BITCOIN

Scottex99

Qyburn said:

boingy said:

Comparing Bitcoin with shares is not a sensible approach.
You should compare Bitcoin with other, more traditional, currencies. People invest in Dollars, Pounds and Euros. Just like Bitcoin, none of those things are real. 

I don't see how Bitcoin can be both a currency and an investment. To be a currency it needs a stable and predictable value.

I heard a good description last week.

There's big B bitcoin which is the price (what takes 90% of the attention of most people).

Then there's little b bitcoin which is the network, the blockchain and the core product and developers etc. Not my strong suit as I'm not techy.

But, I think because of inflation and typically any fiat money not surviving much more than 100 years, there's a narrative that Bitcoin could become the global settlement layer for finance. 

A bit far fetched imo but they are two separate things, yes.

Qyburn

Scottex99 said:

Qyburn said:. 

I don't see how Bitcoin can be both a currency and an investment. To be a currency it needs a stable and predictable value.

I heard a good description last week.

There's big B bitcoin which is the price (what takes 90% of the attention of most people).

Maybe an example would help explain what i mean about currency. Let's say I'm selling my house, and with Bitcoin at £55k I se the price at offers over 6 BTC.  Selling a house could take a few months, during which Bitcoin price could vary wildly. I might find nobody will offer because Bitcoin has risen so much my house isn't worth 6 BTC. Or dropped to the extent that I'd be giving it away.

Alternatively I could set the price in £, but accept payment in Bitcoin. That's using it as a payment method, not as a currency. 

Scottex99

Yep, I get that. What the bitcoin maximalists will say is sometime in the future, you won't need to price it in £ because that person will just pay you 6 BTC, and then you'll do all your other spending in BTC with no need for conversion.

i.e 1 BTC = 1 BTC.

We're not there yet of course so settling invoices or paying bills (to a fixed fiat amount) doesn't really make sense unless it's a small instant transaction.

You do still see it from time to time, people buying houses or cars etc.

What's happening in the payments infrastructure for the companies that do invoice/settle in crypto, they are using stablecoins, mainly USDT and USDC.

Qyburn

Scottex99 said:

You do still see it from time to time, people buying houses or cars etc.

The only context I've seen where someone asked for payment in Bitcoin without also quoting a real-world currency equivalent was ransomware scammers. I haven't followed that industry accurately enough to know if they're treating Bitcoin as an absolute reference, or adjusting their price to more or less track £ (or $). I suspect the latter.

mooneysaver

zagfles said:

mooneysaver said:

zagfles said:

Scottex99 said:

zagfles said:

Scottex99 said:

Hexane said:

But Scott, for those of us that found this interesting, it's all a bit quiet. What should we do now? Keep searching dead threads like this one? Or do I need to sign up to "podcasts and newsletters" to follow what you guys are up to?

tbh I've just sunk another 10K in an HSBC fund.

Yeah I don’t mind keeping it going, just can’t be bothered with all the arguments like last time.

Even though I’ve worked in Crypto since 2018, the bear markets are boring and I tend to cut out the newsletters and podcasts, but I’m back in them now, haha.

It’s pretty interesting to see the psychology.

”oh it’s dead, it’s going to 0”
”wait a sec it’s come back a bit”
”it’s doing pretty well now”
”I can’t believe I didn’t buy loads at the bottom, please will it go down in price so I can buy more”

Yeah really interesting psychology, here's another, although it probably doesn't fit the narrative

https://forums.moneysavingexpert.com/discussion/comment/78167059/#Comment_78167059

Strange, I never feel the need to do or say anything like that with any of my investments, or potential investments, regardless how well or badly they've done. Why don't other investments have the same psychology I wonder.

It’s a forum to talk about investments, some might have strong opinions, incorrect or not.

It’s cyclical in nature, just the stock market but on a shorter timeframe. 2017, 2021 and soon to be a likely bullrun in 2025 - due to the 4 year halvening events. All you can do is try to learn more from each one.

People also tend to gloat or brag if they are in the minority of being right on something speculative. I’ll try to keep mine to a minimum when BTC rips next year 😉

I've done well on speculative stuff, also done badly on others, but I never feel the need to gloat, brag, or even cry about any of it. I never feel the need to make predictions about my investments on internet forums either. Somehow bitcoin is different. Very strange that.

I also never feel I've missed out if a speculative investment which I turn down does really well. Any more than if a mate wins a 50-1 shot on the horses. They took a gamble, they won, good for them. I wasn't prepared to take the gamble. I never feel I've lost out because I didn't do the same.

Good luck to everyone, whatever you're investing in. But beware of anyone who makes any predictions about anything unpredictable. Particularly using carefully selected statistical information. Just google a graph, then you see the level of volatility and risk, and then you may start to question why social media is full of people who only want to give one side of the story...

Not really a bet on the horses when as Scott has explained anyone investing now is guaranteed to make money come 2025 due to the halvening

 

OK I'm sure you're taking the p, but just in case not, or anyone else reading doesn't understand basic market fundamentals...

Any known future event will already be priced into the current market price. If the market knows or even anticipates a future event which is likely to increase price or demand, the price will have already risen to account for it. 

So no, there is no guarantee whatsoever. Unless you know something that no-one else does.

