Cryptocurrencies

[SharperDingaan]

The corporate interest is blockchain implementation.

Introduction is via Bitcoin Protocol, crypto currency as an asset class (BTC, ETH, CME derivatives), 'token' riding on a crypto-currency 'ETH, XLM', and the HyperLedger. The bigger players implementing directly on the HyperLedger, but the execs need to get up to speed.

 

BTC/ETH/XLM as an investment, is largely secondary.

 

SD

 

[Xerxes]

I think you're probably wrong about corporate adoption. I certainly think it'll take time for it to become "mainstream", but Saylor just hosted an event where apparently hundreds of corporate executives were in attendance with the sole topic of the event being "how to adopt Bitcoin in your business". Whether as a means of payment, a treasury asset, or as a business plan.

 

I don't think that the adoption rate will be 0% from that event given that it was self selecting audience with executives already interested being in attendance. You probably won't see $500 million or $1B purchases from most of them, but a handful of $100-200 million purchases would still be meaningful.

 

And the thing about these companies adding it for their balance sheet means that generally it's removed from supply in the intermediate term - this further squeezes a market that is defined by it's scarcity.

 

My thesis for the last several months was that prices had to go higher to satisfy even a small amount of corporate adoption - we're now up 400+% since PayPal announced it's adoption 4 months ago. Do I think it goes higher? Yes. Will we see 400% over the next 4 months? Doubtful.

 

The other consideration is asset management. Asset managers can afford to take a flyer on a 1% position on something that his this level of beta. 1% of AUM at several asset managers would still be representative of billions in demand.

 

Hard to be as excited today as I was when it was 10k, but historical booms have all been more than 10x events from where they started accelerating. We're only at ~4x from where this one started taking off so I think there's more juice over the next 12-18 months.

 

Thanks

What i did was to sell MSTR this morning north of $1,000 per share. Wish did that last Tuesday when it soared to $1200.

Need the dry power in my TFSA for other things. Outside my TFSA, i added more to that pile. So sold it at the premium, and bought the underlying.

I prefer the direct exposure. That said, happy about multi-bagger that MSTR was in the past 6 weeks.

 

MSTR was a very unique case, because it had such a low market cap and an outsize bitcoin position that gave it a high-torque, and with a rich premium to the underlying.

You wont get that with Square' $50 million investment on its balance sheet against its giant market cap.

 

I just think that there has to be reaction when the capital flows out of "sponges" back to the real economy, when the world re-opens. 

 

[TwoCitiesCapital]

Other than shorting companies with balance sheets heavy with BTC, are there any more direct way to short BTC?

 

Is there an options market for it yet?

 

It has a futures market.

 

But the best way to do it directly in increments as small as a fraction of a coin would be to work with th DeFi platforms that exist to service these types of financial transactions.

 

If you have USD backed stabled-coins that you can post as collateral, you can borrow BTC on Aave or COMP and sell it. You pay interest on the loan (like paying borrow on the short) and have to return the same BTC as you sold.

 

You can also short BTC directly on DeFi exchanges like Synthetix that provides derivative exposure to a dozen or more assets.

[ValueArb]

MicroStrategy:

 

Another $600m

 

https://www.microstrategy.com/content/dam/website-assets/collateral/financial-documents/press-release-archive/microstrategy-announces-proposed-private-offering-of-600m-of-convertible-senior-notes_02-16-2021.pdf

 

I have some questions for anyone with any insight into how public companies securely hold Bitcoin on their balances sheet.

 

1) How do they secure the BTC from theft, both internal and external, and what tools to they have to detect attempts?

 

2) How is BTC handled in an audit? How do auditors confirm the claimed amount is securely held, and not stolen or fraudulent?

 

 

[TwoCitiesCapital]

MicroStrategy:

 

Another $600m

 

https://www.microstrategy.com/content/dam/website-assets/collateral/financial-documents/press-release-archive/microstrategy-announces-proposed-private-offering-of-600m-of-convertible-senior-notes_02-16-2021.pdf

 

I have some questions for anyone with any insight into how public companies securely hold Bitcoin on their balances sheet.

