What do you think of adding a low% of crypto allocation

[MustacheAndaHalf]

If you asked people on the sidewalk if crypto looks identical to the banking system, I don't think it would pass the laugh test.  But I liked the dig at crypto's goal of getting in bed with Wall Street.  It's also fair to say those firms are collecting fees - perhaps from dumb money investors.

Bitcoin was more like people's hobby in its early years - not a technology on which people developed anything.  I wouldn't count those years, but rather would start when it hit mainstream awareness (maybe around 2017, when Grayscale Bitcoin Trust $GBTC was created).
---

Attacking what "some crypto bros"[quoting the video] believe about "malnourished farmers" sounds like a fake argument to me.
---

The joke about a Bitcoin CEO raising prices is cute... but can we please leave that poor guy alone?  He's one in a long list of not-Satoshi-Nakamoto, and he suffered a lot over one journalist noting his name matched (Nakamoto is a more popular name than you migt think).
https://en.wikipedia.org/wiki/Satoshi_Nakamoto
https://en.wikipedia.org/wiki/Nakamoto

[MustacheAndaHalf]

So it raises the question:  What do you need Bitcoin for?

Dumb money is really preaching a Bitcoin rally because it's currently up 110% YTD. However, if you compare the current price to the price from the day of the original post, it's down 34%.

That would be dumb money like BlackRock, Fidelity, Investco, ...
https://www.coindesk.com/consensus-magazine/2023/06/21/a-straightforward-explanation-for-why-financial-giants-want-to-issue-a-spot-bitcoin-etf/

... all of whom are creating Bitcoin ETFs, if the SEC lets them.  The SEC lost a court case, which suggests they have to allow Bitcoin ETFs.  So far, the SEC has just done nothing.  But that's the reason for a surge in BTC price in October (from $27k to $35k).

If you think anything gaining +110% YTD involves dumb money, are you shorting Facebook's stock (META +153% YTD)?

Without an ETF, there are few ways for regular investors to short crypto. Given the huge demand for ways to short crypto, there are large premiums available to harvest, and that attracts more investors. E.g. if you want to sell a put on crypto to win the large premium, you need to offset your risk by going long crypto - ideally in the same liquid asset for which you sold the put.

So demand for a way to short crypto is a reason the world needs a long crypto ETF with an options market. The market participants don't have to believe in crypto any more than a person harvesting theta on SPY puts every week needs to have an opinion on the direction of the market next week.

Of course, the world needs another Bitcoin fund like the world needs another sports gambling site, but where there is demand there will be supply.

When the SEC allows it, competition for creating Bitcoin ETFs will start.  Unfortunately for everyone else, GBTC starts $22 billion ahead if they convert to an ETF.  That seems like a really huge lead to me, although maybe a battle over expense ratios will ensue.

Investors can already buy put and call options on BITO, a Bitcoin Futures ETF.  Its performance (+63% in 12 months) trails Bitcoin-USD (+91%) and GBTC (+166%) significantly.  The most likely loser is $BITO in this battle.  In my experience, iShares is one of the best companies at fostering an options market, so their ETF might have a chance against GBTC.

[Telecaster]

If you asked people on the sidewalk if crypto looks identical to the banking system, I don't think it would pass the laugh test. 

You think?   Let's say you had a co-worker who was new to crypto and wanted to regularly buy Bitcoin and regularly spend it on normal consumer goods.  How would you explain to him how to get started?   It is pretty tough to buy Bitcoin without using an exchange--which is just another word for broker.   In fact, I'll argue that there wouldn't be enough liquidity for Bitcoin to be usable without the exchanges.   So first thing is to buy Bitcoin on an exchange.  That's starting to look like traditional finance already.  Then, while he can self-custody (akin to maybe putting cash in a shoebox under the bed), it is a lot easier if he uses a custodial wallet on the exchange.  Which is just like having a bank account.   Then when it comes time to buy consumer goods like groceries from Whole Foods or electronics from Newegg, he must use a payment processor like Bitpay.  Which again, from a functional perspective is just like using a bank.

So from a consumer-facing perspective, your co-worker is buying and spending Bitcoin using financial institutions that function the same way as traditional banks and brokerages. 

[MustacheAndaHalf]

If you asked people on the sidewalk if crypto looks identical to the banking system, I don't think it would pass the laugh test. 

You think?   Let's say you had a co-worker who was new to crypto and wanted to regularly buy Bitcoin and regularly spend it on normal consumer goods.  How would you explain to him how to get started?   It is pretty tough to buy Bitcoin without using an exchange--which is just another word for broker.   In fact, I'll argue that there wouldn't be enough liquidity for Bitcoin to be usable without the exchanges.   So first thing is to buy Bitcoin on an exchange.  That's starting to look like traditional finance already.  Then, while he can self-custody (akin to maybe putting cash in a shoebox under the bed), it is a lot easier if he uses a custodial wallet on the exchange.  Which is just like having a bank account.   Then when it comes time to buy consumer goods like groceries from Whole Foods or electronics from Newegg, he must use a payment processor like Bitpay.  Which again, from a functional perspective is just like using a bank.

So from a consumer-facing perspective, your co-worker is buying and spending Bitcoin using financial institutions that function the same way as traditional banks and brokerages.

I objected to your claim crypto "looks identical" (*), and I think "functions the same" is also inaccurate.  You mentioned explaining crypto to a co-worker - but you don't have to explain traditional banking to co-workers.  That knowledge gap isn't the same.

You brought up self-custody, which is another example: if you lose your wallet number or secret, your crypto is lost.  That's not true if you lose your bank account number or PIN code.

If you do nothing with a bank account in USD, it will not double or lose 2/3rds of its value in 12 months.  Both have happened to BTC-USD prices in the past few years - it is not just like having a bank account.


(*)

So we've seen that Bitcoin specifically and crypto in general have grown into something that looks identical to the traditional banking and finance system.   Customer's assets are held in the institution's name, transactions take place off the blockchain, and are regulated by the government.

[FINate]

No, they are not identical in every detail. But they have the same shape, which is why they "look identical." This is why SBF was convicted of securities fraud and commodities fraud. If it looks like a duck, swims like a duck, and quacks like a duck...

The crypto folks are funny. They love talking about providing banking services for the world's unbanked. But when regulators come sniffing it's all "no, we aren't a bank!" Pick a lane!

[Juan Ponce de León]

As the bitcoin price increases during the next 4 year cycle it will be interesting to read the bitcoin haters desperate cope here as it develops into full blown cognitive dissonance.

[FINate]

@Juan Ponce de León I genuinely wish you all the best. I don't care if BTC goes up or down since, on principle, I'm never gonna buy into it.

[Juan Ponce de León]

@Juan Ponce de León I genuinely wish you all the best. I don't care if BTC goes up or down since, on principle, I'm never gonna buy into it.

Thank you sir good luck with your future endeavours.

[MustacheAndaHalf]

No, they are not identical in every detail. But they have the same shape, which is why they "look identical." This is why SBF was convicted of securities fraud and commodities fraud. If it looks like a duck, swims like a duck, and quacks like a duck...

The crypto folks are funny. They love talking about providing banking services for the world's unbanked. But when regulators come sniffing it's all "no, we aren't a bank!" Pick a lane!

