Merged Bitcoin - Part 3

psionl0 said:
Sure lots of people have lost on bitcoin because they bought high then panicked when the price started falling. This is a common strategy for lots of amateur investors.
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If you don't think the price will ever go up past the point that you are selling at, or you need the money for something useful, then it is the perfectly rational thing to do. They gambled, lost and took the loss. Nothing to do with amateurism - loads of institutional investors have lost plenty.

Yeah, you might think the price might go up at some point and hold. It's just speculation however, not some kind of wise investment strategy.
 
Someone just defined Crypto as Libertarians defrauding other Libertarians. Sounds pretty close to the truth for me.
Not that rhis will change the minds of members of the Crypto cult.It has become a matter of pure faith to beleive in Crypto.
 
dudalb said:
Someone just defined Crypto as Libertarians defrauding other Libertarians. Sounds pretty close to the truth for me. Not that this will change the minds of members of the Crypto cult. It has become a matter of pure faith to believe in Crypto.
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I'm not sure that's the case currently. Perhaps in the past. See this post I made where I was surprised that in the USA, minorities were more likely to have crypto than whites. This is fairly characteristic of too many end stage bubbles. Like the 2008 home mortgage where one needed almost no credit or income docs to get a variable rate mortgage or re-fi. Because, hey, house prices always went up! Right!!

http://www.internationalskeptics.com/forums/showpost.php?p=13924919&postcount=2778

Here's a running list of all (questionable) things crypto and web3. Damn it sure is long. Really long.

https://web3isgoinggreat.com/

It really is the Wild, Wild, Wild West. Like no one's ever seen before. (to steal a phrase from DJT)
 
psionl0 said:
It is a strategy that has worked every single time somebody has employed it in the past.
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I don't really understand what you are saying? Is is it that whatever the asset and whatever price you bought it at, if you hold it long enough you will make a profit?

That is evidently not true.
 
FatherLukeduke said:
I don't really understand what you are saying? Is is it that whatever the asset and whatever price you bought it at, if you hold it long enough you will make a profit?
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Er . . this is bitcoin we are discussing.

The price chart clearly shows that up until the beginning of this year, everybody who bought bitcoin could have sold it at a profit some time later. I'm not saying that this proves that the price will exceed $60K at some point but the odds seem good.

It wasn't so long ago that a poster wanted me to be hung, drawn and quartered because I refused to rule out the possibility that the price of bitcoin could reach $20K (it came just short in December 2017). Needless to say, this person is not posting on this thread any more.
 
I my case I'll stay with stocks until interest rates rise above five percent
and then as they rise to ten percent I will get out of stocks entirely. When
interest rates fall bellow five percent I will sell my bonds and begin buying
stocks again. It's not a good strategy as it doesn't consider things like
commodities, but based upon past history I think I will do fine.


What To Consider When Investing In Crypto by Fidelity Viewpoints


Before you invest, get educated on the ins and outs of this fast-growing
industry. For example, you should be able to explain the value of blockchain
technology and decentralization to friends and family.
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psionl0 said:
Er . . this is bitcoin we are discussing.

The price chart clearly shows that up until the beginning of this year, everybody who bought bitcoin could have sold it at a profit some time later.
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"Up to the beginning of the year" is not the same as "Every single time", as you stated. But anyway, yes, the market was rising, then it fell.

I'm not saying that this proves that the price will exceed $60K at some point but the odds seem good.
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Financial products in the UK come with the warning "Past performance is not indicative of future results", or something on those lines.

Bitcoin's peak came during a period of almost unprecedented asset inflation. Years of central banks printing money like it was going out of fashion, historically low interest rates, federal handouts, a global properly bubble, a tech bubble and US stock market bubble. All this is unwinding now, and it's very difficult to see speculative assets like bitcoin getting pumped again any time soon.

