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

[ChpBstrd]

Bitcoin following gold up IMO aswell as anticipation of the ETFs and the halving.  The market is looking for harder assets as it begins to realise that the USA is basically insolvent, the national debt is now rising exponentially and the only choice soon will be to print its way into oblivion.

1) Why would halving - the Bitcoin equivalent of a large interest rate cut - increase the value of Bitcoin? Is new supply really that big a part of the daily float, and is that supply expected to actually drop?

2) The U.S. National Debt as a percentage of GDP has been flat-to-down since 2021. Since the USA is clearly not insolvent and the national debt is clearly not rising exponentially in inflation-adjusted terms, isn't that a negative for Bitcoin?

[Juan Ponce de León]

Bitcoin following gold up IMO aswell as anticipation of the ETFs and the halving.  The market is looking for harder assets as it begins to realise that the USA is basically insolvent, the national debt is now rising exponentially and the only choice soon will be to print its way into oblivion.

1) Why would halving - the Bitcoin equivalent of a large interest rate cut - increase the value of Bitcoin? Is new supply really that big a part of the daily float, and is that supply expected to actually drop?[/img]

Ok i'll try and break it down for you.  The vast majority of Bitcoin is locked away in cold wallets by long term holders, it doesn't move.  Also that percentage of bitcoin that is held by long term holders is continually increasing.  Bitcoin is traded on the margins on exchanges, there is only a small percentage of 'liquid' supply that is not owned by long term holders.  You have your regular buyers and your regular sellers and together on the exchange supply vs demand they determine the price.

After the halving, miners are suddently selling half as much, HODLers are buying just as much as always or more as many are anticipating the price to rise. This throws out the delicate balance between supply and demand and Bitcoin for sale quickly dries up on exchanges = supply shock. The only thing that can give is price. Price goes up.  You only need to look at bitcoins long term charts and you can clearly see the effects of the 4 year halving cycle on bitcoins price.

[Juan Ponce de León]

Bitcoin following gold up IMO aswell as anticipation of the ETFs and the halving.  The market is looking for harder assets as it begins to realise that the USA is basically insolvent, the national debt is now rising exponentially and the only choice soon will be to print its way into oblivion.

2) The U.S. National Debt as a percentage of GDP has been flat-to-down since 2021. Since the USA is clearly not insolvent and the national debt is clearly not rising exponentially in inflation-adjusted terms, isn't that a negative for Bitcoin?

That's one way to look at it.  Another way to look at it is debt interest payments as a percentage of the budget and debt interest payments as a percentage of tax revenue.

America are now inbetween a rock and a hard place where they have to keep interest rates high to keep a lid on inflation but they also cannot afford to pay the interest without printing more money which will drive inflation higher down the road.  The other problem is that nations like China and Saudi Arabia who used to buy a lot of this debt are now reluctant to buy it and reducing their positions.  If debt buyers don't line up to fund the deficits than the money printers switch on.



Keep in mind that Defense spending accounts for 12 percent of all federal spending and nearly half of discretionary spending, just to put it in perspective how huge the debt interest bill is becoming.

Good article here actually

https://www.cnbc.com/2023/11/17/ray-dalio-says-us-reaching-a-point-where-our-debt-problem-gets-even-worse.html#:~:text=Economy-,Ray%20Dalio%20says%20U.S.%20reaching%20an%20inflection%20point%20where,problem%20quickly%20gets%20even%20worse&text=Soaring%20U.S.%20government%20debt%20is,founder%20Ray%20Dalio%20said%20Friday.

[MustacheAndaHalf]

The all-time high in cold BTC wallets has not been matched by an all-time high in the price of BTC, although it has risen +150% YTD.  Crypto exchange Bitfinex released this analysis on Nov 27 2023 :

An unprecedented 13.65 million Bitcoin, approximately 70 percent of the total circulating supply, has not been transacted or moved for over a year, a new
all-time high.

PDF https://blog.bitfinex.com/wp-content/uploads/2023/11/Bitfinex-Alpha-82.pdf

Many (most?) BTC trades avoid blockchain fees.  Crypto exchange Binance doesn't touch its 2.5% of all BTC when its customers trade Bitcoin.  They update internal records.  Same for Grayscale (3.3% of all BTC) when shares of $GBTC change hands.  These transactions are off the chain (!), which hides the volume from those analyzing cold wallets.

Yes, a large majority of BTC wallets are cold, but most trading of BTC doesn't involve wallets or on chain transactions.

[GuitarStv]

The all-time high in cold BTC wallets has not been matched by an all-time high in the price of BTC, although it has risen +150% YTD.  Crypto exchange Bitfinex released this analysis on Nov 27 2023 :

An unprecedented 13.65 million Bitcoin, approximately 70 percent of the total circulating supply, has not been transacted or moved for over a year, a new
all-time high.

PDF https://blog.bitfinex.com/wp-content/uploads/2023/11/Bitfinex-Alpha-82.pdf

Many (most?) BTC trades avoid blockchain fees.  Crypto exchange Binance doesn't touch its 2.5% of all BTC when its customers trade Bitcoin.  They update internal records.  Same for Grayscale (3.3% of all BTC) when shares of $GBTC change hands.  These transactions are off the chain (!), which hides the volume from those analyzing cold wallets.

Yes, a large majority of BTC wallets are cold, but most trading of BTC doesn't involve wallets or on chain transactions.

Makes sense.  Blockchain is a shitty way to do transactions - on a day to day basis any security it provides is unimportant in comparison to the need to actually move bitcoin around so of course circumventing it would be a top priority for anyone interested in trading it.

[ChpBstrd]

The all-time high in cold BTC wallets has not been matched by an all-time high in the price of BTC, although it has risen +150% YTD.  Crypto exchange Bitfinex released this analysis on Nov 27 2023 :

An unprecedented 13.65 million Bitcoin, approximately 70 percent of the total circulating supply, has not been transacted or moved for over a year, a new
all-time high.

PDF https://blog.bitfinex.com/wp-content/uploads/2023/11/Bitfinex-Alpha-82.pdf

Many (most?) BTC trades avoid blockchain fees.  Crypto exchange Binance doesn't touch its 2.5% of all BTC when its customers trade Bitcoin.  They update internal records.  Same for Grayscale (3.3% of all BTC) when shares of $GBTC change hands.  These transactions are off the chain (!), which hides the volume from those analyzing cold wallets.

Yes, a large majority of BTC wallets are cold, but most trading of BTC doesn't involve wallets or on chain transactions.

We are imagining all these Bitcoin sitting in cold wallets (e.g. solid state drives or USB sticks in people's safes) but what if a large percentage of them were lost over the years, as drives failed and got lost, as computers got wiped, as thieves stole stuff and never found the Bitcoin on them, as people died along with knowledge of their keys or passwords, as people simply forgot keys and passwords, etc?

The HODL'ed versus LOST ratio wouldn't really affect the day to day supply and demand or new mining, but it might affect the odds of Bitcoin ever being used for day-to-day transactions. If most of the "currency" is lost, then the supply is much lower than is assumed. That means the number of people holding Bitcoin is lower than it might appear, and the size of the market for Bitcoin is much smaller than we assume when we imagine everyone putting Bitcoin in cold storage for years.

If a high percentage of Bitcoin were lost - that's bullish because supply is lower than expected and >90% of Bitcoin that can exist (according to the current rules) has already been mined. I.e. The slowing trickle of newly mined supply is the only thing keeping Bitcoins available for sale. Yet it's also bearish because it means the fan club of HODL'ers is smaller than thought and cryptocurrency isn't as popular as it seems when one simply multiplies number of coins by price.

