SharperDingaan

If I just want a short term speculation, there are many much more effective options than simply buying/selling BTC. I could wait for a greater fool to show up, in literally thousands of much cheaper investment vehicles; all with much more appealing story lines to the punters of the day. BTC as an inflation hedge, is measured from date of trade through to PTD. Until all BTC are issued; every time the BTC mining reward halves - the current BTC inflation rate drops 50%. Once all BTC have been issued the BTC inflation rate is zero, and BTC becomes a perfect inflation hedge. My BTC is down 70% this year has nothing to do with its inflation hedge property; you just made a sh1te trade If I just want a short term trading sardine, BTC isn't it. Momentum trading off popularity, only works if you don't get caught holding the bag. SD

Expressing this as an algorithm ... IV = PV expected future cashflows + PV utility Utility = highest utility value as an inflation store of value, utility as an alternate to bullion as a store of value, utility as a private payment system. Valuation depends on the holders needs and view. It is hard to value the PV utility (... we lack the information); therefore IV = PV expected future cashflows (asset definition). BTC does not have future cashflows, therefore IV = zero. Q.E.D! And .... the world goes batsh1t crazy !!! ..... Why? Because .... IV = PV utility. > Finance folks go apesh1t, WTF!! this sh1te has ZERO value, and yet the market says no. Repeatedly! > Libertarians go apesh1t. Freedom from CB tyranny has obvious value! finance folks just don't get it!! > 2nd/3rd world folks go apesh1t. Fungible, portable, wealth has obvious value! Rich folks just don't get it !!! PV utility is simply cash paid for the future benefit. In the GAAP world. 'Goodwill' - as the amount paid > PV market cash flows. In the trading world. Whatever the counterparty agrees to pay for it. Hence to value BTC, one has to value the PV utility to its beneficial owner. Everybody will have a different number, and it will be higher the longer the beneficial owner is willing to hold. If you simply held BTC as a hedge against inflation ... every year the worlds CB's inflate their currencies - you benefit by a portion of that total inflation divided over 21M token. Every year, BTC values at a higher fiat price (USD, EUR, GBP, CAD, etc.) Different take SD

NATO has far more money than Russia, and much of the spend is just domestic recycling within their local arms industry. Weapon, missile, and bullet inventories need to be fired off, NATO reaps the benefit of replacement war time spending just as Russia does, the destruction remains in Ukraine, and armories update with better and more up to date replacements. But like any good business, when costs > benefits, negotiate 'peace' (Feb-23 peace summit). The keys to power run the show (dictators playbook), and their mouthpieces execute ..... Most would expect the Ukraine to get everything back including the Crimea, a new Eastern European world-order 'agreement', and the early retirements of both leaders. The political solution. Political solutions take a while, but the result is stability for a good 10-30 years until the cycle repeats. Given that Europe averages at least one war every 70 years or so, 30 years of stability is not a bad outcome. SD

To many of those in finance; Asset Value = PV Future Cash Flows. That's it !! No think dogma. No cash flow? there's no asset. Yet as soon as we do an acquisition, it no longer applies. Whenever we buy an asset above market price, we record the price difference on our books as 'goodwill', supported with a schedule of expected synergy savings; under US GAAP that difference is whatever we say it is - and we amortize it over 40yrs. Under IFRS, it's prove it or lose it, annually. Total asset value = market price + 'goodwill'. Goodwill = the PV of your 'minds eye' future synergy savings, evidenced via a cash payment. Isn't that identical to what Intrinsic Value is - the PV of 'minds eye' future cash flow, evidenced via a cash payment (a buy/sell of BTC)? Point? Intrinsic value will be a different number for different people, and it's just a PV of expected future benefits (not just future cash flow). You either get that, or you just don't - no think dogma wins. SD

Actually, it's identical to BTC. Saturday night her value was high, with prospects swarming all over her (BTC at USD 50K). Of course next morning .... it's a little different (BTC at USD 15,000)! The problem is the radical change in valuation, not the innate value of the women herself. Blockchain is the value add, the app (BTC) value is purely situational. If I want the extreme privacy I'm willing to pay the mining charge. If I'm concerned about the price volatility I'm willing to pay the put premiums. If I think I'm going to benefit from future inflation (future money in-flows>out-flows) I'm willing to treat it as an investment. Mining cashflow, option premium cashflow, future net money in-flows; not a lot different to any other investment. I don't have a way of easy valuation, does not mean that there is no value. SD

