BITCOIN

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? 🤣

Thrugelmir

Zola. said:

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

The fad is passing in terms of being an investment. 

mooneysaver

Doesn't generate value? What do you call building wind turbines in Gambia?

https://mobile.twitter.com/farzad23864527/status/1451430597944020994?lang=en-GB

I think some people in here got lost on the way to their boomer stocks threads 

Thrugelmir

mooneysaver said:

 What do you call building wind turbines in Gambia?

A good idea. My portfolio is stocked up with renewable investment. From battery storage, wind, solar, hydro, forestry, charging points etc etc. I don't need to buy a crypto currency to own a share of them though. Just adds an unneccesary layer of risk. 

mooneysaver

Ah so when you said "no value" you meant "too risky". Careful those goalposts are heavy, you might do yourself some damage if you keep shifting them around so much.

Aegis

Thrugelmir said:

mooneysaver said:

 What do you call building wind turbines in Gambia?

A good idea. My portfolio is stocked up with renewable investment. From battery storage, wind, solar, hydro, forestry, charging points etc etc. I don't need to buy a crypto currency to own a share of them though. Just adds an unneccesary layer of risk. 

It always baffles me when people claim that the "revolutionary" feature of crypto is that some of the projects do things like build renewable sites and jointly own them.  My portfolio also has plenty of renewable energy investments, and the collective way in which such sites are owned is via a company, so I own shares in that company.  Those shares are then valued depending on how much someone is willing to pay for a piece of the overall assets and income.  Anyone can buy or sell those shares pretty much instantly using an exchange, and some of the investment vehicles have been around for decades.  The difference is that a) my ownership of the shares confers a legal right to income and assets in the event of wind-up and b) the value of such shares is essentially based on the profitability of the underlying asset with various factors influencing whether there is a premium or discount to the net asset value of the underlying holdings.  This type of structure is an investment trust, and these have been going as an asset type for over a century.

Or, apparently, I could take ownership by buying an asset type where the price is determined almost exclusively by sentiment and influencers, with no real bearing on the actual value of the assets that are owned by the token as a whole.  On top of that, it's genuinely questionable in some cases whether owning a token actually grants ownership of anything under actual law.

I'll stick with investment trusts!