 

1) How do they secure the BTC from theft, both internal and external, and what tools to they have to detect attempts?

 

2) How is BTC handled in an audit? How do auditors confirm the claimed amount is securely held, and not stolen or fraudulent?

 

My guess would be they're using custody services from either a custodial bank or an established crypto exchange. How do those counterparties secure it from theft? I'm sure it varies, but probably have measures around it just like they would cash, or physical gold, or securities.

 

How can it be audited? The third party custodian should be able to report the value at any given time OR could allow auditors read access to the wallet in which the BTC is stored.

[rkbabang]

MicroStrategy:

 

Another $600m

 

https://www.microstrategy.com/content/dam/website-assets/collateral/financial-documents/press-release-archive/microstrategy-announces-proposed-private-offering-of-600m-of-convertible-senior-notes_02-16-2021.pdf

 

I have some questions for anyone with any insight into how public companies securely hold Bitcoin on their balances sheet.

 

1) How do they secure the BTC from theft, both internal and external, and what tools to they have to detect attempts?

 

2) How is BTC handled in an audit? How do auditors confirm the claimed amount is securely held, and not stolen or fraudulent?

 

My guess would be they're using custody services from either a custodial bank or an established crypto exchange. How do those counterparties secure it from theft? I'm sure it varies, but probably have measures around it just like they would cash, or physical gold, or securities.

 

How can it be audited? The third party custodian should be able to report the value at any given time OR could allow auditors read access to the wallet in which the BTC is stored.

 

If you know the public address of the wallet, then the balance is publicly viewable.  It seems like auditing would be simple and straightforward.

 

[ValueArb]

Thanks to both of you for the help.

[tooskinneejs]

Three questions:

 

Bitcoin et al. are purportedly their own currencies, albeit in virtual form.  Are there any other currencies whose prices are stated exclusively in terms of currencies other than their own?

 

I can easily move, exchange, and transact in U.S. Dollars electronically with little or no cost.  Aside from non-traceability for conducting illegal transactions, what is the advantage of a virtual currency rather than a real one?

 

Why is buying a virtual coin or token more logical than buying a virutal car, virtual land, a virtual business, or virtual tulip bulbs?

 

[rkbabang]

MicroStrategy:

 

Another $600m

 

https://www.microstrategy.com/content/dam/website-assets/collateral/financial-documents/press-release-archive/microstrategy-announces-proposed-private-offering-of-600m-of-convertible-senior-notes_02-16-2021.pdf

 

With the huge premium its shares are trading above both what the operating company is worth + its BTC holdings, it makes sense to tap the market for cash, even if just to buy more BTC.

 

[Fly]

MicroStrategy:

 

Another $600m

 

https://www.microstrategy.com/content/dam/website-assets/collateral/financial-documents/press-release-archive/microstrategy-announces-proposed-private-offering-of-600m-of-convertible-senior-notes_02-16-2021.pdf

 

I have some questions for anyone with any insight into how public companies securely hold Bitcoin on their balances sheet.

 

1) How do they secure the BTC from theft, both internal and external, and what tools to they have to detect attempts?

 

2) How is BTC handled in an audit? How do auditors confirm the claimed amount is securely held, and not stolen or fraudulent?

 

My guess would be they're using custody services from either a custodial bank or an established crypto exchange. How do those counterparties secure it from theft? I'm sure it varies, but probably have measures around it just like they would cash, or physical gold, or securities.

 

How can it be audited? The third party custodian should be able to report the value at any given time OR could allow auditors read access to the wallet in which the BTC is stored.

 

I believe Coinbase provides the custody service for MSTR and TSLA. Something to consider when they eventually have their direct listing IPO

[TwoCitiesCapital]

Three questions:

 

Bitcoin et al. are purportedly their own currencies, albeit in virtual form.  Are there any other currencies whose prices are stated exclusively in terms of currencies other than their own?