Hate to tell you this but the man very much knows what he is talking about, we just don't want to hear it. You and I could replicate Bitcoin Protocol tomorrow to create our own tokens, and they would go nowhere. Why? Our tokens cannot be actively traded by institutions as no CME options/futures are available, and hence are worthless. If still an unbeliever, look no further than the 2,400 token currently on the dead coin list. All those coin issuers thought that they too could just replicate BTC protocol to create their own currency, then discovered they couldn't. ttps://www.coinopsy.com/dead-coins/ Developers issue coins to fund their projects; typically an ETH token wrapped as a utility coin burned in the project application. The ETH consensus mechanism may be quasi-decentralized, but the burn of that utility coin itself, is centralized in the developers hands. You give the centralized developer cash for the utility coin, the centralized developer burnt it, and you got whatever the app was supposed to do. BTC has no future cashflow attributed to it, therefore it's not an asset, therefore it's a fools game! however, the only fool is the one with this view. Apparently ..... if a pretty girl in the bar batts her eye at you late on a Saturday night, that has no value ?? Or only if she's a hooker fishing for custom ??? You must lead a lonely life! SD

Hold over 5, 10, or 20 years ... and you are holding over multiple full cycles. You repeatedly couldn't tell, after the fact, when you had been through multiple booms and busts ???? Obviously, it is not an approach for everyone! SD

If you are not prepared to swing trade your holding, you should not be in o/g period. Simply because whether you choose to participate by owning a Exxon, or a junior; swing trade gain/losses will typically make up a good chunk of your annual return. Hence the hate by so many of the WEB buy and hold 'forever' set. SD

Merry Xmas to all, and the best of the season. Santa's on his way! .... SD

CBDC (Yin) and BTC (Yang) are the payment extremes; they each serve their own market extremely well, and neither is going out of business. However, going forward, the cost of transacting will include a charge for privacy. If you are fine with your payment being tracked (most people), welcome to the very material transactional cost reductions of CBDC. But if you want extreme security and privacy - welcome to the mining charges of BTC. You decide how much privacy is worth to you. However, the more that CBDC collectively replaces cash bills in circulation, the more black market activity it drives onto BTC - simply because you need cash bills to settle anonymously. And with fewer bills now in circulation, you now need to use off-chain BTC, and will ultimately drive up the money in-flows into BTC. On that fixed BTC supply - BTC prices must rise. Better still, every one of those off-chain BTC transactions includes profit, so money in-flows will continually rise. Simply because if I take out 10 BTC to pay for my goods/services, and return 15 BTC after I've sold everything, I have increased BTC money in-flow by the fiat cost of my 5 BTC profit. And the more people doing this ... the more cumulative money in-flow into BTC. And money in-flows will NEVER cap out as long as the CB continues to debase its currency at a target inflation rate. If there is USD 100B (easy numbers example) of currency in circulation, and 15% black market activity (example purposes), a 2% target inflation rate adds 0.3B (0.02x 100B x 15%) to BTC money in-flows. Divide over 21M BTC, and it's potentially a rise of 14K/BTC - this year. And as the fiat continues to debase .... BTC continues to rise. Welcome to the design of BTC. SD

+1 Our Ukrainian venture was entirely priced in EUR from start/finish, with all cash settlements done in off-chain BTC; largely because it could be done from anywhere in the world, in real-time, and cheaply. Plus at lower amounts; CB currency control and transaction tracking can be easily circumvented. Ultimately it was no different to producing a good/service at home, and selling it in a foreign currency without any FX hedging to offset currency movement (i.e: everyday practice). Had we wanted to hedge, we would simply have bought CME puts, with a strike at the transaction date BTC/USD value. The hardest part was getting your head around making your profit in BTC, and NOT thinking in terms of USD/EUR/CAD equivalents (Profit = total BTC received - total BTC paid). SD

The key assumption here is that to get the money out, the blacklisted wallet has to sell its BTC. Utter crap! The BTC is simply put up as collateral on a stable coin, a derivative, a loan etc. The off-ramp vehicle over collateralized enough to ensure that there will never be a default, and a need to collect. SD

Perhaps it is time to revisit the criteria? Every one of the ticker symbols in the Investment Ideas thread is a 'store of value' (vehicle holding some wealth), no different to BTC. Today, those derivatives once derided as 'WMD', are routinely used by many on this board (ie: options). BTC derided today as 'rat poison', is the same thing - just at an earlier stage. It may also be time to add a new category: Crypto We would suggest a separate thread for each of ETH (smart contracts), CBDC (e-CNY), NFT's (artwork, doc storage, games, etc.), and Crypto Infrastructure (Funds, Exchanges, Providers, etc.). Simply because if you wish to scale up the app ... you need to skate to where the puck is going, not where the puck currently is. SD

The Ukraine war ends with Putin in a box and a negotiated political solution. No different to anywhere else, the man is replaced, the nukes stood down, and the new team does its thing. Box, or a 'slip and fall'; the man is gone. https://www.youtube.com/watch?v=rStL7niR7gs Dictatorships with their foot on energy prices is the norm, not the exception, and well understood. The players just periodically change, as the old dictatorship falls to the new one. SD

