin worth 24K?

Kingfisher PLC Fundamentals

Company Name	Kingfisher PLC	Last Updated	2022-05-13
Industry	Home Improvement Retail	Sector	Consumer Cyclical
Shares in Issue	2.017 bn	Market Cap	£5.15 bn
PE Ratio	6.41	Dividend per Share	£0.12
Dividend Yield	4.72	Dividend Cover	3.30
EPS	£0.40	EPS Growth (%)	0.30
PEG	0	DPS Growth (%)	0
Debt Ratio	0.1902	Debt Equity Ratio	0.2919
Asset Equity Ratio	1.8224	Cash Equity Ratio	0.1158
Quick Ratio	0.5175	Current Ratio	1.29
Price To Book Value	0.7596	ROCE	0

Kingfisher PLC Dividends

Type	Ex-Date	Pay Date	Currency	Net Dividend	Year Total
Prelim	2022-05-19	2022-06-27	GBP	0.0860
Interim	2021-10-07	2021-11-12	GBP	0.0380
Interim	2021-06-03	2021-07-05	GBP	0.0825
Interim	2019-10-03	2019-11-08	GBP	0.0333
Prelim	2019-06-06	2019-07-15	GBP	0.0749

Kingfisher PLC Company Financials

Assets	2022	2021	2020	2019
Tangible Assets	£4.96 bn	£4.92 bn	£4.90 bn	£5.32 bn
Intangible Assets	£2.75 bn	£2.75 bn	£2.75 bn	£2.81 bn
Investments	£17.00 m	£20.00 m	£16.00 m	£15.00 m
Total Fixed Assets	£8.40 bn	£8.31 bn	£8.13 bn	£8.52 bn
Stocks	£2.75 bn	£2.49 bn	£2.48 bn	£2.57 bn
Debtors	£230.00 m	£226.00 m	£229.00 m	£406.00 m
Cash & Equivalents	£785.00 m	£1.09 bn	£763.00 m	£850.00 m
Other Assets	£670.00 m	£625.00 m	£451.00 m	£382.00 m
Total Assets	£12.35 bn	£12.27 bn	£11.91 bn	£12.47 bn

Liabilities	2022	2021	2020	2019
Creditors within 1 year	£3.12 bn	£3.18 bn	£3.43 bn	£3.51 bn
Creditors after 1 year	£2.46 bn	£2.52 bn	£2.68 bn	£2.81 bn
Other Liabilities	0	0	£88.00 m	0
Total Liabilities	£5.57 bn	£5.70 bn	£6.11 bn	£6.32 bn
Net assets	£6.78 bn	£6.57 bn	£5.80 bn	£6.15 bn

Equity	2022	2021	2020	2019
Called up share capital	£325.00 m	£332.00 m	£332.00 m	£332.00 m
Share Premium	£2.28 bn	£2.27 bn	£2.27 bn	£2.27 bn
Profit / Loss	£1.01 bn	£756.00 m	£103.00 m	£300.00 m
Other Equity	£6.78 bn	£6.57 bn	£5.80 bn	£6.15 bn
Preference & Minorities	0	0	0	0
Total Capital Employed	£6.78 bn	£6.57 bn	£5.80 bn	£6.15 bn

Ratios	2022	2021	2020	2019
Debt Ratio	£0.24	£0.29	£0.29	0
Debt-to-Equity	£0.32	£0.40	£0.40	0
Assets / Equity	1.8224	1.8224	1.8224	1.8224
Cash / Equity	0.1158	0.1158	0.1158	0.1158
EPS	£0.38	£0.29	£0.16	£0.15

Cash Flow	2022	2021	2020	2019
Cash from operating activities	£1.65 bn	£897.00 m	£1.11 bn	0
Cashflow before financing	£1.09 bn	£140.00 m	£278.00 m	0
Increase in Cash	£881.00 m	£2.00 m	£12.00 m	0

Income	2022	2021	2020	2019
Turnover	£13.18 bn	£12.34 bn	£11.51 bn	£11.69 bn
Cost of sales	£8.25 bn	£7.77 bn	£7.26 bn	£7.37 bn
Gross Profit	£4.93 bn	£4.57 bn	£4.25 bn	£4.32 bn
Operating Profit	£1.14 bn	£916.00 m	£283.00 m	£480.00 m
Pre-Tax profit	£1.01 bn	£756.00 m	£103.00 m	£300.00 m