Not to mention what a toxic image crypto has now developed.
 
psionl0 said:
This "bigger fool theory" is just crap.
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There's no point in making that assertion because the bigger fool "theory" is factually true: the only way to make money on Bitcoin (unless you are a miner) is to get somebody else to give you more money for your Bitcoin holdings than you paid for it. That is all there is to it.

Bitcoin is traded on the open market just like any other commodity or collectable. Further more, unlike collectables (like used stamps), bitcoin has utility.
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As I understand it, stamp collectors prefer unused or "mint condition" stamps.

Some people get aesthetic pleasure out of collecting things. Not all stamp collectors - in fact, perhaps not even a majority - collect stamps as an investment vehicle. So yes, stamps have utility - not just for paying postage.

Sure lots of people have lost on bitcoin because they bought high then panicked when the price started falling. This is a common strategy for lots of amateur investors.
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Ultimately, for anybody to make money on Bitcoin, somebody else has to lose money because all the money you get from selling it has to come from other people buying it. If you want it to be the case that theoretically everybody can make money, there has to be an infinite chain of people prepared to pay more than what the last person paid for Bitcoin.
 
psionl0 said:
Er . . this is bitcoin we are discussing.

The price chart clearly shows that up until the beginning of this year, everybody who bought bitcoin could have sold it at a profit some time later.
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No this is false. The price chart only shows what the next Bitcoin sold will get. It does not mean that, when the price was $60k everybody could sell and get $60k per Bitcoin.
 
jeremyp said:
Ultimately, for anybody to make money on Bitcoin, somebody else has to lose money because all the money you get from selling it has to come from other people buying it. If you want it to be the case that theoretically everybody can make money, there has to be an infinite chain of people prepared to pay more than what the last person paid for Bitcoin.
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Exactly the same as with gold or stock market. Ok, gold also has pure consumers, but it can be recycled after use and very small amount is actually removed from the system. Probably less than in case of crypto, where wallets are lost on daily basis.
 
Dr.Sid said:
Exactly the same as with gold or stock market. Ok, gold also has pure consumers, but it can be recycled after use and very small amount is actually removed from the system. Probably less than in case of crypto, where wallets are lost on daily basis.
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I keep seeing estimates of leakage, where bitcoin wallets have been lost, of between 10 and 20 percent of bitcoin.

Following up on that, just noticed an article about a company that performs brute force attacks on wallets for people who have lost/forgotten their passwords.

That company says: "...approximately half the wallets we open are empty."

I'm now wondering how the user could tell the difference?
(i.e. How do they know that the company hasn't cracked their wallet and stolen the loot?)

Perhaps the user receives the recovered keys and wallet ID/address, and there is a method to demonstrate that the wallet has been emptied over time via normal usage by running those keys against the blockchain.

Edited to add:

Aha! If you do get your wallet address back, you can track all transactions from that wallet:

https://gocardless.com/en-us/guides/posts/bitcoin-transaction-verification/
 
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I read you buy bitcoin for 57 cents in the dollar on Grayscale, but Grayscale assures everyone things are 1 for 1.
 
Dr.Sid said:
Exactly the same as with gold or stock market. Ok, gold also has pure consumers, but it can be recycled after use and very small amount is actually removed from the system. Probably less than in case of crypto, where wallets are lost on daily basis.
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Ah but bitcoin is different. It is unique. It is an island unto itself. It doesn't follow the usual rules of supply and demand like everything else. It is magical.

When people choose to buy item A instead of item B the usual rules of supply and demand suggest that we would expect the price of item A to increase and the price of item B to decrease.

This doesn't happen when bitcoin is one of the items. When people buy bitcoin instead of some other item, it has no effect whatsoever on the demand or price of the other item. Similarly, if people sell their bitcoins to buy the other item then again, it has no effect on the price or demand for the other item.
 
FatherLukeduke said:
Bitcoin's peak came during a period of almost unprecedented asset inflation. Years of central banks printing money like it was going out of fashion, historically low interest rates, federal handouts, a global properly bubble, a tech bubble and US stock market bubble. All this is unwinding now, and it's very difficult to see speculative assets like bitcoin getting pumped again any time soon.
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Bitcoin has had many peaks in its 13 year history (the earliest being in 2011 when it peaked at $30).