 

How do you quote the value of the dollar if not in relative terms of what it can buy? Whether that be in goods, labor, or other currencies, the only value of any currency is relative. Why would crypto be different?

 

I can easily move, exchange, and transact in U.S. Dollars electronically with little or no cost.  Aside from non-traceability for conducting illegal transactions, what is the advantage of a virtual currency rather than a real one?

 

I fundamentally disagree with you. I just moved 15k from a high-yield savings account to my checking account. Took 7 calendar days because of the weekend and the U.S. holiday on Monday. 7 days isn't fast. Even excluding the holiday and weekend, it's still 3-5 business days for ACH. That is NOT fast.

 

If I wanted it immediately, I could have wired it, but that typically costs $25-35 pending your financial institution and there are also problems associated with that (see above comment from compoundinglife back on 2/10 on wiring money from one investment account to another).

 

Ok so if ACH isn't fast, and a wire isn't cheap, what about the immediate liquidity of credit cards with 30 days to move the money to pay it off before interest?  Merchants pay a 2% swipe fee which means YOU pay a 2% swipe via higher prices on goods/services to reflect this additional cost to the business.

 

So when it comes to moving USD it's either cheap or fast - but you don't get both.

 

For comparison, when I transferred 15k of BTC from Coinbase to my personal wallet a few months back? Cost me ~$10 and was confirmed in ~10 minutes. Faster and cheaper than both wires and credit card swipes. A bit more expensive than ACH, but significantly improves upon the end result so am ok with the fee.

 

 

Why is buying a virtual coin or token more logical than buying a virutal car, virtual land, a virtual business, or virtual tulip bulbs?

 

People DO buy virtual things like that in some respects (see games like Second Life or World of Warcraft or other big MMO games where people use real money to purchase digital goods).

 

But ultimately in this instance, the coin/token IS the network. It is the coin/token that enforces the protocol by which you are transferring money (Bitcoin) or settling a contract (ethereum/tokens). The logic/code/security is built into the coins/token. You must have the coins/token to participate in the protocol that makes these transactions available. They are simultaneously the pipeline AND the oil flowing through it is how I tend to think about it i.e. it is simultaneously both the value of the network and the asset flowing through it.

 

[tooskinneejs]

Thanks for the response.

 

"How do you quote the value of the dollar if not in relative terms of what it can buy? Whether that be in goods, labor, or other currencies, the only value of any currency is relative. Why would crypto be different?"

 

In a store in the UK, they don't state prices in terms of US dollars, they say the price is XX Pounds sterling.  Same with other countries.  Bitcoin et al. are supposedly their own currency, but nothing is priced in Bitcoins (not even its own currency).  How can something be its own currency when it is never stated in its own currency units?

 

"So when it comes to moving USD it's either cheap or fast - but you don't get both."

 

So, illegal transactions and very large transactions that need to happen really fast are the two advantages of virtual currencies?

 

How often do people need to move large amounts of funds really fast and is the price/existence risk of holding Bitcoin instead of cash worth the $15 savings for a wire fee for what is likely to be an infrequent transaction?

 

"in this instance, the coin/token IS the network."

 

Again, it sounds like the reason for buying virtual currency is access to a speedy transaction.  What would happen to the price of virtual currencies (as stated in U.S. dollars) if big players in the payment processing industry announced tomorrow a new system using their networks that would allow for exchanges of large amounts of dollars really fast?

 

Thanks again.

[clutch]

Thanks for the response.

 

"How do you quote the value of the dollar if not in relative terms of what it can buy? Whether that be in goods, labor, or other currencies, the only value of any currency is relative. Why would crypto be different?"

 

In a store in the UK, they don't state prices in terms of US dollars, they say the price is XX Pounds sterling.  Same with other countries.  Bitcoin et al. are supposedly their own currency, but nothing is priced in Bitcoins (not even its own currency).  How can something be its own currency when it is never stated in its own currency units?

 

"So when it comes to moving USD it's either cheap or fast - but you don't get both."

