BITCOIN

Scottex99

HansOndabush said:

Scottex99 said:

HansOndabush said:

Onestepcloser said:

I personally don't own bitcoin but have invested about 4.5k in alt coins since December and as of today I'm up 500% probably more if I was to calculate the interest from staking.  Crypto for the most part is definitely not a scam , although volatile if you choose projects with solid technology  gains should continue just the same way it would with the stock market.

That is so completely not true. You don't seem to realise that stock markets go up due to the work done by companies to produce goods and services which increases the value of the companies such that they can pay larger dividends and investors are therefore willing to pay more for the shares. That is completely different to crypto currencies that produce nothing and have limited use and which cannot increase value on their own. Crypto price might be increasing for now but that is only due to other punters betting a higher stake on it. If you are making 500% then someone else is or will be losing it as Malthusian has tried to explain and which you clearly fail to grasp.

Crypto is like the stock market on steroids, fine.
But does it really make sense that Tesla is worth more than all the other US car companies combined? How many cars do they sell? Or that Apple is worth more than some countries? How good are their products really?

Trying to claim that the share price is exactly correlated to the profits and output of certain companies, and then use that as a reason why crypto somehow produces nothing in comparison, is just incredibly short-sighted. 

Malthusian's point also doesn't do it for me. How is it any different to the stock market? The market(s) determine the price for everything. Are we crying about how much the other people are losing when we sell stocks at a 5x profit too? I don't see how it's relevant at all.

I'll try again as you don't seem to understand the difference between shares in the stock market and a cryto currency token.

A share is what it says an actual share in a company that works and produces goods and services. The goods and services increase the value of the company, the company can pay dividends, and the shares rise and fall on the merits of the company; not just as wild speculation.

I admit that Apple and Tesla are arguably in a bubble too right now and buyers of their shares are possibly being over-optimistic about their future prospects. That however is totally different to speculating on Bitcoin in the hope that someone will pay a higher price for it sometime in the future. Bitcoin is not going to produce any clever smartphones or electric cars; it is never going to pay a dividend; in fact it is nothing but a number on a blockchain. Once governments bring out their official digital currency that actually has a purpose, i.e. you can buy things with it and pay bills, then what is the purpose of Bitcoin apart from trying to move funds around out of sight of the authorities?

When the crash comes, crypto will be the biggest casualty and probably never recover.

Imagine thinking you need to get paid a dividend for something to have value. CBDCs are the complete opposite of decentralised hard money. The more you say nonsense like that, they more I know you either don't get it or have done next to no research.

Crypto winter decimated most coins by 90%, the start of Covid put BTC down to $4k and ETH down to $100. There's been multiple crashes in the last 10 years. Yet more people (and big corps) are buying BTC and ETH than ever before.
Hence BTC is $58k and ETH is the highest it's ever been, today. $3650.

Nobody took me up on this before, lets have a bet. BTC is closer to $100k than $0. You pick the timeframe and the amount. £1/£10/£100/£1000, whatever you want. Loser pays the other's charity.

Let's at least make it fun for me to prove you wrong, which I will. Or better yet, Bitcoin will 

Notepad_Phil

darren232002 said:

...  despite countless people on here still insisting that the government will ban it (which as already mentioned is impossible due to technical considerations and game theory implications anyway). ...

I'd be interested to know why you think this is impossible.

The US Government can lever a lot (and I mean a lot) of power over non-US companies so could essentially ban any financial company from allowing access to it - so without those banks etc how do you put your money into crypto or get it out again?

Theoretically you could keep it in crypto and e.g. buy a tesla, but what happens when tesla's bank says sorry but you can't accept crypto anymore or the stock market regulator says we'll have to delist you if you continue to accept crypto.

And yes there might be a very small percentage of trade that continues, but I'd say that this is going to be much closer to a real ban than what happened with the ban on alcholhol during Prohibition.

