TwoCitiesCapital

+1 The wallets can be tracked, identified, blacklisted by established institutions, prevented from transacting to underlying fiat, etc etc etc. But as long as someone is willing to to transact with you directly, and accept the risks of doing so, you can still use the crypto itself. Terrorist organizations? Crime rings? Drug dealers? Might have a much harder time finding individuals to transact with who are willing to accept the ire of world governments for accommodating black listed wallet addresses and might also find themselves blacklisted. Individuals fleeing repressive regimes with their crypto intact likely find much less difficulty in transacting and getting the crypto off chain regardless of whatever monitoring/doxxing their govt does.

The general argument is gold preserves value and doesn't grow it. You only really want to own it as a hedge against stagflation (oil has historically been a MUCH better inflation hedge so gold is specific to stagflation). Stagflation is terrible for both bonds and stocks and so outflows begin and gold picks up incremental demand as a safe haven and preservation of value play. Real assets are what you want to own any inflationary environments - not financial assets. If growth is high during the inflation, you want industrial commodities as demand is soaring for them. If growth is low during the inflation, you want gold as industrial commodities probably are hemorrhaging demand. If you believe inflation is stickier than expected, now is the time to be rotating from industrial commodities to gold for relative outperformance. But on an absolute level, gold will only do well if inflation persists while growth slows. Otherwise it might just be broadly sideways like much of the last 12 months as real rates remain negative, but less so than they were.

We don't have to have the debate here and can continue the convo in the crypto thread - but BTC exploding from $1,100 - $20k during the 2017 hiking cycle suggests that it's not a bubble bet or even a bet on 0% interest rates. Even after blowing up in 2018, the lows were still 3x that of 2017 opening price. Highly volatile, inelastic, with a secular growth trend is probably more emblematic of it's price behavior

All significantly less traceable than crypto... As a matter of fact, crypto is being touted as a way to track commodities so you know their source specifically so we can trace things like blood diamonds and Russian oil exports. Wonder why it's good enough for use in tracing commodities and their origins but still to anonymous and difficult to track when it comes to criminals and their money.

Here's a more recent example. https://www.justice.gov/opa/pr/two-arrested-alleged-conspiracy-launder-45-billion-stolen-cryptocurrency They couldn't spend the money because of the scrutiny on the wallets and we're eventually identified, arrested, and proceeds recovered. Bitcoin is terrible for criminal enterprise. Direct quotes from the article: "Today’s arrests, and the department’s largest financial seizure ever, show that cryptocurrency is not a safe haven for criminals" "Federal law enforcement demonstrates once again that we can follow money through the blockchain, and that we will not allow cryptocurrency to be a safe haven for money laundering or a zone of lawlessness within our financial system"

KYC at primary on-ramps and off-ramps destroyed any utility to criminal organizations which is why you're having to go back 9-years for your example. It was only beneficial when you could anonymously transact without scrutiny and get BTC off exchanges and into fiat. There have been major efforts to lock down on-ramps and off-ramps and to have KYC attached to specific wallets. Even wallets separate from major exchanges can be partly identified through forensics and transactions from known wallets. Hence why lots of BTC from criminal activities has been recoverable and many recent hacks have had proceeds returned because the wallets were blacklisted and couldn't spend the money. This has been discussed extensively in the Cryptocurrency main thread and is an argument that hasn't held water for years now. Having your criminal activities publicly viewable and balances publicly traceable is laughably stupid for criminal enterprise.

I think at this point I don't expect the rate reset to be high enough for me to want to lock up money for 12-months. We'll see where it prices at in May if I buy more, but I think corporates, mortgages, and maybe even treasuries have the opportunity to do better in 2023 and beyond with high coupons locked in and duration to hedge falling rates/inflation. Also, at some point in 2023, I expect the stock market to look better going forward too so want the cash available for that.

The narrative about gold being an inflation hedge has ALWAYS been wrong. Gold's historical correlation to inflation has been near zero. Its a real rate hedge - when real rates are negative, gold does well (a la 2021). When they're getting less negative/more positive, gold doesn't do well. It's not the inflation - it's the relationship of inflation to interest rates. It's that simple. The Federal reserve started hiking rates earlier this year very agressively - real rates are less negative now than they were then. Thus gold peaked and dropped with other assets. Would add that being flat over the last 12 months is still fairly enviable relative to equities (which every else seems to believe are an inflation hedge) or TIPS (which everyone knows ARE an inflation hedge).

Is it 2016 again? Haven't we beaten this horse to death that there is NO value to criminal organizations to have all your funds visible/trackable/black-listable on a public blockchain? Can we put the trope of it being used for money laundering and drug deals to bed already? The USD is FAR more common in criminal enterprise than BTC ever was or will be.

