BITCOIN

masonic

DannyCarey said:

The dollar has lost 99.88% of its purchasing power vs Bitcoin over the last ten years.

We all may as well quit our jobs, as we're now being paid next to nothing in Bitcoin terms. It's just lucky everything has become so cheap or we'd have perished.

Frequentlyhere

DannyCarey said:

The dollar has lost 99.88% of its purchasing power vs Bitcoin over the last ten years. 

And Bitcoin has lost 35% of its purchasing power vs Gamestop stock over the last five years. Who knew meme stocks were the real future of money?

Malthusian

DannyCarey said:

The dollar has lost 99.88% of its purchasing power vs Bitcoin over the last ten years. 

When you put it like that, it sounds like a really bad idea to try to use worthless dollars to buy a laughably miniscule sliver of magic Internet money. Like a 4-year-old kid with their first pocket money walking into a Lambo showroom and asking how many they can buy with their 50p.  Might as well HFSP.
The good news is that the US dollar has rocketed c. 250% in value over the last couple of years. It turns out the US dollar was the real get rich quick scheme all along! And atheism is just another religion. Few understand.

aaj123

Malthusian said:

Yes I do, because more of them lost money in the ensuing dumps than hodled to the next pump. That is a simple mathematical property of a zero-sum game (negative sum-game if you exclude electricity costs). Punters' money in == punters' money out. Few understand.

The flaw in your logic is that it is not just a case of money in = money out. While there are ofcourse many (like in any investment) who just want fiat gains, there is a growing base of holders for whom there is a clear intention to use Bitcoin as an alternate store of value and allocate permanently a % of their capital for the protection this gives against inflation. The pumps during bull cycles will continue because of speculators who get tempted by quick gains but the dumps only go down to levels much higher than previous dumps because of the rising hodler base. Even the hodler base will rationally try to sell into these speculation laden pumps but will promptly aim to buy back in when the pumps fade, thus solidifying a new higher low. Indeed, few understand this.

What this means is that eventually Bitcoin will have reached a stable peak which like gold will tend to be only moderately volatile and will continue rising with fiat inflation. In this state there will be ongoing liquidity because of people who exit to fiat for regular needs and people entering to hedge their fiat value against future inflation. Your mistake is to think that at some point, everyone holding Bitcoin will be rushing for exits - it just means you do not understand why Bitcoin was invented and what the real value is other than speculation that any investment attracts.

aaj123

Observe how $17 billion of Credit Suisse Bonds became worthless overnight. This is called bankruptcy risk and it is present to an extent in all traditionally financial instruments. On the other hand, crypto like Bitcoin and ETH are bearer instruments that you can be sure will exist even decades from now. There is no analogous cpty risk / bankruptcy risk involved in holding these (provided you self-custody). This very fact makes them have moneyness.

aaj123

Frequentlyhere said:

DannyCarey said:

The dollar has lost 99.88% of its purchasing power vs Bitcoin over the last ten years. 

And Bitcoin has lost 35% of its purchasing power vs Gamestop stock over the last five years. Who knew meme stocks were the real future of money?

The reason stocks can never have the quality of moneyness is because their supply is not controlled (i.e could get diluted) and because they can cease to exist due to bankruptcy. Further you cannot even self custody shares nor transact with them if you want to pay another party.

Bitcoin has none of these disadvantages hence it has 'moneyness'.

Malthusian

aaj123 said:

The flaw in your logic is that it is not just a case of money in = money out. While there are ofcourse many (like in any investment) who just want fiat gains, there is a growing base of holders for whom there is a clear intention to use Bitcoin as an alternate store of value and allocate permanently a % of their capital for the protection this gives against inflation. 

Are you asserting that some people will never cash out their Bitcoin for money or money's worth? Not even on death?
Even if we entertain that idea, in that case they get 0 money out and punters' money in still == punters' money out.
If you are attempting to separate punters into "speculators who sell their Bitcoin for money or money's worth" and "hodlers who wait a really long time before selling their Bitcoin for money or money's worth", it does not alter the mathematics.
Speculators' money in + hodlers' money in == speculators' money out + hodlers' money out.
If you are attempting to say that some people will spend their Bitcoin in a mythical future where you can pay your grocery bills with it without converting it into fiat first, that also does not alter the mathematics. If I spend £27,000 to buy a Bitcoin, hodl and buy a Lambo worth £270,000, the same amount of money has to be put into the system by other investors as if I spent £27,000 to buy a Bitcoin, hodl and sell it for £270,000 in dirty fiat to buy a Lambo with. Money == money. 
What we are seeing is an attempt to "other" people who lose money in Bitcoin as "speculators" and "paper hands", to remove their losses from the equation on the grounds that they "didn't Bitcoin properly". Every pound / dollar / can of baked beans of profit made by someone in Bitcoin is a pound lost by somebody else. But if you pretend the losses don't count because they were borne by "speculators", hey presto, punters' money in < punters' money out and WAGMI. (We're All Gonna Make It, for those not keeping up with the acbronyms.)

Observe how $17 billion of Credit Suisse Bonds became worthless overnight. This is called bankruptcy risk and it is present to an extent in all traditionally financial instruments.

Inorite. That showed all those mugs who put all their savings into Credit Suisse loan notes claiming they were "the future of money" because the price of the bonds would moon to 5x and beyond in a matter of years.

startrim

Does anyone here in the UK use Koinly to keep track of their Crypto transactions and to help with filling in the HMRC form for capital gains?
I am considering using Koinly unless there are better alternatives?

masonic

Malthusian said:

Are you asserting that some people will never cash out their Bitcoin for money or money's worth? Not even on death?

In fairness, people lose access to their Bitcoin even before they die. I'd imagine quite a lot of Bitcoin gets permanently locked away in wallets of the deceased with little hope of ever being recovered. Though efforts to do so sometimes bear fruit.

Frequentlyhere

aaj123 said:

 

There is a growing base of holders for whom there is a clear intention to use Bitcoin as an alternate store of value and allocate permanently..The pumps during bull cycles will continue because of speculators who get tempted by quick gains but the dumps only go down to levels much higher than previous dumps because of the rising hodler base. 

Just wanted to pick out this specific bit from @aaj123 's comment.

This quote seems to suggest that the spot price of Bitcoin is able to naturally build as 'hodlers' increasingly outweigh speculators. If we accept there are an increasing number of 'hodlers' (frankly, I've no idea) is that true?

Under my current understanding, the people holding bitcoin and neither buying nor selling aren't actually relevant to the price. The price is determined only by the balance between those actively selling or buying. Do I have it wrong?

My understanding is that this mechanism is the reason that often very large BTC buy/sells are done away from the spot market, because they could quite easily crash the price.

If I do have it right, wouldn't a smaller pool of people actively buying/selling actually make it more volatile as liquidity thins?