Cryptocurrencies

[Milu]

2 hours ago, TwoCitiesCapital said:

 

Yes. I made the comment back in ~21 that I thought gold would outperform equities in general for the next decade.

 

I expect the 2020s to be a decade of hard assets where financial assets struggle with regular bouts on inflation and recession. 

 

Only reason I don't own more myself is that I expect Bitcoin to be even more superior, but have plans to roll my BTC into gold, and other assets, at specific price/return points. 

Interesting, I haven’t heard of many bitcoiners intending to roll bitcoin back into gold. Typically once a goldbug becomes a bitcoin convert they don’t tend to go back. I’m a fan of both and held both at one stage but eventually just decided that bitcoin had the slightly better properties in terms of a store of value. Although I have noticed a lot more talk in the bitcoin community about gold as the recent rally and outperformance has likely caused a lot of people to second guess things.

[TwoCitiesCapital]

1 hour ago, wachtwoord said:

 

In part or nearly full? What relative valuation are you thinking? Parity?

 

Not sure what you're asking, but if it's how much BTC would be sold then it's going to depend on the price and how quickly it gets there. I've maintained that Im holding most of stash for the long-term, but maintain that ~20-30% of its is tradable in a mania. 

 

1 hour ago, wachtwoord said:

How do you deal with the chance btc displaces gold (purely conceptually it's simply better gold after all. Whether Mr Market will agree remains to be seen of course).

 

I expect that to happen, but for it to take a long time AND that gold won't be valueless just like silver isn't valueless after gold displaced it. I watch the Bitcoin/Gold ratio to determine which is more attractive at any given time, but haven't yet reached a ratio in comfortable converting BTC to gold ....to my detriment this year. 

[TwoCitiesCapital]

8 minutes ago, Milu said:

Interesting, I haven’t heard of many bitcoiners intending to roll bitcoin back into gold. Typically once a goldbug becomes a bitcoin convert they don’t tend to go back. I’m a fan of both and held both at one stage but eventually just decided that bitcoin had the slightly better properties in terms of a store of value. Although I have noticed a lot more talk in the bitcoin community about gold as the recent rally and outperformance has likely caused a lot of people to second guess things.

 

They can, and do, behave differently as this year proves. The relative value between price is my guide with the benefit being additional portfolio diversification until such a time as Bitcoin IS widely accepted as a store of value. At that point I'd expect it'll be much higher in value and much more correlated to gold. 

[Milu]

11 minutes ago, TwoCitiesCapital said:

 

They can, and do, behave differently as this year proves. The relative value between price is my guide with the benefit being additional portfolio diversification until such a time as Bitcoin IS widely accepted as a store of value. At that point I'd expect it'll be much higher in value and much more correlated to gold. 

Makes sense. Not sure where you live but do you have to pay capital gains on any sales of bitcoin which you would roll into gold, and vice versa if you rolled back, if so that would be a major drag on things.

[scorpioncapital]

Bitcoin is deflationary, so the argument is you can buy 2 houses tomorrow, instead of 1 house today. Or 1 house and X instead of just 1 house...

 

But actually if you believe Jordi Vissner (see his substack), what he is arguing is more profound.

He is arguing that bitcoin is the only stock/productive asset/entity remaining - the 'last man standing' in a world where technology and productivity leads to universal basic dividend/income, the death of corporations (perhaps crypto-native DAOs to replace them) and ultimately, no assets will make money except bitcoin and some crypto that are the end-point of the inability to profit from anything else. Thus, crypto becomes an automated form of universal income/socialism for the masses that AI brings to us. Dystopian? Maybe , maybe not. Some will get ahead by owning the means of production like Musk but what happens when Tesla shareholders cannot make any money but still cranks out cars by the millions? Do they all move to holding some crypto token or bitcoin that just goes up and up and pays for their lifestyle in proportion to how early they got on board or how many tokens they can hoard?

[TwoCitiesCapital]

3 minutes ago, Milu said:

Makes sense. Not sure where you live but do you have to pay capital gains on any sales of bitcoin which you would roll into gold, and vice versa if you rolled back, if so that would be a major drag on things.

 

Yes. Capital gains is 15% for me. None at the state level. 

 

Given Gold's 50% outperformance this year, would have been well worth paying them.

 

There's obviously a consideration to the switch, and the bar needs to be high enough and infrequent enough to make sense. Never understood people who will stay in an underperforming name just to save that 15%. Any stock can swing that much in a single month - so you're gonna ride a loser for decades to avoid 15% on just the gain? 

