Cryptocurrencies

[TwoCitiesCapital]

1 hour ago, nsx5200 said:

Those adoption statistics.  Do they account for lost key/wallet, or essentially inactive key/wallet?  Also, what's the historical & expected lost rate? 

 

 

Estimates vary, but most of the research I've seen suggests that there will be a max of 13-14 million BTC in circulation after accounting for lost and intentionally 'burned' coins. These account for known loss cases, wallets assumed to be 'burn accounts', estimates of unknown losses, and satoshi's believed stash. 

 

How that evolves going forward is hard to say - especially as more and more become centralized. You'd think someone like a Blackrock would have good security/recovery protocols in place; however, Blackrock losing access to a  hard wallet is quite a bit different than an individual losing it. Historical loss trends may now be meaningful in estimating future ones as a result. 

 

But, I think the only thing we can say with some certainly is loss rates will SLOW 1) because more people will be taking steps to secure their Bitcoin now that it has recognized value (vs a history when it was trading sub-$100) and  2) because it's harder for any one individual wallet to acquire a significant sum of BTC now that the price has risen to $80k+ from pennies. 

 

1 hour ago, nsx5200 said:

If a long-inactive wallet suddenly comes alive, how does that change the price in terms of supply/demand, if that's even possible to figure out?  How should a logical bitcoin holder/investor account for such events?

 

We see this all the time. Regularly seeing headlines about whale wallets from 7-10 years ago moving for the first time. Doesn't seem to impact the daily price. 

 

If wallets believed to be associated with Satoshi moved, it might be different. But the remainder don't seem to be problematic. 

 

Edited April 1, 2025 by TwoCitiesCapital

[rkbabang]

13-14 million BTC in circulation seems a reasonable number, but whatever it eventually is the number will never be known exactly by anyone.  No one 100 years from now will know if a wallet from 2012 is lost or if a family has been handing down the private key for a few generations without touching it.   It is impossible to ever know.   

 

The one thing that is for sure though is that, because losing a private key will always be possible, and creating more than 21M Bitcoin will never be possible, the number of Bitcoins that are lost will forever be an ever increasing amount and the total available supply will be an ever decreasing amount.  It is like if a company could buy back shares, but it was impossible to every issue new shares.  Even if the rate of loss is slow, it will still be an increasing net loss of supply over time.

 

I can envision a day when a non-controversial soft-fork will be to add more decimal places beyond the current 8, to accommodate the increased demand for the decreased supply, causing 1 Satoshi (0.00000001 Bitcoin) to be worth so much that it needs to be divisible by another 2, 4, or more decimal places to make it practical. 

[nsx5200]

5 hours ago, TwoCitiesCapital said:

But, I think the only thing we can say with some certainly is loss rates will SLOW 1) because more people will be taking steps to secure their Bitcoin now that it has recognized value (vs a history when it was trading sub-$100)

So it seems like holding bitcoin safely doesn't seem like it's 'free' or cost less.  You're paying for it either through some service/device that needs to be maintained, and/or incur some risks(cost).  If the private key can be captured with digital camera/phone/hack, then stealing an account/address can now be invisible, and possibly not known until long after the fact.  So it's even harder to claim that a given Bitcoin address is safe and not stolen yet.  

 

IMHO, the advantages of Bitcoin/cryptocurrency vs gold substitute one set of problems with another, with more unknowns for crypto that have not yet passed the test of time.

 

I'll let you guys work out the deeper implications for a shrinking pool(reduced supply) that is suppose to be used as a vessel for storage of value in the exchange of goods.  I will also stop poking the bear (or is it bull?).

 

Thank you, @TwoCitiesCapital & @rkbabang for your answers as they resolved my questions as to whether certain problems have been solved yet.