Each time the price fell (dramatically) from its peak, there would be a raft of posters "explaining" why it will never reach that price again. You are just the latest in a long line such prophets. I dare say we won't see you in this thread again when the $60K barrier is crushed.
 
I'm not "a self-proclaimed personal money management expert" but this reflects my assessment quite well:
Financial Guru Dave Ramsey Weighs in on FTX Collapse — Reiterates His Crypto Warning

A longtime bitcoin and crypto skeptic, Ramsey called BTC “funny money” in December 2020. He also expressed his doubt that bitcoin could be cashed out, advising investors to sell their coins now. In January, he said crypto is fun and here to say but should only be a small part of a portfolio “for entertainment.”

Referencing his warning about crypto, the self-proclaimed personal finance expert said “I told you so” several times during his show that was published Friday.
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Gord_in_Toronto said:
I'm not "a self-proclaimed personal money management expert" but this reflects my assessment quite well:
Financial Guru Dave Ramsey Weighs in on FTX Collapse — Reiterates His Crypto Warning

Referencing his warning about crypto, the self-proclaimed personal finance expert said “I told you so” several times during his show that was published Friday.
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Everybody says "I told you so" when a bitcoin bubble ends even though this is as surprising as finding out that water is wet.

Unsurprisingly enough, nobody says "I told you so" when the price of bitcoin eclipses its previous peak.
 
psionl0 said:
Each time the price fell (dramatically) from its peak, there would be a raft of posters "explaining" why it will never reach that price again. You are just the latest in a long line such prophets. I dare say we won't see you in this thread again when the $60K barrier is crushed.
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I've don't know for sure what the speculators\gamblers might do with the bitcoin price. I'm just explaining why you are wrong to say "holding works every single time" where it clearly doesn't for anyone who bought at anything above the current price. Yeah, maybe one day it will "crush" (cringe) the magic number of $60K, or maybe it won't. You seem to be implying that it is guaranteed, which is obviously silly.

I'm making an educated guess that as all the other bubbles in the US and global economy are unwinding (and still have a long way to go) then speculative assets will do particularly badly. There seems to be all downsides and no upsides right now. No more money printers going brrr. On top of that there appears to be hardly any liquidity left in the crypto markets and that it's pretty clear the whole ecosystem is build on a house of BS.
 
jeremyp said:
Dr.Sid said:
Ultimately, for anybody to make money on Bitcoin, somebody else has to lose money because all the money you get from selling it has to come from other people buying it. If you want it to be the case that theoretically everybody can make money, there has to be an infinite chain of people prepared to pay more than what the last person paid for Bitcoin.
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Exactly the same as with gold or stock market.
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Nope. Business have earnings and earnings have real value to shareholders. 90% of gold mined each year is used in the jewelry market so it's used to manufacture consumer products in a way that bitcoin just isn't.
 
The Cautionary Tale:

Tulipmania: About the Dutch Tulip Bulb Market Bubble

Tulipmania is a model for the general cycle of a financial bubble:

Investors lose track of rational expectations.
Psychological biases lead to a massive upswing in the price of an asset or sector.
A positive-feedback cycle continues to inflate prices.
Investors realize that they are holding an irrationally priced asset.
Prices collapse due to a massive sell-off, and an overwhelming majority go bankrupt.
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But you could always plant your bulb with the expectation of a pretty flower in the Spring.
 
FatherLukeduke said:
I've don't know for sure what the speculators\gamblers might do with the bitcoin price. I'm just explaining why you are wrong to say "holding works every single time" where it clearly doesn't for anyone who bought at anything above the current price. Yeah, maybe one day it will "crush" (cringe) the magic number of $60K, or maybe it won't. You seem to be implying that it is guaranteed, which is obviously silly.
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You know very well that I specifically denied that it was guaranteed because you responded to that post. I merely pointed out that the odds were good.