You're clearly replying to my post, so where did I claim crypto was "about providing banking services for the world's unbanked"?  Where did I claim crypto was a bank?

The frauds you mention relate to "FTX investors" - venture capitalists, not retail bank clients.

SBF was convicted of
"... conspiracy to commit securities fraud and conspiracy to commit commodities fraud against FTX investors, ..."
https://www.cnbc.com/2023/11/02/sam-bankman-fried-found-guilty-on-all-seven-criminal-fraud-counts.html

[Stimpy]

As the bitcoin price increases during the next 4 year cycle it will be interesting to read the bitcoin haters desperate cope here as it develops into full blown cognitive dissonance.

My good sir, your dreaming.   I believe if you look in the history of this forum... you'll find OTHER crypto threads with similar sentiment, I assure you, there will be no one coping over this.  Only laughter at how ridiculous it all is.  We won't all be "poor", trust me on that one.

I expect most of the coping will be coming from the BTC, and other crypto holders, when it crashes in spectacular fashion, as it seems to always do.   This Tulip bulb market seems to have ebbs and flows and I am certain some of us will profit from the foolishness of it.   But I am also certain, most those will.... get out again, when the bulbs seem a little too good to be true...

Anyway, I do wish you good luck on your investment.  I hold just enough to let the wheel roll, but not enough to care one iota what happens.   Such is the way to be when in Las Vegas.....  I mean the crypto market.

[Juan Ponce de León]

As the bitcoin price increases during the next 4 year cycle it will be interesting to read the bitcoin haters desperate cope here as it develops into full blown cognitive dissonance.

My good sir, your dreaming.   I believe if you look in the history of this forum... you'll find OTHER crypto threads with similar sentiment, I assure you, there will be no one coping over this.  Only laughter at how ridiculous it all is.  We won't all be "poor", trust me on that one.

I expect most of the coping will be coming from the BTC, and other crypto holders, when it crashes in spectacular fashion, as it seems to always do.   This Tulip bulb market seems to have ebbs and flows and I am certain some of us will profit from the foolishness of it.   But I am also certain, most those will.... get out again, when the bulbs seem a little too good to be true...

Anyway, I do wish you good luck on your investment.  I hold just enough to let the wheel roll, but not enough to care one iota what happens.   Such is the way to be when in Las Vegas.....  I mean the crypto market.

Oh yes you're so right.  It will 'crash' for sure.  2016 it crashed to $200.  2019 it crashed to $3000.  2022 it crashed to $15000.  Have you noticed anything about these crashes yet???

[Telecaster]

As the bitcoin price increases during the next 4 year cycle it will be interesting to read the bitcoin haters desperate cope here as it develops into full blown cognitive dissonance.

You're confusing "hate" with "observation."    It doesn't make any sense to hate Bitcoin anymore than it makes sense to hate baseball cards or other collectables.    A couple posts above, I listed out the basic premise and purported benefits of Bitcoin (self-custody, not controllable by a central bank or government, peer-to-peer transactions, immutable blockchain etc.).     But the mileposts that Bitcoin Maxis use to show evidence of growing adoption, like BTC ETFs or using Flexa to buy a latte', all include removing self-custody and moving the transactions off the blockchain, eliminating most of the purported benefits.  Other purported benefits/use cases like banking the unbanked and international renitences have never gained traction. 

In other words, the premise of Bitcoin does not match the observable reality of Bitcoin.   That's not a cause for hate or anything.  It is just an observation.   

[FINate]

No, they are not identical in every detail. But they have the same shape, which is why they "look identical." This is why SBF was convicted of securities fraud and commodities fraud. If it looks like a duck, swims like a duck, and quacks like a duck...

The crypto folks are funny. They love talking about providing banking services for the world's unbanked. But when regulators come sniffing it's all "no, we aren't a bank!" Pick a lane!

You're clearly replying to my post, so where did I claim crypto was "about providing banking services for the world's unbanked"?  Where did I claim crypto was a bank?

The frauds you mention relate to "FTX investors" - venture capitalists, not retail bank clients.

SBF was convicted of
"... conspiracy to commit securities fraud and conspiracy to commit commodities fraud against FTX investors, ..."
https://www.cnbc.com/2023/11/02/sam-bankman-fried-found-guilty-on-all-seven-criminal-fraud-counts.html

Only my first paragraph is referring to you. By crypto folks I mean well known advocates such as Jack Dorsey and SBF.

[erjkism]

@Juan Ponce de León I genuinely wish you all the best. I don't care if BTC goes up or down since, on principle, I'm never gonna buy into it.

what principles specifically?

[erjkism]

I think there will be a huge crypto bubble in the next few years, with bitcoin doing very well, but with coins proclaiming utility in relation to artificial intelligence dominating.  Whether any of these coins will have any actual usefulness in AI is unclear, but that probably won't stop them from exploding in price.

[ChpBstrd]

I think there will be a huge crypto bubble in the next few years, with bitcoin doing very well, but with coins proclaiming utility in relation to artificial intelligence dominating.  Whether any of these coins will have any actual usefulness in AI is unclear, but that probably won't stop them from exploding in price.

Can you help me imagine how an AI would use a cryptocoin?

My first idea is to start an investment AI, and then behind the scenes influence it to run pump and dump cryptocurrency scams on its followers while claiming cover from the SEC's current vagueness about whether they're securities. My second best idea is to use the AI to monitor real-time social media sentiment and hop into and out of cryptocurrencies accordingly. Yes, one could substitute stocks here, but stocks have the pesky problem of being connected to fundamentals such as earnings reports or economic statistics. My third best idea is to use an AI to create millions of fake social media accounts and post info to trick the second type of AI into buying crypto, under cover of legal gray zones. 

[Stimpy]

Oh yes you're so right.  It will 'crash' for sure.  2016 it crashed to $200.  2019 it crashed to $3000.  2022 it crashed to $15000.  Have you noticed anything about these crashes yet???

You mean other then the crashes are getting bigger, the losses wider, and the chance of doubling dropping?  And many many other things but lets keep it simple.

IF you invested at the peak, your still out half your money right now, heck investing up to roughly April 2022, your still at a loss.   Now, being nice and assuming people averaged up...  (I know one of my friends did) we can assume your breaking even or close, if followed the usual advice here for timings of investing.   ie. Constant, consistent, investments be the market up or down.

Or you could be like some of the others, holding and hoping, and not investing more.  Pending on when you invested, you may be fine, you maybe "poor".  (Yup I know people in this boat too.)

Or you could be like the rest of the public in general, they saw it drop and got out, many of them at a loss and have lost their appetite till.... possibly now?  These people are losers in the game and realistically, will probably remain so, even if they get back in. 

No one said money can't be made, as I said, play the ebbs and flows.   Eventually, it will stabilize or die, it's only use is....  well, no use other then the greater sucker.   So yes, invest.  I still wish you the best in your adventure and hope your not the one with diamond hands on the final show.

[GuitarStv]

I think there will be a huge crypto bubble in the next few years, with bitcoin doing very well, but with coins proclaiming utility in relation to artificial intelligence dominating.  Whether any of these coins will have any actual usefulness in AI is unclear, but that probably won't stop them from exploding in price.

Can you help me imagine how an AI would use a cryptocoin?

