BITCOIN

RichTips

A currency? If you're asking me, not in its present form, no. The narrative that it's a store of value is currently the pre-eminent one, I believe. An arguably convenient hedge against currency debacement, etc.

Regarding volatility, I think Apple lost two thirds of its value in just a year during 1983, 2000 and 2008, despite presently being the most valuable company by market cap in the world. Succesful, concentrated investments arn't immune to volatility or even extreme volatility. I do see your point though, Bitcoin's certainly not something you'd want to bet the farm on and anyone recommending it be anything more than a modest portion of the average British person's net worth would be negligent for not acknowledging the benefits of diversification. I honestly do believe one can hold it while also being a relatively sedate, risk-adjusted person.

User232002

Linton said:

Yes a money transfer system generates value.  We have remarkably effective global ones in operation at the moment run by companies who offer their shares on the stock market.  

I have, just today, had cause to send a payment to an institution in Europe. I had to phone my bank, because you can't request SEPA payments via online banking, and provide 8 identifying pieces of information and 2 explanations as to my conduct. The call took 21 minutes and the payment takes 2-3 days and won't be received until Friday at the earliest because I "missed a 2:30pm cut off time to be sent the same day." That is, of course, assuming any one of the approximately 80 digits and characters we confirmed and reconfirmed weren't incorrect and it does actually reach its destination. 

Please tell me again about this 'remarkably effective global' financial system that was built in the 1970s...

With crypto, I can go from request to my payee receiving the funds within 5 minutes - all without asking permission and justifying what I'm doing to anyone.

Linton said:

But to do this one invests by owning part of the network company, not in the stuff being transferred.  Buying more $s because companies make profits by moving $s around the world makes no sense whatsoever.

Linton said:

I dont have the time or energy to answer all your misaconceptions but this one is easy.....

Oh, the irony....

Malthusian said:

Blimey, Bitcoin must be pamping hard, the King of the Blockquote Gish Gallop is back.

I've not been anywhere. I have enjoyed the quiet time and the ability to position accordingly. However, my participation here over the next two years will be mostly spent laughing at the naysayers as time serves to dismantle your arguments.

And then, I will remind you that some of us saw this coming. And that wasn't an accident or luck.

Malthusian said:

I.e. the largest cohort of bros. The most money was put in at 50k and upwards, that's why it was at 50k and upwards.

Evidence please. You continue to simply make stuff up to suit your own beliefs.

According to Glassnode, 89% of Bitcoin transactions are currently in profit. And just so that we are clear, here is a chart in USD terms. The price of Bitcoin has been above $50k for 5 months in its history. Pick any 5 volume bars from this chart and tell me that 'most' money purchased Bitcoin above $50k...

Malthusian said:

If you genuinely think Tether is an unbacked currency, then short it.

"I'm going to go into the casino and make a fortune betting on red."
"You're going to lose your money."
"Well why don't you come with me and bet on black if u so smart?"

If you genuinely believe that these two statements are equivalent, then you should not be posting on a finance forum.

Cus

RichTips said:

Rather than deliberate this with you in finer detail, Malthusian (despite your evident love of spreadsheet cell price-incorportating reductionist arguments), I'll just leave the post for others to consider.

In respect to you in particular, it's satisfying for me to simply remind you that when you disparaged me as a "bagholder" back in May of 2020 following my first ever post, the price of Bitcoin was £7,200. For all your derision, it's never dropped below that price in the three and a half years since then and currently sits at £33,000. In light of this, forgive me if I'm a little dismissive of your contributions to these Bitcoin/cryptocurrency threads.

I considered the post, and I can't see anything relating to it not being a zero sum game. It could easily have gone the other way with USD/GBP. What am I missing?

As for the current value, it will only truly be satisfying if you convert now to $ I would have thought.

Not directed to you in particular but I find it a shame that we can't discuss the driver's behind the angst / passion etc of bitcoin versus the establishment, the lack of hope or trust in the established markets, how it's perceived  to be weighted against younger generations etc. All we can seem to do is snap at each other, deride or brag.

Johnjdc

darren232002 said:

Malthusian said:

If you genuinely think Tether is an unbacked currency, then short it.

"I'm going to go into the casino and make a fortune betting on red."
"You're going to lose your money."
"Well why don't you come with me and bet on black if u so smart?"

If you genuinely believe that these two statements are equivalent, then you should not be posting on a finance forum.

They are certainly equivalent for as long as there isn't an exchange where you can short Tether, which is not in on the Tether scam. You short Tether on those, you're going to get mysteriously stopped out when someone decides it's worth $1.25 for a fraction of a second. Probably at around the same time the exchange managers, fresh from running a poker site where god-mode players can see everyone's hand, feel there is too much short interest.

Adyinvestment

Whatever else it is, it is currently ranked as the 10th largest asset by market cap in the world

https://companiesmarketcap.com/assets-by-market-cap/

RichTips

Johnjdc said:

darren232002 said:

Malthusian said:

If you genuinely think Tether is an unbacked currency, then short it.

"I'm going to go into the casino and make a fortune betting on red."
"You're going to lose your money."
"Well why don't you come with me and bet on black if u so smart?"