Most would expect volatility, but any numbers are little better than 3-month guesses. As/when the US starts filling the SPR, the NA floor for heavy sour crude is supposedly USD 70-75 landed, and sourced primarily from Mexico, VZ, and Canada. If US/UK LNG exports are to double over winter, the SPR will also be filling with associated light crude from mostly southern US fields. Ukraine severely damages a Russian oil/gas facility in a reprisal raid, and o/g prices materially spike upwards overnight. A VLCC transports roughly 2M bbl/trip. It's not how long it takes to fill one up, it's more about how many VZ VLCC tankers get offloaded in 3 months starting Jan 01 SD

To add to the actuals ... The higher your food and utilities/rent budget, the worse this is. A $1,250/month starting budget is very low - were it a more realistic $2,500/month (single person in a bigger city) the year 2 shortfall without a raise would be $112/month. $3,750 for a family of 4 and it is $168/month. Widespread and rotating labor strikes; demanding wage increases well above inflation, are entirely rational. In 'theory', wage growth > inflation cures the problem. But that inflation cannot be negative! ... 'cause it will deflate the value of 'real' assets (make rich people poor)!!! To keep wage growth > inflation you need to change jobs every 2nd/3rd year, and always move to a higher paying job; if there aren't any higher paying jobs, retrain and move to another industry. But what if you can't change industries?, are too old to go back to school?, or just don't have the ability? (money, family responsibilities, attitude/motivation, etc.) - the vast majority of ordinary people ??? New Ontario nurses stay in the profession maybe 3 years; same thing in much of Europe. Why? it's a sh1t job and promotional wage growth is < than inflation. Result? very long delays getting to see a doc, if at all (you've died). Long distance trucking can't get enough drivers. Why? It's a family killer, and growth in take-home is < inflation. Result? keep the trucking distances local, or go without. But what if my food and utilities/rent budget is small? I own my house, I have no mortgage, I don't buy/eat much, I'm rich! I have investment income (inflation adjusted), I have pension (mostly inflation adjusted), I work (casually, part-time, etc.), I'm even more rich! . My reality looks very, very different to that of everyone else ... so hardly surprising if my investment outlook is not similarly distorted? Theory is just a guideline. SD

I hear you, but compare theory to actuals ... Imagine you have a $1,250 budget to cover your food and your portion of utilities/rent (bunk mates). It used to cost you just $1,100/month, you had $150/month to spend on other things, and life was good. In year 1 there is 10% inflation, it now costs $1,210 (1100x1.1), and you only have an extra $40/month to spend. As pointed out, that inflation essentially 'taxed' you $110/month. In year 2 there is 8% inflation, but you got a 2% raise. You have 2% more budget at $1,275/month (1250x1.02), but your cost is now $1,306 (1210x1.08). With the 2% raise you are in the hole $31/month (1275-1306). Without the raise your are in the hole $56/month (1250-1306). Given that the monthly shortfalls are not major, you cut back your standard of living to accommodate. Inflation > wage increases continue, and the monthly shortfalls get bigger. If you rent and your building is sold, there is a good probability that your new utilities/rent will be at market rate and a lot higher than you currently pay. To pay the higher rent you cut back on food, and visit the foodbank. Once a quarter, then once/month, then twice/month. You're either going to demand a raise > inflation, or vote with your feet (if you can). Employers will rant that unions are screwing them! and that they cant get labor (at the price they can pay). Rather than close now unviable businesses, they import illegals and abuse them. Slaving. To get out of the inflation trap the population needs to either do something else, work somewhere else, or become capitalist (helicopter money, guaranteed minimum income, etc.). Wage increase > inflation is straight forward if you're young and able, or a good thief ... but a very different story if you have mortgage, kids, are old and infirm. Yet none of this is in the theory ..... Hence, hardly surprising that so many are dismissive, and rightly so! SD

The reality is that retail is pretty clueless, and always has been. Back in the day, HF's used to be very smart ... but now? - not much better than retail. Margining and packaging dogshit to retail in shiny wrappers, claiming they are fully hedged, and blowing up as/when the market moves against 25%+. Mostly smart enough to not be holding the bag when it blows up; but hey bud, WTF happened to those hedges !! Buying/selling multiple names in any quarter isn't investing, it's addiction. And addiction is a great business! as every reasonably competent legal drug pusher can attest to. There are very few genuinely very good investors, they are almost all contrarian, and for the most part they are all private. Inflation thing. Prices do not go down simply because inflation goes down; lower inflation does not reduce the number of people having to use foodbanks. And inflation driven wage increases, REDUCE the number of people forced to use those foodbanks. The only whining is pensioners whose pension isn't inflation adjusted, and businesses exploiting low cost wages; folks who knew they were taking risks, and believed everyone else should pay for it! ..... welcome to moral hazard. SD