My first idea is to start an investment AI, and then behind the scenes influence it to run pump and dump cryptocurrency scams on its followers while claiming cover from the SEC's current vagueness about whether they're securities. My second best idea is to use the AI to monitor real-time social media sentiment and hop into and out of cryptocurrencies accordingly. Yes, one could substitute stocks here, but stocks have the pesky problem of being connected to fundamentals such as earnings reports or economic statistics. My third best idea is to use an AI to create millions of fake social media accounts and post info to trick the second type of AI into buying crypto, under cover of legal gray zones. 

They won't have anything to do with AI.  The whole crypto space has always been sold on buzzwords and scam rather than substance or application.  AI is a big tech buzzword right now, so I'd be shocked if there aren't dozens of crypto bros launching their new 'AI' coins.  And I'd be just as shocked if they don't end up going the way of NFTs.

Worst case for crypto would be if we have any real sort of serious economic contraction . . . then I suspect that most will abandon their useless and worthless facsimiles of value in much greater numbers than did with the very mild recent financial concerns that caused the recent bitcoin collapse.

[erjkism]

I think there will be a huge crypto bubble in the next few years, with bitcoin doing very well, but with coins proclaiming utility in relation to artificial intelligence dominating.  Whether any of these coins will have any actual usefulness in AI is unclear, but that probably won't stop them from exploding in price.

Can you help me imagine how an AI would use a cryptocoin?

My first idea is to start an investment AI, and then behind the scenes influence it to run pump and dump cryptocurrency scams on its followers while claiming cover from the SEC's current vagueness about whether they're securities. My second best idea is to use the AI to monitor real-time social media sentiment and hop into and out of cryptocurrencies accordingly. Yes, one could substitute stocks here, but stocks have the pesky problem of being connected to fundamentals such as earnings reports or economic statistics. My third best idea is to use an AI to create millions of fake social media accounts and post info to trick the second type of AI into buying crypto, under cover of legal gray zones.

Those ideas would probably be successful, and I bet you people are beginning to implement similar ideas right now.

From what I have seen, the idea among crypto bros is that AI should be decentralized.  There are a couple projects out there claiming to be developing such things, although i am highly skeptical of their practical uses.

Secondly, this decentralized AI will theoretically require lots of stored data for it to draw upon.  A decentralized data storing system, of which there are already a few, might claim to be vital for this theoretical decentralized AI and get a lot of hype. I am also skeptical about the practicality of this, but I think that such coins could pump hard like they did in 2021.

[erjkism]

I think there will be a huge crypto bubble in the next few years, with bitcoin doing very well, but with coins proclaiming utility in relation to artificial intelligence dominating.  Whether any of these coins will have any actual usefulness in AI is unclear, but that probably won't stop them from exploding in price.

Can you help me imagine how an AI would use a cryptocoin?

My first idea is to start an investment AI, and then behind the scenes influence it to run pump and dump cryptocurrency scams on its followers while claiming cover from the SEC's current vagueness about whether they're securities. My second best idea is to use the AI to monitor real-time social media sentiment and hop into and out of cryptocurrencies accordingly. Yes, one could substitute stocks here, but stocks have the pesky problem of being connected to fundamentals such as earnings reports or economic statistics. My third best idea is to use an AI to create millions of fake social media accounts and post info to trick the second type of AI into buying crypto, under cover of legal gray zones. 

They won't have anything to do with AI.  The whole crypto space has always been sold on buzzwords and scam rather than substance or application.  AI is a big tech buzzword right now, so I'd be shocked if there aren't dozens of crypto bros launching their new 'AI' coins.  And I'd be just as shocked if they don't end up going the way of NFTs.

Worst case for crypto would be if we have any real sort of serious economic contraction . . . then I suspect that most will abandon their useless and worthless facsimiles of value in much greater numbers than did with the very mild recent financial concerns that caused the recent bitcoin collapse.

if we get any economic contraction, the government will come to the rescue and print money like they did for COVID. That worked out pretty well for risk assets.

[Juan Ponce de León]

Oh yes you're so right.  It will 'crash' for sure.  2016 it crashed to $200.  2019 it crashed to $3000.  2022 it crashed to $15000.  Have you noticed anything about these crashes yet???

You mean other then the crashes are getting bigger, the losses wider, and the chance of doubling dropping?  And many many other things but lets keep it simple.

IF you invested at the peak, your still out half your money right now, heck investing up to roughly April 2022, your still at a loss.   Now, being nice and assuming people averaged up...  (I know one of my friends did) we can assume your breaking even or close, if followed the usual advice here for timings of investing.   ie. Constant, consistent, investments be the market up or down.

Or you could be like some of the others, holding and hoping, and not investing more.  Pending on when you invested, you may be fine, you maybe "poor".  (Yup I know people in this boat too.)

Or you could be like the rest of the public in general, they saw it drop and got out, many of them at a loss and have lost their appetite till.... possibly now?  These people are losers in the game and realistically, will probably remain so, even if they get back in. 

No one said money can't be made, as I said, play the ebbs and flows.   Eventually, it will stabilize or die, it's only use is....  well, no use other then the greater sucker.   So yes, invest.  I still wish you the best in your adventure and hope your not the one with diamond hands on the final show.

Let me put if for you quite simply.  I believe bitcoin will always go on to make a greater ATH.  I believe in Bitcoin as a store of value, I don't believe there is ever going to be an ultimate 'top' for bitcoin because I believe the printed out of thin air fiat currencies we value it in will always devalue over time, this is what ultimately drives capital towards the harder asset which is Bitcoin, the only asset which humans cannot increase the supply of.  Let me say it again, there is no top for bitcoin because there is no bottom for fiat, fiat will always be printed into infinity.

Now, you can argue the timing of peoples investments all you like, yes the people who bought the last ATH are currently 'at loss', but the next ATH will come around and at that moment, nominally the amount of people 'at loss' at the next ATH will be zero.  Yes there will be another 'crash' at some stage, yes people will be at 'loss' for a year or two, but IMO the value of bitcoin will always eventually go up vs printed fiat currencies inflating away their value over time.  This is really all I have to say on the matter as all of this has been covered in the past I'm sure.

[Telecaster]

They won't have anything to do with AI.  The whole crypto space has always been sold on buzzwords and scam rather than substance or application.  AI is a big tech buzzword right now, so I'd be shocked if there aren't dozens of crypto bros launching their new 'AI' coins.  And I'd be just as shocked if they don't end up going the way of NFTs.

One of the promises of some NFTs was that copyright would travel with the NFT itself.   In theory that's possible.  But copyrights are transferred off the blockchain.    Unless the buyer and copyright holder signed a legal contract transferring rights to the buyer, then the copyright remains with the copyright holder, regardless of who owns the token.   This exactly the way it works with other creative works too, of course.  Which means you don't need the NFT for anything.   Once the cryptoworld figured that out, the price of NFTs went way, way, way, down.   

Crypto projects fall into two categories:  1) solutions for problems that already have better solutions, or 2) solutions for problems that don't exist.  AI coin is the latter.

[erjkism]

Oh yes you're so right.  It will 'crash' for sure.  2016 it crashed to $200.  2019 it crashed to $3000.  2022 it crashed to $15000.  Have you noticed anything about these crashes yet???

You mean other then the crashes are getting bigger, the losses wider, and the chance of doubling dropping?  And many many other things but lets keep it simple.