[TwoCitiesCapital]

17 hours ago, nsx5200 said:

So it seems like holding bitcoin safely doesn't seem like it's 'free' or cost less.  You're paying for it either through some service/device that needs to be maintained, and/or incur some risks(cost).  If the private key can be captured with digital camera/phone/hack, then stealing an account/address can now be invisible, and possibly not known until long after the fact.  So it's even harder to claim that a given Bitcoin address is safe and not stolen yet.  

 

IMHO, the advantages of Bitcoin/cryptocurrency vs gold substitute one set of problems with another, with more unknowns for crypto that have not yet passed the test of time.

 

I'll let you guys work out the deeper implications for a shrinking pool(reduced supply) that is suppose to be used as a vessel for storage of value in the exchange of goods.  I will also stop poking the bear (or is it bull?).

 

Thank you, @TwoCitiesCapital & @rkbabang for your answers as they resolved my questions as to whether certain problems have been solved yet.

 

Life is trade offs. 

 

While the trade off of BTC is you are responsible for it, the cost of securing it is low. You can buy a hardware wallet for ~$100 that holds tens of millions of value safely as long as you secure your private keys. 

 

The cost savings and transportability of wealth are trade offs for there being no rewind if YOU make a mistake with it. 

 

There will be people who lose fortunes in BTC. There have been plenty more who have lost fortunes denominated in gold, and dollars, for different reasons 

Edited April 2, 2025 by TwoCitiesCapital

[rkbabang]

Reminds me of one of my favorite quotes which can, and should, be applied to every possible topic, human problem, and every possible human situation.

 

 

"There are no solutions. There are only trade-offs."

 --Thomas Sowell

 

 

[Dave86ch]

Let's be honest—if you're simply responsible, the trade-off is incredibly advantageous.

 

You own and carry your wealth anywhere in the world by memorizing just 12 words. You can access it from any Bash terminal.

 

 

[Milu]

2 hours ago, Dave86ch said:

Let's be honest—if you're simply responsible, the trade-off is incredibly advantageous.

 

You own and carry your wealth anywhere in the world by memorizing just 12 words. You can access it from any Bash terminal.

 

 

It’s pretty sweet alright. 

[Fly]

Some big volatility in the traditional markets but BTC has been pretty subdued. This is... different...

[Paarslaars]

Yeah BTC is holding strong, it is still a volatile risk asset in the short term. Especially when announcements are made after hours, people panic and want to sell but the only thing you can sell at that moment is BTC because it trades 24/7.

 

However looking at recent events, we just had the worst day in the market since march 2020 and BTC is still up 20% since the election and 21% over the past year (from it's local peak at that time). Meanwhile the S&P is down 9% since election and only up 4% over the past year.

[Milu]

Perhaps this is finally Bitcoins moment to shine as a risk-off asset. Usually when the nasdaq plummets bitcoin ends up falling more. I've always been waiting for the day when markets crash and bitcoin rallies as a safe haven. Felt we were 5-10 years away. Perhaps this tariff stuff will bring the day forward.

[james22]

32 minutes ago, Milu said:

Perhaps this is finally Bitcoins moment to shine as a risk-off asset. Usually when the nasdaq plummets bitcoin ends up falling more. I've always been waiting for the day when markets crash and bitcoin rallies as a safe haven. Felt we were 5-10 years away. Perhaps this tariff stuff will bring the day forward.

 

I believe it's a risk-on asset still.

 

Just unaffected by tariffs and anticipating catalysts.

 

Might react more positively to some catalyst than otherwise at this time, given the uncertainty in other risk assets, which might give it the appearance of a safe haven (which might bring the day forward), but it'll be an effect rather than the cause.

[james22]

1 hour ago, Milu said:

Perhaps this is finally Bitcoins moment to shine as a risk-off asset.

 

Upon reflection, you may be right.

 

If not risk-off, at least a diversifier.

 

BTC is a different asset class than equities. It marches to its own (adoption curve) beat, not the business cycle, etc.

 

Its reaction to tariffs might remind investors of that.

