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Comment by dadoge | Hacker News Reader

Bitcoin “crashed” to a market cap of 440 billion USD.

It is valued more than the vast majority of publicly traded companies.

From that measure alone, why should anyone think “it’s dead”?

Bitcoin ain’t tulips, ain’t the pets.com, etc, to think something that is 14 years old and valued at 440 billion is going to die anytime soon seems…so wrong

Especially when in the past 2 weeks, BlackRock (biggest asset manager) is continuing to dabble more in bitcoin https://financefeeds.com/blackrock-makes-bitcoin-eligible-in...

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If you have $10B worth of stock in a company with $440B market cap, you’ll have no trouble converting those shares to cash.

If you have $10B worth of Bitcoin today, good luck trying to extract $10B in real dollars out of the crypto system.

If you're sitting on $10B of Bitcoin, you can certainly use it for collateral.

No need to convert it to cash, unless you need to buy Twitter, or something.

Where does one get a multi-billion-dollar line of credit with only crypto as collateral?

I’m skeptical that, say, Morgan Stanley would do that. But I may be wrong.

If you're sitting on $10B worth of anything, you know people.

https://www.reddit.com/r/ifiwonthelottery/comments/9qv4e1/po...

My argument is that $10B of Bitcoin isn’t worth anywhere near that.

You can’t sell it without crashing the market, and you probably can’t borrow multiple billions of cash against it either because nobody in the crypto ecosystem has that kind of liquidity anymore. I’m open to be proven wrong by evidence.

Argument from ignorance fallacy. I'd love to prove you wrong, but the fact is that it is impossible to prove.

My own experience says that there is a lot more money out there than anyone can ever hope of comprehending. A good portion of that money belongs to people who are never seen. Not everyone tries to be a public figure. Not everyone is in the US. I just saw a video of a G-Wagon in Saigon (~$650k)... Vietnam is a very poor country on the outside, but you'd be astonished how much money people have there.

The amount of money in crypto is staggering. I know of people who started mining ETH from day one... and didn't stop. I can only imagine their wealth. It would be easy for them to sell off chunks over the last 4 years without anyone noticing.

Needless to say, I'm sure that if someone wanted to get rid of it, they could. It might take some time and effort, but when you have god levels of money, all you have is time.

I feel like you and I are actually arguing the same thing. A lot of people in crypto are obviously crypto-rich and have been converting to cash over the years to buy those fancy cars and penthouses.

So who's left buying today? Retail frenzy brought the fresh dollars but it's dried up. Those crypto-millionaires don't need to convert their cash back to crypto. They own enough crypto already, and (as you describe) they went through an effort to build cash positions, so why revert that... So where does the $10 billion in cash come from?

> So who's left buying today?

I know that institutions and high net worth individuals (hnwi) are quietly buying. There are companies like attestant.io who are staking ETH for (hnwi).

> Retail frenzy brought the fresh dollars but it's dried up.

For now. Being in the industry myself, I've had a saying for years, like it or not... magic internet money always goes back up. I feel like you're just looking at one blip in 13 years of blips, throwing up your hands and saying game over. That's like saying after the dot-com bubble bursting, that tech would never go up again.

You can definitely bet that people are buying the dip. It is starting to show in the recent upward price movement too. 20%+ gains in a few weeks are not small.

You don't necessarily need a bank for that; DeFi platforms like Aave can provide the equivalent of a margin loan. Looks like the current (variable) APY for WBTC is 1.11%.

And then what? Can they provide you with 10 B of real money?

You would get stablecoins and redeem them for fiat.

Let me get ahold of the CEO of Bitcoin

> From that measure alone, why should anyone think “it’s dead”?

Because everyone is waiting to exhume it when it's worth something. Bitcoin has no utility, which is not a knock against it's implementation but it is an ill-omen for it's value. The concept of 'digital gold' only works if the gold is inherently worth something. Owning a piece of a blockchain that's too expensive to transact on is a detriment, not a positive.

Not to insinuate there's some 'better investment' though. Crypto is dead because the dream of democratized currency hit the mainstream and got rejected, big-time. Use it if you want, invest for however long you'd like, but you should make peace with the fact that a crypto future is nothing more than opportunistic ankle-biting.

How could ANYTHING stand the test of time and be worth 440 billion if it has no utility? Genuine question.

It's not Berkshire Hathaway, Bitcoin's "test of time" was 3 years of media attention that is now coming to a close. Regulation and taxation is disincentivizing people from using it. Exchanges and liquidity holders are being ousted as scammers, it's basically The Reckoning for everyone who promoted a Laissez-faire economy.

I love the idea of a democratized currency, but Bitcoin's value is propped up by very little now. As I said before, you cannot run an economy on goodwill alone. Someone's getting fooled into holding the bag, and the longer you hold out for a payday, the greater the chance that fool is you.

14 years*

14 years is a lot different than 3 years.

That a whole decade more for people to learn about it, and especially since the main features has not changed. Yes, there are improvements to the protocol, but the main thing has changed little over the years

Betting on the stability of a protocol is a good way to lose your money when that protocol is obsoleted.

Edit: I'm coming right out and saying it; if we even have to talk about L2 chains, you might as well just admit that Bitcoin itself needs an update to be usable.

Paper cash was an innovation to solve the issue that gold is hard to lug around. And very much an analogy of a L2 network

It is arguably easier to counterfeit than gold (there is fools gold too…)

The base layer is very secure. L2s will be faster, but have a trade off of being less secure.