 

So, illegal transactions and very large transactions that need to happen really fast are the two advantages of virtual currencies?

 

How often do people need to move large amounts of funds really fast and is the price/existence risk of holding Bitcoin instead of cash worth the $15 savings for a wire fee for what is likely to be an infrequent transaction?

 

"in this instance, the coin/token IS the network."

 

Again, it sounds like the reason for buying virtual currency is access to a speedy transaction.  What would happen to the price of virtual currencies (as stated in U.S. dollars) if big players in the payment processing industry announced tomorrow a new system using their networks that would allow for exchanges of large amounts of dollars really fast?

 

Thanks again.

 

I don't think looking at the value of BTC as a currency would give you any answers. The value of BTC is tied to its history, not on its utility. It's based on our social construct.

 

You might think that's silly but the concept of fiat money is also a social construct. It's backed by a government, and has more utility and a much longer history than BTC. But intrinsically they are the same. Neither are material objects but rather created via a series of social acts.

[TwoCitiesCapital]

Thanks for the response.

 

"How do you quote the value of the dollar if not in relative terms of what it can buy? Whether that be in goods, labor, or other currencies, the only value of any currency is relative. Why would crypto be different?"

 

In a store in the UK, they don't state prices in terms of US dollars, they say the price is XX Pounds sterling.  Same with other countries.  Bitcoin et al. are supposedly their own currency, but nothing is priced in Bitcoins (not even its own currency).  How can something be its own currency when it is never stated in its own currency units? [/Quote]

 

Same for silver and gold - doesn't mean they don't have SOME value as a transactional currency or store of value. As of right now, ~10% of the population even knows what BTC is, let alone how to use it or spend it. Once you get to 90%, adoption and the price stabilizes, it wouldn't shock me to some places price things in BTC as they do in other currencies.

 

For what it's worth, here in the U.S., we don't price things in pound sterling. Doesn't mean GBP isn't a currency - just one that's not broadly accepted here. That's the case with BTC everywhere at this point - but don't make the mistake of assuming broad acceptance = permanence as a currency (a la gold/silver) OR that the converse is true (the lack of broad acceptance = permanence of that situation).

 

"So when it comes to moving USD it's either cheap or fast - but you don't get both."

 

So, illegal transactions and very large transactions that need to happen really fast are the two advantages of virtual currencies?

 

How often do people need to move large amounts of funds really fast and is the price/existence risk of holding Bitcoin instead of cash worth the $15 savings for a wire fee for what is likely to be an infrequent transaction?

 

Large transactions are vastly cheaper. I would rather pay the $10 to pay for my 20k bathroom renovation than the $400 I'd pay running the same thing in my credit as the contractor DOES add an additional fee. Wire it? Sure? But then I'm paying $25-35 AND taking that money out if interest bearing accounts a week before necessary just to send it on time.

 

I doubt we'll ever use BTC to buy candy bars. But to buy a car? A house? A renovation? To settle credit card receivables between Visa and Walmart? Sure. Why not. Fast and cheap is not just a use case for illegal transactions. On that note, having a public ledger of all of your illegal transactions also sounds stupid to me, but what do I know - I'm not a drug dealer.

 

Just like a use case exists for paying $35 to use you own damn money, a use case exists to do the same for $10.

 

"in this instance, the coin/token IS the network."

 

Again, it sounds like the reason for buying virtual currency is access to a speedy transaction.  What would happen to the price of virtual currencies (as stated in U.S. dollars) if big players in the payment processing industry announced tomorrow a new system using their networks that would allow for exchanges of large amounts of dollars really fast?

 

Thanks again.

 

The problem is payment processors CANT introduce that system tomorrow. You think they're just holding that in their back pocket and not releasing bit to the public? The plumbing of our financial system currently doesn't allow for settlements that quickly.

 

Is Visa going to spend billions replumbing and building that network all over? Or does the existence of BTC and stable coins negate that need and they can leverage that and still add trust to purchases, and borrowing capabilities, as value-adds on top of that existing blockchain?

