Bitcoin value tumbles almost 50% since record November
cnn.com
cnn.com
I like it. I'm going to use that.
Wasn't that mostly true for gold as well? (Unless you wanted to make jewelry out of it, low utility high status signaling)
Well:
* https://en.wikipedia.org/wiki/General_Motors_Chapter_11_reor...
* https://www.reuters.com/article/us-autos-gm-treasury-idUSBRE...
* https://www.cbc.ca/news/politics/loans-canada-account-financ...
Politicians decided that GM going bankrupt would be too disruptive, especially since it occurred during the already turmoil-filled 2008-2009 timeframe.
Heh, you'd actually have been wiped out in 2009.
I feel awful for everyone in El Salvador and Turkey and elsewhere who've been conned into holding this instead of fiat and are now in a mire - a mire that probably involves not eating.
Christ, I decided that I couldnt handle the BTC risk - people who encouraged those folks to take it on should be... well... should be sorry.
Like the old adage said, when your shoe shine boy has a stock tip, it's time to sell. And when your aunt has an opinion about crypto, it's time to sell, as well.
Him : "NFT's are going to revolutionize the art market"
Me : "I don't know much about that, I just laugh whenever one of those bored monkeys gets right clicked and they all go mad about it".
Him : "What do you mean"
Me : "Someone copies the jpeg and uses it and they can't stop them"
Him : "nahhh you can't steal them"
Me : "It's only the meta data that's on a blockchain"
Him : "I have a question, right"
Me : "I dunno"
Him : "But do you know what a blockchain really is?"
Me : "Ahh, well, ahh... yes, I think I do, I'm a bit hazy on some of the maths, but errrm yeah"
Him : "I don't, noone can ever explain it, but everyone seems to want to buy into it so ...."
So - it's not evidence but still I think that almost all investors in crypto have little to no idea of what they are investing in. This is not good.
Honestly ... your hairdresser will have doubts that you are not messing with him.
Crypto is one compelling alternative. Note, I lump a reputable USD stablecoin in here too. It's all software after all.
How is theft by grifters (whatever we're calling crypto-bros) better?
From 2 days ago: El Salvador Buys $15 Million Worth Of Bitcoin ‘Really Cheap,’
https://www.forbes.com/sites/zacharysmith/2022/01/21/el-salv...
For reference, sp500 also dropped like 10% since december. Since it's market cap is like 40 trillion, that 10% drop is worth like 7-8 times the market cap of all Bitcoin. Smaller markets with lower liquidity moves more.
Above a certain level of liquidity the difference is marginal to nonexistent. Bitcoin certainly exceeded that level. This was not a small, illiquid market.
Bitcoin gets a lot of press, but in the grand scheme of things it's still very tiny.
On another note, what's the update on the proof of stake?
It's insane that we're using 0.55% of global electricity production for a decentralized spreadsheet.
Phasing out coal power might be detrimental to lives of millions of people who depend on coal to power their dwellings, but shutting down coal power plants used for crypto mining sounds like a reasonable compromise.
But Ethereum is still on schedule for Q2 this year. It already uses far less electricity than Bitcoin does, but will do so much better as PoS.
I've been hearing about Ethereum POS for many years, and almost started losing hope at this point.
If the supply chain issues persist, there's also a chance that raising interest rates will fail to deflate commodity and product prices, in which case we might be overestimating Fed's ability to control inflation.
Let's hope China decides to stick with dollar as the reserve currency and doesn't decide to suddenly cut off the flow of goods, or things might turn very ugly.
Win/win cooperative deals are being made between cities and miners to establish predictable baseload and to turn off under prearranged conditions. BTC mining is becoming integrated with society at the municipal level.
Not the price. That doesn't matter.
I discovered it around 2012 and at that time people were really excited. Not because they thought about "getting rich". But because people were finally learning about how money works and how corrupt and fragile the whole system is. Bitcoin showed us at once both what money really is, how it works and gave us a solution to the problem. Very exciting times. Many of us dreamed of being free from the heartless leeches in private banks.
But before long people did start to think about "getting rich". That's the really sad thing about finance. It has attracted some of the smartest people in the world who use their brains not to help others or do anything useful, but to essentially just leech off the real economy.
So Bitcoin just became like everything else. Clever people "getting rich" doing nothing of value, and people like me just giving up trying to explain what the real problems with money are.
Now I feel like the old world financial system is stronger than ever. People are singing its praises because now there is a failed alternative to compare it with.
> So Bitcoin just became like everything else
It didn't really give a solution to the problem, as "the problem" is more of a human nature issue and not something solved by a few lines of code. People will commit fraud and be leaches with an economy in dollars or bitcoins or dog money or sea shells or 1,000lb stone wheels.
Bitcoin was about permissionless digital cash initially, and then it shifted into a digital store of value. That's much less compelling to me and many of the early passionate people.
I know several early BTC people who are sitting on the sidelines now. If it were still about permissionless digital cash, they'd be more engaged. Maybe a bubble burst will help.