[SharperDingaan]

2 hours ago, TwoCitiesCapital said:

Never understood people who will stay in an underperforming name just to save that 15%.  

 

Tax free account research (TFSA) indicate that it's often simply to avoid paying the additional commissions [that $30 over 3 swing trades on a really bad day]. It shows up in oversized bids in illiquid stocks as well, when it would be cheaper to simply do 2-3 smaller bids at lower prices. 

 

SD

 

Edited December 21, 2025 by SharperDingaan

[Milu]

53 minutes ago, TwoCitiesCapital said:

 

Yes. Capital gains is 15% for me. None at the state level. 

 

Given Gold's 50% outperformance this year, would have been well worth paying them.

 

There's obviously a consideration to the switch, and the bar needs to be high enough and infrequent enough to make sense. Never understood people who will stay in an underperforming name just to save that 15%. Any stock can swing that much in a single month - so you're gonna ride a loser for decades to avoid 15% on just the gain? 

15% is not too bad, for me it’s 33% so I’d have to be pretty confident in the predictive capabilities of any strategy based on swapping in and out gold and bitcoin. I don’t think people intentionally stay in an underperforming name to avoid taxes, the underperformance is only evident in retrospect, but any investment decisions are made with the unknowable future.

 

For example I hold bitcoin now with a large unrealised capital gain, I expect that it will continue to perform well for the next decade, but maybe when we get to 2035 and look back it ends up underperforming against gold, it’s not like I am deciding now not to sell my bitcoin to avoid taxes. I just can’t predict the future so selling now paying a large chunk of tax, and then putting it into a similar asset gold which now needs to outperform the capital gains drag I have created. Let’s say I make the switch and then in five years I get a feeling that bitcoin might start outperforming gold again, now I’ll sell my gold reduce my capital base a second time and then hope that bitcoin outperformance outweighs the performance of gold plus the tax drag I had realised.

 

Probably just holding one of the assets bitcoin or gold for the full period would probably outweigh and strategic trading between the two, at least based on my tax rate, since yours is lower perhaps it might make more sense, but not fully convinced.

Edited December 21, 2025 by Milu

[TwoCitiesCapital]

1 hour ago, scorpioncapital said:

But actually if you believe Jordi Vissner (see his substack), what he is arguing is more profound.

He is arguing that bitcoin is the only stock/productive asset/entity remaining - the 'last man standing' in a world where technology and productivity leads to universal basic dividend/income, the death of corporations (perhaps crypto-native DAOs to replace them) and ultimately, no assets will make money except bitcoin and some crypto that are the end-point of the inability to profit from anything else.

 

I don't think I agree, but would be interested to hear his reasoning. 

 

1 hour ago, scorpioncapital said:

.... but what happens when Tesla shareholders cannot make any money but still cranks out cars by the millions? 

 

I mean, that has largely been the case, no? Never paid a dividend. Most appreciation was multiple expansion. And Musk's compensation has far exceeded all of the cumulative profits of the enterprise going back to it's founding.

 

If Musk has extracted more than 100% of all of the profits, the only gains to shareholders have been from 'greater fools' so to speak. 

[scorpioncapital]

I think his argument is when nobody makes any profit in any business, or very little, and stockholders as a group can no longer depend on the sp500 to supplement their wages (if they even have a job anymore). In this world, he thinks everyone will jump on bitcoin, but I do find the argument a little odd. I mean why not jump on profitless corporations anyway, or emerging market equities? The other argument is that corporations will change their nature and there will be no need for corporations as a structural entity of production. Actually another guy I very much like, Viktor Shvets of Macquaire Funds in Australia also believes in this endgame - at least for the developed world, deflation , wage loss and everyone on the dole, or short of that, everyone on a proxy for the economics of the future - crypto/bitcoin/dao/ai. 

Edited December 21, 2025 by scorpioncapital

[wachtwoord]

6 hours ago, TwoCitiesCapital said:

 

Not sure what you're asking, but if it's how much BTC would be sold then it's going to depend on the price and how quickly it gets there. I've maintained that Im holding most of stash for the long-term, but maintain that ~20-30% of its is tradable in a mania. 

 

 

I understood you as trading out of Bitcoin in favor of gold for the longer term so I asked at what relative valuation would you exchange btc for gold (parity being when both market caps are equal) and what portion of your current btc allocation (however large or small it is).

