BITCOIN

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.

RichTips

Sorry, are you honestly saying Apple was "small" in 2008? It was something like the 33rd largest company by market cap in the world in 2007 and 18th in 2008. If that's small, Lord knows what qualifies as big. Perhaps $6 to $197 is indicative of something other than just its growth from "small" to "big".

As for volatility among national currencies, how about the Argentinian Peso? The new president has just devalued the currency by 50%. I hope people in the 22nd largest economy in the world didn't have all their money hidden at the bottom of any barrels.

Regarding the benefit of hindsight, not much else I've advocated a "gamble" on at very risk-adjusted levels in this forum other the Bitcoin. Thanks, mods, for allowing me to delete all those posts I made recommending buying shares in Credit Suisse

Taking a break for real this time, promise.

silvercue

2024 is gearing up to be a great year for crypto.  FED Dovish, interest rate drops expected, halving, Spot ETFs

Bitcoin up 150% already this year and only just starting to gear up.  My biggest bag, ADA, is up 150% in last 3 months.

On top of the ludicrous APRs I am getting yield farming.   Looking good.

My stock portfolio is up 49% YTD, but dwarfed by my Crypto gains.

Funny to see the crypto bashers still spend all of their time in a thread for a product they are not interested in investing in!   

MeteredOut

silvercue said:

2024 is gearing up to be a great year for crypto.  FED Dovish, interest rate drops expected, halving, Spot ETFs

Bitcoin up 150% already this year and only just starting to gear up.  My biggest bag, ADA, is up 150% in last 3 months.

On top of the ludicrous APRs I am getting yield farming.   Looking good.

My stock portfolio is up 49% YTD, but dwarfed by my Crypto gains.

Funny to see the crypto bashers still spend all of their time in a thread for a product they are not interested in investing in!   

TLDR; HODL!

Scottex99

Cus said:

Scottex99 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.

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. 

Good for you, everyone is here to try to make money from their investments.

It creates such strong responses because it’s nascent, the White Paper for Bitcoin is 15 years old.

Typically older people don’t trust it as they can’t understand it and younger people see it as a type of digital gold: store of value, democratised hardest form of money that cannot be inflated away like fiat money can (and has).

We all know big bankers can’t be trusted to look after the average person, the same as the majority of politicians. Jamie Dimon just came out this week saying he hates Bitcoin and no doubt gave some Terrorist Financing, Money Laundering reason for it, ironic given what his bank has paid in fines for doing the exact same thing.

It is very volatile and speculative, I personally find it fun.

If you want to hold bonds or very low risk funds, then go ahead. If you want to throw £500 at some super risky altcoin then do that too. We all know to max out our ISAs, invest in sensible baskets of stocks that return 10-12% per year and over decades we can retire comfortably - but

A lot of young people today don’t have that choice and they are looking for alternatives. If there is some great reset coming in whatever form, crypto MAY be a way to front run it.

Your comment on young people is interesting.  The feeling of a lack of choice. Why can't a young person invest in sensible stocks for 30/40 years and then retire?

Good question.

I'll have a crack.

Because they are not taught how money and investing and savings and interest works at school.
They don't have any spare cash (They make £25k, have to pay rent and a box of Shreddies is now 6 quid)
They are lazy
They are looking for some shortcut or get rich quick scheme, which I have to remind my friends looking to get into crypto, that's not what it is
Maybe a few others, mainly the lack of money i'd say 

Aegis

silvercue said:

2024 is gearing up to be a great year for crypto.  FED Dovish, interest rate drops expected, halving, Spot ETFs

Bitcoin up 150% already this year and only just starting to gear up.  My biggest bag, ADA, is up 150% in last 3 months.

On top of the ludicrous APRs I am getting yield farming.   Looking good.

My stock portfolio is up 49% YTD, but dwarfed by my Crypto gains.

Funny to see the crypto bashers still spend all of their time in a thread for a product they are not interested in investing in!   

Someone who bought a winning lottery ticket would be showing gains that dwarf your crypto gains. Doesn't make it a good investment, just means that they got lucky. And in fact, it's a very similar concept, in that both are zero sum games at best, so any gains that one person sees must eventually be offset by losses incurred by someone else (or multiple someone elses).