I am unaware of any way to distinguish whether a coin that didn't move for a year, or five years, is being cold stored or if it was lost, never to be found again. I.e. if it's on a thumb drive, are those Bitcoin in a safe and destined to be spent some day, or is it 30 feet deep in a landfill? I think this detail matters for an "asset" whose value is completely dependent upon a narrative of expanding public interest.

[LateStarter]

The all-time high in cold BTC wallets has not been matched by an all-time high in the price of BTC, although it has risen +150% YTD.  Crypto exchange Bitfinex released this analysis on Nov 27 2023 :

An unprecedented 13.65 million Bitcoin, approximately 70 percent of the total circulating supply, has not been transacted or moved for over a year, a new
all-time high.

PDF https://blog.bitfinex.com/wp-content/uploads/2023/11/Bitfinex-Alpha-82.pdf

Many (most?) BTC trades avoid blockchain fees.  Crypto exchange Binance doesn't touch its 2.5% of all BTC when its customers trade Bitcoin.  They update internal records.  Same for Grayscale (3.3% of all BTC) when shares of $GBTC change hands.  These transactions are off the chain (!), which hides the volume from those analyzing cold wallets.

Yes, a large majority of BTC wallets are cold, but most trading of BTC doesn't involve wallets or on chain transactions.

More Bitcoin in cold wallets is a positive sign - is it not ?  Fewer Bitcoin on exchanges = fewer Bitcoin at non-custodial risk and fewer Bitcoin being actively traded.
Maybe I'm missing something, but you seem to be arguing against points that nobody has made.

We are imagining all these Bitcoin sitting in cold wallets (e.g. solid state drives or USB sticks in people's safes) but what if a large percentage of them were lost over the years, as drives failed and got lost, as computers got wiped, as thieves stole stuff and never found the Bitcoin on them, as people died along with knowledge of their keys or passwords, as people simply forgot keys and passwords, etc?

The HODL'ed versus LOST ratio wouldn't really affect the day to day supply and demand or new mining, but it might affect the odds of Bitcoin ever being used for day-to-day transactions. If most of the "currency" is lost, then the supply is much lower than is assumed. That means the number of people holding Bitcoin is lower than it might appear, and the size of the market for Bitcoin is much smaller than we assume when we imagine everyone putting Bitcoin in cold storage for years.

If a high percentage of Bitcoin were lost - that's bullish because supply is lower than expected and >90% of Bitcoin that can exist (according to the current rules) has already been mined. I.e. The slowing trickle of newly mined supply is the only thing keeping Bitcoins available for sale. Yet it's also bearish because it means the fan club of HODL'ers is smaller than thought and cryptocurrency isn't as popular as it seems when one simply multiplies number of coins by price.

I am unaware of any way to distinguish whether a coin that didn't move for a year, or five years, is being cold stored or if it was lost, never to be found again. I.e. if it's on a thumb drive, are those Bitcoin in a safe and destined to be spent some day, or is it 30 feet deep in a landfill? I think this detail matters for an "asset" whose value is completely dependent upon a narrative of expanding public interest.

There are widely-publicised speculations that as many as 6M Bitcoin could be lost - it's common knowledge. Lost Bitcoin doesn't mean lost or reduced interest. The 'losers' still own the Bitcoin and it's safe to assume they still care about Bitcoin - they just can't access their lost Bitcoin. They are the ultimate HODLers - taking one for the team.

Complete non-issue = zero concern.

[blue_green_sparks]

The 'losers' still own the Bitcoin and it's safe to assume they still care about Bitcoin - they just can't access their lost Bitcoin. They are the ultimate HODLers - taking one for the team.

This made me chuckle. There truly is a "crypto language" that will probably be studied by linguists and sociologists someday. Us degen whales can't stand those paperhanded FUDsters who diss dApp and DeFi. It's probably nothing, LFG.

[MustacheAndaHalf]

The all-time high in cold BTC wallets has not been matched by an all-time high in the price of BTC, although it has risen +150% YTD.  Crypto exchange Bitfinex released this analysis on Nov 27 2023 :

An unprecedented 13.65 million Bitcoin, approximately 70 percent of the total circulating supply, has not been transacted or moved for over a year, a new
all-time high.

PDF https://blog.bitfinex.com/wp-content/uploads/2023/11/Bitfinex-Alpha-82.pdf

Many (most?) BTC trades avoid blockchain fees.  Crypto exchange Binance doesn't touch its 2.5% of all BTC when its customers trade Bitcoin.  They update internal records.  Same for Grayscale (3.3% of all BTC) when shares of $GBTC change hands.  These transactions are off the chain (!), which hides the volume from those analyzing cold wallets.

Yes, a large majority of BTC wallets are cold, but most trading of BTC doesn't involve wallets or on chain transactions.

More Bitcoin in cold wallets is a positive sign - is it not ?  Fewer Bitcoin on exchanges = fewer Bitcoin at non-custodial risk and fewer Bitcoin being actively traded.
Maybe I'm missing something, but you seem to be arguing against points that nobody has made.

Look where Juan Ponce de León, two posts above that one, replies to ChpBstrd asking about halving.  He claims a balance exists between supply and demand, which is upset by halving of block rewards (which reduces new supply).

Exchanges use cold wallets.  For example, Binance moved $4 billion USD worth of Bitcoin from a cold wallet a week or so ago (very likely to pay fines to the U.S. government).
https://blockworks.co/news/binance-cold-wallet-usdt

[LateStarter]

The 'losers' still own the Bitcoin and it's safe to assume they still care about Bitcoin - they just can't access their lost Bitcoin. They are the ultimate HODLers - taking one for the team.

This made me chuckle. There truly is a "crypto language" that will probably be studied by linguists and sociologists someday. Us degen whales can't stand those paperhanded FUDsters who diss dApp and DeFi. It's probably nothing, LFG.

I responded to a post that speculated about "HODLers" and the "HODL'd versus LOST ratio" in the same language as the original post - for clarity.

Language is interesting and changes all the time, particularly in specialised subjects, and especially with new tech. If linguists and sociologists do study it someday, they'll conclude that "crypto-language" is nothing more than typical in-group shorthand and humour. I'm an older fellow, not really one of the cool kids, and don't use "crypto-language" much - but it's clear and concise, and can sometimes be useful.



This message was screened for Viruses, Malware, Spam and Phishing content before being sent from an Android device via Bluetooth and WiFi through several Firewalls.
Chuckle, chuckle . . . There truly is a "tech-bro language" that will probably be studied by linguists and sociologists someday . . .

[LateStarter]

The all-time high in cold BTC wallets has not been matched by an all-time high in the price of BTC, although it has risen +150% YTD.  Crypto exchange Bitfinex released this analysis on Nov 27 2023 :

An unprecedented 13.65 million Bitcoin, approximately 70 percent of the total circulating supply, has not been transacted or moved for over a year, a new
all-time high.

PDF https://blog.bitfinex.com/wp-content/uploads/2023/11/Bitfinex-Alpha-82.pdf

Many (most?) BTC trades avoid blockchain fees.  Crypto exchange Binance doesn't touch its 2.5% of all BTC when its customers trade Bitcoin.  They update internal records.  Same for Grayscale (3.3% of all BTC) when shares of $GBTC change hands.  These transactions are off the chain (!), which hides the volume from those analyzing cold wallets.

Yes, a large majority of BTC wallets are cold, but most trading of BTC doesn't involve wallets or on chain transactions.