+1 Earnings contraction is likely to continue. Rates have continued to move higher and CPIs have continued to lag PPIs (margin contraction). The other factors: 1) USD - off it's recent highs, but still significantly higher than a year ago which will continue to show poor comps YoY for exports 2) Oil prices are back down to where they were a year ago, but only after taking SPR reserves to multi-decade lows to accomplish it. What's the likelihood oil prices remain this low while physical shortages abound without additional releases of reserves? Oil may go modestly lower in a recession, but intermediate term outlook is for higher prices to destroy demand and fix the shortage. The story for Q3 earnings is that fewer companies are beating estimates for revenues/profits than historical quarters, and the few who do beat are beating by a significantly smaller margin than historical beats. And those "beats" are only occurring AFTER months of downward revisions. And all of this is occurring before the bulk of the lagged effect from rate hikes is felt and before labor market weakness is evident...

wBTC and wETH are controlled by DAOs. Certainly possible that they're misbehaving, but would be very hard to coordinate that misbehavior across a number of independent parties (wBTC protocol has 17 different organizations as DAO members). Not saying this isn't a potential point of failure, but is an unlikely one IMO and wasn't what the article was alleging Edit: the wBTC DAO website also identifies wallet addresses for the BTC reserves, their balances, and the issuance of wBTC against that so I think we can be relatively confident the BTC does exist since it's verifiable on a public blockchain. They also identify the entire history of redemption and creation so you clearly see people are redeeming for the underlying successfully. Primary concern would be the DAO losing control of the keys to those wallets.

https://protos.com/defi-protocol-aave-faces-bad-debt-and-centralized-points-of-failure/ I've mentioned Aave's strength through the failure of centralized lenders multiple times here, so am shocked to see articles like this. I feel I'm familiar with the protocol, but maybe someone here is more so? Aren't all of Aave's loans over collateralized and immediately liquidated when debt covenants are breached? I thought that was part of why they survived the prior fallouts was because they auto-liquidated collateral before anyone else could act. For anyone else that is familiar with the protocol, is this article just total FUD or does Aave actually extend credit on an uncollateralized basis?

But she isn't after the current decline - not anywhere close. You're measuring her from her top. I'm measuring Bitcoin much, much closer to it's bottom. And separately, BTC has survived multiple 80-90% corrections during that period of time and still went on to be the best performing asset class. Cathie did not. I think we're comparing apples and oranges here. ARKK seems clear or was a bubble. The behavior of Bitcoin less so since it seems like it matches it's historical pattern of booms and busts pretty closely.

My company recently made a similar point - and was quiet on it still being the best performing asset class over the last decade despite the 80% drop. These people are missing the forest for the trees.

+1 Tokens are just a different form of capitalization and ownership than stock. They're a commodity and reflect the value of both being a user and owner of the network. I'd also argue they better align incentives across as stakeholders as users/network owners are the same group of people versus stock ownership that pits the business owners against other stakeholders in a zero sum game. It'll be interesting to see what comes out of DAO type organizations, but will definitely take time for the industry to come back from this "bank run".

That's roughly the annual fee, so you haven't really identified anything troubling about the sales. 1.5-2% fees are high, but when buying at a 40-50% discount to NAV you're being well compensated for them. And I agree, the physical BTC is very likely held because Coinbase and BNY Mellon have very little to gain and a lot to lose otherwise.

Wouldn't this be required in their financial disclosures which solely disclosure BTC? Their 10-Q explicitly states that the Trust does NOT invest in derivatives instruments for example. Given that the assets are custodied by Coinbase and Administrated by BNY Mellon, isn't it unlikely that two publicly traded and SEC regulated companies would both be independently lying about the holdings of said Trust?

I'm dead

I honestly love fixed income for this reason. I also thought bonds were boring at one point. Then worked at a fixed income house for long duration pension plans that were +/- 40% in any given year and realized there's REAL money to be made in rates/credit.

Not sure there's a "fix". Credit is credit regardless of the currency it's extended in. Smart contracts can help with enforcement and facilitation of payment and contract law, but not certain I understand what's "broken" about credit to know how Bitcoin or other crypto might be expected to fix it?

The TL;DR Bitcoin fixes this

It would require a change to the protocol and a hard fork of the BTC Blockchain. Which has happened before. Go look at Bitcoin Cash (BCH) or Bitcoin Satoshi Vision (BSV) or Doge Coin. All are forks/copies of the BTC protocol with something changed. None have retained anywhere near the value of BTC in the long-run and will likely fade to obscurity. Any new hardfork likely faces the same fate. The only way it DOESN'T result in a hardfork is if you get a consensus amongst BTC market participants to take away the primary characteristic that gives BTC its relative value - it's scarcity. Why would the industry come to a consensus and change the protocol against their own best interest?

I own GBTC in my IRAs. I own Bitcoin in my hardware wallets. No reason no to own both, but I prefer direct custody of my BTC. Only buying GBTC because of the current discount and that I trust a spot ETF will eventually be a thing here in the US and am willing to wait years for it to happen since I'd be holding the BTC for years anyways.

All things are possible, but I think 1k is highly improbable. 10k I think is also unlikely, but could happen as sentiment grows even darker from the recent FTX scandal and the soon-to-be-seen collateral damage. I thought the prior lows of 16k might've done it. Now I think it's 50/50 that we go as low as 12-14k, but am absolutely open to being wrong on my bottom call. Just continuing to DCA. As for highs? I don't think several hundred thousand per coin is out of the realm of possibility. Is a question of how many countries have adopted it at that point, how many central banks have onboarded it, whether or not it's being used as a CB reserve asset or for a portion of int'l trade, etc. All supply/demand and sentiment based. But I've seen credible models that consider network effects and hypothesized values of networks suggest upwards of $500-$1M in the next decade if the network growth follows similar S-curve dynamics of prior tech trends (phone, internet z Facebook users, etc). So far it's been tracking higher than those prior trends.

And could've sold at $10-15 SMDH