Is it too soon to talk about Crypto yet?

[MinnesotaEric]

A reply like this really lowers your credibility.

If a guy cannot laugh at themselves first, they have no right to laugh at others. Besides we're going into a lull in Crypto.

The short-attention-span people who thought we'd have instant legislation changes are fed up that crypto legislation is taking too long to get moving and so the entire crypto marketcap just backfilled what was basically the election gap up from the November election cycle and so now we grind sideways until we have a catalyst to move the market. Which is to say, nutton is expected to happen for a bit. Boring.

 

[rumwrks]

This doesn't cover the entirety of the shenanigans going on with microstrategy... but it's a nice overview of the basics

 

[kenmbz]

I worked wall street for many years and have not even thought of crypto.
It was bad enough with derivatives and computer timed trades.

I interviewed for one group whose sole purpose was to get trades in faster, shorter wider connections to beat the rest of the algorithms to market.
They spent a fortune to get a few microseconds.

The only reason this worked is the size of their trades (millions to billions)
I still think they made more money in the cash overnight than by decreasing time to trade.

Crypto started as a way to hide money trails, and that's why it took off so fast.
But the gov is getting involved, so these groups are looking for the next big way of bypassing gov scrutiny, which still might be bitcoin, but in different guises.

This stuff changes so often and so fast, is amazingly risky and has been the cause of billions lost and unrecoverable. But many have been made rich too.

 

[MinnesotaEric]

I worked wall street for many years and have not even thought of crypto.
It was bad enough with derivatives and computer timed trades.

I interviewed for one group whose sole purpose was to get trades in faster, shorter wider connections to beat the rest of the algorithms to market.
They spent a fortune to get a few microseconds.

The only reason this worked is the size of their trades (millions to billions)
I still think they made more money in the cash overnight than by decreasing time to trade.

Crypto started as a way to hide money trails, and that's why it took off so fast.
But the gov is getting involved, so these groups are looking for the next big way of bypassing gov scrutiny, which still might be bitcoin, but in different guises.

This stuff changes so often and so fast, is amazingly risky and has been the cause of billions lost and unrecoverable. But many have been made rich too.

It took me a while to jump on the bandwagon as crypto cannot hurt if it was dropped on your foot. At the same time, I was often explaining currencies to others as "faith-based" means of trade. When faith is high in any given currency, that currency can buy more goods and services relative to other currencies whose value has "less faith." Then in a discussion with a friend, he asked,

"If all fractional reserve currencies as faith-based, how is crypto any different?"

I answered by explaining nation-state currencies are fiat but that question got me thinking more about crypto until I came to understand the deflationary nature of a capped supply of (some) crypto. But the process took me years for my viewpoint to change from, "It's a bad idea," to "I should buy this with both hands!"

Meanwhile, next week, on Friday, Trump is hosting the inaugural cryptocurrency summit at the White House. Regulatory clarity is coming to the USA.

Then on the 11th of March, The Bitcoin Policy Institute will be hosting a policy meeting in DC, portions of which will be live-streamed for keynote speakers.


Source:

https://twitter.com/x/status/1894401239518982286

 

[MinnesotaEric]

This doesn't cover the entirety of the shenanigans going on with microstrategy... but it's a nice overview of the basics

The pushback is that ponzis are hidden and with Strategy (the new name for Microstrategy) everything is being done out in the open. The convertible debt being issued is being bought by sophisticated investors who want the volatility and to date, those assets have outperformed Bitcoin. While paying a coupon into perpetuity, once those assets reach the cashout threshold, they will likely be cashed out rather than converted into common so that a new round of convertibles can be purchased. Meanwhile, the purchasing power of the dollar continues to be diluted through inflation.

Mark's primary argument is "...that it looks like the value of the asset is increasing, but it relies on larger and larger amounts of money coming in."

Likewise, as Saylor pointed out about commercial real estate values in Manhattan, cashflow doesn't exist and takes 27 years to break even. And capital appreciation only happens if a buyer is found willing to pay more. In other words, real estate is also a ponzi if we follow Mark's argument (Mark is the guy who made the video). Fundamentally what Mark is failing to consider is the value of the asset class itself. As one commenter on the video pointed out, "Being an asset is valuable in itself, and Bitcoin is the best asset."