Note: the L2 Lightning Network is different than L2s for ETH like POLY, POLY has its own market cap (garbage idea IMO). Lightning is just a tool to make BTC more efficient

See, it's already over. If you have to explain that to a layperson, it's not going to get adopted. Furthermore, if people are taught to adopt this mentality, that puts them at pretty great risk for getting scammed.

Again - do whatever you want and invest wherever you please. But L2 chains are not catapulting crypto back into usability, and Lightning is living evidence that Bitcoin's bet failed. If you need auxiliary technology to transact the money you supposedly own, your protocol is broken to the core and needs replacement.

> See, it's already over. If you have to explain that to a layperson, it's not going to get adopted.

Does every layperson have to adopt stocks or commodities? Are these also dead if a layperson does not adopt it?

A democratized currency sounds kind of neat, but bitcoin was never this. It started out as an oligarchical currency with the halvenings (especially spaced the way they were). It became oligarchical at the transaction verification level (the level of taxation) when ASICs were developed for it.

It has accidentally utility: speculation.

That's only good until enough people get burned so bad they never touch it again. Then it has completely no utility.

Gold has survived as a speculative vehicle because it's been relatively stable over a much longer time period. That, and unlike Bitcoin, gold is actually a physical asset that is not held together by (wasting) electricity.

> How could ANYTHING stand the test of time and be worth 440 billion if it has no utility? Genuine question.

1) markets aren't rational nor are the people in them

2) BTC is a currency but is being treated like a commodity

3) a lot of big orgs, investors, and even governments bought in and now either hold and pray for growth, or else pray it doesn't drop. They have every incentive to hype up its value even though its use for most things is essentially moot; your Mom isn't going to use BTC to buy catfood, and its utility on the dark web is now overshadowed by things like Monero. You HODL and hype cuz otherwise you lose billions.

And about $120 billon of that is stable coins

It's too soon to say it won't fall further. The chart is still very weak. It won't take much for btc fall below 16k again. Another major failure like gemini or greyscale will do it.

Yes, it's worth a lot still, but for most btc investors long-term returns have been bad unless you bought pre-2017. BTC is only up 15% from its 2017 highs (from 19.5k to 22.5k). This lags almost all index funds.

The combined value of oil or copper is worth a lot too, but this does not make it a good investment either.

Maybe all the talk about the death of crypto just reflects where we are in the cycle.

The mood feels similar to late 2018 when most people weren't paying attention at all, and the few who were paying attention were just disgusted by the whole thing.

When the conventional wisdom is that everything from art to sports to real estate will be imminently cryptoized, you know it's frothy, and near the top of the cycle.

When the conventional wisdom is revulsion and disgust then maybe we're another six to eight months away from not thinking about it at all, which is probably the bottom of the cycle.

Please stop spreading FUD.

> And about $120 billon of that is stable coins

Check any reputable source (like [1]) and you will find that BTC market cap is 438B today without any stable coins.

> unless you bought pre-2017

Get your facts straight. BTC was <4K in Q1-2019. Heck, it was <10K for the entire H1-2020. Today it is 22,762$.

[1] https://coinmarketcap.com/

pets.com at least provided _some_ value.

How could something be worth 440 billion in market cap after a major correction not be valuable?

This is after having a 14 year history of people learning about it, not some scam coin like LUNA that went from zero to 40 billion and to zero in less than 1 year

For the simple reason that market corrections are not absolutes: the only thing that a correction down to 440B tells us is that it hasn’t been corrected down to 0 yet.

It may never be, but that’s just to say that “it’s still valued” is not a good argument for “it’s correctly valued.”

If I take 80 Dollars from you and promise to return you 50, is this operation also worth 50 Dollars? If so, what‘s the meaning of „worth“?

If I open a bank account and someone else deposits 1 billion there and I have a contract that obliges me to return the money in a year and I am not allowed to move it or use it as a security, is my bank account or the bank creating it „worth“ 1 billion?

Whether bitcoin is worth something as a tool/currency cannot be measured well by the amount of money stored in it.

I mean, not to defend Bitcoin, but if you have invested at $60 and sold at $60K - it has provided tremendous value. Most people are going to lose money on this “investment”, but just saying that it provides no value at all is a tired argument.

This is nihilistic value: the “value” of Bitcoin seems to be latent not in its productive capacity, but in its ability to extract value from other people. Which is to say that it has the same value that a credit card skimmer does, and that that is not a useful definition of “value.”

It’s a good argument. I don’t fully agree we should limit the definition of value to only its (subjectively) productive quality. It’s like gambling - I personally don’t see value in it but, hey, many people love it so they get something from it.

I'm not sure if that argument is any good, since everything you say holds equally well with every pyramid scheme in history.

Bitcoin is obviously not a pyramid scheme [0]. Criticizing things you disagree with requires a bit more skill than just using labels that don’t apply.

[0] https://en.m.wikipedia.org/wiki/Pyramid_scheme

I said nothing about Bitcoin, only about your argument. Responding to an argument requires reading it first, which is a bit more skilled than just knee-jerk reactions.

Bitcoin will probably be fine, displayed bitcoins in the exchange where many regular crypto investor keep them might go poof.

Yes, the FTXs and people who use them will suffer, sadly

More regulation is needed

The same happened before FDIC insured banks, fake banks that would “hold your paper cash safely”

If crypto is going to be regulated all fees need to come out of taxes from crypto earnings. Otherwise it isn't paying its way. And since it isn't creating general goods for the broader market, the taxes of the broader market shouldn't be expected to cover it.

Bitcoin will be fine at $20k or $2. Investors, another story...

It also crashed to a value that is still above the 2017 high and above what it was for 2018 through 2020.

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