Current value January 4, 2021 - $2,238 billion
https://www.microstrategy.com/en/company/company-videos/micr...
What explains this price doubling? Certainly it's not actual use of BTC as said in the article.
Similarly, if BTC was somehow underpriced all this time, why would it see such a rapid price correction upwards?
The gains can be explained by nothing else than mania and speculation.
This was always the case for Bitcoin. Why would ever use it as a currency when its value can swing +/- 20% in a single day, that would be ridiculous.
Bulls trot out the "Bitcoin to $1M" trope all the time, that hardly seems stabilized to me.
Sure, some folks purchase narcotics and other folks send money to Venezuela with it, but the vast majority of BTC holdings are playing their part in a multi-level marketing scheme for tech nerds. Every schmo who pumps the price with their fractional purchases pads the value of the whales' holdings.
You have to drop the idea that scarce/finite assets can, should or need to be used as "currency".
Currencies are necessarily able to be increased in supply easily.
Even though there are debates about the actual description of central banks expanding their balance sheets as literal "money printing", this is mostly a debate about where this liquidity flows. For the wealthy and corporations who can borrow at extremely low rates, of course this means they have access to this "printing" and will then inject this liquidity into assets.
>The gains can be explained by nothing else than mania and speculation.
Sure, sort of.
But finite assets are doing their job if they rise in price (in reference to fiat currency units of account) as fiat quantities increase, and the people who have access to this fiat look for a place to put it.
This is literally the use case of Bitcoin, and so it is absolutely "being used".
But since the expansion of BTC has no flexibility (strict supply schedule regardless of economic conditions or price), unlike gold mining or central bank open market operations, it makes BTC very volatile both on the way up and on the way down.
But long term (so far) it is doing its job (of absorbing expanding fiat liquidity and supply).
Sure, but the whole premise that Bitcoin is an asset is that it has theoretical use as currency. There are plenty of other things which are limited in quantity and fungible which nobody is paying $30k for because nobody believes that they are future of money.
That this is not what was in the original bitcoin whitepaper doesn't seem to have stopped him.
And almost 22 billion fake tether dollars injected into the space.
As someone who is an amateur looking in, could you help fill in the holes in this picture? Why do we need tether? Why does it matter if tether is not backed 1:1 by USD? If the fraud really is so obvious and impactful, why 1) isn't BTC tanking and 2) why aren't there charges filed against the company?
I'm not sure how it's supposed to affect current prices, however. Tethers are still around, and as far as I know, they have not submitted to an audit, but 1 USDT is still trading for 1 USD.
They promised to produce documentation that should shed significant light on the situation by January 15 of this year [0]. In recent days, they have issued up to $800M tokens a day [1].
Which either means that everything is going just swimmingly, or that somebody is stuffing a few more suitcases with cash while heading for the airport. We may soon find out.
[0] https://cointelegraph.com/news/ny-attorney-general-expects-d... [1] https://twitter.com/usdcoinprinter/status/134612804290579251...
There are, it's currently under investigation, lookup tether/bitfinex new york court case.
Tether is needed as many exchanges cannot trade in USD so need a crypto-substitute in a form of a 1:1 dollar equivalent stable coin.
Not being backed matters because it means a single company can essentially print infinite money and buy up crypto, leading to fast price increases, just like the one we are seeing right now. When you see $30000 price tag on a bitcoin you don't know what percentage of it is actually fake USDT dollars. Right now it doesn't mater as you can exchange usdt for usd 1:1, but one day the music will stop and a "bank run" will happen, which will expose a giant hole and a real price of btc, collapsing the whole scheme.
>why 1) isn't BTC tanking
My current theory is that they co-opted a lot of exchanges, if you read their website https://tether.to/ they admit that they are not backed by USD and mention "loans made by Tether to third parties" which sounds like they give exchanges billions of dollars for IOUs. So exchanges get free billion dollar loans and in turn tether can print more billions and trade it for real money on bitfinex which they own.
You only get taxed on gains when you transfer coins to "real" currencies like USD... so you can use Tethers instead and buy Bitcoins back after a drop
What if I transfer from a Bitcoin wallet to another Bitcoin wallet?
The IRS has designed crypto as a property, so you are subject to paying capital gains (or claiming capital losses) whenever you sell, convert, pay or earn. Converting one crypto to another (or to USD) is a taxable event, while transferring BTC in one wallet to another wallet is not (since you keep the same property). Further details at https://www.coinbase.com/bitcoin-taxes#paytaxes.
If you sell a car for more than you bought it for, you do owe taxes on that. https://www.carvana.com/research/2020/03/what-to-know-about-....
It is not since it is a different private key...
Again, the understanding of "property" is evolving in this environment, and there are areas of regulatory uncertainty (such as synthetic assets from staking collateral in money markets). However, transferring from one wallet to another is pretty safe territory.
Here are a couple of threads describing the dynamics in play. Feel free to agree or disagree after reading but, contrary to your statement above, these can explain the price increase:
https://twitter.com/Croesus_BTC/status/1319734166557081600 https://twitter.com/real_vijay/status/1143070383261638656
Here's Lyn Alden, regarded by many to be one of the best macroeconomic thinkers working today (who is now very bullish on BTC), playfully echoing the same idea from above:
https://twitter.com/LynAldenContact/status/13458545139457065...