 

[Tpondel]

Sam Bankman Fried was hosted at the White House four times.

That was, of course, before he was convicted for fraud related to crypto.

Just sayin’

 

[MinnesotaEric]

Sam Bankman Fried was hosted at the White House four times.

That was, of course, before he was convicted for fraud related to crypto.

Just sayin’

Can you explain how Sam Bankman Fried who took customer money and used it as though it was his own is the same as or at least similar to the discussion about Bitcoin in particular and crypto in general?

I ask because trying to tie in Sam Bankman Fried's crimes of comingling funds as the basis to cast doubt on the entire crypto industry is like saying because Al Capone was convicted of tax evasion, we should question the use of the dollar. The argument is a category error.

 

[MinnesotaEric]

Moving on there is a good article published back in December of last year about changing the way Bitcoin is recorded to make it easier for people to use in commerce. Each Bitcoin is comprised of 100,000,000 satoshis (sats). In Bitcoin, a transaction of 100,000 satoshis is expressed as 0.00100000 BTC. Admittedly this can be confusing and more so if expressed as 0.001 BTC. The proposal is rather than expressing Bitcoin in fractions, it should be expressed in satoshis. So in the example above, rather than expressing 100,000 satoshis as 0.001 BTC, it would be expressed as 100,000 BTC or 100,000 SAT.

Anyway, I think the proposal is a good idea.

Link Satoshis as the New Bitcoin? Simplifying Crypto for the Mainstream

 

[rumwrks]

The pushback is that ponzis are hidden and with Strategy (the new name for Microstrategy) everything is being done out in the open.

Openly fraudulent doesn't make it better lol. I can't even imagine the thought process that somehow justifies that response. A failure of regulatory agencies to prosecute open fraud.. doesn't mean it's smart to invest in it. The rest of your response there is predicated on "line go up" which works as long as there are enough greater fools (or in the case of MSTR they are pumping the asset they're relying on to pump their stock in a ridiculously circular fashion).

Meanwhile, next week, on Friday, Trump is hosting the inaugural cryptocurrency summit at the White House. Regulatory clarity is coming to the USA.

By "regulatory clarity" you mean "no regulations or enforcement of fraudulent activity" but "please back my favorite scam coin with government money when it craps out".

I guess it's working, Justin Sun's investment has paid off handsomely. Just "invest" a few million and BOOM the investigation is dropped. All out in the Open! Which makes it A-OK! Transparent! Winning!

Moving on there is a good article published back in December of last year about changing the way Bitcoin is recorded to make it easier for people to use in commerce.

This does nothing to address the problems with using it in commerce. The problem is lack of scalability and lack of backing. It's always (more or less) been possible to denote it in Satoshi's but that actually solves nothing. It's just meaningless drivel to give bag holders more hopium and lure in more suckers.

In other news "totally backed trust us" (it's not) Tether printed another Billion of nothing out of thin air to keep BTC propped up. As predictable as the sun coming up in the morning and going down in the evening..

 

[MinnesotaEric]

Openly fraudulent doesn't make it better lol. I can't even imagine the thought process that somehow justifies that response. A failure of regulatory agencies to prosecute open fraud.. doesn't mean it's smart to invest in it. The rest of your response there is predicated on "line go up" which works as long as there are enough greater fools (or in the case of MSTR they are pumping the asset they're relying on to pump their stock in a ridiculously circular fashion).

View attachment 2891151



By "regulatory clarity" you mean "no regulations or enforcement of fraudulent activity" but "please back my favorite scam coin with government money when it craps out".

I guess it's working, Justin Sun's investment has paid off handsomely. Just "invest" a few million and BOOM the investigation is dropped. All out in the Open! Which makes it A-OK! Transparent! Winning!



This does nothing to address the problems with using it in commerce. The problem is lack of scalability and lack of backing. It's always (more or less) been possible to denote it in Satoshi's but that actually solves nothing. It's just meaningless drivel to give bag holders more hopium and lure in more suckers.

In other news "totally backed trust us" (it's not) Tether printed another Billion of nothing out of thin air to keep BTC propped up. As predictable as the sun coming up in the morning and going down in the evening..