[Investmentacct]

MicroStrategy:

 

Another $600m

 

https://www.microstrategy.com/content/dam/website-assets/collateral/financial-documents/press-release-archive/microstrategy-announces-proposed-private-offering-of-600m-of-convertible-senior-notes_02-16-2021.pdf

 

I have some questions for anyone with any insight into how public companies securely hold Bitcoin on their balances sheet.

 

1) How do they secure the BTC from theft, both internal and external, and what tools to they have to detect attempts?

 

> Custodial Multi-Sig solutions

 

2) How is BTC handled in an audit? How do auditors confirm the claimed amount is securely held, and not stolen or fraudulent?

 

Custody accounts list BTC holded through applicable wallets.

 

 

[fareastwarriors]

Bitcoin ETF Roars in Debut With $165 Million of Trading Volume

 

 

Purpose Bitcoin ETF, ticker BTCC, debuted in Toronto Thursday

Largest cryptocurrency has surged fivefold in the past year

 

https://www.bloomberg.com/news/articles/2021-02-18/first-bitcoin-etf-in-north-america-sees-raging-interest-in-debut

[rkbabang]

BTC now has a market cap over $1T

 

[SharperDingaan]

And BTC is now at USD 53,700.

A few bunnies now, attracting a whole lot more into the coming buffalo jump ;D

 

SD

 

[clutch]

How are folks here keeping their BTCs as they continue to grow? Do you "diversify" your storage with a number of hardware wallets/recovery seeds? Is there anything considered more secure than a hardware wallet these days?

[rkbabang]

How are folks here keeping their BTCs as they continue to grow? Do you "diversify" your storage with a number of hardware wallets/recovery seeds? Is there anything considered more secure than a hardware wallet these days?

 

I use mostly paper wallets.  And smallish amounts in Coinbase.

 

[clutch]

How are folks here keeping their BTCs as they continue to grow? Do you "diversify" your storage with a number of hardware wallets/recovery seeds? Is there anything considered more secure than a hardware wallet these days?

 

I use mostly paper wallets.  And smallish amounts in Coinbase.

 

You mean seed phrases kept on paper (vs. actual private keys/address)?

[ValueArb]

BTC now has a market cap over $1T

 

At $53, isn't the BTC market cap around $700B as I seem to remember that accounting for lost and unmined total count was closer to 14M?

 

Or is that way off?

[rkbabang]

BTC now has a market cap over $1T

 

At $53, isn't the BTC market cap around $700B as I seem to remember that accounting for lost and unmined total count was closer to 14M?

 

Or is that way off?

 

No one knows for sure how many coins are lost (including millions of bitcoins presumably owned by Satoshi Nakamoto), so the market cap is calculated based on the only number which is known for sure: the number of mined bitcoins.  So yes the real market cap is somewhat less, but no one knows how much less.  I know there have been people who have looked at the number of coins which has not moved in X numbers of years, but that doesn't mean anything as a lot of people are holding.  Most of my coins haven't been moved since 2014, but they are not lost.  There is really no way to ever know for sure which coins are lost and which are being intentionally held.

 

[Castanza]

BTC now has a market cap over $1T

 

At $53, isn't the BTC market cap around $700B as I seem to remember that accounting for lost and unmined total count was closer to 14M?

 

Or is that way off?

 

No one knows for sure how many coins are lost (including millions of bitcoins presumably owned by Satoshi Nakamoto), so the market cap is calculated based on the only number which is known for sure: the number of mined bitcoins.  So yes the real market cap is somewhat less, but no one knows how much less.  I know there have been people who have looked at the number of coins which has not moved in X numbers of years, but that doesn't mean anything as a lot of people are holding.  Most of my coins haven't been moved since 2014, but they are not lost.  There is really no way to ever know for sure which coins are lost and which are being intentionally held.

 

How much do you own?  ;)

[Liberty]

How much do you own?  ;)

 

He's a billionaire, clearly.