These aren't basic markets. There is a halvening every few years

Malthusian

zagfles said:

 

OK I'm sure you're taking the p, but just in case not, or anyone else reading doesn't understand basic market fundamentals...

They're not taking the p. Check their comment history. To truly understand the future of finance it helps to understand the mindset of the "early adopters".

Scottex99

These aren't basic markets. There is a halvening every few years

Doesn't guarantee anything except the block reward is cut in half and therefore supply into the market is reduced. All the previous 4 year cycles have followed a similar pattern and I think this will be the same but nobody can be sure 100%

Aegis

Scottex99 said:

How is that different to gold or stocks, aside from dividends and “gold can be used to make watches”

I don’t think it’s zero sum at all. 

I’ve bought at every possible price between $3k and $60k.

I bought at ~$17k in Jan this year when whoever was on the other side was happy to sell to me.

And I’ll sell sometime next year, hopefully in the $60-80k range. When someone will happily buy too.

its a free market, nobody that got in super early needs to convince people to push the price up, the market, hard money and economics does that job well enough 

If that was a serious question, you really aren't an informed investor.  Stocks are fractional ownerships of companies, which means that in the event that the shares are wound up, the shareholders are entitled to a proportion of the company's underlying assets.  At the same time, the ownership also gives access to a proportion of the profit that the company makes, whether distributed as a dividend or reinvested into the company for future growth. Doesn't matter which of those happens, the idea is the same: the company's activity brings in funds from external sources in exchange for the goods or services that the company provides.  As such, if the company has a good business model or good potential, that's the reason to expect the value of the company to go up.

That's not even remotely comparable to what happens with commodities like gold.  In the case of gold, someone buys it and it does nothing.  The hope is that the scarcity coupled with the utility (it's pretty and it's also a very good conductor) means that someone will eventually want to pay more for your gold than you bought it for.

With bitcoin, you have a system set up like commodities, but missing the utility. On its own, scarcity really doesn't matter, and eventually people will realise that. Based on what I am seeing in terms of the number of people who are getting more aware of what crypto is and how many scams there are in the sector, I'd be really surprised if you achieved $60-80k next year.  But hey, it's all based on completely irrational sentiment, so who knows?

Aegis

boingy said:

Comparing Bitcoin with shares is not a sensible approach.
You should compare Bitcoin with other, more traditional, currencies. People invest in Dollars, Pounds and Euros. Just like Bitcoin, none of those things are real.

Anyhow, I'm just glad to get my Bitcoin money back. Too volatile for my liking.

I don't know why crypto triggers such strong responses in people. 

I would agree, it's definitely not even remotely similar. Much better to make a comparison with commodities, but there are still quite a lot of differences, in that when you buy a commodity you have a right to an actual physical asset.  The best analogy I have come up with is to a commodity future contract dated so far into the future that you will never have ownership of the actual asset. 

Scottex99

Aegis said:

Scottex99 said:

How is that different to gold or stocks, aside from dividends and “gold can be used to make watches”

I don’t think it’s zero sum at all. 

I’ve bought at every possible price between $3k and $60k.

I bought at ~$17k in Jan this year when whoever was on the other side was happy to sell to me.

And I’ll sell sometime next year, hopefully in the $60-80k range. When someone will happily buy too.

its a free market, nobody that got in super early needs to convince people to push the price up, the market, hard money and economics does that job well enough 

If that was a serious question, you really aren't an informed investor.  Stocks are fractional ownerships of companies, which means that in the event that the shares are wound up, the shareholders are entitled to a proportion of the company's underlying assets.  At the same time, the ownership also gives access to a proportion of the profit that the company makes, whether distributed as a dividend or reinvested into the company for future growth. Doesn't matter which of those happens, the idea is the same: the company's activity brings in funds from external sources in exchange for the goods or services that the company provides.  As such, if the company has a good business model or good potential, that's the reason to expect the value of the company to go up.

That's not even remotely comparable to what happens with commodities like gold.  In the case of gold, someone buys it and it does nothing.  The hope is that the scarcity coupled with the utility (it's pretty and it's also a very good conductor) means that someone will eventually want to pay more for your gold than you bought it for.

With bitcoin, you have a system set up like commodities, but missing the utility. On its own, scarcity really doesn't matter, and eventually people will realise that. Based on what I am seeing in terms of the number of people who are getting more aware of what crypto is and how many scams there are in the sector, I'd be really surprised if you achieved $60-80k next year.  But hey, it's all based on completely irrational sentiment, so who knows?

You're right, the majority of my experience is with crypto and not with S&S, although I'm still old enough to have some Funds on HL etc.

But that doesn't make it zero-sum, except that the potential utility is more conceptual and is going to be for a while when the whole asset class is barely 15 years old.

Scarcity will matter if central banks keep printing billions in a never ending cycle of debt and inflation. 

And scams I would say are irrelevant, like there isn't scams in banking or even in huge global companies. Enron etc. Scams are prevalent because it's new and people are fairly clueless. I opened my junk mail personal email yesterday and had multiple Nigerian Prince, Lottery wins etc. Nobody would fall for that these days but they might just fall for some investment scam promising 2% return a week for "Forex Bitcoin Super Algo Trading" because people might think hmmm BTC did go from $1 to $50k.....