Bitcoin Falls Below $20k
coindesk.com
coindesk.com
(Although the original goals seem interesting, speaking of an inflation defying currency. It's hard to imagine the problem wouldn't pop out elsewhere)
Fortunately in what sense? You're talking as if BTC was worth nothing. 19K is still a really good price if you zoom out.
I understand young people whose first investment was BTC 1 year ago and bought at 60k and are -70%. But if you have been investing for 10+ years as you mention then there's nothing fortunate about not having bought BTC.
Yes, you could have bought Amazon stock in 2001. But if you're trying to judge rational investment strategy, 3 years of most people losing money sounds like a pretty significant figure.
For reference, the S&P (boring market index) 3 year return is +50%.
https://www.statmuse.com/money/ask/what%27s+the+median+price...
To be more specific there, the people that are down in that 3 year time range are only those that bought since DEC 2020 (so 1.5 years ago). But even if you ignore that, that doesn't sound bad at all.
It makes no sense to compare to the SP500, of course the 500 largest companies combined are less volatile. Keep in mind something like NASDAQ 100 took like 10 to 15 years to recover after dotcom, and even QQQ isn't comparable to something as volatile as crypto. I think something like TQQQ is the most comparable, and they overlap quite a bit.
But going back to what I was commenting, my point was that if I was a 10+ year investor as parent said, I would not feel fortunate about not having bought bitcoin throughout my years. Of course very recent years are different.
That's exactly the point. Most investors are happy to not have gambled on cryptocurrency over the last 10 years. That's why their money is in USD and not Casino Chips. You're only looking at the outcome. You don't control the outcome. What you control is your methodology for your deployment of capital.
If you regret not investing in Bitcoin because you've established some new thesis, then now is the time to employ that thesis. But if you regret not gambling because someone else hit 00 and got 35 to 1, that's not investing.
You can argue that it would have been a bad decision. Sometimes a bad decision ends in a good outcome due to luck, and a good decision ends in a bad outcome. And that doesn't make it less good or bad of a decision.
But happiness here is about the outcome. I would for sure would be happy to have gambled all my money into bitcoin 10 years ago now that we know the outcome. And I'm sure people would think that way too. I would be happier to have made a (arguably) bad decision and be rich, than be "right" but non rich.
So going back to what he said
> Fortunately, about 10-12 years of stock market investing showed me a lot of patterns.
It's the opposite. It was bad fortune, as if he had been (according to him) more ignorant he may have invested in bitcoin (even if it was a bad decision), and he would have made a lot of money with such investment.
Yours might be. Happiness in general is about your personal narrative of reality. I'm happier than you are to have not invested in Bitcoin 10 years ago, because I thought it was a bad idea then. I'm not unhappy at the fake money I didn't gain, because I have more exciting fantasies than that. Being unhappy that you didn't win a coin flip sounds like a pretty unfortunate way to structure the narrative of your life.
> It's the opposite. It was bad fortune, as if he had been (according to him) more ignorant he may have invested in bitcoin (even if it was a bad decision), and he would have made a lot of money with such investment.
Or they might have invested in any of the periods where it went down, or in any of the exchanges or coins that collapsed, or gotten too much money too early in their life to develop the skills necessary to make it last. The problem with romanticizing some alternative past is that it's literally just fiction.
Investments are made against Expected Value. The goal is to have enough money to always be making more. Over a long time horizon, you need the probability of gain to be greater than the probability of loss, otherwise in an infinite game you will always run to 0. Engaging in gambling, as defined by Expected Value being less than Principle, is not a possible action for a rational actor interested in keeping their money forever.
You're looking at Bitcoin today like the game is over, like you bought 10 years ago and sell at $20K. What is your selling thesis? What made you buy 10 years ago that allows you to sell today? Or is it more likely that you'd keep holding? What are the probabilities of gain or loss over the next 10 years? 20? All investors see is a financial instrument with no backing, facilitating services we already have, at higher cost than existing solutions.
You might be an odd one out and value things differently, but going back to what you said
> Most investors are happy to not have gambled on cryptocurrency over the last 10 years.
I'm sure most investors are happy if the outcome is more money, above anything else. After all that's the goal of investing.
> I'm not unhappy at the fake money I didn't gain, because I have more exciting fantasies than that. Being unhappy that you didn't win a coin flip sounds like a pretty unfortunate way to structure the narrative of your life.
I don't understand where this being unhappy thing comes from. I never mentioned such thing, so I don't know what you are arguing about. Also don't know what you mean by fake money. I'm talking about realized gains.
> Or they might have invested in any of the periods where it went down, or in any of the exchanges or coins that collapsed, or gotten too much money too early in their life to develop the skills necessary to make it last. The problem with romanticizing some alternative past is that it's literally just fiction.
The topic being discussed in the original comment is very clear: Bitcoin / Crypto in terms of price and fundamentals. Things such as "what if earning too much money too young ended up being bad?" are completely unrelated. You can make up any evil genie situation "he gets rich from crypto but he ends up being hit by a bus on his way to withdraw some cash" but such imaginary situations are besides the point.
