After a brutal stretch, cryptocurrencies are surging
npr.org
npr.org
This betrays some big misunderstanding of Bitcoin, which you can buy in quantities much smaller than 1 BTC (technically, as small as 10^-8 BTC). Many people gamble a few hundred dollars on Bitcoin.
Way back in Nov 2020, Paypal opened up crypto transactions and for the hell of it, I bought $100 each of bitcoin and ethereum. I haven't touched it at all.
Today, it is worth a combined $742.28. ETH is up 381%, while BTC is up 161%.
It has been a fun experiment and I plan to donate it all to charity at some point.
If an apple was priced in BTC, you wouldn't care if it was worth a different amount of rupees or ounces of gold yesterday, just as you only care about the dollars and cents on the price tag now.
USD is sure as hell not stable. It's unstable by design - it is constantly declining in value as the money printers continue to churn. If you are hoping for a stable BTC-USD then you are hoping for a bizarre and unlikely situation where BTC declines in value at the exact same rate as the USD. I don't understand.
This is only true if you are holding the thing for the sake of holding it. Generally currencies, as a medium of exchange, are held for the purposes of later use in buying goods and services: so while 1 BTC is 1 BTC, the fact that sometimes it would take 1 BTC to (e.g.) buy a car, something 2 BTC, somethings 3, makes it less useful for knowing if you have (saved) enough for trade.
Similarly for treating currencies as a store of value: is x BTCs enough for retirement? If it keeps jumping around, how do you have "enough"?
> USD is sure as hell not stable. It's unstable by design - it is constantly declining in value as the money printers continue to churn.
Yes, because having it stay exactly the same in value is impossible (and generally undesirable), and having it go up in value (deflation), is considered even worse. An inflexible monetary system is not a good thing.
Surely someone's got a few lines of python in 'em to be up to the task...
This was done in Canada accidentally: at one point Pierre Poilievre (a right-leaning politician) put forward cryptocurrencies as a hedge against inflation:
> Conservative leadership candidate Pierre Poilievre said Monday a government led by him would do more to normalize cryptocurrencies like bitcoin and ethereum in Canada to "decentralize" the economy and reduce the influence of central bankers.
* https://www.cbc.ca/news/politics/poilievre-bitcoin-policy-1....
> As early as September 2021, then-finance critic Poilievre touted “digital currencies … giving people an opportunity to protect themselves against inflation.” Six months later, as a Conservative Party of Canada leadership candidate, he doubled down. At a campaign event at a restaurant, Poilievre bought a shawarma with Bitcoin and extolled “the freedom to use other money, such as Bitcoin… Choice and competition can give Canadians better money and … let Canadians opt out of inflation with the ability to opt into cryptocurrencies.”
* https://www.nationalobserver.com/2023/01/10/opinion/pierre-p...
If this advice was actually followed:
> The number of bitcoins needed to pay for shawarmas, groceries, gas, and housing is up 73.1 per cent compared with 5.2 per cent annual inflation measured in Canadian dollars.
* https://www.hilltimes.com/story/2023/03/29/poilievres-over-i...
Poilievre seems to no longer hold any:
* https://www.cbc.ca/news/politics/cryptocurrency-political-co...
While not having a very inflationary currency is certainly important, not having a deflationary one is even more important, and one that is somewhat predictable (at least over 'short' time frames like <3 years) is especially important. BTC, being the poster child for cryptocurrencies, hardly seems to fit the latter two criteria.
Random media picking up on the hype is the signal you should buy stuff to dump it in a couple of months on other people's FOMO.
So the music-stops metaphor is apt, “greater fool theory” I’m not so sure — collectible NFTs? Yeah.
Willingly choosing to restrict yourself to one very narrow aspect (tether) of a rich and complex ecosystem such as Bitcoin and deriving a definitive conclusion from that narrow and restrictive point of view is very likely going to lead you to an incorrect outcome.
And even if, by miracle, you happen to predict the correct outcome, it'll be by sheer luck, not on the strength of your analysis, thereby lending no credibility whatsoever to your ability to predict things in general.
Bitcoin is tracking tech stocks speculation more than being stable during inflation.
Prood that BTC is inversely correlated with inflation.
https://news.cryptorank.io/wp-content/uploads/2022/09/photo_...