If you genuinely believe that these two statements are equivalent, then you should not be posting on a finance forum.

They are certainly equivalent for as long as there isn't an exchange where you can short Tether, which is not in on the Tether scam. You short Tether on those, you're going to get mysteriously stopped out when someone decides it's worth $1.25 for a fraction of a second. Probably at around the same time the exchange managers, fresh from running a poker site where god-mode players can see everyone's hand, feel there is too much short interest.

You can short Tether on decentralized finance applications on the Ethereum blockchain, among others. You'd do so by lending, for example, USDC, on protocols such as Aave or Compound, then using that as collateral to borrow USDT. The borrowed USDT could then be sold to USDC, which could be added as further collateral before repeating the process. Chainlink, or some other price oracle, will be aggregating multiple price feeds when ascertaining the USDT value, providing a weighted average that is public and verifiable. If you were to be stopped out or liquidated (an app such as DeFi Saver can provision stops), you'd be able to examine exactly what happened.

zagfles

RichTips said:

A currency? If you're asking me, not in its present form, no. The narrative that it's a store of value is currently the pre-eminent one, I believe. An arguably convenient hedge against currency debacement, etc.

It's not a "hedge" against anything while it's so volatile. If you want to hedge against currency losing value it's easy these days, just buy index linked gilts, returns are now positive so you can guarantee a real terms increase in value if you hold to maturity.

Regarding volatility, I think Apple lost two thirds of its value in just a year during 1983, 2000 and 2008, despite presently being the most valuable company by market cap in the world. Succesful, concentrated investments arn't immune to volatility or even extreme volatility. I do see your point though, Bitcoin's certainly not something you'd want to bet the farm on and anyone recommending it be anything more than a modest portion of the average British person's net worth would be negligent for not acknowledging the benefits of diversification. I honestly do believe one can hold it while also being a relatively sedate, risk-adjusted person.

Yes and there'll be hundreds of other companies which lost two thirds of their value and never recovered. Which is why most people will invest in a fund, eg a global tracker, which doesn't hold more than a tiny percentage in any individual company. For instance VLS100 seems to have only about 2% Apple, even now when they are massive. When they were smaller, it'd have been a fraction of a %. So yeah no issue with someone putting a tiny % of their assets into highly volatile stuff. Putting a significant amount in that sort of investment is a gamble.

zagfles

Cus said:

RichTips said:

Rather than deliberate this with you in finer detail, Malthusian (despite your evident love of spreadsheet cell price-incorportating reductionist arguments), I'll just leave the post for others to consider.

In respect to you in particular, it's satisfying for me to simply remind you that when you disparaged me as a "bagholder" back in May of 2020 following my first ever post, the price of Bitcoin was £7,200. For all your derision, it's never dropped below that price in the three and a half years since then and currently sits at £33,000. In light of this, forgive me if I'm a little dismissive of your contributions to these Bitcoin/cryptocurrency threads.

Not directed to you in particular but I find it a shame that we can't discuss the driver's behind the angst / passion etc of bitcoin versus the establishment, the lack of hope or trust in the established markets, how it's perceived  to be weighted against younger generations etc. All we can seem to do is snap at each other, deride or brag.

I don't think there is a lack of hope/trust in the established markets even amongst the young - most will be in DC workplace pensions which will be invested in established markets. 

There may be a narrative when trying to talk up a particular niche investment (or sometimes a pure scam) that the establishment are against your sort, look here's how to beat them etc.

RichTips

zagfles said:

RichTips said:

A currency? If you're asking me, not in its present form, no. The narrative that it's a store of value is currently the pre-eminent one, I believe. An arguably convenient hedge against currency debacement, etc.

It's not a "hedge" against anything while it's so volatile. If you want to hedge against currency losing value it's easy these days, just buy index linked gilts, returns are now positive so you can guarantee a real terms increase in value if you hold to maturity.

Regarding volatility, I think Apple lost two thirds of its value in just a year during 1983, 2000 and 2008, despite presently being the most valuable company by market cap in the world. Succesful, concentrated investments arn't immune to volatility or even extreme volatility. I do see your point though, Bitcoin's certainly not something you'd want to bet the farm on and anyone recommending it be anything more than a modest portion of the average British person's net worth would be negligent for not acknowledging the benefits of diversification. I honestly do believe one can hold it while also being a relatively sedate, risk-adjusted person.

Yes and there'll be hundreds of other companies which lost two thirds of their value and never recovered. Which is why most people will invest in a fund, eg a global tracker, which doesn't hold more than a tiny percentage in any individual company. For instance VLS100 seems to have only about 2% Apple, even now when they are massive. When they were smaller, it'd have been a fraction of a %. So yeah no issue with someone putting a tiny % of their assets into highly volatile stuff. Putting a significant amount in that sort of investment is a gamble.

It's at least a hedge against debasement of something equally or more volatile, of which there are many currencies. Even GBP has shown some pretty shocking volatility in the last couple of years (thanks, Truss). It also lost 55% of its value against USD over the course of 5 years during the 1980s and 25% against it tn the space of 6 months during the 2008 financial crisis.