More Bitcoin in cold wallets is a positive sign - is it not ?  Fewer Bitcoin on exchanges = fewer Bitcoin at non-custodial risk and fewer Bitcoin being actively traded.
Maybe I'm missing something, but you seem to be arguing against points that nobody has made.

Look where Juan Ponce de León, two posts above that one, replies to ChpBstrd asking about halving.  He claims a balance exists between supply and demand, which is upset by halving of block rewards (which reduces new supply).

And Juan is, of course, correct. Bitcoin halving will clearly affect the Bitcoin supply/demand balance.

Exchanges conducting customer transactions internally/offChain have zero effect on the overall supply/demand balance - they're just buffers that soak up some of the to-ing and fro-ing.

[LateStarter]

Most crypto related anomalies like "Bitcoin Sender Struck With $3.1M Transaction Fee"; are related to the exchanges or simply due to various very unforgiving operator error.

https://web3isgoinggreat.com/

The 'unforgiving' side of things can seem scary at first but it's part and parcel of 'immutable'. It's nothing new - we all know that physical reality/time is immutable, and we're all generally comfortable with it. We know our lives are on the line when we cross the road, so we take great care. We should take similar care transacting Bitcoin, when our money is on the line.

And, note that 'immutable' is not synonymous with 'unresolvable'.

The $3.1M fee you mentioned is being (has been?) voluntarily refunded: https://cryptoslate.com/antpool-to-refund-record-3-1m-bitcoin-transaction-fee-after-costly-user-mistake/.
Likewise, the similar Paxos $500k fee that occurred in September was voluntarily refunded.

If you fat-finger 0.1BTC instead of 0.01BTC to your crack dealer, you probably won't get it back. But if you're dealing with honest people with a conscience and/or a reputation to protect, immutable errors can be resolved.

[crimp]

If you fat-finger 0.1BTC instead of 0.01BTC to your crack dealer, you probably won't get it back. But if you're dealing with honest people with a conscience and/or a reputation to protect, immutable errors can be resolved.

This is basically the value proposition of the traditional financial system. There’s nothing wrong with augmenting cryptographic protections in practice with some amount of trust or legal contract, but it is kind of telling that the blockchain-based payments systems rely on significant externally enforced social protocols just like banks do. At some point it seems to me relying on a slow database and generally honest counterparties is not particularly compelling as opposed to a fast database and generally honest counterparties.

[LateStarter]

If you fat-finger 0.1BTC instead of 0.01BTC to your crack dealer, you probably won't get it back. But if you're dealing with honest people with a conscience and/or a reputation to protect, immutable errors can be resolved.

This is basically the value proposition of the traditional financial system. There’s nothing wrong with augmenting cryptographic protections in practice with some amount of trust or legal contract, but it is kind of telling that the blockchain-based payments systems rely on significant externally enforced social protocols just like banks do. At some point it seems to me relying on a slow database and generally honest counterparties is not particularly compelling as opposed to a fast database and generally honest counterparties.

This couldn't be further from the truth - it's a complete misunderstanding / misinterpretation / misrepresentation.

The Bitcoin offering is completely different from "the value proposition of the traditional financial system". Bitcoin absolutely categorically does not "rely on significant externally enforced social protocols just like banks do".

My point was simply that an honest party can voluntarily refund a payment made in error or whatever, and that there is history of honest parties doing just that - including the specific 'unforgiving' case quoted by blue_green_sparks being forgiven.
The fact that a party may behave honourably does not, in any way, detract from the fundamental permissionless trustless immutability of a Bitcoin transaction.

[crimp]

If you fat-finger 0.1BTC instead of 0.01BTC to your crack dealer, you probably won't get it back. But if you're dealing with honest people with a conscience and/or a reputation to protect, immutable errors can be resolved.

This is basically the value proposition of the traditional financial system. There’s nothing wrong with augmenting cryptographic protections in practice with some amount of trust or legal contract, but it is kind of telling that the blockchain-based payments systems rely on significant externally enforced social protocols just like banks do. At some point it seems to me relying on a slow database and generally honest counterparties is not particularly compelling as opposed to a fast database and generally honest counterparties.

This couldn't be further from the truth - it's a complete misunderstanding / misinterpretation / misrepresentation.

The Bitcoin offering is completely different from "the value proposition of the traditional financial system". Bitcoin absolutely categorically does not "rely on significant externally enforced social protocols just like banks do".

My point was simply that an honest party can voluntarily refund a payment made in error or whatever, and that there is history of honest parties doing just that - including the specific 'unforgiving' case quoted by blue_green_sparks being forgiven.
The fact that a party may behave honourably does not, in any way, detract from the fundamental permissionless trustless immutability of a Bitcoin transaction.

I understand the cryptographic assumptions and security properties of Bitcoin. I design, implement and review cryptography software professionally. We just disagree philosophically in regards to whether those properties are attractive as a contribution to an overall payments ecosystem.

My position is that in a payments ecosystem, the database and settlement layer is only a subset. In both banking and cryptocurrency there have been numerous instances of lawyers forcing clawbacks of funds sent in error, exchanges sending money back when they receive it in error, etc. In cryptocurrency you also get the recurring comedy of offering a carrot ('white hat' rewards) or stick (law enforcement) to those who abuse protocols to steal funds. I posit that in both banking and cryptocurrency the existence of informal, socially-enforced means of correcting for human error is a feature, not a bug.

The difference is that in the banking system, these guard rails and relationships are explicitly the product on offer. Fraud protections and AML requirements offer a social good separate from the underlying database technology used to move around figures in ledger(s). In the cryptocurrency world, people argue that the social enforcement is unimportant to the ecosystem because the security proofs demonstrate that the basic transaction substrate (Bitcoin) is secure. This is true in the powerful, limited technical sense of cryptographic proofs, but elides the context in which the technology is actually used. In practice, many cryptocurrency proponents seem change their philosophy suddenly when they realize they accidentally sent too much money or sent funds to the wrong address. They then look for legal means to recoup their funds (assuming they didn't destroy them entirely by sending them to an invalid address)! A very similar story has played out in various ways in the world of smart contracts.

If you're going to fall back on the legal system or the honor of others in any case, why not use a fast settlements layer instead of a slow one? Either code is law or it isn't. Luckily, it isn't.

[MustacheAndaHalf]

Bitcoin halving will clearly affect the Bitcoin supply/demand balance.

Exchanges conducting customer transactions internally/offChain have zero effect on the overall supply/demand balance - they're just buffers that soak up some of the to-ing and fro-ing.

Sure, less Bitcoin produced per day is less supply.  What I question is how much it matters - how much Bitcoin's price will change in anticipation of halving.  There's a lack of data, since halving happens once every 4 years.

One article claimed the May 2020 halving caused Bitcoin's price to soar compared to "two months prior".  They compared to the lows during Covid-19 panic, didn't mention Covid-19 at all, and then attributed the price gains to the halving.  To me that's very poor attribution of what caused the price gains.

Yet if we go back to July 2016, Bitcoin was faily unknown.  No futures market, no $GBTC and no $BITO.  Mt Gox was hacked 2 years before, causing a huge drop.  I could believe a halving boosted enthusiam and price in 2016, but many factors present now were absent then.

[seattlecyclone]

And Juan is, of course, correct. Bitcoin halving will clearly affect the Bitcoin supply/demand balance.

Sure, of course it will have some effect, it's just rather incredible that it seems to have so much effect.

