The Bitcoin Standard

David Nelson said:
Wanna eat these words?
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No. In fact, I am buying more at this cheap prices.

I admit that it went lower then I thought, but my conviction isn't shaken one bit. Bitcoin had many 80+% crashes before, this one is still not that bad.

I expected it to be less volatile to the downside, but what can I say...Macro environment is very scary, Bitcoin always leads the broader market due to its 24/7 market. It's very easy to sell it. Particular stocks aren't doing much better (Netflix is down like 75%), and real estate is gonna follow soon. It just takes time. Bitcoin always bottoms first, but then shoots up first as well. That's just the nature of the market (digital, 24/7, no need for paperwork etc.).

Unfortunately Bitcoin is still not counter-cyclical. A bunch of people still see it as high beta risk asset. Over time I think (hope?) it's gonna be seen as a ultimate safe-haven asset, but not yet. The fact is that the correlation between Bitcoin and tech stocks is very high at the moment, so it's not counter-cyclical at all.

Now we HODL. :sunglasses:
 
David Nelson said:
Hadn’t Bitcoin gone tits up?
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You doubters never learn. It's a bear market at the brink of recession, everything has gone tits up.

philostam said:
I admit that it went lower then I thought, but my conviction isn't shaken one bit. Bitcoin had many 80+% crashes before, this one is still not that bad.
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Everything is going according to plan. Every cycle so far has ended with bitcoin leveling with its realized price and 200 MA which is around 23k right now. Some people are making insane predictions like 7k bottom, but I think 19-20k is likely at most.
 
My roommate’s brother acquired $5K of Bitcoin in the Spring of 2013.

Tits up? You do the math.

Cheers,
Ian
 
If on July 17, 2010, the first day Bitcoin was available as an investment...

if you invested 99¢, or $0.99, and just sat on it, left it alone, didn’t touch it...

...on June 12, 2022, this past Sunday, your investment would be worth...

$543,630.176

that’s a 303.268% return, annually, and the total return is 54912038.962%

if that’s tits up, I want those titties! :P

-------

with $1,000 invested

$549,121,389.618

Cheers,
Ian
 
Crypto is the only free market left, there is no government bailouts here. Irresponsible actors are getting insolvent and this is sending shock waves across the crypto market. This is how it should be. A lot of VC funds and crypto hedge funds are getting rekt and are forced to sell their Bitcoin.

Meanwhile it gets transferred to the strong and responsible holders.

Remember that Amazon collapsed 90% back in the dot com crush.

Bitcoin's value preposition is clear as day to me, but unfortunately majority of people don't get it yet. Things will either have to get really bad (like 30% inflation) or really good for Bitcoin price to trigger FOMO. Currently people still think our economy is fine and can be salvaged, that we can go back to pre-Covid normality...
 
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John K said:
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Just joking - you’re probably right that it’ll recover. Too many people have committed to it for it to fail.
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If there's no new buying pressure, Bitcoin will collapse to 0. It doesn't matter how many billions is locked in.

However, I think this is very unlikely. Whoever understands Bitcoin but hesitated to buy it at the peak mania phase, has now gotten another chance to get in and buy it from the weak hands.

Let the free market play out...
 
In a contagion event, you don't necessarily sell because you want to. You sell because you have to. This is what's happening now, sellers are overwhelming the buyers. There's not enough buyers to offset all the forced sellers. Buyers are still hesitant.

Meanwhile, Bitcoin hash power is higher than it's ever been. The network is more secure then ever. Unlike in previous cycles, the miners aren't selling. However, at this prices (20k per BTC) it's getting unprofitable to mine, so I expect some miners with poor financing will have to shut down too, so the mining difficulty will be adjusted.
 
Where do the profits in crypto come from? No such thing as free money, unless you print it. Who loses?
 
David Nelson said:
Where do the profits in crypto come from? No such thing as free money, unless you print it. Who loses?
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Well, the idea of Bitcoin is that as more people chase a scarce thing, the value of that thing goes up. The same as with every asset. Of course scarcity is only one part of the equation; it has to have utility too. Scarcity + utility + high demand = high price.

Who loses? Well, everyone who bought at 60k is now underwater. These people estimated the demand for Bitcoin will continue to go up at the short term, but it didn't. At least for now. So the network didn't grow as much or as fast as they anticipated.

So the more relevant question is: what is utility of Bitcoin. That will ultimately decide its faith.
 
One inherent problem with crypto is it has no inherent value. Yes, you can say the same about physical money, but at least governments and everyone else acknowledge the value there, plus it is physical.

Can you spend it, or do you have to currency convert?
 
David Nelson said:
One inherent problem with crypto is it has no inherent value. Yes, you can say the same about physical money, but at least governments and everyone else acknowledge the value there, plus it is physical.

Can you spend it, or do you have to currency convert?
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What is inherent value? Bitcoin is obviously valuable, otherwise price would be 0.

You are talking about utility value. Maybe you think Bitcoin has no utility, but I would disagree. Yes you cannot sleep in it like you can in a house, and in general the world agrees that real estate is more valuable than Bitcoin. Global real estate market is around 600x more valuable than Bitcoin.

So again, the question is: does Bitcoin have utility? Does the world need a decentralized, digital property that cannot be confiscated and inflated?
 
For more in depth argument, check this:

https://dergigi.com/2022/04/03/inalienable-property-rights/

"Law. Language. Money. The three paradigms of spontaneous and emergent order in society. Moral questions are at the root of it all:
  • Who should be allowed to speak?
  • Who should be allowed to publish?
  • Who should be allowed to have property?
  • Who should be allowed to defend said property?
  • Who should be allowed to issue and control the money?
It might not be obvious at first, but these questions and their respective areas - law, language, and money - are all related. They are related in general, but, more importantly, they are intimately related in the Gordian knot that is Bitcoin. Allow me, at least for a moment, to try to untangle this knot. Hopefully, without losing the thread that makes all of it hang together."
 
I see Hayek quoted on that page. Hardly a bastion of the people, they are/were a right wing ideologue, largely responsible for the mess we are currently in. I think right wingers hate any state control, especially things like money printing. But what is their desire in this? To a fair and decent society? No, so they can have more power for themselves. I suspect this is more at the root of crypto.
 
David Nelson said:
I see Hayek quoted on that page. Hardly a bastion of the people, they are/were a right wing ideologue, largely responsible for the mess we are currently in. I think right wingers hate any state control, especially things like money printing. But what is their desire in this? To a fair and decent society? No, so they can have more power for themselves. I suspect this is more at the root of crypto.
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Completely disagree with you. Money printing is the reason for the mess we are in. Full stop.

Money printing and near zero borrowing costs.

I never even read Hayek. I know he is hated in the leftist community (I was part of it once), but looking at his ideas today, they look miles better than what Kaynes had to offer.
 
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