BITCOIN

HCIMbtw

Frequentlyhere said:

Yes, indeed - "yield".  Terra/Luna investors were getting 20% "yield" too.

The thing is, if there was a risk-adjusted solid yield available on these things, then it would be instantly arbed away by huge global finance houses on the lookout for high yield in a (still, fairly) low yield world. 

I accept that it is nominaly possible to 'earn' with coins, but that money is either at best is coming from marketing departments looking to build popularity of a project, or at worst is the fun half of a ponzi scheme where there's not actually enough money coming out at the back end.

Q. Banks generate interest (yield) on currency? how is it possible for banks to do this if not their marketing teams or a ponzi?

A. Because DeFi platforms like CeFi (banks) are actually businesses that loan and offer products, invest money and generate an income, they can use to offer customer benefits on holding assets with them, giving them liquidity and helping them maintain/grow business 

Q. Why can people earn higher yields on assets like BTC? 

A. We'll if you remove the cost of regulation, the overheads of operating offices and a wealth of physical infrastructure you have then you have much better parity between rates of income and return to customers.. 

I'm not saying DeFi is all reputable, it's a minefield and a loads of risks, and yes loads of trashy alt coins with huge amounts of inflation that generate tokens out of thin air to support huge 'yields', but it seems pretty logical to me that DeFi returns can beat CeFi 

HCIMbtw

mooneysaver said:

Google will have to hold some btc on their balance sheet eventually.  I expect it to hit 6 figures quite easily this year.  Potential blow of top in September a lot higher from here if bitcoin follows its behaviour from the previous 4 year cycles.

Very different from my expectations.. I'm expecting us to track sideways for another few weeks, run a bull trap up to mid/higher 30s, then a bigger retraction down to $22-24k.. a lot more sideways for a couple of months, Expect September to be about the end of the bottom dwelling and start of gradual return to more consistent recovery 

I'm still DCA'ing though

Thrugelmir

mooneysaver said:

Google will have to hold some btc on their balance sheet eventually.  I expect it to hit 6 figures quite easily this year.  Potential blow of top in September a lot higher from here if bitcoin follows its behaviour from the previous 4 year cycles.

Companies aren't in the business of currency speculation. Shareholders would become extremely uneasy. As adds another layer of risk. 

Malthusian

Poor old Laszlo Henyecz. Why dump on him every May? Wouldn't it be more instructive to focus on the guy who bought his 10,000 Bitcoins and now has a hundred-million-dollar fortune?

Oh wait, he cashed in years ago as well, and is now living a modest life as a software developer. Like almost everyone else who bought or mined Bitcoins in the experimental and Silk Road stages. 10,000%+ returns lol.

darren232002 said: I note no anti-Bitcoiner has made any further attempt to make statements regarding what would change their mind on Bitcoin.

Anyone specific you had in mind? I didn't answer that question because it didn't apply to me. You addressed that question to people who believed 1) that Bitcoin is a "Ponzi" and a "scam" 2) that the current dump represents the end of it. Those two beliefs would only apply to someone with little interest in Bitcoin, few of whom will be reading p218 of a Bitcoin thread.

Cash has essentially no yield right now - Money is basically free because it can be printed on a whim which is why banks are paying 0.1% interest.

Not how interest rates work. Governments were perfectly capable of printing money in 1980 when savings accounts paid 10%pa.

Non-best-buy savings accounts pay 0.1% because that is the going rate for lending someone a stable currency, repayable on demand, backed by an industry insurance scheme and ultimately by the taxpayer, for people who don't bother moving their moeny around.

Even if we accept this to be true (I don't, but just for the sake of argument), Bitcoin is still a good bet. People under 40 invest in crypto in equal proportion to those who invest in the stock market. Boomers and older generations own less crypto and more traditional investments. As the wealth from boomers is inherited by millennials, its going to find its way in to crypto ;which is essentially a two decade re-balancing of where wealth is held by humanity.

And millennials keep asking why they are skint and why the boomers have all the money.

As you say, eventually the milennials will inherit real assets from their boomer grandparents and the satoshi will drop one way or another. After the Genexers have had their share.

A generation uninterested in Bitcoin transferring wealth to the generation that is interested in Bitcoin is not a great thing for hodlers. If more millennials get rich thanks to inheritance bailing them out, this reduces the potential market of people buying Bitcoin in the hope of getting rich.

But a fairly significant percentage of businesses don't pay out dividends. Which by the logic espoused in this thread must make them ponzi's.