IF you invested at the peak, your still out half your money right now, heck investing up to roughly April 2022, your still at a loss.   Now, being nice and assuming people averaged up...  (I know one of my friends did) we can assume your breaking even or close, if followed the usual advice here for timings of investing.   ie. Constant, consistent, investments be the market up or down.

Or you could be like some of the others, holding and hoping, and not investing more.  Pending on when you invested, you may be fine, you maybe "poor".  (Yup I know people in this boat too.)

Or you could be like the rest of the public in general, they saw it drop and got out, many of them at a loss and have lost their appetite till.... possibly now?  These people are losers in the game and realistically, will probably remain so, even if they get back in. 

No one said money can't be made, as I said, play the ebbs and flows.   Eventually, it will stabilize or die, it's only use is....  well, no use other then the greater sucker.   So yes, invest.  I still wish you the best in your adventure and hope your not the one with diamond hands on the final show.

Let me put if for you quite simply.  I believe bitcoin will always go on to make a greater ATH.  I believe in Bitcoin as a store of value, I don't believe there is ever going to be an ultimate 'top' for bitcoin because I believe the printed out of thin air fiat currencies we value it in will always devalue over time, this is what ultimately drives capital towards the harder asset which is Bitcoin, the only asset which humans cannot increase the supply of.  Let me say it again, there is no top for bitcoin because there is no bottom for fiat, fiat will always be printed into infinity.

Now, you can argue the timing of peoples investments all you like, yes the people who bought the last ATH are currently 'at loss', but the next ATH will come around and at that moment, nominally the amount of people 'at loss' at the next ATH will be zero.  Yes there will be another 'crash' at some stage, yes people will be at 'loss' for a year or two, but IMO the value of bitcoin will always eventually go up vs printed fiat currencies inflating away their value over time.  This is really all I have to say on the matter as all of this has been covered in the past I'm sure.

the 21 million number may actually have to change at some point.

I think the major concern long term is the sustainability of bitcoin's security mechanism. As the issuance of bitcoin continues to decrease, miners will have to be incentivized not by block rewards but rather by fees.  This may not actually work.  There is some discussion of even solving this problem by increasing the hard cap of 21 million, but the hard cap is the major selling point of bitcoin.  Because of this problem, I think bitcoin basically has to either go to $1 million eventually or it will die.  However, we should still be able to get at least one more big pump out of it before that problem hits.

https://www.lynalden.com/bitcoin-security-modeling/

[seattlecyclone]

@Juan Ponce de León I genuinely wish you all the best. I don't care if BTC goes up or down since, on principle, I'm never gonna buy into it.

what principles specifically?

For me it's the principle that I shouldn't invest in things that don't have any good reason to increase in value.

[MustacheAndaHalf]

On the last day of October, I closed a short position on a crypto stock (Marathon Digital Holdings).  Until I sold, I had a slightly negative exposure to crypto.  I have a suspicion I'm the only one here who has shorted crypto stocks.

I have a vague plan to short crypto again once the excitement and prices peak, but that isn't a very strong case.  The recent price gains are driven by stories like this one about possible Bitcoin ETFs:

"The U.S. Securities and Exchange Commission (SEC) has opened talks with Grayscale Investments on the details of the company's application to convert its trust product GBTC to a spot bitcoin exchange traded product (ETF), according to a person familiar with the back-and-forth, which could have momentous implications for the crypto industry."
https://www.coindesk.com/policy/2023/11/08/us-sec-said-to-open-talks-with-grayscale-on-spot-bitcoin-etf-push/

[FINate]

@Juan Ponce de León I genuinely wish you all the best. I don't care if BTC goes up or down since, on principle, I'm never gonna buy into it.

what principles specifically?

For me it's the principle that I shouldn't invest in things that don't have any good reason to increase in value.

And environmental reasons. BTC consumes an appalling amount of energy.

These are the big principles that make BTC a non-starter for me.

On a more practical level, crypto has issues similar to gold (which I also don't buy). I either have to self host, which means physically securing assets which can be risky. Or I have someone else host it for me, and the crypto industry doesn't exactly have a great record. So a bunch of risk and hassle for what? For me it doesn't solve any problems, only creates new ones.

[ChpBstrd]

On the last day of October, I closed a short position on a crypto stock (Marathon Digital Holdings).  Until I sold, I had a slightly negative exposure to crypto.  I have a suspicion I'm the only one here who has shorted crypto stocks.

I have a vague plan to short crypto again once the excitement and prices peak, but that isn't a very strong case.  The recent price gains are driven by stories like this one about possible Bitcoin ETFs:

"The U.S. Securities and Exchange Commission (SEC) has opened talks with Grayscale Investments on the details of the company's application to convert its trust product GBTC to a spot bitcoin exchange traded product (ETF), according to a person familiar with the back-and-forth, which could have momentous implications for the crypto industry."
https://www.coindesk.com/policy/2023/11/08/us-sec-said-to-open-talks-with-grayscale-on-spot-bitcoin-etf-push/

I briefly bought a put on a crypto fund last year. It decayed with extraordinary speed and I sold for a loss.

Here was the error of my ways: I reasoned that crypto had no fundamental utility, so the price would go down. The critical thinking question I should have asked myself was "given that it has no fundamental utility now, and never had any fundamental utility, why is it currently selling for any price at all?"

The answer is people are willing to pay some amount of money for crypto for reasons that have nothing - zero - to do with the purported utility of the tokens. That is true today and it might be true in the future.

Thus the fallacy is to short something that is not at all priced on fundamentals, for fundamentals reasons. Logic, observation, reasoning - throw all that shit out the window. The price of cryptocurrencies is not related to any one of these things. To short crypto because it has no present or future as a real currency is like trying to create an intellectual model to explain the motions of the ball in a roulette wheel at a casino. The whole point of a roulette/crypto investment is to be unreasonable, to detach outcome from process quality.

This is a completely different game than using a reason-based process to short a company you can observe having deteriorating financials, obsolete products, poor quality management, or exposure to specific risks. You're likely to win the company bet, but winning a crypto short is a matter of pure luck.

[erjkism]

@Juan Ponce de León I genuinely wish you all the best. I don't care if BTC goes up or down since, on principle, I'm never gonna buy into it.

what principles specifically?

For me it's the principle that I shouldn't invest in things that don't have any good reason to increase in value.

And environmental reasons. BTC consumes an appalling amount of energy.

These are the big principles that make BTC a non-starter for me.

On a more practical level, crypto has issues similar to gold (which I also don't buy). I either have to self host, which means physically securing assets which can be risky. Or I have someone else host it for me, and the crypto industry doesn't exactly have a great record. So a bunch of risk and hassle for what? For me it doesn't solve any problems, only creates new ones.

Bitcoin does increase in value, whether or not you think it "doesn't have a good reason" doesn't matter, the market declares the value

"If you believe that Bitcoin offers no utility beyond serving as a ponzi scheme or a device for money laundering, then it would only be logical to conclude that consuming any amount of energy is wasteful. If you are one of the tens of millions of individuals worldwide using it as a tool to escape monetary repression, inflation, or capital controls, you most likely think that the energy is extremely well spent. Whether you feel Bitcoin has a valid claim on society’s resources boils down to how much value you think Bitcoin creates for society."

 https://hbr.org/2021/05/how-much-energy-does-bitcoin-actually-consume

[FINate]

@Juan Ponce de León I genuinely wish you all the best. I don't care if BTC goes up or down since, on principle, I'm never gonna buy into it.

what principles specifically?