 

But your answer seems to be you would sell speculatively (to buy back later?) Instead of a longer term relative rebalancing and it sounds like you'd base it on an exact Dollar value than the price relative to gold (really?!) So not what I thought you meant at al it seems.

 

6 hours ago, TwoCitiesCapital said:

I expect that to happen, but for it to take a long time AND that gold won't be valueless just like silver isn't valueless after gold displaced it. I watch the Bitcoin/Gold ratio to determine which is more attractive at any given time, but haven't yet reached a ratio in comfortable converting BTC to gold ....to my detriment this year. 

 

So that seems to confirm you would roll over btc to gold only speculatively and temporarily right?

 

I'm not one for speculation/trading but good luck.

[TwoCitiesCapital]

1 hour ago, wachtwoord said:

 

I understood you as trading out of Bitcoin in favor of gold for the longer term so I asked at what relative valuation would you exchange btc for gold (parity being when both market caps are equal) and what portion of your current btc allocation (however large or small it is).

 

But your answer seems to be you would sell speculatively (to buy back later?) Instead of a longer term relative rebalancing and it sounds like you'd base it on an exact Dollar value than the price relative to gold (really?!) So not what I thought you meant at al it seems.

 

The decision to sell Bitcoin for cash has certain price targets/levels in mind over a specific time frame. $500k/coin makes sense long-term - it doesn't make sense tomorrow and I'd sell a healthy chunk if it occurred. 

 

That cash can be rolled into any asset - stocks, bonds, gold, or to pay off existing debt pending what is most attractive at that time. But adding an allocation to gold is my priority - just has to be at the right ratio. If gold rallies just as hard as BTC, hardly does me good to sell one and buy the other. 

 

1 hour ago, wachtwoord said:

 

So that seems to confirm you would roll over btc to gold only speculatively and temporarily right?

 

I'm not one for speculation/trading but good luck.

 

I haven't ever sold Bitcoin speculatively yet - but I've always had price targets I'd be willing to exit at. Back in 2021 it was prices exceeding $100k. This year it was prices exceeding $200-250k.

 

At $200k, the BTC/gold ratio would be at all time highs by a fair margin,despite gold's terrific run this year, and I'd feel comfortable converting some of that balance. 

 

We never saw either so I haven't sold either time. 

Edited December 22, 2025 by TwoCitiesCapital

[Dave86ch]

14 hours ago, scorpioncapital said:

Bitcoin is deflationary, so the argument is you can buy 2 houses tomorrow, instead of 1 house today. Or 1 house and X instead of just 1 house...

 

But actually if you believe Jordi Vissner (see his substack), what he is arguing is more profound.

He is arguing that bitcoin is the only stock/productive asset/entity remaining - the 'last man standing' in a world where technology and productivity leads to universal basic dividend/income, the death of corporations (perhaps crypto-native DAOs to replace them) and ultimately, no assets will make money except bitcoin and some crypto that are the end-point of the inability to profit from anything else. Thus, crypto becomes an automated form of universal income/socialism for the masses that AI brings to us. Dystopian? Maybe , maybe not. Some will get ahead by owning the means of production like Musk but what happens when Tesla shareholders cannot make any money but still cranks out cars by the millions? Do they all move to holding some crypto token or bitcoin that just goes up and up and pays for their lifestyle in proportion to how early they got on board or how many tokens they can hoard?

 

I think the same.

Interestingly, every AI will eventually explain why Bitcoin is superior, if you ask it.

This is interesting for two reasons:

AI will have a huge impact on narratives and on how people think over the next decade.

Bitcoin is the only form of money AI can meaningfully handle, so it may tend to promote it.

I am not implying that AI has a manipulative attitude.

I am not surprised if AI simply favors the architecture that makes the most sense in an AI-dominated environment, given the trajectory humans are putting in place.

[formthirteen]

On 12/22/2025 at 10:50 AM, Dave86ch said:

Interestingly, every AI will eventually explain why Bitcoin is superior, if you ask it.

 

It's feels weird to say this, but bitcoin has historically been a superior store of value in comparison to stocks and currencies.

 

I think the US is going to continue to adopt cryptocurrencies, financial innovation is part of US history. Cryptocurrencies are not going away, whatever anyone thinks.