The words Freq used were "businesses that make profit that can be paid as dividends". All businesses make profits or they (eventually) go bust. Dividends are of increasingly little importance in the modern financial system, and consist simply of a business moving some money you already own from an account you already own into a different bank account you already own. It's profits that matter.

A diversified investment into businesses that make profit is a positive sum game because of those profits. An investment into a computer token in the hope of selling it for more than you paid later is a zero sum game.

Gary1984

Adyinvestment said:

My mate paid for my fish and chips a couple of weeks ago with Bitcoin, I would say that was a pretty normal transaction.

The instability of the Bitcoin value is irrelevant for the retailers (in fact they would not even know Bitcoin was used) as the retailer will always get the fiat amount they are due.

Ah, so your pal converted some bitcoin to Sterling and paid for it with that?

I could probably buy a meal in a restaurant in most countries in the world with my Nationwide debit card. Doesn't mean they've all started accepting Sterling.

Adyinvestment

Gary1984 said:

Adyinvestment said:

My mate paid for my fish and chips a couple of weeks ago with Bitcoin, I would say that was a pretty normal transaction.

The instability of the Bitcoin value is irrelevant for the retailers (in fact they would not even know Bitcoin was used) as the retailer will always get the fiat amount they are due.

Ah, so your pal converted some bitcoin to Sterling and paid for it with that?

I could probably buy a meal in a restaurant in most countries in the world with my Nationwide debit card. Doesn't mean they've all started accepting Sterling.

Well, by your own argument that would mean that Bitcoin can be just as useful as Sterling for general purchasing outside the UK? His card has zero exchange fees so probably better in this comparison.

Thrugelmir

Adyinvestment said:

Gary1984 said:

Adyinvestment said:

My mate paid for my fish and chips a couple of weeks ago with Bitcoin, I would say that was a pretty normal transaction.

The instability of the Bitcoin value is irrelevant for the retailers (in fact they would not even know Bitcoin was used) as the retailer will always get the fiat amount they are due.

Ah, so your pal converted some bitcoin to Sterling and paid for it with that?

I could probably buy a meal in a restaurant in most countries in the world with my Nationwide debit card. Doesn't mean they've all started accepting Sterling.

Well, by your own argument that would mean that Bitcoin can be just as useful as Sterling for general purchasing outside the UK? 

Who wants to hold a currency whose value could have fallen in the time you've entered the restaurant to the time you need to pay the bill. 

Adyinvestment

Thrugelmir said:

Who wants to hold a currency whose value could have fallen in the time you've entered the restaurant to the time you need to pay the bill. 

Isn't that the case with any currency in a foreign country?

Frequentlyhere

Just to cover off a few points from Darren's reply to me:


"Tether is a liquidity instrument. Its a means of exchange that facilitates trade but that doesn't necessarily change the price of a store of value like BTC"

Can I hold you to that? If Tether goes completely TU, are you saying that Bitcoin won't be substantially affected as it's a store of value?  

"People under 40 invest in crypto in equal proportion to those who invest in the stock market"

Where's that from out of interest? If true, I'm not sure it's really relevant as lots of people under 40 have pensions invested in the stock market, so they might have £50 in bitcoin and £50k in their pension (and very few in reverse). Even putting that aside, I'm surprised by that, so would be interested to see the source.

Re: yield/dividends/profit/cash, as per @Thrugelmir 's point, I think the bottom line is that you can't sit on currency and watch it appreciate without some other currency losing out. You can't do it with £, or with $, and if we give Bitcoin the dubious right as a currency you can't with that either. Its gains come from greater fools, of which there seems to be a dwindling supply at present.

And one from @HCIMbtw

"A. Because DeFi platforms like CeFi (banks) are actually businesses that loan and offer products, invest money and generate an income, they can use to offer customer benefits on holding assets with them, giving them liquidity and helping them maintain/grow business"

The differences being that DeFI is unregulated, that these platforms often have rather the propensity to instead steal lots of funds rather than invest them, that when they don't it's not uncommon for said invested funds to be invested with leverage in more crypto at huge levels of risk, and that no real world business wants loans in crypto, they want them in cash so they can actually do something with it.

Crypto 'investors' often like talking about asymmetric risks, well I'd say lending out crypto is one of those where you might get 6% on your investment or you might lose the lot. That's not the type of asymmetry which particularly appeals to me.

Frequentlyhere

Adyinvestment said:

Thrugelmir said:

Who wants to hold a currency whose value could have fallen in the time you've entered the restaurant to the time you need to pay the bill. 

Isn't that the case with any currency in a foreign country?

No. The £/$/Euro very rarely dip 10% over the duration of a long lunch.