For me it's the principle that I shouldn't invest in things that don't have any good reason to increase in value.

And environmental reasons. BTC consumes an appalling amount of energy.

These are the big principles that make BTC a non-starter for me.

On a more practical level, crypto has issues similar to gold (which I also don't buy). I either have to self host, which means physically securing assets which can be risky. Or I have someone else host it for me, and the crypto industry doesn't exactly have a great record. So a bunch of risk and hassle for what? For me it doesn't solve any problems, only creates new ones.

Bitcoin does increase in value, whether or not you think it "doesn't have a good reason" doesn't matter, the market declares the value

"If you believe that Bitcoin offers no utility beyond serving as a ponzi scheme or a device for money laundering, then it would only be logical to conclude that consuming any amount of energy is wasteful. If you are one of the tens of millions of individuals worldwide using it as a tool to escape monetary repression, inflation, or capital controls, you most likely think that the energy is extremely well spent. Whether you feel Bitcoin has a valid claim on society’s resources boils down to how much value you think Bitcoin creates for society."

 https://hbr.org/2021/05/how-much-energy-does-bitcoin-actually-consume

I'm not effected by any of those things. I have no need to consume huge amounts of energy for BTC.

[GuitarStv]

@Juan Ponce de León I genuinely wish you all the best. I don't care if BTC goes up or down since, on principle, I'm never gonna buy into it.

what principles specifically?

For me it's the principle that I shouldn't invest in things that don't have any good reason to increase in value.

And environmental reasons. BTC consumes an appalling amount of energy.

These are the big principles that make BTC a non-starter for me.

On a more practical level, crypto has issues similar to gold (which I also don't buy). I either have to self host, which means physically securing assets which can be risky. Or I have someone else host it for me, and the crypto industry doesn't exactly have a great record. So a bunch of risk and hassle for what? For me it doesn't solve any problems, only creates new ones.

Bitcoin does increase in value, whether or not you think it "doesn't have a good reason" doesn't matter, the market declares the value

"If you believe that Bitcoin offers no utility beyond serving as a ponzi scheme or a device for money laundering, then it would only be logical to conclude that consuming any amount of energy is wasteful. If you are one of the tens of millions of individuals worldwide using it as a tool to escape monetary repression, inflation, or capital controls, you most likely think that the energy is extremely well spent. Whether you feel Bitcoin has a valid claim on society’s resources boils down to how much value you think Bitcoin creates for society."

 https://hbr.org/2021/05/how-much-energy-does-bitcoin-actually-consume

If we're judging crypto's ability to help unbanked folks with an alternative way of sending or buying money, it seems like quite a failure thus far.

Only 12% of crypto users are unbanked (https://pro.morningconsult.com/analyst-reports/state-of-cryptocurrency) and the majority of them are heavy users of traditional banking.  Only 16% of crypto users say that they use it to send money or buy things, while 66% say that they use crypto “as a way to make money rather than send it”.

[Scandium]

Let me put if for you quite simply.  I believe bitcoin will always go on to make a greater ATH.  I believe in Bitcoin as a store of value, I don't believe there is ever going to be an ultimate 'top' for bitcoin because I believe the printed out of thin air fiat currencies we value it in will always devalue over time, this is what ultimately drives capital towards the harder asset which is Bitcoin, the only asset which humans cannot increase the supply of.  Let me say it again, there is no top for bitcoin because there is no bottom for fiat, fiat will always be printed into infinity.

Now, you can argue the timing of peoples investments all you like, yes the people who bought the last ATH are currently 'at loss', but the next ATH will come around and at that moment, nominally the amount of people 'at loss' at the next ATH will be zero.  Yes there will be another 'crash' at some stage, yes people will be at 'loss' for a year or two, but IMO the value of bitcoin will always eventually go up vs printed fiat currencies inflating away their value over time.  This is really all I have to say on the matter as all of this has been covered in the past I'm sure.

Sure, this is true; there's a limited supply of BTC. Just as there's a limited supply of gold, MTG cards, or used tissues signed by Tom Hanks.. But it doesn't follow that the value of those things will go up forever. They also need to have a utility, otherwise you're just paying for the novelty of owning something, which has a pretty limited market. And the ability, and experience, of using BTC to pay for things is, honestly, pretty shit. The uses cases where BTC is "better" than electronic or hard cash is very small, even less if you exclude criminal activity. Even if you can use BTC to pay at Newegg or whatever, there's almost never a good reason why you would if you also have $. And finally, not being able to use it to pay your taxes pretty much kills the cycle of use for a currency. Unless that changes you'll need dollars (or your local currency) at some point.

But yeah, go bet on the "fiat currency will collapse" theory, it's been going strong for decades already.

[Glenstache]

To me it seems like the primary value is a "money" that fits libertarian ideals of decoupling from government. This is also its primary drawback as many users of financial systems really like things like regulation and stability. It appears that the integration with the global financial system requires a middle man and decoupling of the blockchain from transactions thus making it a bit of a niche item. Ironically, the value proposition for BTC is fundamentally the same as all other currencies in that it has value to the extent that people *believe* it has value. The fiat currencies have value because they are widely used and agreed upon as a source of value. The ability to adjust the supply of money through central banks is a feature, not a bug. That is not to say that the ability to change supply cannot be mismanaged, but it has incredible power to smooth economic turbulence at a macro level.

In my mind, BTC is worse than gold because there is a fundamental value there for making things (electronics, gaudy jewelery). BTC is a store of wealth strictly to the extent that people believe it is. The exceptional volatility is a natural outcome of this fundamental characteristic. To say that BTC has no top because fiat currencies have no bottom is useful as a metric only to the extent that BTC is values in fiat-dollars/euros/clams; this undermines the concept of it useful as a stand alone monetary tool.

[seattlecyclone]

Bitcoin does increase in value, whether or not you think it "doesn't have a good reason" doesn't matter, the market declares the value

Sure, there are lots of things that have increased in value that I nevertheless didn't invest in because I had no particular belief beforehand that I should expect them to increase in value. Bitcoin is one in a long list of such items.

Let me put if for you quite simply.  I believe bitcoin will always go on to make a greater ATH.  I believe in Bitcoin as a store of value, I don't believe there is ever going to be an ultimate 'top' for bitcoin because I believe the printed out of thin air fiat currencies we value it in will always devalue over time, this is what ultimately drives capital towards the harder asset which is Bitcoin, the only asset which humans cannot increase the supply of.  Let me say it again, there is no top for bitcoin because there is no bottom for fiat, fiat will always be printed into infinity.

Now, you can argue the timing of peoples investments all you like, yes the people who bought the last ATH are currently 'at loss', but the next ATH will come around and at that moment, nominally the amount of people 'at loss' at the next ATH will be zero.  Yes there will be another 'crash' at some stage, yes people will be at 'loss' for a year or two, but IMO the value of bitcoin will always eventually go up vs printed fiat currencies inflating away their value over time.  This is really all I have to say on the matter as all of this has been covered in the past I'm sure.