Ethereum's "world computer" vision for example, might actually lead to some neat stuff if it was dramatically cheaper to run smart contracts.
Cheap, less volatile BTC makes it much more useful as an actual underground currency.
I sort of want crypto to crash, not because of some schadenfreude, but because so much more technical experimentation with ideas can happen if it's dramatically cheaper to play with.
Bitcoin has thus far failed as a currency, so people have been pushing the “store of value” line for quite some time.
It was only when Bitcoin could no longer function well for payments (due to the high fees), that bagholders changed the narrative from "medium of exchange" to "store of value".
When bitcoin fails (and it will), those who mine will be the first to move their value out to whatever BitCoin2.0 is. Then they will be able to charge whatever they want to the suckers left who want to exit, because you literally will have to pay the miners transaction fees to let you do this, and there will be no cap on what they can charge.
The final appeal will be to the government, saying "you bailed out the banks, homeowners, students, the auto industry, the airline industry, why not those who lost money in bitcoin?"
We can't look at Bitcoin as a purely economical issue. There are a lot of facets that need to be understood.
DeFi COULD be useful for people in under-developed or generally economically limited countries but I believe that the implementation needs to go back to phase-0 and solve many of the speculative issues that are inherent in DeFi today.
So you would be against crypto getting bailed out by the government?
They tend to shut up when they grow in value again, to values they never reached before.
In some months it will spike again, and then it will fall like this or less, again. It's like that.
> (extreme volatility rollercoaster)
You do have some stable coins like USDT, BUSD, which follow the value of the dollar.
It's well known that bitcoin, and crypto as a whole, have and will likely continue to demonstrate a boom/bust cycle that will likely continue to excite the get-rich-fast-crew for some time to come. But people are mostly pointing out that bitcoin is not the equity hedge many hoped it would be, it's not an independent thing apart from the vagaries of the market.
To me, perspective on bitcoin would mean seeing that it isn't the revolutionary thing it's sold as. It's not freedom money, it's not the way to stick it to the financial industrial complex, and it's not a safe harbor asset. It's only really good for one (legal) thing: speculation. It seems like the vast majority of bitcoin transactions are either people speculating on it or criminal in nature. And it uses more power than the entire country of Sweden. Maybe another coin in the future will address cryptos problems, but I haven't seen it yet, eth isn't it.
I own some cypto, because it's fun. I watch numbers go up or down, but the money I put into it is already in the written-off-but-will-be-nice-if-pops category. That's perspective. You have people taking out loans to buy bitcoin or even just putting a significant amount of their portfolio in crypto, that is not perspective.
That which is in locomotion must arrive at the half-way stage before it arrives at the goal.
— as recounted by Aristotle, Physics VI:9, 239b10
When cryptos fall, everyone speaks about it and says cryptos are dead, when it grows nobody speaks anything about it.
Cryptos are here to stay that's the truth wether you like it or not. Its already moving wayy to much money to stop.
But you bring up a very good and often missed point. Highly speculative wagers are, if maybe not rational, understandable when 100X+ or 1000X+ potential gains exist. But that's not where BTC is right now.
If everyone is very lucky maybe BTC does 3x. Maybe even 6x but that's much more tenuous and uncertain. 100X? Very unlikely right now. The downside risk just isn't worth potential 3X gains for me and probably many others, but I'd feel different if there were realistic 100X gains possible.
BTC has 100x left in it, easily. Probably a lot more.
3 million x 21 million = (probably more money then is in circulation worldwide?)
I guess anything is possible but it seems highly improbable to me.
(edit) Just for fun I checked with quick and dirty math/2 second Google lookups.
Say BTC does 100X and attains 3 million. 3million/BTC x 21 million BTC = six hundred thirty trillion!
Right now there is around 40 trillion worldwide in the form of "money".
So they are going to have to print a lot more money and BTC is going to have to represent all of it near as I can tell for 100X to happen.
- The market for negative real interest bearing bonds is over $200 Trillion or 200x Bitcoin’s current market cap. Why would anyone store their savings in negative yielding debt?
- The total addressable market for BTC is much larger than most expect, though it will take time for the gains to be realized.
Just the dollar will drop dramatically in value. This might happen sure.
Couple of points (just my opinions).
If the dollar declines that precipitously in value (in our lifetime), seems it might get slated for replacement. Particularly given what we now know digital currencies can do. Will governments throw in the towel on control of currencies? Seems unlikely, willingly, but maybe they won't have a choice. Would some kind of international monetary standard, agreed to by treaties, replace sovereign currencies with a digital currency? What kind of problems might this solve? (or claim to solve anyway). I don't know. Just don't see nation states giving up control quite yet. I suspect BTC has it's uses for national interests or seems it would have been stomped to death some time ago. If that's even possible, idk.
If the dollar declines that precipitously, that rapidly, it seems like significant social upheaval would accompany the decline. Back to my point about the lights being on and networks up. Were I to chose a store of value in this scenario it would be essential physical goods, water and land. Seems you could pick up a lot of baubles with that during the tough times and have wealth when things smooth out. BTC depends on a number of underlying assumptions about social order, at least to the level of maintaining utilities and production lines so there is something to spend it on.