Whether the US government would ever want to do this I've no idea, but the idea that it would be impervious to a concerted US government action does not tally with the facts.

Scottex99

Notepad_Phil said:

darren232002 said:

...  despite countless people on here still insisting that the government will ban it (which as already mentioned is impossible due to technical considerations and game theory implications anyway). ...

I'd be interested to know why you think this is impossible.

The US Government can lever a lot (and I mean a lot) of power over non-US companies so could essentially ban any financial company from allowing access to it - so without those banks etc how do you put your money into crypto or get it out again?

Theoretically you could keep it in crypto and e.g. buy a tesla, but what happens when tesla's bank says sorry but you can't accept crypto anymore or the stock market regulator says we'll have to delist you if you continue to accept crypto.

And yes there might be a very small percentage of trade that continues, but I'd say that this is going to be much closer to a real ban than what happened with the ban on alcholhol during Prohibition.

Whether the US government would ever want to do this I've no idea, but the idea that it would be impervious to a concerted US government action does not tally with the facts.

I'd never say never but at this stage with big corps getting in and JPM, Citi etc etc all having a look I'd say highly unlikely now.

Fair point though. There are regs in a few jurisdictions now, quite a few in Europe. My firm is regulated out of Gibraltar, actually very strict and expensive to get a DLT licence there, and we're pretty cautious whenever being approached by US nationals/companies purely because of the SEC.

Maybe a potential ban could come in but I think there would be too much backlash now

steampowered

Scottex99 said:

Nobody took me up on this before, lets have a bet. BTC is closer to $100k than $0. You pick the timeframe and the amount. £1/£10/£100/£1000, whatever you want. Loser pays the other's charity.

Let's at least make it fun for me to prove you wrong, which I will. Or better yet, Bitcoin will 

If you are so confident that you know what will happen to the price of bitcoin, why don't you put your money where your mouth is and short it? 

HansOndabush

Bitcoin could go to any price $100K, $1m, anything which still would not prove it isn't just a bubble and might go to $0

benbay001

Scottex99 said:

I'd never say never but at this stage with big corps getting in and JPM, Citi etc etc all having a look I'd say highly unlikely now.

Wait, what? JPM and Citi are holding crypto?

TimSynths

benbay001 said:

Scottex99 said:

I'd never say never but at this stage with big corps getting in and JPM, Citi etc etc all having a look I'd say highly unlikely now.

Wait, what? JPM and Citi are holding crypto?

Citi weighs launching crypto services after surge in client interest | Financial Times

onomatopoeia99

TimSynths said:

benbay001 said:

Scottex99 said:

I'd never say never but at this stage with big corps getting in and JPM, Citi etc etc all having a look I'd say highly unlikely now.

Wait, what? JPM and Citi are holding crypto?

Citi weighs launching crypto services after surge in client interest | Financial Times

No doubt one of the investment experts on here will be along to tell us that Citigroup are cultists.

User232002

Notepad_Phil said:

I'd be interested to know why you think this is impossible.

The US Government can lever a lot (and I mean a lot) of power over non-US companies so could essentially ban any financial company from allowing access to it - so without those banks etc how do you put your money into crypto or get it out again?

Theoretically you could keep it in crypto and e.g. buy a tesla, but what happens when tesla's bank says sorry but you can't accept crypto anymore or the stock market regulator says we'll have to delist you if you continue to accept crypto.

And yes there might be a very small percentage of trade that continues, but I'd say that this is going to be much closer to a real ban than what happened with the ban on alcholhol during Prohibition.

Whether the US government would ever want to do this I've no idea, but the idea that it would be impervious to a concerted US government action does not tally with the facts.

They could try, but it would never succeed over a long term timeframe.

Sure, you can target fiat on and off ramps, but you cant stop Bitcoin unless you're willing to turn off the internet. I was around in 2006 when the US attempted to ban payments to gambling sites via the UIGEA. These transactions move through banks and payment intermediaries like Neteller and Paypal. It was a colossal failure; people have been able to gamble online from the US throughout the whole time period. If they can't regulate payments made within a system that they have full control of and sight within - how on earth are they going to stop a global network that they have no authority over?

