BITCOIN

Linton

thegentleway said:

Aegis said:

RolandFlagg said:

Aegis said:

RolandFlagg said:

https://www.youtube.com/watch?v=HtyvFo9oyB8

Excellent discussion with some of the smartest people in the space.

50 minutes in things really got my juices going on what will be an incredible journey the next couple of decades.

Some interesting stats thrown out such as:
Bitcoin Layer 1 now settles as many transactions as VISA and..
Pick any four year time frame in BTCs history and if you had put 2% of your portfolio in it and kept the rest in cash earning nothing you would have outperformed the S&P 500 and also had a much better Sharpe Ratio.

And to think this is just the beginning. The likes of Blackrock and Fidelity are going to be marketing the crap out of how amazing BTC is as an investment and how groundbreaking the tech is.

The problem with this is that it is purely a discussion of the past performance, and as we know, past performance is not a guarantee of future performance. Goes without saying that very high returns are simply not sustainable in the very long run, meaning the returns either have to level out or collapse altogether.  The long term prospects still boil down to "where is the return coming from?" and the answer is still "from greater fools" (not a statement that everyone buying into bitcoin is a fool, but rather a reference to greater fool theory, which is discussed periodically in this thread) and not from any sort of actual economic activity.

Berrnie Madoff had a very successful investment strategy for many years, and anyone not investing in his strategy was probably being told "you could get better returns with less volatility" by giving him their money. Worked well for early adopters, but much less so for those caught in the latter days before the whole thing unwound.

1. You are kind of making a case for Bitcoin.

Active Management, the kind that Madoff was offering adds another layer of risk. Not only do you have market risk that you get with passive index funds, but you are now adding a Human risk.
You could get a Buffett or Lynch or you could get a Woodford or Madoff.
Madoff fooled people because he offered them a product with no volatility, which is impossible, but because people are risk adverse, myopic and not knowing that risk and volatility are not the same bought into it.

So for years people have called Bitcoin too volatile.
Madoff's fund wasn't volatile.
2.  So far which has been the ponzi?

Was Amazon stock a ponzi because it has fallen in price by 90% twice?
Or Nvidia because it has fallen in price by 85% twice.

New and exciting tech is volatile as it's still in price discovery mode.
It's a feature not a bug.

Portfolio management suggests the more volatile something is, the less of it you should have, because when the asset goes parabolic a small amount goes a long way.
That is what has happened with Bitcoin, and anyone who thinks it won't keep outperforming the stock market and Gold over the long term are just fooling themselves.

3.  It's just got going.

https://www.youtube.com/watch?v=u1-oN8L9590

1. I'm really not. If you think I am, then you are focusing on wholly the wrong things.

2. Both. It's not an either/or choice. The difference is that Madoff's scheme was for his benefit and has collapsed, while bitcoin has yet to collapse. Doesn't mean that bitcoin is more valid than Madoff's scheme, it just means that, for now, enough people still believe in bitcoin as an investment for it to continue performing well. That doesn't change the fact that it does nothing, generates no economic return as a unit and therefore has absolutely no reason to grow in value. As such, it is wholly sentiment driven, i.e. people more or less arbitrarily deciding to ascribe value to something valueless. That's not an investment, therefore it has no place in my or my client's portfolios.

3. Perhaps it has. Or perhaps this is the last gasp before people who bought in at, say, $40,000 realise that there just aren't enough people willing to buy in at, say, $60,000 to drive the price higher. When that happens, the liquidity will dry up and the price will plummet. It might recover, but any major fall could be the last one because there isn't a floor to the price underpinned by economic activity. The history of bitcoin price over time looks like nothing more than a series of bubbles bursting, the unusual part is the number of times the process has repeated.

I have asked on a number of occasions for people to tell me how to calculate a fair price for something like bitcoin, and still nothing. I'm afraid that functions to do with the network size really don't make much sense, as the underlying asset does the same whether the network is a single person or everyone on the planet. Without a mechanism for calculating fair value, there's no way to know whether you are paying a good price for your assets or just a price that has been driven wholly by irrational sentiment.

How do you work out the price of futures, derivatives, gold, etc… ?

It don’t have to be a productive asset; just need enough people to believe it’s a store of value.

Yes, but it helps if there is some reason they wont change their minds at some point.  Pure faith is not sufficient.

You can work out a price of futures and derivatives. On what basis do you think people trade them?  What you consider a reasonable price for such investments may rather depend on why you want them.  Generally they are used I believe as insurance to limit risk, not to make a quick buck.  So what is valuable to you may not be valuable to someone else.  More generally trade can only take place if both sides believe it is in their interests to do so.

Gold is traded for industrial and artistic use and has the benefit of thousands of years of cultural history.

Scottex99

“Pre ETF” pump over the last couple of days. Interesting for a number of reasons.

It’s expected that over 10 could be approved but even if they are, does it become sell the news if the price stalls from there or what if they all get blocked or delayed?