There's Bitcoin ETF's whose approval is imminent.
Never mind the fact that it's been able to be held in 401(k)'s for over a year now.
And while that sounds sort of nuts, consider that in the 70s, people looked at gold investors askance considering that given that it was no longer money and had very few industrial uses, it looked like quite an overvalued commodity.
That bubble hasn't burst yet. Maybe don't hold your breath too much.
My big concern is what happens when the original wallet structure can be broken by quantum computers. Modern wallets aren't vulnerable, but there's enough BTC floating around in lost wallets that the influx of liquidity could be quite an event, to say the least, when it hits markets.
I guess every cycle brings with it people who weren't around for the last one though.
And to think I was told I'd "missed it" when I bought at $140...
I also daily block multiple "hot girls" fake profiles liking my 6 month old tweets.
This is probably the media trying to get some bags pumped.
The graph of the price of bitcoin has been going up exponentially since it launched. Every four years starting one year before the halving event it shoots up for a year and then falls:
https://www.monochrome.au/research/articles/why-do-people-lo...
You say it like it's a bad thing?
The fact that Bitcoin behaves like no other asset on the planet is precisely what makes it interesting, worth understanding, and if you can stomach the volatility over sizable stretches of time, worth owning.
This was true (although hard to understand back then) on January 3rd 2009, 18:15:05h UTC and still holds true 15 years later.
I see this as a means to sucker more retail cash in and have the early adopters of Bitcoin hoover it up.
For the record, my statement as of right now is still true. Remember that Bitcoin peaked at nearly 69k a piece and it’s currently at around $42k a piece.
This is really feeling like tragedy of the commons and needing to find more ways to pull in real money into this system so whales can swim in their piles.
No capital gains, for one. "Buy BTC for my IRA" =/= "Bet my entire retirement fund on BTC"
Also, the halvening I imagine will be a very bad thing for miners, unless it’s guaranteed to double in price, miners are going to suddenly make less in value after the event occurs. Just because the halvening happened to behave a certain way in the past doesn’t guarantee future results.
You asked for good reasons why someone would put BTC in an IRA, and I gave you one. Whether or not "degenerate gamblers" would follow that advice is moving the goalposts. You can responsibly use your IRA to buy stocks as well, but that's irrespective of whether "degenerate gamblers" would abuse that.
>Also, the halvening I imagine will be a very bad thing for miners [...]
Are you replying to the wrong comment? I thought we were talking about IRAs?
Yup.
Better yet, they own Bitcoins.
Remember GME, AMC?
Dunno, maybe you should ask State Street Global Advisors[1] or Blackrock[2] why they have gold ETFs, when investors could just gamble on the yellow stuff itself.
[1] https://www.ssga.com/us/en/intermediary/etfs/funds/spdr-gold...
[2] https://www.ishares.com/us/products/239561/ishares-gold-trus...
There's a good chunk of money that for regulatory reasons CAN'T touch it until it hits this structure.
At any rate, one consideration folks don’t seem to have for the halvening is the reduction in rewards for miners.
As mining becomes more expensive and transaction fees increase exponentially, I see more and more smaller miners dropping out of the pool as it becomes too expensive for them to operate (and we are in a high interest rate environment, so capital for borrowing is much more expensive to acquire). Then the miners that are left start to concentrate and potentially cause a security concern. It becomes too top heavy.
I’m not sure why alarm bells aren’t going off for Bitcoiners?
But for those who have an open mind, here is a list of some useful applications: https://intercoin.org/applications
I do recall people having that sentiment about cryptocurrency, especially as it exists now, which is not precisely the same thing. And for a technology that’s been around so long it’s taking an awful long time to start solving problems at any noteable scale.
About half of the natives here have a hard time telling the difference between Crypto, Bitcoin, Blockchain, Web3 and NFTs
The moment any of theses words are uttered here, instant skin rash.
At this point in time, it's so predictable it's actually quite enjoyable.
We have been spending a long time and $ on third party security audits etc.
> By combining Web2 (community interfaces) and Web3 (smart economies), we can launch the next generation of applications — which we refer to as Web5.
This is not how versioning works. It looks more like marketing coming up with the highest number possible without a meaningful increase in value delivered. (Remember the old PC magazines with 999+ games on a CD Rom?)