To your other point, you said:

[Bitcoin is] An investment? One that could almost treble its value in a year or lose nearly two thirds of its value! In just a year.

Nah, that's not an investment, that's a gamble.

Apple did lose more than two thirds of its value in a year on three seperate occasions. Does that mean that by purchasing it as a single stock it is disqualified as an investment as it is, by your above definition, a gamble? I can't fault you on the relative stability of some index funds, however. The FTSE 100 has been pretty flat for the last 25 years (despite the pound having lost around half of its purchasing power).

All that said, I hope you're okay with me being playful in this reply. I do appreciate your position and think we are in agreement that only a tiny percentage of a portfolio being allocated is appropriate for most people when looking at these rollar coaster investments/gambles. I'm going to take a break from replying for a bit now.

zagfles

RichTips said:

zagfles said:

RichTips said:

A currency? If you're asking me, not in its present form, no. The narrative that it's a store of value is currently the pre-eminent one, I believe. An arguably convenient hedge against currency debacement, etc.

It's not a "hedge" against anything while it's so volatile. If you want to hedge against currency losing value it's easy these days, just buy index linked gilts, returns are now positive so you can guarantee a real terms increase in value if you hold to maturity.

Regarding volatility, I think Apple lost two thirds of its value in just a year during 1983, 2000 and 2008, despite presently being the most valuable company by market cap in the world. Succesful, concentrated investments arn't immune to volatility or even extreme volatility. I do see your point though, Bitcoin's certainly not something you'd want to bet the farm on and anyone recommending it be anything more than a modest portion of the average British person's net worth would be negligent for not acknowledging the benefits of diversification. I honestly do believe one can hold it while also being a relatively sedate, risk-adjusted person.

Yes and there'll be hundreds of other companies which lost two thirds of their value and never recovered. Which is why most people will invest in a fund, eg a global tracker, which doesn't hold more than a tiny percentage in any individual company. For instance VLS100 seems to have only about 2% Apple, even now when they are massive. When they were smaller, it'd have been a fraction of a %. So yeah no issue with someone putting a tiny % of their assets into highly volatile stuff. Putting a significant amount in that sort of investment is a gamble.

It's at least a hedge against debasement of something equally or more volatile, of which there are many currencies. Even GBP has shown some pretty shocking volatility in the last couple of years (thanks, Truss). It also lost 55% of its value against USD over the course of 5 years during the 1980s and 25% against it tn the space of 6 months during the 2008 financial crisis.

Seriously? You want to hedge something that generally fluctuates about 5% a year and rarely more than 10% with something that trebles or thirds in value over a year That's not a "hedge"!

You'd have to scrape the barrel to find any fiat currency that's more volatile than Bitcoin. Maybe the Venezuelan Bolivar or Zimbabwean dollar?

RichTips said:

zagfles said:

RichTips said:

A currency? If you're asking me, not in its present form, no. The narrative that it's a store of value is currently the pre-eminent one, I believe. An arguably convenient hedge against currency debacement, etc.

It's not a "hedge" against anything while it's so volatile. If you want to hedge against currency losing value it's easy these days, just buy index linked gilts, returns are now positive so you can guarantee a real terms increase in value if you hold to maturity.

Regarding volatility, I think Apple lost two thirds of its value in just a year during 1983, 2000 and 2008, despite presently being the most valuable company by market cap in the world. Succesful, concentrated investments arn't immune to volatility or even extreme volatility. I do see your point though, Bitcoin's certainly not something you'd want to bet the farm on and anyone recommending it be anything more than a modest portion of the average British person's net worth would be negligent for not acknowledging the benefits of diversification. I honestly do believe one can hold it while also being a relatively sedate, risk-adjusted person.

Yes and there'll be hundreds of other companies which lost two thirds of their value and never recovered. Which is why most people will invest in a fund, eg a global tracker, which doesn't hold more than a tiny percentage in any individual company. For instance VLS100 seems to have only about 2% Apple, even now when they are massive. When they were smaller, it'd have been a fraction of a %. So yeah no issue with someone putting a tiny % of their assets into highly volatile stuff. Putting a significant amount in that sort of investment is a gamble.

It's at least a hedge against debasement of something equally or more volatile, of which there are many currencies. Even GBP has shown some pretty shocking volatility in the last couple of years (thanks, Truss). It also lost 55% of its value against USD over the course of 5 years during the 1980s and 25% against it tn the space of 6 months during the 2008 financial crisis.

To your other point, you said:

[Bitcoin is] An investment? One that could almost treble its value in a year or lose nearly two thirds of its value! In just a year.

Nah, that's not an investment, that's a gamble.

Apple did lose more than two thirds of its value in a year on three seperate occasions. Does that mean that by purchasing it as a single stock it is disqualified as an investment as it is, by your above definition, a gamble?

Absolutely, when it was small like in 2008 ($6 a share compared with $197 now) anything more than a tiny % of an investment portfolio would be a gamble. Obviously, with hindsight, a very successful gamble. But it's easy to find successful gambles with hindsight.