Sure, this is true; there's a limited supply of BTC. Just as there's a limited supply of gold, MTG cards, or used tissues signed by Tom Hanks.. But it doesn't follow that the value of those things will go up forever. They also need to have a utility, otherwise you're just paying for the novelty of owning something, which has a pretty limited market. And the ability, and experience, of using BTC to pay for things is, honestly, pretty shit. The uses cases where BTC is "better" than electronic or hard cash is very small, even less if you exclude criminal activity. Even if you can use BTC to pay at Newegg or whatever, there's almost never a good reason why you would if you also have $. And finally, not being able to use it to pay your taxes pretty much kills the cycle of use for a currency. Unless that changes you'll need dollars (or your local currency) at some point.

But yeah, go bet on the "fiat currency will collapse" theory, it's been going strong for decades already.

This. The supply of gold, for example, is fairly stable. There are mines that increase this supply by 1-2% every year, but that lags behind fiat inflation and also behind population growth. Is holding gold better than holding cash under your mattress? Sure. It's widely recognized as a good store of value. Its purchasing power remains relatively stable over time. There's much less of a case for why it should increase in real value over time (not nominal fiat-denominated value, but real value in terms of purchasing power).

I see Bitcoin-proponents often come back to the comparison with inflationary fiat currencies as though that proves Bitcoin is worth investing in. No. Nobody should consider fiat currency an investment. Everyone knows it will be worth less in a few years than it is worth now. "Likely a better investment than a known bad investment" is a pretty low bar to clear, and gives us next to no information about whether it's actually a good investment.

[mistymoney]

Let me put if for you quite simply.  I believe bitcoin will always go on to make a greater ATH.  I believe in Bitcoin as a store of value, I don't believe there is ever going to be an ultimate 'top' for bitcoin because I believe the printed out of thin air fiat currencies we value it in will always devalue over time, this is what ultimately drives capital towards the harder asset which is Bitcoin, the only asset which humans cannot increase the supply of.  Let me say it again, there is no top for bitcoin because there is no bottom for fiat, fiat will always be printed into infinity.

Now, you can argue the timing of peoples investments all you like, yes the people who bought the last ATH are currently 'at loss', but the next ATH will come around and at that moment, nominally the amount of people 'at loss' at the next ATH will be zero.  Yes there will be another 'crash' at some stage, yes people will be at 'loss' for a year or two, but IMO the value of bitcoin will always eventually go up vs printed fiat currencies inflating away their value over time.  This is really all I have to say on the matter as all of this has been covered in the past I'm sure.

Sure, this is true; there's a limited supply of BTC. Just as there's a limited supply of gold, MTG cards, or used tissues signed by Tom Hanks.. But it doesn't follow that the value of those things will go up forever. They also need to have a utility, otherwise you're just paying for the novelty of owning something, which has a pretty limited market. And the ability, and experience, of using BTC to pay for things is, honestly, pretty shit. The uses cases where BTC is "better" than electronic or hard cash is very small, even less if you exclude criminal activity. Even if you can use BTC to pay at Newegg or whatever, there's almost never a good reason why you would if you also have $. And finally, not being able to use it to pay your taxes pretty much kills the cycle of use for a currency. Unless that changes you'll need dollars (or your local currency) at some point.

But yeah, go bet on the "fiat currency will collapse" theory, it's been going strong for decades already.

How is btc not a fiat currrency? Except for the part about being backed by a government, there are no physical assets such as gold or silver to support it. Is btc calling itself a physical commodity?

I'm not getting this....I thought fiat meant we are all going to pretend this has value to facilitate buy and sell stuff without bartering.....isn't btc the definition of we are all going to pretend....and there isn't even a government entity to back it up.

What am I missing?

[GuitarStv]

Let me put if for you quite simply.  I believe bitcoin will always go on to make a greater ATH.  I believe in Bitcoin as a store of value, I don't believe there is ever going to be an ultimate 'top' for bitcoin because I believe the printed out of thin air fiat currencies we value it in will always devalue over time, this is what ultimately drives capital towards the harder asset which is Bitcoin, the only asset which humans cannot increase the supply of.  Let me say it again, there is no top for bitcoin because there is no bottom for fiat, fiat will always be printed into infinity.

Now, you can argue the timing of peoples investments all you like, yes the people who bought the last ATH are currently 'at loss', but the next ATH will come around and at that moment, nominally the amount of people 'at loss' at the next ATH will be zero.  Yes there will be another 'crash' at some stage, yes people will be at 'loss' for a year or two, but IMO the value of bitcoin will always eventually go up vs printed fiat currencies inflating away their value over time.  This is really all I have to say on the matter as all of this has been covered in the past I'm sure.

Sure, this is true; there's a limited supply of BTC. Just as there's a limited supply of gold, MTG cards, or used tissues signed by Tom Hanks.. But it doesn't follow that the value of those things will go up forever. They also need to have a utility, otherwise you're just paying for the novelty of owning something, which has a pretty limited market. And the ability, and experience, of using BTC to pay for things is, honestly, pretty shit. The uses cases where BTC is "better" than electronic or hard cash is very small, even less if you exclude criminal activity. Even if you can use BTC to pay at Newegg or whatever, there's almost never a good reason why you would if you also have $. And finally, not being able to use it to pay your taxes pretty much kills the cycle of use for a currency. Unless that changes you'll need dollars (or your local currency) at some point.

But yeah, go bet on the "fiat currency will collapse" theory, it's been going strong for decades already.

How is btc not a fiat currrency? Except for the part about being backed by a government, there are no physical assets such as gold or silver to support it. Is btc calling itself a physical commodity?

I'm not getting this....I thought fiat meant we are all going to pretend this has value to facilitate buy and sell stuff without bartering.....isn't btc the definition of we are all going to pretend....and there isn't even a government entity to back it up.

What am I missing?

'fiat currency' is issued by a government by definition.  This is different from non-fiat currency (like the scrip that was issued by mining companies to keep employees dependent and destitute), or if I started making 'Steve Bucks'.

[Scandium]

Let me put if for you quite simply.  I believe bitcoin will always go on to make a greater ATH.  I believe in Bitcoin as a store of value, I don't believe there is ever going to be an ultimate 'top' for bitcoin because I believe the printed out of thin air fiat currencies we value it in will always devalue over time, this is what ultimately drives capital towards the harder asset which is Bitcoin, the only asset which humans cannot increase the supply of.  Let me say it again, there is no top for bitcoin because there is no bottom for fiat, fiat will always be printed into infinity.

Now, you can argue the timing of peoples investments all you like, yes the people who bought the last ATH are currently 'at loss', but the next ATH will come around and at that moment, nominally the amount of people 'at loss' at the next ATH will be zero.  Yes there will be another 'crash' at some stage, yes people will be at 'loss' for a year or two, but IMO the value of bitcoin will always eventually go up vs printed fiat currencies inflating away their value over time.  This is really all I have to say on the matter as all of this has been covered in the past I'm sure.

Sure, this is true; there's a limited supply of BTC. Just as there's a limited supply of gold, MTG cards, or used tissues signed by Tom Hanks.. But it doesn't follow that the value of those things will go up forever. They also need to have a utility, otherwise you're just paying for the novelty of owning something, which has a pretty limited market. And the ability, and experience, of using BTC to pay for things is, honestly, pretty shit. The uses cases where BTC is "better" than electronic or hard cash is very small, even less if you exclude criminal activity. Even if you can use BTC to pay at Newegg or whatever, there's almost never a good reason why you would if you also have $. And finally, not being able to use it to pay your taxes pretty much kills the cycle of use for a currency. Unless that changes you'll need dollars (or your local currency) at some point.