Right now there are 6.25 BTC added to the supply per block mined. There are 144 blocks mined on an average day, so that means about 900 BTC added to the blockchain per day. That represents an approximately 0.0046% increase per day of the overall supply. Within the next few months that number will be cut down to 0.0023%. Both of these numbers are essentially insignificant fractions of the overall supply, and they're also much less than 1% of the overall daily trading volume per Coinmarketcap. Furthermore each future halving is more or less scheduled already, so you'd think it would already be priced in to a large extent, rather than something people react to as if it was some sort of surprise.

[LateStarter]

If you fat-finger 0.1BTC instead of 0.01BTC to your crack dealer, you probably won't get it back. But if you're dealing with honest people with a conscience and/or a reputation to protect, immutable errors can be resolved.

This is basically the value proposition of the traditional financial system. There’s nothing wrong with augmenting cryptographic protections in practice with some amount of trust or legal contract, but it is kind of telling that the blockchain-based payments systems rely on significant externally enforced social protocols just like banks do. At some point it seems to me relying on a slow database and generally honest counterparties is not particularly compelling as opposed to a fast database and generally honest counterparties.

This couldn't be further from the truth - it's a complete misunderstanding / misinterpretation / misrepresentation.

The Bitcoin offering is completely different from "the value proposition of the traditional financial system". Bitcoin absolutely categorically does not "rely on significant externally enforced social protocols just like banks do".

My point was simply that an honest party can voluntarily refund a payment made in error or whatever, and that there is history of honest parties doing just that - including the specific 'unforgiving' case quoted by blue_green_sparks being forgiven.
The fact that a party may behave honourably does not, in any way, detract from the fundamental permissionless trustless immutability of a Bitcoin transaction.

I understand the cryptographic assumptions and security properties of Bitcoin. I design, implement and review cryptography software professionally. We just disagree philosophically in regards to whether those properties are attractive as a contribution to an overall payments ecosystem.

My position is that in a payments ecosystem, the database and settlement layer is only a subset. In both banking and cryptocurrency there have been numerous instances of lawyers forcing clawbacks of funds sent in error, exchanges sending money back when they receive it in error, etc. In cryptocurrency you also get the recurring comedy of offering a carrot ('white hat' rewards) or stick (law enforcement) to those who abuse protocols to steal funds. I posit that in both banking and cryptocurrency the existence of informal, socially-enforced means of correcting for human error is a feature, not a bug.

The difference is that in the banking system, these guard rails and relationships are explicitly the product on offer. Fraud protections and AML requirements offer a social good separate from the underlying database technology used to move around figures in ledger(s). In the cryptocurrency world, people argue that the social enforcement is unimportant to the ecosystem because the security proofs demonstrate that the basic transaction substrate (Bitcoin) is secure. This is true in the powerful, limited technical sense of cryptographic proofs, but elides the context in which the technology is actually used. In practice, many cryptocurrency proponents seem change their philosophy suddenly when they realize they accidentally sent too much money or sent funds to the wrong address. They then look for legal means to recoup their funds (assuming they didn't destroy them entirely by sending them to an invalid address)! A very similar story has played out in various ways in the world of smart contracts.

If you're going to fall back on the legal system or the honor of others in any case, why not use a fast settlements layer instead of a slow one? Either code is law or it isn't. Luckily, it isn't.

Please expand on the "numerous examples of lawyers forcing clawbacks of [Bitcoin] sent in error".

Also, re. the "many [Bitcoin] proponents changing their philosophy suddenly when they realize they accidentally sent too much money or sent funds to the wrong address". Many ? Evidence ? Regardless, humans are humans - see also the many keen dog owners who became much less enthusiastic when they got bitten, the many keen parachutists who . . . , etc. etc. A few unfortunate/careless exceptions changing their minds doesn't invalidate the initial premise.

I've not suggested that anyone should "fall back on the legal system or the honor of others" - those are your words. I merely pointed out that, contrary to what was claimed, errors can be recoverable and recoveries have been made. I do not propose this as a 'fall back on' strategy - simply that you might get lucky if you're dealing with honourable people.

[ChpBstrd]

And Juan is, of course, correct. Bitcoin halving will clearly affect the Bitcoin supply/demand balance.

Sure, of course it will have some effect, it's just rather incredible that it seems to have so much effect.

Right now there are 6.25 BTC added to the supply per block mined. There are 144 blocks mined on an average day, so that means about 900 BTC added to the blockchain per day. That represents an approximately 0.0046% increase per day of the overall supply. Within the next few months that number will be cut down to 0.0023%. Both of these numbers are essentially insignificant fractions of the overall supply, and they're also much less than 1% of the overall daily trading volume per Coinmarketcap. Furthermore each future halving is more or less scheduled already, so you'd think it would already be priced in to a large extent, rather than something people react to as if it was some sort of surprise.

I think this is the answer I was looking for. Supply inflation around 1.68% per year is expected to halve. Will that result in a shortage of Bitcoin? IDK. I'd have to know the amount of fiat currency flowing into Bitcoin (i.e. demand), plus the elasticity of Bitcoin, to answer that question. But what I can tell from this answer is that we're talking about a 0.86% slower increase in the supply of Bitcoin, not a major change.

That sort of perspective is important when thinking about something that runs on narratives of "it will go up because of this" or "it will go down because of that" and has no other real-world touchpoints to confirm things like we have with fiat currencies traded in markets. It's also a rare hard number in a world of faux transactions and bad data.

[LateStarter]

Bitcoin halving will clearly affect the Bitcoin supply/demand balance.

Exchanges conducting customer transactions internally/offChain have zero effect on the overall supply/demand balance - they're just buffers that soak up some of the to-ing and fro-ing.

Sure, less Bitcoin produced per day is less supply.  What I question is how much it matters - how much Bitcoin's price will change in anticipation of halving.  There's a lack of data, since halving happens once every 4 years.

One article claimed the May 2020 halving caused Bitcoin's price to soar compared to "two months prior".  They compared to the lows during Covid-19 panic, didn't mention Covid-19 at all, and then attributed the price gains to the halving.  To me that's very poor attribution of what caused the price gains.

Yet if we go back to July 2016, Bitcoin was faily unknown.  No futures market, no $GBTC and no $BITO.  Mt Gox was hacked 2 years before, causing a huge drop.  I could believe a halving boosted enthusiam and price in 2016, but many factors present now were absent then.

We only have the data we have. It's surprising how often that data is sufficient to validate negative characteristics, eg. volatility, yet it's never enough to validate anything positive.

I agree. On the face of it, that's a rubbish article. I'd ignore it.

If halving has an effect, it is likely to be independent of those other things. They might add to it or subtract from it, but they won't negate it.

And Juan is, of course, correct. Bitcoin halving will clearly affect the Bitcoin supply/demand balance.

Sure, of course it will have some effect, it's just rather incredible that it seems to have so much effect.

Right now there are 6.25 BTC added to the supply per block mined. There are 144 blocks mined on an average day, so that means about 900 BTC added to the blockchain per day. That represents an approximately 0.0046% increase per day of the overall supply. Within the next few months that number will be cut down to 0.0023%. Both of these numbers are essentially insignificant fractions of the overall supply, and they're also much less than 1% of the overall daily trading volume per Coinmarketcap. Furthermore each future halving is more or less scheduled already, so you'd think it would already be priced in to a large extent, rather than something people react to as if it was some sort of surprise.

I think this is the answer I was looking for. Supply inflation around 1.68% per year is expected to halve. Will that result in a shortage of Bitcoin? IDK. I'd have to know the amount of fiat currency flowing into Bitcoin (i.e. demand), plus the elasticity of Bitcoin, to answer that question. But what I can tell from this answer is that we're talking about a 0.86% slower increase in the supply of Bitcoin, not a major change.