 

Most cryptocurrencies have a real use case and a "category defining" cryptocurrency (e.g. BTC, ETH, SOL):

• Bitcoin - store of value, religion base currency
• Ethereum - enables smart contracts and e.g. other cryptocurrencies
• Solana - Enables day-to-day use and transactions

New innovations are born through cryptocurrencies. I noticed SEC had a roundtable in December with privacy-focused companies/coins:

 

 

Here's an overview of the cryptocurrencies:

 

Cryptocurrencies
├── Native Coins
│   ├── Proof of Work
│   │   ├── Bitcoin (BTC)
│   │   ├── Litecoin (LTC)
│   │   └── Dogecoin (DOGE)
│   ├── Proof of Stake
│   │   ├── Ethereum (ETH)
│   │   ├── Cardano (ADA)
│   │   ├── Solana (SOL)
│   │   └── Polkadot (DOT)
│   └── Privacy-Focused
│       ├── Monero (XMR)
│       ├── Zcash (ZEC)
│       ├── Dash (DASH)
│       ├── Pirate Chain (ARRR)
│       ├── Secret (SCRT)
│       └── Firo (FIRO)
├── Stablecoins
│   ├── Fiat-Collateralized
│   │   ├── USDT (Tether)
│   │   ├── USDC (Circle)
│   │   └── BUSD (Binance)
│   ├── Crypto-Collateralized
│   │   ├── DAI (MakerDAO)
│   │   └── sUSD (Synthetix)
│   ├── Algorithmic
│   │   ├── FRAX
│   │   └── UST (defunct)
│   └── Commodity-Backed
│       ├── PAXG (gold)
│       └── XAUT (gold)
└── Tokens
    ├── Utility
    │   ├── LINK (Chainlink)
    │   ├── UNI (Uniswap)
    │   └── AAVE
    ├── Governance
    │   ├── MKR (MakerDAO)
    │   └── COMP (Compound)
    └── Wrapped
        ├── WBTC
        └── WETH

 

Category defining cryptocurrencies (subject to opinion), I only follow BTC, ETH, and SOL:

 

Cryptocurrencies
├── Native Coins
│   ├── Bitcoin (BTC) — store of value, digital gold, base currency
│   ├── Ethereum (ETH) — smart contracts, DeFi foundation, token factory
│   ├── Solana (SOL) — high throughput, low fees, daily transactions
│   └── Monero (XMR) — private by default, untraceable transactions
├── Stablecoins
│   ├── USDT (Tether) — most liquid, "trust me bro" reserves
│   ├── USDC (Circle) — regulated, audited, institutional favorite
│   └── DAI (MakerDAO) — decentralized, crypto-collateralized, censorship-resistant
└── Tokens
    ├── LINK (Chainlink) — oracle network, connects blockchains to real world
    └── WBTC (Wrapped Bitcoin) — Bitcoin on Ethereum, DeFi bridge

Edited December 27, 2025 by formthirteen

[wachtwoord]

9 hours ago, formthirteen said:

• Ethereum - enables smart contracts and e.g. other cryptocurrencies
• Solana - Enables day-to-day use and transactions

 

Great that the system has a use case,(maybe, far from certain) that doesn't give the tokens value though. Even more so after they moved to POS. 

 

They deserve at least many orders of magnitude of discount vs Bitcoin and are overvalued (again: on a relative basis vs Bitcoin) by orders of magnitude.

[scorpioncapital]

has anyone heard of the security vs energy cost of Bitcoin? aka the 51% attack hack. It seems that bitcoin requires very high energy costs to maintain network security..if the total coins are not going to expand (a real risk later which would nullify its deflationary thesis), then miners must use very high energy to secure the network..in other words Bitcoin is money on a treadmill. furthermore , transaction fees can never really compensate for the cost of securing the network even if everyone in the world used it I think the profit is somewhat trivial. However if computing power rises to the point that it is much cheaper than now , that is also another option. It is very interesting to have a network store of value that goes to zero if someone tries to steal it! You don't see that in fiat land.

Edited December 27, 2025 by scorpioncapital

[wachtwoord]

5 hours ago, scorpioncapital said:

has anyone heard of the security vs energy cost of Bitcoin? aka the 51% attack hack. It seems that bitcoin requires very high energy costs to maintain network security..if the total coins are not going to expand (a real risk later which would nullify its deflationary thesis), then miners must use very high energy to secure the network..in other words Bitcoin is money on a treadmill. furthermore , transaction fees can never really compensate for the cost of securing the network even if everyone in the world used it I think the profit is somewhat trivial. However if computing power rises to the point that it is much cheaper than now , that is also another option. It is very interesting to have a network store of value that goes to zero if someone tries to steal it! You don't see that in fiat land.

 

My man c'mon..... Transaction fees.

