BITCOIN

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

Scottex99

darren232002 said:

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. 

I'm just back from a week in Dubai and Abu Dhabi, I spoke at a couple of Crypto Fund events. 

There are regulatory frameworks being set up in both Emirates right now, there are going to be a lot of big players there. Three Arrows just moved their HQ from Singapore to Dubai.

I have a contact at a mining firm who is direct to the Gov of Oman. Bahrain was mentioned and a lot of the other Middle East too. 

El Salvador and Central African Republic don't really matter on their own but it's the first of a few dominoes to fall while governments realise that the current Central Bank controlled Fiat currency system isn't working properly.

Frequentlyhere

darren232002 said:

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

...What does it do to the theory that 'Tether is a crock' if it manages to sustain the peg and maintain redemptions throughout this kind of market volatility?

Apologies for my slow reply, despite my poorly chosen username I am not all that frequently here.

What does it do? Well, not a lot really. Just as I'm sure they did in the USA many times in days of yore, wildcat banks can survive occasional crises, which doesn't make them a great idea and certainly doesn't mean they'll survive the next one.

I know it's dreadfully tedious for me to keep just referring to FT articles, but there's another timely article this weekend on this very topic.

The thing that would hands-down falsify my view on Tether for me personally would be if they released a complete audit (not attestation) of their assets, which as per the article they point blank refuse to do, despite the fact that they have been one of the direct and explicity stated reasons for the US authorities denying permission for a spot Bitcoin fund.

Until then, what you have is a very large cog in the crypto infrastructure which can't back up its claims and is very susceptible to a run. Not to mention the various misdoings and very peculiar total public absence of the people in charge of it (do you not find that a tadge odd?), or indeed the mystery of how a figure as large as $80bn can be allocated in safe assets with very little evidence of where or what those assets are from anyone outside of Tether.

That's as far as I and I think anyone without insider knowledge can really go, I think. Whilst I suppose it's technically possible they're acting in good faith, it smells incredibly rotten and no-one can really identify any good reasons for the highly suspicious way they behave.

Malthusian

darren232002 said:

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.

(source with more detail)

Presumably a 12% dump isn't a "meaningful percentage" to people who are hodling for returns of 200%pa.

Thrugelmir

darren232002 said:

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.

Nothing temporary. This is is the start of the reset. With Central Banks losing control ofinflation. Pouring fuel on the fire by printing money is no longer an option. A return to normality for interest rates which will result in repricing of assets of all classes. Non income generating assets by default will be the ones to suffer the most. 

Zola.

So you're saying bitcoin is dead @Thrugelmir? 🤣