BITCOIN

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?

Frequentlyhere

No answers? Oh well.

Nice take on the current Bitcoin price bump from Molly White here.  Definitely worth reading it all, but as it happens it also seems to support what I've said above, in one of the reasons for Bitcoin going up (my bold)

"2. Bitcoin liquidity is low

Bitcoin liquidity was never high, but after the collapse of FTX it tanked, and has remained quite low ever since. This exacerbates Bitcoin’s price volatility, causing trades to have outsized impact on price. This may be supported by data from CoinShares, which showed substantial Bitcoin outflows"

Just also to highlight one other random bit, that I can certain empathise with. This is her describing how the current bank scares do not really feed into price appreciation of Bitcoin:

"Most people who have the thought “wow, this bank stuff is scaring me” don’t leap right to “so I should withdraw my cash and put it into Bitcoin”. If you are brain-poisoned by crypto Twitter like I am, it’s sometimes easy to forget that this is a really fringe position. If people are afraid about their money, they usually take actions to try to “flee to safety”, and buying Bitcoin is not typically one of those actions"

aaj123

Frequentlyhere said:

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?

As Bitcoin continues to get hodled, sure a smaller proportion of overall supply gets traded on a regular basis but its incorrect to imply from this that the pool of buyers and sellers active are also going to be small. Further, a larger proportion of bitcoin ends up being hodled only as a consequence of the distribution spreading around such that fewer participants have outsize positions that can crash a market if dumped.

As for flight to safety during banking scares, no one is suggesting that anyone puts all their eggs into Bitcoin. They just choose Bitcoin as one key allocation to hedge themselves. Even if this is a small proportion of people, its no different to may financial instruments not having a wide base among retail. Or one could say that the catchment will increase over time.

User232002

Posted 11th October 2022;

darren232002 said:

Sold nothing. Bought more and will continue to do so. What new information? The thesis is literally playing out right in front of your eyes...

When push comes to shove, the printer will always be turned on. This all ends up one way, with YCC and fiat currencies being printed to cover obligations. Bitcoin is sitting very pretty.

Posted 28th November 2022;

Frequentlyhere said:

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>

S&P500 then 3963; S&P500 now 3970 (+0%)
FTSE100 then 7500; FTSE100 now 7400 (-1.3%)
Bitcoin then $16200; Bitcoin price now $27500 (+70%)

Bonds went down so bad they caused entire banks to fail.

"As prophesised"

Frequentlyhere said:

"2. Bitcoin liquidity is low

Bitcoin liquidity was never high, but after the collapse of FTX it tanked, and has remained quite low ever since. This exacerbates Bitcoin’s price volatility, causing trades to have outsized impact on price. This may be supported by data from CoinShares, which showed substantial Bitcoin outflows"

(1) Define low please. Numerically. Because you have a habit of attempting to use qualitative terms to discuss quantitative topics. 

(2) Bitcoin trades several hundred thousand BTC per day on Binance alone, which as a share of its market cap or total supply is 2 to 3 times more than the amount traded in the first few S&P500 stocks I checked (AAPL, META & MSFT). The reason Bitcoin crashed in Jan 2020 is precisely because it is a liquid instrument; In a crisis, you sell what you can, not what you want.



(3) Volume is shown in the bars along the bottom. The FTX collapse began on Nov 2 2022 (highlighted). Please can you point to this 'tanking' of liquidity and its 'remaining quite low ever since.' On the contrary, it would appear that liquidity has recovered and grown in 2023.

Frequentlyhere said:

Just also to highlight one other random bit, that I can certain empathise with. This is her describing how the current bank scares do not really feed into price appreciation of Bitcoin:

"Most people who have the thought “wow, this bank stuff is scaring me” don’t leap right to “so I should withdraw my cash and put it into Bitcoin”. If you are brain-poisoned by crypto Twitter like I am, it’s sometimes easy to forget that this is a really fringe position. If people are afraid about their money, they usually take actions to try to “flee to safety”, and buying Bitcoin is not typically one of those actions"

In a two week period where serious concerns about the banking system have surfaced, Gold is up 10% and Bitcoin is up 40%. Its a bold assertion to claim that these are merely unrelated events. Bitcoin price is behaving like the safe haven asset should.

I'm not Jon Stewart's biggest fan, but this caught my attention;

https://youtu.be/tU3rGFyN5uQ

Data is showing that demand and wage inflation are not the main drivers of inflation and people are, rightly, starting to question the fairness of a system that continually bails out businesses ahead of consumers and employees. 

At 0:50 Summers goes on a strawman tirade about sicknesses and side effects. At 1:30 he tries to bring Stewart's credibility in to question by using 'you and me' to point out to an audience that Stewart is rich (repeated several times throughout the interview). Stewart makes the point that post 2008, the stock market reversed all its losses within 4 years, but the job market took twice as long to do that (and that's just in raw employment terms, because real terms wage growth went nowhere over that time). The argument that the workers should take the pain in the current economy is starting to be questioned.

At 6:20 is the bit that can apply to every public sector strike in the UK right now;

"You're saying to me, 'John, market forces are market forces, and if demand goes up, are you suggesting that Apple should charge less than they could charge?' Let me flip that on you; when there's a tightness in the labor market, what you're saying is the workers shouldn't do the same. That the workers, just following the same capitalistic principles that allow Apple to charge more for their phones, shouldn't charge more because wage inflation is driving inflation."

When people begin to question the fairness of the current financial system, they will look for alternatives. A finite monetary system rewards labor over those that control the money printer because, by definition, the printer allows people to print away the value of labor previously rendered. 

Frequentlyhere

"When people begin to question the fairness of the current financial system, they will look for alternatives"

And yet here we are in exactly the sort of forum which you'd expect to be at the vanguard of such a revolution if that were true, and there's only about 20 of us here talking about bitcoin and perhaps only 3 or 4 of those who actually still think it's a good idea.

It has the reverse of any sort of traction. People were open-minded and gave it lots of leeway with the run up in price, but it's been many years, people lost lots of money, they found no good use for it, and the jig is up.

Adyinvestment

Frequentlyhere said:

"When people begin to question the fairness of the current financial system, they will look for alternatives"

And yet here we are in exactly the sort of forum which you'd expect to be at the vanguard of such a revolution if that were true.

That is quite possibly the most back to front statement I have read on this forum.

I purposely have stopped trying to debate the pro's and con's of Bitcoin here as I find it to be the most closed minded forum I have come across in regard to anything Bitcoin related.