Firstly, who says you would want to take your money out of crypto if there was a ban? If the US government made an attempt to ban bitcoin, its basically a tacit admission that its a direct competitor to the dollar and that the dollar is losing (too quickly). This is an advertising campaign for Bitcoin being hard money the likes of which would have never been seen before, which is exactly why Bitcoin trades at a higher price (compared to spot) in every country that has 'banned' it so far. Reducing or restricting trade (as you've described) doesn't make anyone better off. Trade is a tide that raises all boats and is a positive sum game. The optics of this also would not sit well when your entire countries narrative is built on the strength of a free market. The success of Bitcoin is really a story about the loss of trust in fiat currencies, and a government trying to enforce their currency by force tends to be the nail in the coffin to that story, not the reversal of fortune.

Secondly, innovation doesn't happen in large institutions. Banks aren't innovators due to their size, which is exactly why they have all been crushed for the last decade. Financial innovation is happening in the crypto world. Its faster, cheaper, more egalitarian and the elimination of rent seeking intermediaries means network users can accumulate that value instead. If a country wants to ban itself from that then they can go right ahead, but banning yourself from technological innovation is a strategy that will undoubtedly leave you poorer, especially relatively so when other countries embrace it instead. Imagine how well off the UK, or any country, would be right now if we decided to ban ourselves from the internet in 2000.

Thirdly, the US government has, as previously mentioned, shown itself to be anti market crashes since 2008. Whatever you want to say about Bitcoin, there is a considerable amount of US wealth locked up in it right now. Attempting to wipe out that level of wealth is going to cause some consequences for you politically (at a time when the US political scales are very finely balanced no less). I'm not just talking about the amount of wealth that is actually held in digital assets either; Coinbase is currently valued at $60B and would essentially be nuked by such regulation. Then there are the multiple mining companies and early adopters like Silvergate. More pertinently, there has been a shift over the last 6 months towards large institutions suggest to make Bitcoin 1-5% of your portfolio. The people who use these institutions are high net worth individuals, like politicians & lobbyists. Nobody votes to make themselves poorer.

Fourthly, how do you think people are going to react to this? You're a young idealistic Comp Sci graduate with significant crypto assets and currently working for a Defi startup in the US and the government moves to ban it - whats your play? You're probably under 30 and have no wife or kids. My play would be to take my assets and skills to a more crypto-friendly country. So now in order to ban it, you really need a large cabal of countries to come along with you. This comes with two problems; (i) the worlds governments have not shown themselves to be able to co-operate well historically, (ii) as soon as you build a large cohort of countries that aim to ban it, the 'prize' for those that choose not to becomes bigger and harder to resist, therefore any alliance is inherently an unstable solution to the problem. This is probably best expressed with China and Russia, who do not seek to be the reserve currencies of the world, but they definitely don't want the US to continue to enjoy this 'exorbitant privilege' either. 

Look, I think the fed is a cumbersome dinosaur but Yellen, Powell et al aren't stupid. They know all this and they know that any attempt to ban it wouldn't work. They also know about the Triffin dilemma and that reserve currency status is both a privilege and a burden that can not last forever. The people who continue to believe banning it is a thing tend to be people who overestimate the governments power, ability and willingness. Even though I might agree with it from a moral POV, the war on drugs has been going on for 50 years now and is nothing more than a colossal failure economically.

User232002

HansOndabush said:

Bitcoin could go to any price $100K, $1m, anything which still would not prove it isn't just a bubble and might go to $0

Ah, and now the intellectual integrity becomes apparent. You've basically put your fingers in your ears and nothing we can say, however true, will change your mind.

Anti-Bayesian thinking is not a recipe for success in any walk of life.