There will be a pegged redemption rate, for fiat currencies to the Bitcoin. Because states can keep printing more fiat, there will be some shenanigans with fake Bitcoin. Make sure you always take custody because the banks will try to inflate it!
I believe this because it is the only honest money we have. It was invented to keep us honest.
Seems like it has more utility with the smart contracts.
The idea that this specifically matters surely arises from the same logic that thinks certain companies are worth more or more performant because their per-share price is higher.
Your confusion is the share price is denominated in fiat, which is decreasing.
i don't know if the crypto and meme-stock worlds realize this, but... out here in the real world we have tools to correct for that; you can compute things like a "real rate of return" on your holdings and see it come up positive, because... well, I know this will seem fantastical to crypto-land especially, but imagine having an asset that actually does something useful while you own it, making income, instead of just existing for speculation!!! it's much better than loaning it out through dodgy exchanges for the purposes of speculation.
we actually have nice things like this in the real world, and when we go through routine turbulence (like the last month) our losses are more like 10% of holdings, instead of, like, 50%.
We are playing very different games you and I. As the crypto markets mature, and robust Money markets increase in liquidity, such tradfi metrics can be calculated too. Thing is, eventually you realize it’s all bullshit and just go all in on BTC, the only honest coin in the room.
Yes. One is investing, and the other is speculative grift. And if you're not utterly ruined then you may very well end up with substantially more money than I have.
In the event that this happens, I hope you find that the money is its own reward, because that will be the full extent of your reward. Certainly there will be no special plaudits from society in general.
It comes down to your definition of fiat currencies. From context, I was referring to central bank issued currencies aka fiat currencies. It has to be issued by a State. As opposed to cryptocurrencies that are issued by either mining, or genesis block issuance.
And currently trading at 35k, having shed 35k already, and numerous threats?
No thanks.
Like bike racing's game of chicken in the velodrome.
Crops fail. Promising biotech turns out to be impossible; new drugs are shown to be ineffective. The housing market turns out not-to-go-up-for-ever. A drought in Taiwan stifles semiconductor manufacturing and good chips are hard to find for years; ASML's factory catches fire. Oil spills, and must be cleaned up; Union Carbide leaks gas all over Bhopal. COVID-19 kills people, makes others (rationally) fear for their health, and far less gets done.
TBH, if these things were rational, I would have guessed most "bad" news would have pumped bitcoin's value; but I clearly have no clue what's going on, which is why I'm asking.
I'm also open to explanations that complex adaptive systems have intermitent booms and busts.
Don't get me wrong, I'm not really a fan (though blockchain tech does seem to have some promise), but let's just say these guys aren't exactly impartial.
When Bitcoin's fiat-denominated value drops, the claim that the price of everything actually increased while Bitcoin remains stable — becomes a clearly silly argument when you realize we can make the exact same argument for literally any other asset of your choice (which will in some cases yield completely contradictory conclusions about whether the price of everything else is going up, or down).
To make this argument, you are essentially axiomatically proclaiming that the value of X is fixed, and so when its value appears to drop relative to other things, this therefore is actually just a case of everything else getting more expensive.
The problem is you actually have to justify why you believe the value of X is fixed; otherwise, the conclusion is tautological. Without justification, you will find endless logical contradictions by applying the same logic simultaneously to multiple assets, yielding stark disagreement/contradiction on whether "everything else" went up or down in value, depending on which asset you chose as your denomination reference point :)
My new point is simply this: You can make this argument about anything whose value declines relative to other things; it doesn't make it a useful interpretation of the actual market trends.
For example, I could say that the price of computational resources hasn't been falling over the past few decades due to advances in computer efficiency an speed; no, rather I claim that this is just an illusion -- the cost of computation has actually remained fixed, while the price of literally everything else in the world has been rising, as long as we denominate them in terms of computational resources! But this is silly and doesn't reflect what's actually happening, because I'm subtly making an axiomatic/unfalsifiable assertion here (that the 'true cost' of computational resources is fixed).
It might be easy to misconstrue as reflective of truth because many things do rise in cost, so it intuitively might seem like a profound alternate viewpoint on reality that logically checks out. But, in reality, the viewpoint is simply wrong / not useful -- a reflection merely of an axiomatic assertion yielding a tautological claim, with no external evidence to back it up.
Is it really that hard to figure out?
Edit: re correlation v causation. That’s the problem, people having been pumping Bitcoin as an alternative to gold, it’s supposed to be uncorrelated to the stock market…
The Dollar is not and never has been a long-term store of value. That is a fundamental misunderstanding of what a currency is.
>The Dollar is not and never has been a long-term store of value
Depends on what you mean by long-term. If you held the dollar from 1813 to 1913 it was an excellent store of value. If you hold it from 1971 to 2071, with our current target of 2% inflation, you'll be lucky if 13% of your value is left. The systemic intentional destruction of value of the dollar has accelerated rapidly since at least the early 70s.