But yeah, go bet on the "fiat currency will collapse" theory, it's been going strong for decades already.

How is btc not a fiat currrency? Except for the part about being backed by a government, there are no physical assets such as gold or silver to support it. Is btc calling itself a physical commodity?

I'm not getting this....I thought fiat meant we are all going to pretend this has value to facilitate buy and sell stuff without bartering.....isn't btc the definition of we are all going to pretend....and there isn't even a government entity to back it up.

What am I missing?

yes I agree, but didn't even bother bring that up. BTC is pretty much the definition of fiat. It only has "value" (using that very loosely!) because everyone agree it does. Even though you can barely buy anything with it, nobody gets paid a salary in it, it can take hours to convert to dollars, and (except a handful) no government accepts it.

[maizefolk]

yes I agree, but didn't even bother bring that up. BTC is pretty much the definition of fiat. It only has "value" (using that very loosely!) because everyone agree it does. Even though you can barely buy anything with it, nobody gets paid a salary in it, it can take hours to convert to dollars, and (except a handful) no government accepts it.

Don't essentially all of those same arguments apply to gold though?

Gold has value only because a lot of people agree it does.
I don't know anywhere outside of an old western movie I could show up with a sack of gold dust and buy anything directly.
I don't know anyone who gets paid a salary in gold.
It can take days or weeks to covert gold to dollars.
Governments typically don't accept it as payment for taxes.

Now I'm not arguing people should be buying bitcoin or gold. But I don't think these particular set of features make bitcoin look any worse than gold, yet people treat gold as the opposite of fiat money.

Gold's main advantage over bitcoin is a longer track record of people continuing to agree it has value. 
Bitcoin's main advantage over gold is that self custody is a lot easier/cheaper, particularly if you move around a lot.

[LateStarter]

@Juan Ponce de León I genuinely wish you all the best. I don't care if BTC goes up or down since, on principle, I'm never gonna buy into it.

what principles specifically?

For me it's the principle that I shouldn't invest in things that don't have any good reason to increase in value.

And environmental reasons. BTC consumes an appalling amount of energy.

These are the big principles that make BTC a non-starter for me.

On a more practical level, crypto has issues similar to gold (which I also don't buy). I either have to self host, which means physically securing assets which can be risky. Or I have someone else host it for me, and the crypto industry doesn't exactly have a great record. So a bunch of risk and hassle for what? For me it doesn't solve any problems, only creates new ones.

Bitcoin does increase in value, whether or not you think it "doesn't have a good reason" doesn't matter, the market declares the value

"If you believe that Bitcoin offers no utility beyond serving as a ponzi scheme or a device for money laundering, then it would only be logical to conclude that consuming any amount of energy is wasteful. If you are one of the tens of millions of individuals worldwide using it as a tool to escape monetary repression, inflation, or capital controls, you most likely think that the energy is extremely well spent. Whether you feel Bitcoin has a valid claim on society’s resources boils down to how much value you think Bitcoin creates for society."

 https://hbr.org/2021/05/how-much-energy-does-bitcoin-actually-consume

If we're judging crypto's ability to help unbanked folks with an alternative way of sending or buying money, it seems like quite a failure thus far.

Only 12% of crypto users are unbanked (https://pro.morningconsult.com/analyst-reports/state-of-cryptocurrency) and the majority of them are heavy users of traditional banking.  Only 16% of crypto users say that they use it to send money or buy things, while 66% say that they use crypto “as a way to make money rather than send it”.

Eh ?

The fact (taken at face value) that more banked than unbanked hold crypto says absolutely nothing about "crypto's ability to help unbanked folks with an alternative way of sending or buying money".

[MustacheAndaHalf]

"Fiat money is a type of currency that is not backed by a commodity, such as gold or silver."
https://en.wikipedia.org/wiki/Fiat_money

"Yes, virtual currencies, such as Bitcoin, have been determined to be commodities under the Commodity Exchange Act (CEA)"
[PDF] https://www.cftc.gov/sites/default/files/2019-12/oceo_bitcoinbasics0218.pdf

[seattlecyclone]

Bitcoin's main advantage over gold is that self custody is a lot easier/cheaper, particularly if you move around a lot.

Is it though? A million dollars worth of gold weighs about 16 kg and occupies less than a liter of volume. Should be easy enough to secure that in any residence, and transporting it from one residence to another is also a fairly simple task.

Self-custody of Bitcoins is not significantly easier, at least if you don't want your coins to die with you. If you want to make sure that your heirs have access to your crypto wallet when you die, but not until then, you need to make sure the keys are written down somewhere, which comes with all the same physical security challenges inherent with storing a liter of gold.

[maizefolk]

All things being equal, I would rather fly -- whether domestically or internationally -- with a bitcoin seed phrase memorized than show up to the airport with a liter of gold in my carry on (although I agree, $1M of gold would still fit within the carry-on allowance). I'll acknowledge that may be a personal preference rather a universal one though.

A wallet key or a bunch of gold coins/bars in a bank safe deposit box or home safe are going to be about equally secure. Bitcoin also offers options like multi-signature setups that require 2 out of 3 keys in order to access the wallet. That lets your heirs lose any one of three written down keys without losing access to you bitcoins. And anyone who finds or steals one of three written down keys still wouldn't gain access to your bitcoin wallet. To me the latter seems more secure, but again that may be a personal preference rather than a universal truth.

[LateStarter]

Bitcoin and the crypto movement grew in part as a response to the 2008 banking and the associated problems with big institutional banking.   At first blush, the benefits seem large.  Bitcoin is a peer-to-peer, cashless transaction system.    You do not need a bank to hold your Bitcoin, which could be a huge benefit for the hundreds of millions if not billions of the unbanked.  It also makes it  more difficult for the government or other entity to seize your Bitcoin, and you do not need a third party to make transactions.  All the transactions are immutably recorded on the blockchain and cannot be falsified.   Transactions can be conducted across international borders with no additional expense.  Bitcoin cannot be debased or manipulated by any central bank or government. 

Sounds good, right?  But has it grown?   I mean, within say the last five to ten years?  Anecdotally, it doesn't seem that any more businesses accept Bitcoin than back then, and the number might even have gone down.  And of those businesses that you've heard of that do accept Bitcoin, all use a third-party servicer like Bitpay to facilitate the transactions.

That's your sole measure of growth ?

I'm not expecting to see widespread adoption of Bitcoin/Lightning for day-to-day transactions in developed nations for a while yet - there's no great urgency for it. I'd be pleased to see it but I'm losing zero sleep over it's absence - it's a non-issue.

If a business sees benefits in using Bitpay, so be it - it's a choice - it's up to them. It wouldn't affect me as a buyer using my own Bitcoin/Lightning wallet - I don't see the problem.

El Salvador treats Bitcoin as legal tender, but by all accounts actual adoption is extremely low.   Custody is facilitated by a government controlled app, which again means there is typically no self-custody and no trustless transactions.  Bitcoin ATMs typically have higher fees than regular ATMs.   Remittances via Bitcoin--which was a major selling point of El Salvador's plan--are a rounding error of the total and dropping.