[TwoCitiesCapital]

1 hour ago, Milu said:

Perhaps this is finally Bitcoins moment to shine as a risk-off asset. Usually when the nasdaq plummets bitcoin ends up falling more. I've always been waiting for the day when markets crash and bitcoin rallies as a safe haven. Felt we were 5-10 years away. Perhaps this tariff stuff will bring the day forward.

 

I don't think its quite there, but it IS encouraging to see it break the narrative of "leveraged NASDAQ" trade that people seem to believe even when not borne out by long-term correlations. 

 

I think the real savior for BTC here is that it never had its blow-off top rally - so it's not terribly valued relative to fundamentals of adoption/growth trends - and interest rates are plummeting with expectations of global liquidity rising. These would be supportive of assets that you expect to be resistant to monetary debasement. 

[Buckeye]

It’s also already down @ 20% from its ATH. 

[TwoCitiesCapital]

46 minutes ago, Buckeye said:

It’s also already down @ 20% from its ATH. 

 

Which is pretty normal for an asset with greater than 50+% annual volatility. 

 

And also not much worse than the NASDAQ despite crushing the NASDAQ for the preceding 2-years. 

[Paarslaars]

But up strongly over the past year. So it outperforms, it's just volatile.

[Buckeye]

Yea, that wasn't a judgment call, just pointing out that it's already been hammered 20%.

Edited April 4, 2025 by Buckeye

[SharperDingaan]

Look at how BTC performed ... today vs yesterday, yesterday vs day before (ie: crash and pre crash). 

Dropped from the open yesterday along with everything else, but recovered part of the drop during the day. Opened today at above what it closed at yesterday, and held it through another day of 1,600 point drop on the Dow; i.e. it was acting as a contra safe haven alternative to gold .... rising as the Dow falls.  Why? exiting safe haven money created enough of a net inflow into BTC to raise the price on the limited supply. More grist for the adoption curve.

 

The mystery is whether, in the near term, tariff related money outflow is greater than new money inflow from adoption; if net negative, BTC continues to grind down. The wild card is the fed response ... lower rates to boost liquidity, but drive tariff related inflation even higher. Or restructure the debt using BTC as the asset backing the note at some fixed price peg. 

 

Our own view is that BTC grinds lower until the fed acts. Err on the side of caution, and when that seems near ... buy back the BTC you've sold, collect on the close out of your swing trade, and simply hold. It might buy you a house.

 

SD

  

 

 

 

 

 

Edited April 4, 2025 by SharperDingaan

[james22]

12 minutes ago, SharperDingaan said:

The wild card is the fed response ...

 

The wild card is the SBR announcing a buy.

[james22]

Today: BTC holds (+1%), BRK cracks (-7%).

 

 

 

[tede02]

I found it really interesting that bitcoin and ethereum rose today. As someone else pointed out, in 2022 especially, crypto traded like a bubble tech stock. Also interesting that gold was down. 

[Fly]

19 hours ago, tede02 said:

I found it really interesting that bitcoin and ethereum rose today. As someone else pointed out, in 2022 especially, crypto traded like a bubble tech stock. Also interesting that gold was down. 

Grabbed from Reddit, unverified

[Paarslaars]

Well a day late but there it goes. 

[gfp]

On 3/10/2025 at 12:09 PM, gfp said:

I'm a wild man - I bought some bitcoin at $78,357.73

 

I'm gonna be riiiiccchhh!

 

I got some more!  $79,852.08

 

I'm averaging UP!  uh oh!

[jfan]

Luxor’s Aaron Foster on Bitcoin Mining's Growing Sophistication

 

First impression re: FPPS models is the disaggregation of bitcoin mining incentives from miners who get paid regardless of solving a block and further centralization of hash power/hosting sites under large entities. 

 

And is the financialization with hashrate forward contracts, a net positive thing for network security? If miners can stabilize their profitability, does this encourage more mining activity in the long-term?