You have a knack for expressing opinion as though it is a fact.

Let's consider a FACT.

If you save in dollars, over time everything gets more expensive because of the dollar's ever-reducing value.
If you save in Bitcoin, over time everything gets less expensive because Bitcoin is appreciating in value.

Is Bitcoin's increasing scarcity a reason for its increase in value? Certainly! As more people recognize Bitcoin as an asset class for warehousing wealth, the increased buying interest will naturally increase the underlying asset's price according to the law of supply and demand much in the same way as the law of supply and demand has increased real estate valuations over time.

If it is claimed that Bitcoin's value has only gone up because of the influx of foolish investors, I note that since the dollar is depreciating in value, Bitcoin needs only to hold its value to increase in dollar value over time.

Thus we come back to my opening argument again:

If you save in dollars, over time everything gets more expensive because of the dollar's ever-reducing value.
If you save in Bitcoin, over time everything gets less expensive because Bitcoin is appreciating in value.

 

[Fuddyduddy1952]

"If you save in Bitcoin, over time everything gets less expensive because Bitcoin is appreciating in value."

 

[MinnesotaEric]

"If you save in Bitcoin, over time everything gets less expensive because Bitcoin is appreciating in value."View attachment 2905456

The relatively common pullbacks are a feature that allows people to buy more while over time we see price appreciation. This is from Dec. 2022 to today.

But let's go back further.

 

[rumwrks]

If you save in dollars, over time everything gets more expensive because of the dollar's ever-reducing value.
If you save in Bitcoin, over time everything gets less expensive because Bitcoin is appreciating in value.

You might be well served to take a basic economics class that explains the value of a slightly inflationary currency and the problems with a deflationary one.

You're still ignoring the actual problems of scalability and the fact that it's not actually backed by anything at all. You can say that fiat is "faith based" but I have (well had anyway) a lot more faith in the productivity of the entire country and the power of the US military which is what backs a national currency than a bunch of shysters on the internet.

You also vacillate back and forth between "it's a currency" and "it's a store of value" depending on what fits your current narrative.

As more people recognize Bitcoin as an asset class for warehousing wealth, the increased buying interest will naturally increase the underlying asset's price according to the law of supply and demand much in the same way as the law of supply and demand has increased real estate valuations over time.

Real estate is an actual tangible thing though. This is more like selling "real estate" on Proxima Centauri, it's bunk.. there's nothing there. Like I said as long as there are more fools... (which tbf is a

"If you save in Bitcoin, over time everything gets less expensive because Bitcoin is appreciating in value."

Heh.. You know he's just going to pivot to how that's temporary, few understand, and early and, now is the time to "dollar cost average". (to late.. there it is... lol).

Facts:

• The current bear market is largely because one sale of $500M out of a nominal (aka made up) market cap of 1.6 trillion (give or take 20% depending on the day)
• There's little liquidity in the system
• Most of the price is propped up by wash trading and printed out of nothing "currency" (tether is the worst but other coins also print made up money to pump the value)
• Crypto proponents will ignore any actual facts and pivot to sea lioning about something else every.. single.. time..

 

[MinnesotaEric]

You might be well served to take a basic economics class that explains the value of a slightly inflationary currency and the problems with a deflationary one.

You're still ignoring the actual problems of scalability and the fact that it's not actually backed by anything at all. You can say that fiat is "faith based" but I have (well had anyway) a lot more faith in the productivity of the entire country and the power of the US military which is what backs a national currency than a bunch of shysters on the internet.

You also vacillate back and forth between "it's a currency" and "it's a store of value" depending on what fits your current narrative.



Real estate is an actual tangible thing though. This is more like selling "real estate" on Proxima Centauri, it's bunk.. there's nothing there. Like I said as long as there are more fools... (which tbf is a



Heh.. You know he's just going to pivot to how that's temporary, few understand, and early and, now is the time to "dollar cost average". (to late.. there it is... lol).

Facts:

• The current bear market is largely because one sale of $500M out of a nominal (aka made up) market cap of 1.6 trillion (give or take 20% depending on the day)
• There's little liquidity in the system
• Most of the price is propped up by wash trading and printed out of nothing "currency" (tether is the worst but other coins also print made up money to pump the value)
• Crypto proponents will ignore any actual facts and pivot to sea lioning about something else every.. single.. time..