That sort of perspective is important when thinking about something that runs on narratives of "it will go up because of this" or "it will go down because of that" and has no other real-world touchpoints to confirm things like we have with fiat currencies traded in markets. It's also a rare hard number in a world of faux transactions and bad data.

Measuring the supply of new Bitcoin vs Total Bitcoin is unlikely to be very useful imo. We know that many BTC are lost. We know that many BTC haven't moved for a long time - and should probably not be considered 'supply' in any practical sense.
Also note that, when thinking in terms of "the amount of fiat currency flowing into Bitcoin", each halving removes a greater amount of new BTC in fiat value terms.

Halving has, historically, preceded a bull run. Some Bitcoiners are expecting (assuming?) that this will be repeated in 2024 because it's consistently happened before, supply/demand, etc. Some Bitcoiners are expecting that it will not - because (i) correlation <> causation, (ii) this time it's different - it's priced in, (iii) the effect is becoming too small in BTC terms, (iv) too many are too confident of a dead cert and they will be easy pickings for big traders who can make it not so.

I'm in the "don't know" camp. Bitcoin is still deep in it's speculation stage and it will jump around on rumours, expectations and gossip about halving (and everything else) just as much as and more than other prices do. Maybe we'll see a self-fulfilling prophecy halving bull run, maybe it will be a damp squib. One thing is certain - with Halving, Spot ETFs and who knows what in the fiat world, Recessions, Debt Crises, Interest Rates, Debasements, Inflations, etc. 2024-5 is unlikely to be dull - and it will be tricky to isolate the effects of each cause.

[MustacheAndaHalf]

I'd like to do some research from on the Bitcoin miner's perspective, but I suspect our discussion of halving has run its course.

Sometimes cause & effect are clear.  The same day spot Bitcoin ETFs were handed a victory in court, Bitcoin jumped +13%.  Other gains may be debatable, but that $40 billion increase in Bitcoin's market cap is clearly tied to the events of October 20, 2023.  I guess people ignore the events two years ago, when a futures Bitcoin ETF launched and collected $1 billion in new money... then went nowhere.  Is a spot Bitcoin ETF 40x better, and unlocks $40 billion in new investments?  In my view, that is doubtful.

I have a theory that $GBTC and $TQQQ are both highly speculative, risky investments with similar returns.  That shows up when comparing their performance, with a big gap opening up during the meme stocks hype of early 2021.  Then GBTC crashed down and rejoined TQQQ again.  Keeping that same 5 year comparison, GBTC is currently 1/3rd ahead of TQQQ (Add 100%, the original investment, to their gains then divide).  My theory is that hype over a spot Bitcoin ETF will fade, causing GBTC to crash back down near TQQQ again.

A day ago I closed my short position in a Bitcoin stock.  I'm expecting the SEC to approve spot Bitcoin ETFs in 1 or 4 weeks, and I don't want to hold a short position when it happens - I want to hold a short position after it happens.

[ChpBstrd]

It could be as simple as:

Bitcoin goes up whenever there is media attention (halving, lawsuit, new investment vehicles, new platforms, celebrities, etc.) because this is what attracts new money to this particular asset.

[MustacheAndaHalf]

Rather than derail the predictions thread into crypto, I thought I'd mention what I know about ETFs and how that relates to Bitcoin.

For each ETF, a list of investment banks is authorized to keep the price of the ETF near its assets.  If the ETF is too cheap, the bank buys ETF shares and converts those into the underlying stock.  It unlocks the 500 stocks from an S&P 500 ETF to make a profit.  Their buying and selling pushes the ETF and underlying shares closer together in price.  The big bank arbitrages enough to make a profit, and its actions push ETF prices closer to their underlying assets.

On Coinbase's exchange, customers don't trade Bitcoin "on chain" - their buys and sells are not recorded in Bitcoin's blockchain.  Instead, Coinbase keeps track of who bought, who sold, and how much BTC and cash they have in their accounts.

I assume Bitcoin ETFs (which do not exist yet), will follow a combination of the above.  Some company will need to create electronic records tracking Bitcoin ownership.  They might have 3 assets, to oversimplify: Bitcoin, cash, and "Bitcoin ETF shares".  A big bank, if the ETF shares are too cheap, might do something like this:

(1) somehow lock in the amount & price of the conversion in step (3)
(2) use cash account to buy "Bitcoin ETF shares"
(3) ask Coinbase to convert those "Bitcoin ETF shares" into equivalent Bitcoin
(4) sell its new Bitcoin asset for cash

This is speculation based on what I know - again, this ETF doesn't exist, and this has never been done before.  But the above steps would tend to drive the ETF price closer to the price of Bitcoin, and the institutional investor would profit off it.

BlackRock and iShares do not need to hold Bitcoin to run an ETF.  They can use Coinbase as their Bitcoin custodian, which is what they already listed in SEC filings.  The most famous case of self-custody was the Madoff ponzi scheme, which is why I would prefer to avoid any ETF that self-custodies its own/customer assets.

[ChpBstrd]

Rather than derail the predictions thread into crypto, I thought I'd mention what I know about ETFs and how that relates to Bitcoin.

For each ETF, a list of investment banks is authorized to keep the price of the ETF near its assets.  If the ETF is too cheap, the bank buys ETF shares and converts those into the underlying stock.  It unlocks the 500 stocks from an S&P 500 ETF to make a profit.  Their buying and selling pushes the ETF and underlying shares closer together in price.  The big bank arbitrages enough to make a profit, and its actions push ETF prices closer to their underlying assets.

On Coinbase's exchange, customers don't trade Bitcoin "on chain" - their buys and sells are not recorded in Bitcoin's blockchain.  Instead, Coinbase keeps track of who bought, who sold, and how much BTC and cash they have in their accounts.

I assume Bitcoin ETFs (which do not exist yet), will follow a combination of the above.  Some company will need to create electronic records tracking Bitcoin ownership.  They might have 3 assets, to oversimplify: Bitcoin, cash, and "Bitcoin ETF shares".  A big bank, if the ETF shares are too cheap, might do something like this:

(1) somehow lock in the amount & price of the conversion in step (3)
(2) use cash account to buy "Bitcoin ETF shares"
(3) ask Coinbase to convert those "Bitcoin ETF shares" into equivalent Bitcoin
(4) sell its new Bitcoin asset for cash

This is speculation based on what I know - again, this ETF doesn't exist, and this has never been done before.  But the above steps would tend to drive the ETF price closer to the price of Bitcoin, and the institutional investor would profit off it.

BlackRock and iShares do not need to hold Bitcoin to run an ETF.  They can use Coinbase as their Bitcoin custodian, which is what they already listed in SEC filings.  The most famous case of self-custody was the Madoff ponzi scheme, which is why I would prefer to avoid any ETF that self-custodies its own/customer assets.

I appreciate this reasoning. Sounds like BLK wants to be to cryptocurrency what Levi Strauss was to the California gold rush. They'll make money on fees and they'll make money on self-arbitrage. The question is the risk they are taking with Coinbase, and the risk of getting hacked / betrayed by insiders, just like so many individual investors have experienced.

[MustacheAndaHalf]

Coinbase has 5% of all Bitcoin, from what I recall, but they keep it spread across wallets.  Given their importance as a custodian, a hack there might even result in a halt on trading of Bitcoin ETFs.

The SEC document I quoted in the predictions thread (*) shows BlackRock (BLK) will not self-custody Bitcoin for its iShares Bitcoin Trust ETF.  iShares ETFs provide better support for put/call options, and I expect them to win that niche among Bitcoin ETFs.

