Cryptocurrency

[Itchy]

Bitcoin and others taking another hammering yesterday. A blip? Or is this going to continue? No doubt some will see it as a great opportunity to buy in now when its gone low.

[clarshack]

Bitcoin and others taking another hammering yesterday. A blip? Or is this going to continue? No doubt some will see it as a great opportunity to buy in now when its gone low.

Think Biden announced plans for a hike in Capital Gains taxes which caused this.

[trailer]

I get that you don't think BTC is valuable. You have made that point repeatedly.  Like a I said a few posts back, let's bookmark this conversation for 2025 and see how things look; until then we are both wasting each other's time.

Well Joe/Mick? Bad couple of days for the bubble. Hasn't exactly burst but a little of the hot air has escaped. No doubt it will build up again.

I don't know what the significance of 2025 is and I have no idea what the value of BTC will be in 2025. Could be £500k or could be Nil.And it could be £500k on 2025 and Nil in 2026. That's my point.

Still can't get anyone who can tell me what underpins its value.

Everything I have in, I can afford to lose. But the rough idea is to hold BTC till 2025 unless there are huge profits between now and then. But the overall idea with it is long term.
With ADA I was hoping for short term gains between 5 or 10x. Dunno how likely that'll be now. Prepared for that to go to zero. But it didn't have the huge breakout that other coins have had and they are due to make some announcements around it's platform in the next month, so we will see.
I have a very small stake in XRP which is a punt as I bought round 30p. It could skyrocket off the back of the SEC case or it could go to zero. But I have only £500 in it.

[clarshack]

There's been a bit of an over reaction to this Biden tax fud imo. Much like when the SEC brought their case against Ripple, and XRP actually recovered well after the price dropping back in December.  BTC will rebound and will make a new ATH this year imo.

[smelmoth]

Still can't get anyone who can tell me what underpins its value.

The exact same thing that underpins any FIAT currency's value. Confidence the in ability to exchange it for goods.


What is the difference between the US dollar and the Zimbabwean dollar?

That misses the point the point. Price is a factor of demand and supply. But the demand for dollars is not merely (or even mainly) from investors. The overwhelming majority of demand for USD does not come from investors trying to cash in on a currency value uplift. The demand comes from businesses across the globe settling real world bills. Loads of these business are buying currency forward. But they do this for price certainty. Not trying to beat the market.

Large institutional investors will use treasury functions to have some of their portfolio in various currencies but this is a tiny fraction especially now when there is little motivation to hold any investment funds in liquid form.

Cryptocurrency doesn't have any of that. Basically we have investors thinking cryptocurrency is going to up in value because other investors will think it will go up and of this becomes a self fulfilling prophecy and the actual market value will go up. This is just tulips from Amsterdam stuff.

So you point that crypto and Fiat are underpinned by the same factors is nonsense. But happy for you to set out why this is not the case.

[smelmoth]

There's been a bit of an over reaction to this Biden tax fud imo. Much like when the SEC brought their case against Ripple, and XRP actually recovered well after the price dropping back in December.  BTC will rebound and will make a new ATH this year imo.

I wouldn't bet against your ATH comment. But explain what level you think it will get to this year and why?

[Seamus]

BTC was well on the way to 70k+ when the Chinese government pulled the power plug, disrupting 40% of the mining last weekend. This resulted in a 25% reduction in the hash rate within hours. I have mentioned earlier that the only way BTC will disappear is through the intervention of the Communist Chinese government. Last weekend showed how they can manipulate the market.

We had just entered the Liquidity Swap with BTC dominance going down to 52% and everything was in play for BTC to retrace back down to the 45k level after hitting the mid 70ies., temporarily bring the altcoins with them. The Fibonacci, as in all walks of like in full display.  The safe haven of USDC or even ETH were options and will be again when the market refocuses. It will be OK also to hold the good altcoins as there will be a large resurgence in those altcoins within a number of weeks.

Smart investors always buy the fear and sell the greed. The fear is being sold over the last week.

For the most part only the big boys buy the fear.

https://trimurl.co/GrayscaleAddedBTCandETH

In order to find the value in certain cryptos first look at The White Paper. There is a lot of weeding out to be done. Have a look at the Council Members and who is backing the project, if they are also Council Members so much the better. That is just for starters as plenty more research is needed. For instance there is a coin staring us all in the face that will rival and surpass Netflix. What about upcoming coins that will surpass any technology we have seen before or those of established existing coins. A coin currently being built on the Polkadot platform, about to launch in the coming months with Wall Street all in looks extremely interesting. The best coins are not here yet.

The good coins presently will be a part of our lives well into the future until something better comes along, which will be an Airdrop in most cases. For instance XLM may not be around for long but may do an Airdrop into something even better. 

Regarding the US Dollar, where did the government acquire the trillions for the stimulus packages over the past year with plenty more on the way? Inflation is well over 10%, food and energy prices are not included in the index.  Gas prices have soared 30% since January. During the Carter presidency inflation hit 18%, the Regan admin removed food and energy from the inflation index, a miracle happened.

