BITCOIN

Frequentlyhere

29/09/22: darren232002 said:

JPY, EUR and now GBP decimated. Confidence in any fiat currency other than the dollar has plummeted. Fed finally got to 3% and the global economy is on the precipice of falling in to the abyss. Bitcoin thesis going according to plan.

When everything tanks, BTC will too though. That's your bottom buying opportunity. $15k. Maybe $10k

2 months later:

JPYUSD +4%
EURUSD +5.5%
GBPUSD +8%
BTCUSD -15.5%

Risk-off currenices going up.Stocks going up, bonds going up too. Crypto economy on the precipice of falling into the abyss. Bitcoin specifically - who knows.

Everything not currently tanking, but bitcoin still is, as prophesised. Not sure if that represents a winning prediction. <shrugs>

Section62

Crypto firm BlockFi files for bankruptcy after FTX collapse

https://www.bbc.co.uk/news/business-63786201

 

SonOfPearl

Section62 said:

Crypto firm BlockFi files for bankruptcy after FTX collapse

https://www.bbc.co.uk/news/business-63786201

 

I'm sure the usual suspects will be along shortly to tell us why this doesn't matter and that fiat currencies are doomed and bitcoin is the future. 

Linton

darren232002 said:

GDB2222 said:

In some countries with volatile currencies, a more stable currency is a useful alternative to the local currency. Dollars are often used for that purpose. Why is BTC significantly better?

Because more than 40% of the dollars currently in existence were printed in the last two years simply because a group of 12 unelected people in a room decided to do so. This printing devalues the single dollar and directly steals wealth from those who have saved in dollars.

BTC has a monetary issuance determined by code and consensus, incorruptible by human greed.

So a drop in the value of BTC simply in terms of the goods it can buy isnt a stealing of wealth?  In real terms in the past year has fallen far more than the $ or £.

It would seem the 12 unelected people has done a much better job than the vagaries of the market.

Frequentlyhere

Does anyone else feel like we're approaching another inflection point for Bitcoin?

Silvergate bank shares went down 42% in a single day, and this institution is key to keeping the bitcoin price afloat as it helps keep institutional buyers/sellers from affecting the spot price. Good explainer here.

In short, the visible price we know and see is an artifice and this institution not existing would Not be good news for Bitcoin.

Meanwhile and perhaps not unrelated, the Chinese focused exchange Huobi looks distinctly wobbly.

It seems strange to think that something (BTC) that's 73% down from its high is still artificially way too high, but that's my view. With all of the various internal cartel pressures, it just seems that it's either going to float along as it is if they keep the ship afloat, or it's going to collapse rather spectacularly. I don't see much of a middle ground as everything is so interwoven.

Gary1984

The thing I just don't get is that absolutely any non-zero price is too high. There's nothing to measure it against to suggest when the price may be 'about right'. 

I guess with actual currencies there's also a supply demand dynamic. The dollar is high right now as it's seen as a safe haven. Is this just like bitcoin in reverse? The difference is you can buy things with dollars such as goods, services, bonds, other investments or just pay tax in them if a US citizen. People want dollars as they think they'll perform relatively well but you can also DO things with your dollars. If you can't actually do anything with a bitcoin except maybe convert it back to an actual currency then what's the point? Why does it have value?

hallmark

What I think is strange is the lack of price movement for the last two months. Very uncharacteristic and during a news cycle that's offered lots of opportunities for large falls.  Tesla has more or less halved in the same period  Just my opinion but it looks to me like the BTC price is being propped up by a bunch of Crypto institutions that have nothing to lose by buying more as they're gonna go bankrupt anyway if it falls much more.

Crypto still looks like a Jenga Tower to me.

Frequentlyhere

hallmark said:

What I think is strange is the lack of price movement for the last two months.
Crypto still looks like a Jenga Tower to me.

That explainer thread I posted above explains why that is. In short, the big boys trade discreetly in a way that doesn't affect that price. As you say, the apparent stability doesn't really make sense otherwise.

Silvergate going under may disrupt that, but as there's still some incentive for them to collude, it's anyone guess as to whether it'll have a material impact on the spot price.

GazzaBloom

hallmark said:

What I think is strange is the lack of price movement for the last two months. Very uncharacteristic and during a news cycle that's offered lots of opportunities for large falls.  Tesla has more or less halved in the same period  Just my opinion but it looks to me like the BTC price is being propped up by a bunch of Crypto institutions that have nothing to lose by buying more as they're gonna go bankrupt anyway if it falls much more.

Crypto still looks like a Jenga Tower to me.

Tesla stock price can be valued against measures, for example the price to earnings, which is still 34 times earnings after the latest drops, so you can make a case for it being still notably overvalued.

How do you value Bitcoin? How do you know if it over or under valued?

Frequentlyhere

Gary1984 said:

The thing I just don't get is that absolutely any non-zero price is too high. There's nothing to measure it against to suggest when the price may be 'about right'. 

If you can't actually do anything with a bitcoin except maybe convert it back to an actual currency then what's the point? Why does it have value?

There's a few things:

1) As per the explainer above, the price we see is pretty much faked. There's no real liquidity there. If you had and tried to sell 1000 bitcoins on the open market it would crash badly.

2)  Anything can have value if a set of people feel it does. Gamestop shares still trade at 1000% higher than in 2020. That amount of people has shrunk drastically recently in this case, but there are still many die-hard bitcoin fans who truly believe it is the future of money and that now is just a buying opportunity. 

3) Linked to 1), vested interests. You have people like Michael Saylor who might be forced to liquidate all of his thousands of bitcoins if the price falls too far.

4) Crime. There is genuine usage of bitcoin for money laundering, drugs etc etc.

5) An arguable marginal use case for countries with currency problems e.g. Turkey, Ukraine, Venezuala etc if they're restricted from converting to other currencies for whatever reasons. Of course hardly ideal when your currency saviour itself falls 75% in a year.

There are of course a whole host of other BS reasons which don't really stand up - future of money/inflation proof/store of value/bank the unbanked/digital gold and on and on.