Everyone else is up against Grayscale Bitcoin Trust (GBTC) converting to an ETF.  They will start with both $20 billion in assets and years of experience that new ETFs can't match.  GBTC's 2% expense ratio will face pressure from newer ETFs with lower annual fees.

(*)

According to this SEC filing, BlackRock will rely on Coinbase to hold Bitcoin.

BlackRock Fund Advisors (the “Trustee”) is the trustee of the Trust; Coinbase Custody Trust Company, LLC (the “Bitcoin Custodian”) is the custodian for the Trust’s bitcoin holdings

https://www.sec.gov/Archives/edgar/data/1980994/000143774923028549/bit20231017_s1a.htm

[Juan Ponce de León]

Even though I don't think much of coinbase what I will say is they are very good at custodying Bitcoin in cold storage wallets. 

[Metalcat]

Thought I would come back to this thread.

I chatted not too long ago with some blockchain video game developers and feel like I grasped some crypto utility, a very small example, but it clicked for me how people can think of blockchain as the new internet, ie the network that early adopters seem insane for being a big deal because in the early years it was largely useless.

I guess because I lived with a video game developer back in the day when Second Life was the "next big thing" I have a bit more intuitive understanding of why the fanboys are, well, fanboy-ing. These developers were talking about the utility of blockchain for easier, small increments exchange within their game ecosystem.

So with that little tiny nugget of "hmm...I guess I could see how this isn't totally fucking useless, but I still don't see the big picture" I then read 5 books about crypto/blockchain, which I wanted to do after reading about governments/banks looking into developing their own systems, so I just wanted to feel less ignorant about the whole thing.

I think the issue I've come across is that I see no reasonable path for investment. If I am willing to stipulate that blockchain is the next big revolutionary thing, then I came to the same conclusion that someone (I don't remember who) already stated earlier in this long thread: it's still wild speculation unless and until the utility becomes clear, because just like the dot com disaster, you can't just broadly invest in the concept.

Even if I have total faith in crypto changing the world (I don't), I have no idea which investment vehicle would be a good idea. And if it does end up being crucial to the economy as a whole, it's value will be picked up in my index investing. Because whether *I* put money directly into blockchain tech or not, the entities I'm invested in will.

Just like with the dot com boom and crash, I don't have the hubris to believe that I have any insight into how this could play out. I have no clue what entities could possibly end up established as dominant crypto tech forces, because I have no idea how it's potential utility could play out.

Contrary to all of the books I've read though, I'm not convinced that I should buy Bitcoin, specifically. My gut says that Bitcoin is the Yahoo of crypto, but that's pure, wild speculation with no expertise to back it up in any way, shape or form, and perhaps I will be proven very wrong and Bitcoin will find its elusive use case and become ubiquitous and factor heavily into my index investing returns. Or perhaps I will be proven right and A LOT of people will make a ton of money off of Bitcoin the same way a ton of people made money off of Yahoo. Who knows? But that's kind of my point.

Who knows...

But I won't beat myself for having missed any crypto moonshots because I'm unconvinced that anyone is making big money off of crypto at this stage because they are magically more insightful than everyone else. It's still mostly complete fucking morons in my world banging on about crypto and a few VERY smart people speaking passionately about the potential of blockchain, but conservatively about how to invest in that potential.

My sense is that it will be very difficult to invest really intelligently in blockchain itself, similar to how you couldn't really invest in the internet. Buying crypto coins and NFTs is not the same as investing based on the utility of the overall tech. It's more likely that just like with the internet, the big winners are going to be the companies that figure out how to make blockchain useful, not necessarily the specific coins/NFTs within them.

This is a bad example because MLB isn't a publicly traded company, but imagine it were, what would be the better investment, MLB NFTs because they're worth a lot, or MLB stock because they figured out how to make money off of NFTs?

...or I could still be missing something... I still don't feel like I understand any of this, but I know that I understand a lot more than the fucking morons in my life who keep hammering on about how stupid I am for not buying crypto coins. So there's that...

[FINate]

...or I could still be missing something... I still don't feel like I understand any of this, but I know that I understand a lot more than the fucking morons in my life who keep hammering on about how stupid I am for not buying crypto coins. So there's that...

So much this^^^

Your comparison to the dotcom bubble is apt. Back in those days I became increasingly concerned as those with the least competency became more vocal about their "investments." The same exact thing happened with "real estate investors" (many of the same people in my circles) before the subprime mortgage crisis. The louder the irrationality (e.g. FOMO), the more skeptical I become.

[WayDownSouth]

...or I could still be missing something... I still don't feel like I understand any of this, but I know that I understand a lot more than the fucking morons in my life who keep hammering on about how stupid I am for not buying crypto coins. So there's that...

So much this^^^

Your comparison to the dotcom bubble is apt. Back in those days I became increasingly concerned as those with the least competency became more vocal about their "investments." The same exact thing happened with "real estate investors" (many of the same people in my circles) before the subprime mortgage crisis. The louder the irrationality (e.g. FOMO), the more skeptical I become.

I'm about to short BTC bigtime. Just trying to figure out the numbers and timing today actually. May need to get in and be set as soon as the 24th before midnight.

[ChpBstrd]

...or I could still be missing something... I still don't feel like I understand any of this, but I know that I understand a lot more than the fucking morons in my life who keep hammering on about how stupid I am for not buying crypto coins. So there's that...

So much this^^^

Your comparison to the dotcom bubble is apt. Back in those days I became increasingly concerned as those with the least competency became more vocal about their "investments." The same exact thing happened with "real estate investors" (many of the same people in my circles) before the subprime mortgage crisis. The louder the irrationality (e.g. FOMO), the more skeptical I become.

I'm about to short BTC bigtime. Just trying to figure out the numbers and timing today actually. May need to get in and be set as soon as the 24th before midnight.

I gave up on this line of thinking when I realized crypto operates independently of any reasoning, evidence, or logic. Any rationalization a person can come up with for why it will go up or down is utterly divorced from what will actually happen. If we think we can identify the reasons why it goes up or down, we're probably wrong. There are no earnings, no revenue, no interest, no hard assets, no contracts, no nothing - so to use investment reasoning is to start from the wrong point of view.

It's a lot like trying to overthink a slot machine. We can rationalize about a particular machine being "hot" or "lucky" or "on a payout algorithm" but what we can't see is the inner workings of a relatively simple machine, which looks nothing like our theories about luck, patterns, behavior, etc. and is simply designed to keep the players putting more coins in.

If there's no good reason to think crypto will go up or down, but there are other ways to invest our money that do have reasons to believe they'll go up, then it makes more sense to take the probable win over the coin flip, just like it makes more sense to own stocks rather than playing slot machines.

[Metalcat]

...or I could still be missing something... I still don't feel like I understand any of this, but I know that I understand a lot more than the fucking morons in my life who keep hammering on about how stupid I am for not buying crypto coins. So there's that...

So much this^^^

Your comparison to the dotcom bubble is apt. Back in those days I became increasingly concerned as those with the least competency became more vocal about their "investments." The same exact thing happened with "real estate investors" (many of the same people in my circles) before the subprime mortgage crisis. The louder the irrationality (e.g. FOMO), the more skeptical I become.

I'm about to short BTC bigtime. Just trying to figure out the numbers and timing today actually. May need to get in and be set as soon as the 24th before midnight.