The point is that having bought bitcoin and held for a few years would have been an outstanding investment in terms of returns, even if you disagree with it's price.
The point of the original comment was that they were happy not to invest. You disagreed. I attempted to explain how someone could be happy despite forgoing short term returns; mainly that the process by which you make those short term returns will produce long term losses.
Fortunate in the sense that I learnt that the only way to reliably value any asset is to calculate cash-flows -- for me anyway. There are a million things (BTC,ETH whatever) in which you can invest and some of them will make money but I learnt these weren't for me because I can neither predict how high/low something can go
> I understand young people whose first investment was BTC 1 year ago and bought at 60k and are -70%. But if you have been investing for 10+ years as you mention then there's nothing fortunate about not having bought BTC.
Investing in company stocks that I somewhat understand, yes. Fortunate about not having bought BTC .. well. I don't seem to understand how BTC can be worth anything at all so I didn't/won't :)
a.) we are not at pre-corona levels yet and
b.) most of the highly valued companies which are publicly tradable will continue to provide value to the world or their customers, contrary to the crypto crap.
We are if we account for inflation.
but contrary to a lot of HN commenters in these threads, this is not nearly the death of crypto currencies that they think it is.
Maybe not war in Ukraine itself but fall in Russia’s imports ("to levels not seen since the early 2000s" [1]), and therefore lack of foreign currency? So some billionaires there could decide to get out of crypto?
[1] https://www.themoscowtimes.com/2022/05/25/russias-imports-fa...
Russian Rouble and risk its volatility?
USD in bank and risk its freezing?
Physical printed USD? Not available in sufficient quantities.
> Bitcoin has gone down from $70k to $20k in a year, that’s close
> to 350%. Not to mention it’s down 500% since the $100k high.
If an asset drops from $70k to $20k, that's a 71% drop. If it went from $100k to $20k, that's an 80% drop.
For Bitcoin to drop 350% would mean that someone who purchased it lost more than their initial purchase cost.
The all-time high for Bitcoin is about $61k, not $100k.
With that said, given the glut of cryptocurrency articles on HN that have a very similar nature, I wish I could downvote this submission back to 1 point.
Lower than 20k? Alright, that’s not interesting from a technical perspective. It’s also not interesting from an economic perspective because it’s very hard to have an analysis about it that we haven’t heard in recent months. And if there is such an analysis, the chances that it comes from Coindesk is very low.
That is all to say: I find that this submission is flirting with going against the guidelines of this site. I don’t see how this is intellectually stimulating or interesting for anyone on HN. Also, realize that the real cryptocurrency fans (me) either: hear this through friends or check themselves. So this is not news to cryptocurrency fans either. All this is news to is to cryptocurrency neutral people and people that dislike cryptocurrencies
What ideals?
Again, these are ideals. They are by no means met. The reality is a sad state of affairs, mostly, IMO.
Not saying anything about my ideals, just answering your question.
One of my colleagues is from north Africa and worked in Europe to send money to his family and friends, investing in BTC as it was easier to handle the international transfers. This was a great use for BTC in my opinion and it helped him raise his close ones out of poverty on paper :)
But with the dip, and people believing in the staying power of BTC, a lot of those funds are compromised now. They're not ruined and people are still better off than others, but there's a real concern on if it will be worth it to continue with BTC; the buy-in price is now higher than the current price by far and the total investment has devalued greatly and continuesto devalue without a lot of insight as to why or what can even be done.
So I think the personal stories like this emphasize the importance of the drop, especially since 20k was a fairly signofjcakt growth point for BTC as I remember it.
Alright, but HN isn't strictly about the technical perspective of things... you will find politics (sometimes!), philosophy, culture and variety of other topics that are welcomed by the community.
1 upvote: 50 people agree
1 downvote: 50 people disagree
I have no data for this simple model. If I had, then it would be updated already ;-)
According to my simple model, I’d venture to guess that more people disagree than agree.
The most interesting thing to me is how correlated it is to the S&P 500. It’s interesting in the sense that people used to say it’s an inflation hedge but it isn’t. Suddenly, we don’t see the opposite message so much (that it isn’t an inflation hedge). This shows a positivity bias and points to a certain information asymmetry.
Just to point out how I believe an article with the headline of it falling below 20K could be interesting. The submission here is just a chart, not interesting. I guess this comment can be seen as showcasing some factors as to why it is below 20K :P
I think that the smart money is running for the hills because the FED is performing quantitative tightening. Moreover, more and more retail traders are panic selling, realizing that it isn’t an inflation hedge (but not being vocal about it).
Anyway, I’m just brainstorming.
How do you find it interesting?
It's still a strictly speculative instrument which target (say, in 50 years) value is still unknown - may be anything, for example $1k, $100k, $0. As such, it's currently a terrible inflation hedge. Precious metals are much better for that.
You literally have answered your own question.
The chart is not enough context for me.
So world events impacting the entire economy should have no effect on bitcoin whatsoever? That seems a little reductive.
All bullshit but that was the peddling going on for years, I don't think it's entirely reductive given how the cult tried to propagandise itself.