And, just in case the tone of Lyn Alden's tweet confuses you about the caliber of thinker you're encountering here, this is a recent article of hers with relevance to BTC macroeconomically:
https://www.lynalden.com/fraying-petrodollar-system/
And another covering several BTC misconceptions:
https://www.lynalden.com/misconceptions-about-bitcoin/
As I started: I believe you have not done your research to understand what you're looking at. This would be an excusable situation 5 years ago, but the BTC space is now teeming with high quality, pre-digested material that you can use to build a foundation of knowledge and understanding.
I believe you'll regret your hubris...sooner rather than later.
By whom? She doesn't seem to have a wikipedia page.
Reminds me of when Google was in danger of being a mutual fund for having too much cash
Seriously... this out paced Microstraegy's core business now in just the last year's investment, and who knows how much Saylor put in of his own money without the need to disclose it. Personally, I think Saylor doesn't understand the tech very well and is more focused on selling the news to his investment Corpo class friends sitting on piles of cheap and depreciating fiat, which has it use but is waste of time as he should be using his gains to focus on development in the ecosystem in things like LN, Schnoor and other critical things like micro loan systems in Africa to really make full use of this tech.
Jack Dorsey, by contrast, has done most and all of those things and more, was actually on his way to Africa prior to COVID to embark on that.
'Badeconomics' should be what we call the advent of central bank based fiat currencies, as that has untold amounts of blood on its collective hands.
Did it ever occur to you they may be accumulating a token that is required to operate on the most secure network devised by Man? And are you so immersed in your own narrative (echo chamber) that the potential value of building systems with this infrastructure at it's core never entered your mind? (Someone on a tech related community tried to relate it to Beanie Babies should say it all, FFS.)
Especially with the endless amounts of leaked information that is seen on a daily basis coupled with a situation where Nation-states (and Corps like Ticketmaster and likely larger ones with valuations that rival many country's GDP) are engaging in ever more Cyber warfare than conventional kinetic warfare, just for context: the International arm's trading racket is ~$100 billion/year Industry. Not to mention the ever expanding amount of Surveillance Capitalism tools that will eventually make it into the hands the blackhats and Cyber Military groups.
I highly doubt Saylor is doing that myself, he seems too short sighted on the media to think otherwise but it may be a facade; large institutional players are now coming with a bunch of inflated fiat holdings wanting to get in and are exploring so many more business models that it won't be long before this happens in my view. IBM certainly tried, failed and lost a lot of its potential because it tried to make its own blockchain while disparaging Bitcoin only to see Ripple (a token it focused on for its Hyperledger ecosystem) get sued by the SEC for selling unsecured securities and BTC sits at greater ATHs.
> Most people on HN have a negative view of crypto because of sour grapes. That's fine if you can afford the missed opportunity caused by this kind of luddism.
I get the sourgrapes, we all went through same regretful delays in buying in when we first heard of it as no one 'get's it' right away; but you make it seem like you can't just onboard right now and what irks me the most is the realization that it's the indignation of not having the astronomical gains from being early adopters that prevents you from doing so. It's fine to accept that mistake, we won't judge you (too much) as we've all been there to some degree and will be entirely if you just admit that mistake when you join in and try to do more than just make it a part of your portfolio and hopefully apply your skill set to earning BTC for your services rather than simply buying it.
That's when it all really sinks in and is the best watershed moment that I know of that makes everything click.
We have a different vision of what traded companies do.
For me, a traded company gives either a dividen, or shows a pattern of growth that is reflected in the share price - in either case, it will give me profits in the end, which is all I care about. I do not care about the "how" - that's the CEO and board job. I care about the profits. And so do you if you are not retired, because without profit, you won't be employed by this company for long.
A company that can adapt to a new trend, cut out bad lines of business, and give me more profit is a company I can consider for investment.
All that matters is the bottomline! Unfortunately many people here focus on useless things like technical debt or CICD pipelines, while they are just tools.
One element is diversification. Consider a hypothetical investor that holds 50% bitcoin 50% stocks may think he's somewhat diversified, but if underneath, his stocks just hold bitcoin on their books, then he's just 100% bitcoin and completely undiversified.
This is perhaps the most telling aspect of the investment class that explains how people so many are starving, being evicted and dying from COIVD in the World'd richest country while people keep pouring into Airbnb and Doordash IPOs.
It's so absurd to me how oblivious some people are about things that will lead to inevitable consequences to Society as a while while justifying any and all practices (not least of which slave labour) because their fake paper wealth number increases--all while the currency its denominated in loses more and more purchasing power.
Like every human being, you are entitled to an opinion - however, I fear you are turning that into an emotional argument, instead of logically looking at it. Your emotions are tainting your perceptions.
Most people on HN have a negative view of crypto because of sour grapes. That's fine if you can afford the missed opportunity caused by this kind of luddism.
> fake paper wealth number increases--all while the currency its denominated in loses more and more purchasing power.
Personally, the only "wealth" I believe in is the one that's in a FDIC insured bank, under your name.
As for the purchasing power, it doesn't really matter in isolation: as long as your wealth can increase more in nominal terms than the purchasing power can decrease, it means your wealth increase in real terms.
So what's the problem exactly?
Purchasing power, like everything else, is just one of the "tools" - like CICD or your favorite editor, it's a nice thing to talk about with your friends, but that's not the bottom line.
It doesn't reflect badly or any weird moral thing like that. It's just business.