I gave up on this line of thinking when I realized crypto operates independently of any reasoning, evidence, or logic. Any rationalization a person can come up with for why it will go up or down is utterly divorced from what will actually happen. If we think we can identify the reasons why it goes up or down, we're probably wrong. There are no earnings, no revenue, no interest, no hard assets, no contracts, no nothing - so to use investment reasoning is to start from the wrong point of view.

It's a lot like trying to overthink a slot machine. We can rationalize about a particular machine being "hot" or "lucky" or "on a payout algorithm" but what we can't see is the inner workings of a relatively simple machine, which looks nothing like our theories about luck, patterns, behavior, etc. and is simply designed to keep the players putting more coins in.

If there's no good reason to think crypto will go up or down, but there are other ways to invest our money that do have reasons to believe they'll go up, then it makes more sense to take the probable win over the coin flip, just like it makes more sense to own stocks rather than playing slot machines.

Yep, the more I read the more I understand that I can stay a passive investor and still benefit from whatever utility blockchain may have down the line. It will get baked into existing systems if it's the next big thing, or the new systems will grow up and make their way into the collective larger system.

I will miss all of the huge moonshot opportunities to try and buy in before things skyrocket, but I already missed that with Google, Amazon, Apple, Facebook, Tesla. But I'm not a gambler, I feel zero FOMO about missing out on moonshots.

In the meantime, I continue on my goal to even try and understand blockchain, how and when it could be useful, and what, if anything, that could ever mean for me personally or professionally. I'm not a software person *at all* so it's all very difficult for me to grasp. I *know* a lot of software people, so I get the broad strokes of things, but despite reading multiple books on the topic, I feel like I understand quite well *why* so much of what people would say about crypto made no sense to me, but I don't necessarily feel like I really understand it...if that makes sense.

[WayDownSouth]

...or I could still be missing something... I still don't feel like I understand any of this, but I know that I understand a lot more than the fucking morons in my life who keep hammering on about how stupid I am for not buying crypto coins. So there's that...

So much this^^^

Your comparison to the dotcom bubble is apt. Back in those days I became increasingly concerned as those with the least competency became more vocal about their "investments." The same exact thing happened with "real estate investors" (many of the same people in my circles) before the subprime mortgage crisis. The louder the irrationality (e.g. FOMO), the more skeptical I become.

I'm about to short BTC bigtime. Just trying to figure out the numbers and timing today actually. May need to get in and be set as soon as the 24th before midnight.

I gave up on this line of thinking when I realized crypto operates independently of any reasoning, evidence, or logic. Any rationalization a person can come up with for why it will go up or down is utterly divorced from what will actually happen. If we think we can identify the reasons why it goes up or down, we're probably wrong. There are no earnings, no revenue, no interest, no hard assets, no contracts, no nothing - so to use investment reasoning is to start from the wrong point of view.

It's a lot like trying to overthink a slot machine. We can rationalize about a particular machine being "hot" or "lucky" or "on a payout algorithm" but what we can't see is the inner workings of a relatively simple machine, which looks nothing like our theories about luck, patterns, behavior, etc. and is simply designed to keep the players putting more coins in.

If there's no good reason to think crypto will go up or down, but there are other ways to invest our money that do have reasons to believe they'll go up, then it makes more sense to take the probable win over the coin flip, just like it makes more sense to own stocks rather than playing slot machines.

There are a few good predictive catalysts that are easy to see if you know where to look. I can tell you in my opinion that I don't think you're far off from being correct regarding your general statements above.

Understanding what moves crypto is like studying an alien language while having zero resources at your side.

However I also think I have some really good tools in my box regarding BTC and I'm very confident it'll be making a drop. IMHO I personally suspect it will either happen directly over Christmas, and if not then, very early in January.

I'm talking a heavy drop.

Let's revisit this post and see if I was right. I'll tell you exactly what my catalysts were regardless of if I was right or wrong. If it doesn't drop we can watch to see if those specific catalysts played a prime role or not when it does drop, and discuss why. I genuinely find this very interesting.

[maizefolk]

How big a drop do you need bitcoin to make to conclude you were correct? 20%? 30%? Something more or less than that?

When does very early January end? Jan 10th?

I’m interested to see if your prediction pans out or not.

[MustacheAndaHalf]

I'm about to short BTC bigtime. Just trying to figure out the numbers and timing today actually. May need to get in and be set as soon as the 24th before midnight.

You're the only person besides me who is planning to short crypto.  If you post your thesis, I will analyze it.  If you post links, I'll take a look.  I think the quality of our decisions can be improved by challenging each other's thesis.

I believe multiple spot Bitcoin ETFs will be approved within 3 weeks, per the SEC deadline for ARC21's application.  It would be unfair to give ARC21 the advantage of starting early, so I expect multiple ETFs get approved at once.

I consider it very likely BTC goes above $50k on that news ($43.5k now, so +15%).  It is probable that it rises above $60k (38% jump) in the first week, but not a certainty.  I doubt BTC doubles.

[Juan Ponce de León]

This will be interesting.  One genius planning to short crypto before the ETF approval, another will short it after.  Who will win???

[WayDownSouth]

How big a drop do you need bitcoin to make to conclude you were correct? 20%? 30%? Something more or less than that?

When does very early January end? Jan 10th?

I’m interested to see if your prediction pans out or not.

Within reason, I'm expecting (and will gladly accept my reasoning to be wrong as I'm a day trader and not a crypto trader) at LEAST 25% drop within a span of 3 days total, followed by a slight uptick and another 10% drop... I mean, there's infinite ways it could play out but let's just say for sake of simplicity, over a period of 5 to 7 days total, 30 to 40% drop. Before Jan 10th for sure IMHO.

If I'm wrong I'll have no embarrassment or shame. I'm just doing my best to deliver money to myself. Always learning, always willing to share outcomes and failures as well as wins. I'm really confident about what I'm saying but if it doesn't play out I have no excuses, only data about why I made the decisions I made. Simple, right? Stay tuned! And don't think I'm some genius and follow my prediction, PLEASE. I am not an advisor nor responsible for your losses. Never follow the trades or ideas of another. That's one reason I only share the ideas AFTER the fact.

[WayDownSouth]

I'm about to short BTC bigtime. Just trying to figure out the numbers and timing today actually. May need to get in and be set as soon as the 24th before midnight.

You're the only person besides me who is planning to short crypto.  If you post your thesis, I will analyze it.  If you post links, I'll take a look.  I think the quality of our decisions can be improved by challenging each other's thesis.

I believe multiple spot Bitcoin ETFs will be approved within 3 weeks, per the SEC deadline for ARC21's application.  It would be unfair to give ARC21 the advantage of starting early, so I expect multiple ETFs get approved at once.

I consider it very likely BTC goes above $50k on that news ($43.5k now, so +15%).  It is probable that it rises above $60k (38% jump) in the first week, but not a certainty.  I doubt BTC doubles.

Wait so you're expecting it to jump, yet you plan on shorting it?  Or are you saying you expect a rise for BTC but will short other cryptos? You need to be more clear because you sound extremely contradictory.

[WayDownSouth]

This will be interesting.  One genius planning to short crypto before the ETF approval, another will short it after.  Who will win???

1.) Both can win. Who says it won't dip heavily before approval and then rip upward prior to approval? Or simply dip heavily and stay there until approval?

2.). Who says that it's not possible to rip higher in anticipation of approval, only to fall hard weeks after approval and then rise again when MMs buy the dip of the people who bought FOMO and don't know how to hold?

On and on... The most interesting is that you seem to be the genius watching the other genuises from the sidelines. Are you taking part or are you just stirring the pot? Maybe you have a genuinely sincere interest and your sarcasm isn't sarcasm, which would be cool. Let's see what happens! Either way, I've got the money to burn and I've already invested the time. I'm quite confident but that doesn't mean jack-sh*t. Merry Christmas!