JPM have been caught before openly discrediting crypto whilst buying up the background, would you put it past huge firms trying to do the same again?

Plus the halvening is not far off and historically the true boom doesn’t start until after this.

An interesting few days coming 

MeteredOut

Scottex99 said:

“Pre ETF” pump over the last couple of days. Interesting for a number of reasons.

It’s expected that over 10 could be approved but even if they are, does it become sell the news if the price stalls from there or what if they all get blocked or delayed?

JPM have been caught before openly discrediting crypto whilst buying up the background, would you put it past huge firms trying to do the same again?

Plus the halvening is not far off and historically the true boom doesn’t start until after this.

An interesting few days coming 

Was this the same people/groups within JPM? If not, you can't read much into that since large organisations will always have these disconnects across departments.

Scottex99

I’d have to look for the source but it was high level Jamie Dimon type of thing, from memory.

He called it a fraud and claimed he’d fire his staff if they were buying it personally.

Then there was evidence that JPM was one of the largest buyers of exchange traded notes for Bitcoin.

He said that it was clients purchasing 3rd party products through them.

Either way a bit murky although there is a big crossover between traditional and digital finance coming now, regardless.

MeteredOut

Scottex99 said:

I’d have to look for the source but it was high level Jamie Dimon type of thing, from memory.

He called it a fraud and claimed he’d fire his staff if they were buying it personally.

Then there was evidence that JPM was one of the largest buyers of exchange traded notes for Bitcoin.

He said that it was clients purchasing 3rd party products through them.

Either way a bit murky although there is a big crossover between traditional and digital finance coming now, regardless.

You said "JPM have been caught before openly discrediting crypto whilst buying up the background"

...implying there was some sort of wrongdoing. 

Staff buying crypto personally is not JPM buying it. I can imagine any staff doing that might have been doing so in conflict with their employment contracts, but that does not equate to JPM buying it.

Was there any evidence that it was not client purchases?

Please do share the evidence of what they were "caught" doing, if there is any.

Scottex99

https://news.bitcoin.com/after-the-boss-calls-bitcoin-a-fraud-jp-morgan-buys-the-dip/

https://finance.yahoo.com/news/people-thought-caught-jpmorgan-buying-183900306.html

I was googling whilst typing my reply (to double check I hadn't made it up or been told it by 5 people with the same agenda).

It doesn't matter, Jamie Dimon doesn't care what I think.

But he did say Bitcoin was a fraud which clearly is not true if JPM end up having institutional flows related to BTC ETFs in some way or another. Or they interact with BTC with their assets. Or if they even allow their clients funds to move to 3rd parties to buy BTC......?

MeteredOut

Scottex99 said:

https://news.bitcoin.com/after-the-boss-calls-bitcoin-a-fraud-jp-morgan-buys-the-dip/

https://finance.yahoo.com/news/people-thought-caught-jpmorgan-buying-183900306.html

I was googling whilst typing my reply (to double check I hadn't made it up or been told it by 5 people with the same agenda).

It doesn't matter, Jamie Dimon doesn't care what I think.

But he did say Bitcoin was a fraud which clearly is not true if JPM end up having institutional flows related to BTC ETFs in some way or another. Or they interact with BTC with their assets. Or if they even allow their clients funds to move to 3rd parties to buy BTC......?

Thanks. In summary:

One senior JPM guy gave his (less than glowing) opinion on bitcoin.

Some JPM staff execute trades on notes that track the price of BTC, on behalf of their clients.

A few thousand people on social media go crazy.

So, not "caught" doing anything then.

Scottex99

The senior guy. 

He doesn't need to backtrack and he wont, but it's not a fraud as his bank would therefore be nowhere near it?

Or do bankers do fraudulent stuff a lot?




Moving on, see you at $50k tomorrow afternoon when these things get approved, NFA

MeteredOut

Scottex99 said:

The senior guy. 

He doesn't need to backtrack and he wont, but it's not a fraud as his bank would therefore be nowhere near it?

Or do bankers do fraudulent stuff a lot?




Moving on, see you at $50k tomorrow afternoon when these things get approved, NFA

I wasn't passing comment on the senior guy's views or on the morality of banks, but more-so the apparent need by many in the crypto world to, paradoxically, try to both invalidate traditional banks as dinosaur ponzi schemes whilst at the same time trying to use those banks to validate crypto by suggesting they are making trading decisions to buy it.

Good luck with your $50k target

To the moon. #HODL

Scottex99

Haha that’s more like it!

True, I get the paradox, and there will be plenty of BTC maxis cringing at the ETFs despite the likelihood of them being approved pumping their bags.

This is going to look like a complete set up now but I started this walking to work and just finished it walking back, having no idea they would mention Dimon in it.

Worth a listen , not too high level, ofc it’s two pro crypto people discussing but also describes their “eureka” moments where they decided it could be a real thing 

https://open.spotify.com/episode/7tsDJbtcWxnJILOiJuFTFh?si=UnXAI38dR32G_g2gI-r-QQ