Crypto Dabble.

User232002

tebbins said:

Because that is all it worth. A company is worth the present value of its future cash flows discounted at the risk-free rate of return. You can get different prices all the time but that's how owning businesses works.
Bitcoin is worth... Whatever someone is willing to pay for it.

The current risk free rate of return on Bitcoin is 7-8% APY.* Its been a long time since I checked SPY dividend yields, but I'm going to go out on a limb and assume that is higher than any stock out there. That seems like something worth paying for.

*This is historically pretty low by Bitcoin standards, but is probably due to increased capital in the space driving rates lower.

Hansplace

OK. Whether you are a pro crypto or an anti crypto, please have a look at coinmarketcap webpage and see the recently added tab. There is a new coin / token called 

Loki Variants Fan 

tebbins

darren232002 said:

tebbins said:

Because that is all it worth. A company is worth the present value of its future cash flows discounted at the risk-free rate of return. You can get different prices all the time but that's how owning businesses works.
Bitcoin is worth... Whatever someone is willing to pay for it.

The current risk free rate of return on Bitcoin is 7-8% APY.* Its been a long time since I checked SPY dividend yields, but I'm going to go out on a limb and assume that is higher than any stock out there. That seems like something worth paying for.

*This is historically pretty low by Bitcoin standards, but is probably due to increased capital in the space driving rates lower.

Your understanding of "risk free" gave me a tickle 😆 I'd love to see where you're getting this information from.

grumiofoundation

darren232002 said:

tebbins said:

Because that is all it worth. A company is worth the present value of its future cash flows discounted at the risk-free rate of return. You can get different prices all the time but that's how owning businesses works.
Bitcoin is worth... Whatever someone is willing to pay for it.

The current risk free rate of return on Bitcoin is 7-8% APY.* Its been a long time since I checked SPY dividend yields, but I'm going to go out on a limb and assume that is higher than any stock out there. That seems like something worth paying for.

*This is historically pretty low by Bitcoin standards, but is probably due to increased capital in the space driving rates lower.

Whatever your opinions on crypto currencies this is not risk-free. (However you chose to define risk). 

Please don't post such misleading information. 

User232002

You are both mistaken. I am well aware of what 'risk free' means and used it in the context it is commonly understood. I have stated multiple times on here that 'risk free' returns with no exposure to the underlying volatility of cryptocurrencies is far in excess of what the traditional banking world offers. It requires a little bit of nouse, but its not that hard to achieve.

7-8% APY with no exposure to the underlying price of Bitcoin. You don't even need to take on counter party risk (if you really think that Coinbase would ever get hacked or rugpull). The only risk is you forgetting your own private keys and if thats a real risk, you probably aren't smart enough to figure out how to get it in the first place.

Adyinvestment

darren232002 said:

7-8% APY with no exposure to the underlying price of Bitcoin. 

I am pro crypto but don't know how to achieve this, are you mixing Bitcoin with stable coins?

User232002

Contango to start with.

There's literally like a million arbitrage opportunities in this space though (with some variation in the type and size of risks incurred/exposed to).

Cus

darren232002 said:

Hansplace said:

Even though the crypto marketcap is $1.94 trillion but I have yet to use a single thing in my life related to crypto yet today or since 2000s when bitcoin was born.

The purpose of Bitcoin is exceedingly simple; it is to send economic value generated in the present day in to the future with the minimum amount of drag (loss of purchasing power) possible.

That is to say, that Bitcoins purpose is simply to not do anything. Humans have long sought ways to store their present value in a way that can be sent, and used, in the future. The qualities needed for this are fairly obvious; durability, scarcity, etc. People intuitively understand that if your business was in selling banana's, that storing your wealth in bananas would not be a good strategy. Pacific Islanders used large quarried stones, which was great when these were hard to procure; but their monetary system collapsed when the modern world brought their technology (dynamite, better shipping) to them. There are countless stories of this throughout history. Eventually, we settled on gold for a whole host of reasons. The bottom line is whether you believe that Bitcoins network can objectively enforce digital scarcity (ie. There will only ever be 21m produced). If the answer to this is 'yes,' then Bitcoin is better than gold across all metrics and is therefore the best way to send present day value in to the future. It should also be fairly self evident as to why using cash or a savings account is a colossally terrible way to achieve the stated aims above.

I have stated this before and I believe it needs restating, Bitcoin is not a currency and so using currency or payment metrics to value it is an analysis from a flawed starting point. 

YellowDuc said:

edit: I'm not saying put all your life savings into it (nor have I done that either) - but it's baffling if you wouldn't allocate some part of your portfolio towards crypto. 

Each to their own, but I have > 90% of my networth in crypto assets, mainly Bitcoin. 

Do you have 90% of your net worth in mainly bitcoin to store your present value for future worth, in the same way that someone would store 90% of their current net worth in gold prior to crypto being invented?

Hansplace

If you own 1.0 bitcoin then you will be the one out of 21.0 million (max bitcoin supply)

If you own 0.1 bitcoin then you will be the one out of 210 million out of the 8 billion in this planet.
I am happy to own 0.1 (worth $4200 now) just in case it does becomes something.

tebbins

darren232002 said:

You are both mistaken. I am well aware of what 'risk free' means and used it in the context it is commonly understood. I have stated multiple times on here that 'risk free' returns with no exposure to the underlying volatility of cryptocurrencies is far in excess of what the traditional banking world offers. It requires a little bit of nouse, but its not that hard to achieve.

7-8% APY with no exposure to the underlying price of Bitcoin. You don't even need to take on counter party risk (if you really think that Coinbase would ever get hacked or rugpull). The only risk is you forgetting your own private keys and if thats a real risk, you probably aren't smart enough to figure out how to get it in the first place.

Please stop spreading dangerous misinformation. Clearly loaning your cryptocurrency to a "bank", with no FSCS guarantee is not "risk free" and incurs counterparty risk by definition. Clearly owning cryptocurrency incurs cryptocurrency volatility risk, I don't see how it is possible not to. If it requires "nouse", I fail to understand how it fan be "risk-free". How is it possible to make 7-8% pa from cryptocurrenciea without having exposure to the underlying price?
You've said "nouse" and "smart enough to figure out how to get it in the first place" - please provide sources for your claims because suggesting there is a mysterious "trick" that you won't disclose but leave for us to figure out is, frankly, suspicious.