[Juan Ponce de León]

Oh I'm genuinely interested in Bitcoin, it's the hardest asset on earth and I have no doubt it will continue to appreciate over the long term vs fiat currencies printed out of thin air by central banks to steal the wealth of their citizens via currency inflation.  What the USD price of bitcoin will do over Christmas/january/thanksgiving or any other small window of time I have no idea and anyone who says they do is basically lying LMAO.

[MustacheAndaHalf]

I'm about to short BTC bigtime. Just trying to figure out the numbers and timing today actually. May need to get in and be set as soon as the 24th before midnight.

You're the only person besides me who is planning to short crypto.  If you post your thesis, I will analyze it.  If you post links, I'll take a look.  I think the quality of our decisions can be improved by challenging each other's thesis.

I believe multiple spot Bitcoin ETFs will be approved within 3 weeks, per the SEC deadline for ARC21's application.  It would be unfair to give ARC21 the advantage of starting early, so I expect multiple ETFs get approved at once.

I consider it very likely BTC goes above $50k on that news ($43.5k now, so +15%).  It is probable that it rises above $60k (38% jump) in the first week, but not a certainty.  I doubt BTC doubles.

Wait so you're expecting it to jump, yet you plan on shorting it?  Or are you saying you expect a rise for BTC but will short other cryptos? You need to be more clear because you sound extremely contradictory.

You plan to short Bitcoin now, after which I expect Bitcoin to jump, and then I will short it after the jump.

[MustacheAndaHalf]

This will be interesting.  One genius planning to short crypto before the ETF approval, another will short it after.  Who will win???

Did you slip both of us IQ tests, or is "genius" intended to be a sarcastic personal attack?

[Juan Ponce de León]

This will be interesting.  One genius planning to short crypto before the ETF approval, another will short it after.  Who will win???

Did you slip both of us IQ tests, or is "genius" intended to be a sarcastic personal attack?

In time you'll get over it I promise.

[Juan Ponce de León]

I'll tell you what guys, there are times when shorting bitcoin has been very profitable.  But 4 months before the halving is not one of those times.  In an election year with the fed possibly lowering rates, the planets are lining back up for bitcoin.  It's the greatest performing asset on the planet and shorting such an asset comes with extreme risk.  Of course you could be right and catch a dip but I believe any significant dips are going to be bought up fast.  If you do try this trade and are in profit I suggest you take it while you can.

[MustacheAndaHalf]

This will be interesting.  One genius planning to short crypto before the ETF approval, another will short it after.  Who will win???

Did you slip both of us IQ tests, or is "genius" intended to be a sarcastic personal attack?

In time you'll get over it I promise.

Making personal attacks is against the forum rules.
https://forum.mrmoneymustache.com/forum-information-faqs/forum-rules/

[onecoolcat]

IDK what is going to happen with the ETF decision, nor what will happen in the markets once a decision is published.  For all I know, the price action for a ETF approval is already baked into Bitcoin's price and the markets will sell off into an announcement, or the ETF gets denied and its a total bloodbath, or the ETF is approved and it sparks a massive bullrun unlike any other. 

I'm just not going to do anything and will react accordingly to any movement.  Prices collapse, I am buying.  Prices pump, I am sitting tight.  I prefer a bloodbath because I rather buy more.

[EverythingisNew]

Do you think that the SEC will issue more guidance on crypto regulation before approving the spot-ETFs? It seems to me that the SEC is letting crypto push them and their only regulation is charging “bad actors” in federal court.

[WayDownSouth]

Do you think that the SEC will issue more guidance on crypto regulation before approving the spot-ETFs? It seems to me that the SEC is letting crypto push them and their only regulation is charging “bad actors” in federal court.

I think they'll pretend that they want to issue more guidance prior to passing but will pass before they actually create anything solid. Similar to cannabis.

"Okay, so it's legal, but now what?"

And then the literal endless flow of legislation will start pouring in. This is when you'll begin to see the darker side of what crypto's "regulation" will deliver to the world.

[Telecaster]

Do you think that the SEC will issue more guidance on crypto regulation before approving the spot-ETFs? It seems to me that the SEC is letting crypto push them and their only regulation is charging “bad actors” in federal court.

I don't see why more regulations are needed, do you?   Binance and Changpeng Zhao admitted they broke of slew of existing regulations and CZ is looking at jail time as a result.   Kraken is being sued for allegedly breaking existing regulations.   SBF went to jail for breaking existing regulations.   The Winklevoss Twins are being sued for allegedly breaking existing regulations.   Mashinsky has been sued and charged for allegedly breaking regulations.    I'm no expert on securities law of course, but it seems like the existing regulations are perfectly applicable.

I don't know where the SEC's thinking is at right now, but previously they have rejected Bitcoin ETFs in part because of concerns that a small number of individuals could manipulate the price through wash trading.    Wash trading is already illegal. So what new regulation is needed? 

[WayDownSouth]

Do you think that the SEC will issue more guidance on crypto regulation before approving the spot-ETFs? It seems to me that the SEC is letting crypto push them and their only regulation is charging “bad actors” in federal court.

Another big thing about the "acceptance" of crypto regulation that a lot of people don't understand is taxes. Most of these big players brought their ideas to the SEC in a sneaky format that that the IRS deems as untaxable. Obviously, favorable for them and the average buyer, but highly unfavorable to the SEC and their friends. That's what the main arguments have really been about all this time.

Some have folded to the SEC to an extent and presented a model that IS taxable, but causes them much more potential headaches with actually bringing the product to market efficiently, to say the least.

This is why my opinion is they'll let it pass, then the never-ending regulation will occur, then adjustments will follow for government use of some of these instruments and/or their technologies in a way which they weren't originally intended for, using blanket laws and screwing the whole "regulated crypto market" into something that most crypto fans never imagined or expected.

[ChpBstrd]

Do you think that the SEC will issue more guidance on crypto regulation before approving the spot-ETFs? It seems to me that the SEC is letting crypto push them and their only regulation is charging “bad actors” in federal court.

I don't see why more regulations are needed, do you?   Binance and Changpeng Zhao admitted they broke of slew of existing regulations and CZ is looking at jail time as a result.   Kraken is being sued for allegedly breaking existing regulations.   SBF went to jail for breaking existing regulations.   The Winklevoss Twins are being sued for allegedly breaking existing regulations.   Mashinsky has been sued and charged for allegedly breaking regulations.    I'm no expert on securities law of course, but it seems like the existing regulations are perfectly applicable.

I don't know where the SEC's thinking is at right now, but previously they have rejected Bitcoin ETFs in part because of concerns that a small number of individuals could manipulate the price through wash trading.    Wash trading is already illegal. So what new regulation is needed?

Great points, but there are inherent difficulties enforcing regulations in a semi-decentralized worldwide crypto marketplace. Existing regulations work well in the format of exchanges, market makers, and brokers, all of which have accountable individuals and any of which can be fined or prosecuted. But whose neck do you choke when an account allegedly from Thailand launders dogecoin through a brand new tumbler and spits it out across a dozen international accounts which also trade with the tumbler?

Perhaps the lesson of what’s happening is that the US is prosecuting any identifiable person using crypto the way it was designed to be used - which is as a technical way to dodge regulations and commit crimes. The era of confused regulators and legal loopholes is over. Either crypto brokers follow securities laws to the letter - which may be impossible given the configuration of existing products and markets - or crypto exchanges are regulated out of existence.