Can't comment. I have no direct experience/info and most sources seem to be pretty biased one way or the other.

All of these exchange collapses (FTX, Celsius, Genesis/Gemini, etc.) show that the institutions that have grown up around crypto lacked internal controls to ensure client's interests are safeguarded.  Therefore, there is a lot of excitement in the crypto space about the likely SEC approval of Bitcoin ETFs.     This will allow Wall Street investment banks to hold Bitcoin, and let retail investors speculate on the price without having to deal with self-custody, yet get the assurance of government oversight and regulation.

Can you link to some evidence for this excitement among retail investors for using a Bitcoin ETF in preference to self-custodying Bitcoin ?

The ETFs haven't come about because of FTX, etc. The driver for ETFs is institutional investors (that can't access Bitcoin directly) wanting Bitcoin exposure via an accessible conventional instrument. The excitement (justified or otherwise) is based on the expectation that institutional money will come flooding into Bitcoin - albeit, indirectly.

So we've seen that Bitcoin specifically and crypto in general have grown into something that looks identical to the traditional banking and finance system.   Customer's assets are held in the institution's name, transactions take place off the blockchain and are regulated by the government.

Not so. Not at all.  An ETF is an ETF.  Bitcoin is still Bitcoin.

[deborah]

Last time I was at an airport they said that your carry on bags were limited to 7kg.

[seattlecyclone]

Last time I was at an airport they said that your carry on bags were limited to 7kg.

I have to say I've never flown on an airline that cared about the weight of your carry-on suitcase. Size, yes; weight, no. But in that case you could take your US$1 million of gold, put nearly half of it in your carry-on suitcase, stick the rest (~500 mL volume) in your backpack and/or pockets, no big deal. Are they going to weigh the clothes on your back too?

Regarding the possibility of splitting your Bitcoin key three ways and only requiring two, yeah I think that may be a personal preference. Would you rather fail in the direction of making your wealth disappear if your heirs forget the secrets or not? If two out of three kids can't remember their part of my safe combination they can still spend an afternoon drilling holes in the thing until they can get the gold out. If two out of three kids lose their part of my Bitcoin keys, tough luck, their inheritance just went up in smoke.

[LateStarter]

Let me put if for you quite simply.  I believe bitcoin will always go on to make a greater ATH.  I believe in Bitcoin as a store of value, I don't believe there is ever going to be an ultimate 'top' for bitcoin because I believe the printed out of thin air fiat currencies we value it in will always devalue over time, this is what ultimately drives capital towards the harder asset which is Bitcoin, the only asset which humans cannot increase the supply of.  Let me say it again, there is no top for bitcoin because there is no bottom for fiat, fiat will always be printed into infinity.

Now, you can argue the timing of peoples investments all you like, yes the people who bought the last ATH are currently 'at loss', but the next ATH will come around and at that moment, nominally the amount of people 'at loss' at the next ATH will be zero.  Yes there will be another 'crash' at some stage, yes people will be at 'loss' for a year or two, but IMO the value of bitcoin will always eventually go up vs printed fiat currencies inflating away their value over time.  This is really all I have to say on the matter as all of this has been covered in the past I'm sure.

Sure, this is true; there's a limited supply of BTC. Just as there's a limited supply of gold, MTG cards, or used tissues signed by Tom Hanks.. But it doesn't follow that the value of those things will go up forever. They also need to have a utility, otherwise you're just paying for the novelty of owning something, which has a pretty limited market.

Utility is in the eye of the beholder. Don't conflate "I see no utility" or "it has no utility for me" with "it has no utility".

Also, it might be instructive to review how the gold, MTG and TomHanksTissues markets behaved once ETFs and institutional money got involved. Oh, just gold then . . . so maybe those tired old 'novelty' comparisons should be retired.

And the ability, and experience, of using BTC to pay for things is, honestly, pretty shit. The uses cases where BTC is "better" than electronic or hard cash is very small, even less if you exclude criminal activity. Even if you can use BTC to pay at Newegg or whatever, there's almost never a good reason why you would if you also have $. And finally, not being able to use it to pay your taxes pretty much kills the cycle of use for a currency. Unless that changes you'll need dollars (or your local currency) at some point.

What's the trend ? Who invests based only on how things are today ?

And again again again . . . Few people are working on solving the virtually non-existent day-to-day transaction problems experienced by the average wealthy comfortable American. The fact that you can't use Bitcoin to buy your morning coffee or whatever is utterly irrelevant to almost all Bitcoiners. You're 'tilting at a windmill'.

But yeah, go bet on the "fiat currency will collapse" theory, it's been going strong for decades already.

That part of the bet is generally: fiat currency will collapse be continually debased. It's been going strong for decades already.

[GuitarStv]

Last time I was at an airport they said that your carry on bags were limited to 7kg.

I have to say I've never flown on an airline that cared about the weight of your carry-on suitcase. Size, yes; weight, no. But in that case you could take your US$1 million of gold, put nearly half of it in your carry-on suitcase, stick the rest (~500 mL volume) in your backpack and/or pockets, no big deal. Are they going to weigh the clothes on your back too?

Regarding the possibility of splitting your Bitcoin key three ways and only requiring two, yeah I think that may be a personal preference. Would you rather fail in the direction of making your wealth disappear if your heirs forget the secrets or not? If two out of three kids can't remember their part of my safe combination they can still spend an afternoon drilling holes in the thing until they can get the gold out. If two out of three kids lose their part of my Bitcoin keys, tough luck, their inheritance just went up in smoke.

Drill a hole in the bars and put them on a chain.  Then wear the chain around your neck.  I've never seen airlines care about jewelry weight.

[MustacheAndaHalf]

Having looked it up... the largest gold bar is "400 troy ounces".  Two of them would fit side by side under a Macbook, lifting it 2 inches.  That 55 pounds of gold would be worth about $1.7 million, or slightly less than the cost of the Macbook.  ;)

Is the +38% jump in Bitcoin's price (in 1 month) entirely from expectations of a Bitcoin ETF?

[FINate]

Today I watched a Cornell panel discussion on proposed IRS 1099 reporting rules for crypto. I remember when it was believed crypto was out of reach of regulators. And now these crypto advocate panel members are calling this an existential crisis. The guy at 13:40 is particularly entertaining, as he complains about intermediaries and centralization being the antithesis of the movement. Clever algorithms in the virtual world are not outside the reach of governments, because we live an embodied life in the physical world. It's like when the nihilists in The Big Lebowski protest that it's not fair when their ransom scheme doesn't work out, lol.

[clifp]

So it raises the question:  What do you need Bitcoin for?

Buying drugs, or machine guns, hiring a hitman to take out your wife, business partner, or Donald Trump, a place to store embezzled funds, the applications for bitcoin are quite numerous for criminals.

[FINate]

So it raises the question:  What do you need Bitcoin for?

Buying drugs, or machine guns, hiring a hitman to take out your wife, business partner, or Donald Trump, a place to store embezzled funds, the applications for bitcoin are quite numerous for criminals.

It's not even good for that. The public blockchain combined with other digital fingerprints means it's way more traceable than cash. Here's an interesting interview about the myth of crypto anonymity: https://www.wired.com/story/gadget-lab-podcast-585/