OTOH you are arguing that bitcoin will never reach its peak price again - just like everybody else before you who no longer posts on this thread.
 
dudalb said:
Now talk that Freid will face bribery charges for some of the "donations" he made to people in congress (of both parties, be it noted).
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Where did you get that info about both parties?

Not even the WaPo has mentioned any donations FTX made to republicans.
 
So SBF and his girlfriend took most of the real cash, speculated with it and lost it all. Not exactly financial geniuses. Some people must have been making their fortunes out of FTX.

Also, apparently, when people thought their money was going to FTX it was going direct to Alameda.
 
Gotta love this piece:

https://www.msn.com/en-us/money/mar...io-for-crypto-after-the-ftx-crash/ar-AA14o3bf

But at the very worst – if cryptos ARE a complete scam – cryptocurrencies will still boom. Why? Because they’re a better version of online gambling! If people have an opportunity to turn $1 into $10, they will take it.
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IE, in the worst case it's bound to go up because people like to gamble. Well alrightly.

There's something to that. People like to gamble. Not sure how that means it is guaranteed to go up but what do I know. Just be careful of counterparty risk. Pretty difficult approaching impossible to trade w/o an exchange but as long as you keep most of your digital assets not actively trading in cold wallets, your exposure to that is limited to the stuff you put on the exchanges like FTX.
 
a_unique_person said:
So SBF and his girlfriend took most of the real cash, speculated with it and lost it all. Not exactly financial geniuses. Some people must have been making their fortunes out of FTX.

Also, apparently, when people thought their money was going to FTX it was going direct to Alameda.
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Not just "not genius", but actual raving madmen, unless we're missing something.

Something about this doesn't read right. Like I said, we're probably missing something here. Sure, this guy's dishonest, sure he's a crook; but he'd need to be raving lunatic in order to go speculate with other people's super-volatile crypto! I mean, where would he invest? What I'm saying is, even if his crooked investments pay off, best case, even then, who's to say the underlying asset won't deprecate by some whopping amount in the meantime, rendering him in the red? Crooks do try to make money off of money that doesn't belong to them, but this is ...insane.

Not suggesting Bank-whatsisname isn't a crook, I'm sure he is. Not suggesting crypto's not a dicey asset, everything considered I'd say it is likely it is. It's just that we probably don't have the full story on this Bank-whatsisname guy, this FTX founder/crook. (Or at least, that I don't.) Doesn't quite add up, this craziness.
 
Chanakya said:
Doesn't quite add up, this craziness.
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Sure it does. Crypto brings out the crazy. You know it doesn't make sense, but the thought of all that money you could be making overrides common sense.

Some people say Crypto is just gambling. They are wrong - it's much worse. Crypto promises that everyone will be a winner, which other forms of gambling don't. And crypto pretends to be a better alternative to fiat currency - as if it has a firm financial basis and is morally superior - when it is neither. Bitcoin is fatally flawed and very immoral, but the thought of all that 'free' money stops people from looking too closely at it.

I feel sorry for Sam Bankman-Fried and his friends. I think they bought into the hype and thought that if they were smart enough then everyone could be winner. The FTX crash is proof that everyone isn't (even those who 'hold' forever). It won't be the last. Most have convinced themselves that FTX was a one-off anomaly, when in fact such events are an inherent part of the system. One day it may get to the point where (almost) everyone is loser and it collapses completely - while a few sad hodlers still insist that so long as crypto exists they will eventually win.
 
Dr.Sid said:
Exactly the same as with gold or stock market. Ok, gold also has pure consumers, but it can be recycled after use and very small amount is actually removed from the system. Probably less than in case of crypto, where wallets are lost on daily basis.
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You can make money on the stock market without having to sell shares provided the companies whose stock you buy issue dividends.

There are a number of ways of making money on gold without selling it to just another commodities speculator.
 
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