[TwoCitiesCapital]

21 hours ago, scorpioncapital said:

Furthermore , transaction fees can never really compensate for the cost of securing the network even if everyone in the world used it 

 

What makes you believe this is true? Why can't txn fees support miners in a post block-reward world? 

[scorpioncapital]

Because even a very expensive wire transfer costs like $25. But many crypto networks have virtually free transfers. How is bitcoin going to replace billions in mining and security with costs to move money around that is virtually free in competitor networks? I believe Wise - a money transfer service charges like $6 for any amount...how much can bitcoin charge to move bitcoin around? 

[TwoCitiesCapital]

5 hours ago, scorpioncapital said:

Because even a very expensive wire transfer costs like $25. But many crypto networks have virtually free transfers. How is bitcoin going to replace billions in mining and security with costs to move money around that is virtually free in competitor networks? I believe Wise - a money transfer service charges like $6 for any amount...how much can bitcoin charge to move bitcoin around? 

 

Because the wealth is made and stored in BTC. 

 

If I have wealth in BTC, my options are to send the BTC (I pay a network fee) or I sell the BTC (I pay a network fee and/or a commission that covers the network fee). Either way, the network fee gets paid. 

 

No one is storing value in AVAX or SOL or others. The relative market caps make that obvious. If the value is stored in BTC, people eventually want to spend that value, and the BTC network fees get paid. 

 

The lightning network? Will be great for day to day purchases. But if you're buying a house in BTC? Probably not going to go through the lightning network. Same for buying a car. Same if Walmart is settling receivables with VISA. Or if Central Banks are settling cross border flows. Etc. the network fees will get paid and they'll likely be higher than they are today and yet still a small fraction of the value transferred in the block. 

 

 

 

 

Edited December 29, 2025 by TwoCitiesCapital

[wachtwoord]

3 hours ago, scorpioncapital said:

Because even a very expensive wire transfer costs like $25. But many crypto networks have virtually free transfers. How is bitcoin going to replace billions in mining and security with costs to move money around that is virtually free in competitor networks? I believe Wise - a money transfer service charges like $6 for any amount...how much can bitcoin charge to move bitcoin around? 

Bitcoin won't have cheap transactions on chain.

 

Other crypto isn't truly worth anything.

[Fly]

On 12/28/2025 at 5:52 PM, scorpioncapital said:

Because even a very expensive wire transfer costs like $25. But many crypto networks have virtually free transfers. How is bitcoin going to replace billions in mining and security with costs to move money around that is virtually free in competitor networks? I believe Wise - a money transfer service charges like $6 for any amount...how much can bitcoin charge to move bitcoin around? 

 

If BTC survives another 100years when the block subsidy goes away then I have no doubt miners will continue to mine. At that point I could even see something crazy like every wifi connected device carrying some small mining component similar to the lotto miners we see today. Imagine a world with tens of billions of internet connected devices all contributing tiny amounts of hash power. The equipment manufacturers could have their own mining pools as another revenue stream. 

[brobro777]

Boy it sure does feel like crypto lost its juice

 

It could get it back but could take a while 

[TwoCitiesCapital]

4 hours ago, brobro777 said:

Boy it sure does feel like crypto lost its juice

 

It could get it back but could take a while 

 

I think by March or so we'll probably have moved through the excess supply of everyone throwing in the towel on the 4-year cycle. 

 

Similar to 2024s 9-month consolidation from February to November of prices largely being $60-70k before bouncing to $110k, I think the new range of $85-100k will be the range of a multi-month consolidation before the next leg up. 

 

The fact that it went from $15k to $125k in an environment of QT and high rates makes me optimistic for what it might do in a QE/lower rate environment - particular with secular institutional flows moving into the sector. 

 

 

[brobro777]

26 minutes ago, TwoCitiesCapital said:

 

I think by March or so we'll probably have moved through the excess supply of everyone throwing in the towel on the 4-year cycle. 

 

Similar to 2024s 9-month consolidation from February to November of prices largely being $60-70k before bouncing to $110k, I think the new range of $85-100k will be the range of a multi-month consolidation before the next leg up. 

 

The fact that it went from $15k to $125k in an environment of QT and high rates makes me optimistic for what it might do in a QE/lower rate environment - particular with secular institutional flows moving into the sector. 

 

 

 

You're way better informed than me but the way the dental hygienist went on about crypto and online courses when I went to my Glendale dentist this month seemed like a pretty bad sign

 

Online courses bro, oof