Lot of good points ... Bifinance. Quite a few would surmise they are close to collapse, and begging/lobbying for a bailout. We are 53% of the industry market cap! 67% of derivatives trading! we're the crypto Lehman Bro's ... bail us out - or go down with us !!!!. Thing is, Bifinance doesn't do anything special, and quite a few others do mostly the same thing. If Bifinance weren't there anymore ... industry cap would just be lower, and their market share would simply fall on everyone else - bonus! And the derivative thing? Margin on CME derivatives is updated daily - collapse this sucker and lets play! BTC as store of value. It's occurring, but like all things - adoption is slow in the early stages. Nobody is going to put all their store into BTC, but quite a few are now experimenting with small portions. Unimaginable if you live in the US, but quite a bit different if you live in a Ukraine, Peru, DR/Haiti, South America, Africa, etc. Back in the day nobody thought of their car as a store of value (& still don't); but yesterdays 'Morgan' looks quite a bit different today! Even the Tin Lizzy, and Whisky Six has done well Wisdom of age. Undoubtedly true!, but sadly it comes with limitations. We used to have horse/buggy, then came the motor car. We used to have sail, then came steam and electric (diesel/nuke); change the underlying technology and much of the wisdom instantly becomes obsolete. However, given that collective behavior generally doesn't change much over time (wars excluded), in some things - the older you get, the smarter you get! Live and learn. If you also happen to make a buck or two along the way, bonus! SD

Binance put out an assurance report, and the auditor withdrew it - not good. The report was essentially being misinterpreted/misrepresented, and its forced removal has triggered an additional $6 billion of outflow over 3 days .... so far. All in addition to last week's net $1 billion plus. Most would also argue that the run is accelerating, and Bifinance no longer has the resiliency it once had. Not all virtual token is the same - skip the DD and you will get burned. SD

Expect to be disappointed. Differentials blew out this quarter, WTI is quite a bit lower than it was in Q3, and most are adjusting capex budget (lower)/still plugging away on target debt levels. It's a lot smarter to simply do nothing, wait on Q123 results (hopefully a lot better), and hold excess FCF back for potential Q223 M&A. Buybacks may be high on investors minds, but they are a relatively low priority at present. SD

It's useful to think of payments in steps. 1) Today, using existing rails, that are slow/near capacity. 2) Tomorrow, using CBDC, that is very fast and cheap to transact with. 3) Next day, with CBDC efficiency, but without the CB wallet and CB rails. BTC is going directly to 3), but the cost of anonymity is a transactional mining fee, and less efficiency than CBDC. BTC does not need to be 'best'; it just needs to be a functionally better fit for purpose, and cheaper than existing alternatives (Hawala, Chitti, Baba internet, etc.). Different metrics. SD

I have great confidence in the well practiced abilities of CB's and the criminal element to get it fixed, and fixed fast! Across the world, corruption works great, it's pervasive, it's reliable, and a healthy part of BTC activity is state actors using the channel to settle up covert operations; a proven currency designed for zero-trust environments is a very useful thing! Mess with the program ... and there are people inside/outside of every state, with a strong interest in your rapid demise Whether the angels wear white wings or black ones, they will all be working together, and they are all very good! THAT's the REAL security behind BTC; the 51% thing is just being polite!. And that angel with white wings .. is often just one that managed to shake all the soot off !! Much better than farmland! SD

PPP argument. If everybody on the carousel debases their currency by about the same amount, over the same length of time, the FX exchange rates between each of them will not change by much. The carousel keeps turning, but now there's just a rain of pretty colored paper (QE, helicopter money) to add to the festivity as we all slosh through seas of liquidity. But if I'm not on that carousel (BTC) ...... I'm not debasing my currency, and every time I step on/off that carousel I'm buying/selling BTC for more and more colored paper. I buy at USD 16,000/BTC, sell BTC at 30,000/BTC, and all that extra colored paper (USD 14,000/BTC) pays for my fun and games while on the carousel. If I'm skilled, I step off the carousel with the same number of BTC (zero), and maybe a Porsche. Already rich, and getting richer in colored paper terms; but same as I was in BTC terms (zero). Hell of a game! SD

In parts of Europe it is common practice to charge your hybrid at your house, at night, and pay a low rate for the power. If you aren't using the hybrid next day, the hybrid simply dumps its charge into the grid at a set time, and at the prevailing (higher) rate at the time; pocket the difference in rate x quantity of charge. When you already have solar on your roof, and meters that allow two-way flow, the hybrid simply becomes another battery; it's just one that you can drive! Similar thing around stationary bikes in gyms. The gerbils pump the pedals, the rotation generates charge stored in a battery, dump the charge into the grid next day at a high rate. All controllable from your smart 'phone. SD