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Comment by xiphias2 | Hacker News Reader

,,The bust has been correspondingly brutal''

I don't recall having a brutal bust. 80-85% is the historical average of previous busts, but I'm not sure if statistics is needed for an economist journalist (it should be). It's too bad that I'm paying for the magazine because I haven't found anything better.

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You are saying an 80-85% loss isn't brutal? Man, bitcoin people are way tougher than I am, because losing that much value in my investments would make me want to die. I only lost like 15-20% during the 2008 crash and recovered that and way more over the last 11 years.

edit: this is good for bitcoin, apparently.

If you'd been in Bitcoin over the past 10 years you would have witnessed at least five 85%+ drops and still be up over 300,000%.

Yea! And if you'd invented Facebook 13 years ago, you'd be worth BILLIONS!

What's your point? That 85%+ drops in value are a reasonable thing for a currency? That a 300,000% increase over 10 years is a reasonable return? These are two sides of the same coin telling the glaringly obvious tale that: Bitcoin is an absolutely awful store of value.

I expect adoption in waves, not linearly.

+200% APY is an excellent store of value.

Do you think 200% annual growth is sustainable? Do you think that would make for a useful currency? Why do you think economists consider low (but positive) inflation to be desirable for currencies? Do you think such growth, mixed in with sporadic 85+% drops (aka: high volatility) is a good attribute for a currency?

No, 200% APY in waves is expected as it becomes the reserve currency. Then it grows in value at a rate equal to the growth in productivity, closer to 0%.

States think positive inflation is good, because it's a hidden tax that they profit from. I think 0% inflation is better for all participants.

Yes, I think growth in waves is a great start for a money. Same thing happened with salt, gold, and other commodity monies.

That's not how a store of value is supposed to behave. It's supposed to be stable, it shouldn't go up or go down faster than inflation/deflation.

The point is that you shouldn't invest in an asset without understanding its properties.

I help my friends buying Bitcoin and I make sure that I prepare them for the huge risk they are taking.

You help them by explaining that it would be a mistake to regard an 80% - 85% decline as brutal?

Yes, I myself have been through multiple of those, and it's important for people to expect it.

The most brutal things for me were about losisng/forgetting/not writing down correctly passwords, exchanges being gone with part of my money, even though I tried to be very careful. Being 80% down is nothing compares to.these kind of (not as rare as you think) events.

I read A Random Walk Down Wall Street recently. It says some people aren't emotionally ready to invest in the stock market: you need to be able to hang in through those 20% losses, and that's much harder, more stressful, than you may think.

My reaction: "You sweet summer child..."

The percentage loss from the peak of a bubble is not a terribly useful measurement. The peak is very short lived.

The BTC price early November 2017 was around the same as early Feb 2018(then it bounced up again for another two months). Losing 80% is quite significant, but to get those losses you have to buy in during the height of the bubble. People do so, in bubbles of all kinds, not just crypto, and that is a fact that I don't rightly understand.

I'm not sure what a good measurement would be. possibly some amalgam of 1 week, 1 month and 3 month averages.

The 2017 bubble was a pretty steady ramp from $200 to $20,000. When your frame of reference is a 10,000% increase, then yes, 80-85% doesn't seem that terrible: you're still at +2,000%. Roughly adjusting for volume (you can never tell what's 'new money' vs. trading) about half of the people that bought into the last bubble are still in the green.

This past 'crash' has been downright tame. That's not some kind of swaggering nonchalance, just a very simple assessment of the history of price action. It was suspiciously orderly until last November when some old coins moved and tanked the market.

Even if you were 'new money', you'd have to be extraordinarily unlucky to actually have lost that much. Prices were only over $15k for a brief period, and buying into a white-hot market is such an absurdly greedy play that it's difficult to sympathize with such losses.

I sold most @ $16.5k in the dead cat bounce after the bubble.

I just bought quite a few back @ $3800.

You get used to it, this is my 3rd or 4th >80% drawdown. Still remember $30->$2 in 2011/12

I find FT's reporting far superior to The Economist and the Wall Street Journal

Maybe you're right, WSJ is quite bad, but I wasn't sure if FT or Economist is better. Also the long form writings are interesting with the Economist, not these short headlines.

"80-85% is the historical average of previous busts"

Sources?

The Wall St Crash may have been worse. I can't believe the average being that bad. But it depends what you class as a 'bust'.

From my head: MtGox 1000 -> 200, DDos: 230 -> 70. There was a bigger one before, which was over 90% drop , I think it was the hard fork with the database bug, but it was a long time ago, I don't remember well.

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