There is the US Dollar and then there are the cryptocurrency gems, I will not be leaving too many dollars in the bank.

[RadioGAAGAA]

Price is a factor of demand and supply.

Price of goods/assets is a factor of demand and supply.

But your not completely wrong either - if for reasons you maybe haven't realised.

Cryptocurrency doesn't have any of that.

That is the bit you are missing - its starting to... and that is why people are getting on to it now.

The altcoins is a mess and could well, as you say, burn eventually for many of them.

But blockchain is already being used for big transactions by big banks.

Thus, a few established blockchain currencies will eventually gain widespread acceptance as a means of payment - it already has become accepted on the fringes.

Now, coming back to your comment about demand & supply earlier - with the number of bitcoins produced finite - it is a bit like gold in a barter economy.

Limited supply of gold means each gramme could be worth more if gold becomes more useful in things not yet envisaged. Of course, if a new blockchain currency that is easier to mine becomes accepted - then the price of bitcoin could crash in favour of that new cryptocurrency.

That is what people are betting on, and the altcoins are just along for the ride.

[smelmoth]

RGG - I have always accepted it's a bet. What I am asking people to explain is their claims that it's a good investment, it's like other currencies and the basis of its value.

The "good investment" will probably just garner the response to look at the price relative to a year ago. But then look at relative to a week ago. Markets like stability. Stability comes from a broad base and visibility of the underlying dynamics.

The best I can get here is that Bitcoin is an alternative to gold, penny shares and maybe even currency speculation. On that basis I would ask any retail investor how much do they normally invest in any of those 3. That's your starting point for your crypto investments.

Not sure your Blockchain comments. Blockchain doesn't automatically mean crypto currency. Encryption is being used to allow large organisations to outsource services and maintain confidentiality. Blockchain is being used in that sphere with no link to cryptocurrency.

Payments are also encrypted. Blockchain is now in the payments sphere. But as an alternative to the established SDV systems for paying fiat currencies. Not as an alternative to the currency.

[RadioGAAGAA]

Not sure your Blockchain comments. Blockchain doesn't automatically mean crypto currency. Encryption is being used to allow large organisations to outsource services and maintain confidentiality. Blockchain is being used in that sphere with no link to cryptocurrency.

Payments are also encrypted. Blockchain is now in the payments sphere. But as an alternative to the established SDV systems for paying fiat currencies. Not as an alternative to the currency.

Indeed, blockchain is the numerics behind cryptocurrency. My point is that acceptance of the technology by the banks means it does work, they know it works and they use it, eventually the wider population will too. Not for everything, indeed, probably not for the vast majority of things.

But foreign exchange? Large transactions? A means to hold money outside bank accounts (which are tethered to a nation)? Any one of those holds appeal to multinational companies.

[smelmoth]

Not sure your Blockchain comments. Blockchain doesn't automatically mean crypto currency. Encryption is being used to allow large organisations to outsource services and maintain confidentiality. Blockchain is being used in that sphere with no link to cryptocurrency.

Payments are also encrypted. Blockchain is now in the payments sphere. But as an alternative to the established SDV systems for paying fiat currencies. Not as an alternative to the currency.

Indeed, blockchain is the numerics behind cryptocurrency. My point is that acceptance of the technology by the banks means it does work, they know it works and they use it, eventually the wider population will too. Not for everything, indeed, probably not for the vast majority of things.

But foreign exchange? Large transactions? A means to hold money outside bank accounts (which are tethered to a nation)? Any one of those holds appeal to multinational companies.

The utility of blockchain technology is not the same as saying bitcoin has a value never mind a particular value.

Bank accounts being tethered to a nation is not a material risk when you look probability and available mitigants. Certainly a lot less risk than the volatility of something like Bitcoin

[dec]

Inflation is well over 10%, food and energy prices are not included in the index.

Nonsense

https://www.bls.gov/cpi/

[trileacman]

Regarding the US Dollar, where did the government acquire the trillions for the stimulus packages over the past year with plenty more on the way? Inflation is well over 10%,

Immediately forgot everything you said after that gem.

[Mikhail Prokhorov]

the US are printing fake money so fast, hyperinflation is inevitable

gold(physical) and bitcoin are the sensible hedges if you want to protect against fiat currency crash

[smelmoth]

the US are printing fake money so fast, hyperinflation is inevitable

gold(physical) and bitcoin are the sensible hedges if you want to protect against fiat currency crash

Is hyperinflation worrying you? What level? In which economies? When?

I get that you would expect inflation as demand picks up after lockdown (whenever that is in each economy) and there is also the possibility of a bit of a crash down the line if the post Covid period creates a bubble. But any investor who's primary motivation to to mitigate the risk of hyperinflation is not the sort of investor that should go anywhere near cryptocurrencies.

As for fiat currency crashes? Which ones? USD has maybe a 10/12% premium but how many investors are in currency investment at all never mind USD?

It strikes me that the proponents are scratching around for a problem for their solution