The scalability problem Bitcoin has is getting solved through the forthcoming Cardano bridge since both use UTXO. The demo is supposed to be delivered in May of this year.

Likening BTC to real estate is that both RE and Bitcoin are asset classes. As soon as a guy wraps their mind around that, Bitcoin begins to make sense.

Meanwhile, this remains true:

If you save in dollars, over time everything gets more expensive because of the dollar's ever-reducing value.
If you save in Bitcoin, over time everything gets less expensive because Bitcoin is appreciating in value.

 

[drssg]

If you save in dollars, over time everything gets more expensive because of the dollar's ever-reducing value.

Which is why most people make long-term investments in real companies that produce real products with real value. When Bitcoin goes up, it's because people are buying it, because they think it will go up.

It's a big circle-jerk about nothing. Have fun.

 

[California]

 

[quicksandfarmer]

Likening BTC to real estate is that both RE and Bitcoin are asset classes. As soon as a guy wraps their mind around that, Bitcoin begins to make sense.

Ownership in real estate has value because it is a claim to the future rent on a property. Or if you occupy it yourself, the rent you would have paid.

Ownership in the stock of a company has value because it is a claim to a portion of the future profits of that company.

Ownership in a bond has value because it is a claim to the future interest and principal paid to bondholders.

What income stream is associated with owning crypto?

 

[MinnesotaEric]

Meanwhile, pullbacks are a feature that allows people to buy at a lower cost average. Especially so when price appreciation has been telegraphed through institutional interest, coming regulatory clarity (contrary to the opening statement of the video California posted, we're getting more regulation, not less), Blackrock explaining to their clients that Bitcoin is an asset class in and of itself, Nation-states, sovereign wealth and retirement funds seeking Bitcoin exposure by proxy through Bitcoin ETFs, and not to mention the steady increase of retail investors becoming more and more interested in Bitcoin exposure.

All to say we know that Bitcoin is going to continue to appreciate in price as we move forward in the future. This move is telegraphed for anybody who is not wantonly blinding themselves. Anyway, while I was expecting nothing to happen in the crypto space until regulations hit, this Sunday morning our new President has directed the Presidential Working Group to move forward on a Crypto Strategic Reserve causing crypto markets to absolutely rip upward this morning.

And what was I doing during the days that crypto was pulling back? Doing exactly what I said: pullbacks are a FEATURE that allows investors to buy more. If I like a coin at the current market price and think that coin is going much, much higher because of its utility, then I LOVE that coin when it happens to be on fire sale at a lower price! This gets back to Ben Graham's analogy of "Mr. Market" which I explained in a video 16 years ago.

Anyway, I must admit days like this are fun.

Quickfarmer asked, "What income stream is associated with owning crypto?"

Answer: Through staking. For example, with the coming bridge between Bitcoin and Cardano, Cardano (ticker ADA) will be able to sign Bitcoin transactions while using Cardano as the gas fee.

As it sits, Cardano has a pile of staking pools. Here is a site for comparing returns from staking pools. Billions and billions of market cap worth of Cardano is staked verifying blockchain transactions while earning a fee that is paid out every five days.

 

[etpm]

If you save in dollars, over time everything gets more expensive because of the dollar's ever-reducing value.
If you save in Bitcoin, over time everything gets less expensive because Bitcoin is appreciating in value.

How do you know that Bitcoin is going to appreciate in perpetuity?
Eric

 

[MinnesotaEric]

How do you know that Bitcoin is going to appreciate in perpetuity?
Eric

Banks and institutional investors have been wanting to get into Bitcoin but either their local regulations, investing discipline, or both prohibited them from doing so. When Bitcoin ETFs launched, those ETFs became the fastest-growing ETF segment, ever. The reason for this is banks and institutional investors are allowed to own ETFs. Your question circles back around to my OP when I started this thread.

That said, Bitcoin's supply is capped at 21,000,000 coins and we will have a bum rush to own more and more bitcoin until 2032 when it'll take 100 years to mine the remaining Bitcoin and things stabilize. For me, it comes down to simple supply and demand.