Cryptocurrencies

[james22]

BlackRock Reveals It’s Quietly Preparing For A $35 Trillion Federal Reserve Dollar Crisis With Bitcoin - Predicted To Spark A Sudden Price Boom

 

https://archive.ph/Ld3Pk#selection-1967.0-1967.141

[TwoCitiesCapital]

5 hours ago, james22 said:

 

 

This is huge - especially since BITO has this weird "we're gonna pay a 5% monthly dividend that is totally unsupported by underlying performance of roll yield" strategy that has totally f*cked up my puts and calls on the name over the last 2-3 months despite being roughly correct on Bitcoin timing/price. 

 

Will be nice to trade options on a strategy that ACTUALLY tracks Bitcoin. 

Edited September 21 by TwoCitiesCapital

[james22]

 

[james22]

 

[Paarslaars]

Ignoring the volatility it will bring to an already volatile asset class, I'm assuming the only 'good' thing for BTC holders here would be that traders will cover their positions and need to buy ETFs for that which will increase BTC value?

[SharperDingaan]

2 hours ago, Paarslaars said:

Ignoring the volatility it will bring to an already volatile asset class, I'm assuming the only 'good' thing for BTC holders here would be that traders will cover their positions and need to buy ETFs for that which will increase BTC value?

 

The BTC-ETF just gets sold off, and the proceeds put into the BTC-ETF options; temporarily pressures BTC down as the BTC-ETF sells off some of its now too large a holding of BTC.

 

Most people are not going to be using these for risk management purposes; longer term they will be used to increase holdings in BTC-ETF, which will push up the demand for BTC.

 

SD 

[TwoCitiesCapital]

3 hours ago, Paarslaars said:

Ignoring the volatility it will bring to an already volatile asset class, I'm assuming the only 'good' thing for BTC holders here would be that traders will cover their positions and need to buy ETFs for that which will increase BTC value?

 

I think it's good for a lot of things

 

1) It allows long-term holders to derive an income off an asset that doesn't generate any via covered calls

2) It allows you to hedge positions without selling the underlying if you wanted to do puts

3) It allows an entirely new investors to enter the asset class - those seeking volatility premium

 

Previously, we only had very bad proxies in the US to trade options on.

 

As someone that has traded options on those proxies, more than 1/2 of my profits were wiped out by things like BITO announcing exceptionally large dividends unsupported by roll yield or by MARA's downdraft from $21 to $15 when I was trying to avoid selling puts across BITO's ex-dividend date....

 

 

[james22]

What if the Biden administration deliberately killed off Silvergate — and some of its peers — in an attempt to decapitate the domestic crypto industry? 

 

And what if the settlements Silvergate made with its regulators effectively covered the government’s tracks, allowing it to continue to deny the existence of Operation Choke Point 2.0?

 

https://www.piratewires.com/p/inside-biden-admin-plot-to-destroy-silvergate-and-debank-crypto-for-good-nic-carter

 

Operation Choke Point 2.0: https://archive.ph/OUAyk

[SharperDingaan]

The reality is that there will be a lot more 'potted' narratives until the US election day; for those so inclined, most would place their 'bets' according to their volume and timing. 

 

All that we really know is that the US election is in 5 weeks, it could go either way, and the approach to crypto will probably be quite different depending upon which side prevails. Chinese stimulus effects aren't going to show up for a while, the escalating ME is a significant interim wild-card, and miner holdings/bankruptcy settlement liquidations are continuing. BTC would seem to be a range bound between USD 58-65K until then; not necessarily a bad thing.

 

Lots of ways to play, depending on whether income or appreciation is the aim. Place your bets, step away from the table, and come back after the election; hopefully it pays for a great New Years vacation 

 

SD 

Edited October 2 by SharperDingaan

[james22]

 

https://www.forbes.com/sites/edanyago/2024/10/02/why-bitcoin-is-becoming-a-part-of-traditional-finance/

[james22]

Bipartisan Support Builds For Strategic Bitcoin Reserve

 

All things considered, voter polling data shows consistently that backing bitcoin may be a good bet for members of both political parties.

 

From an electoral perspective, there is massive upside to embracing digital assets and virtually no downside—which makes it all the more likely that bipartisan support for a strategic bitcoin reserve will continue to grow.

 

https://archive.ph/W2cXx

[Dave86ch]

4 hours ago, james22 said:

 

https://www.forbes.com/sites/edanyago/2024/10/02/why-bitcoin-is-becoming-a-part-of-traditional-finance/

The West is trying hard to shift the Overton window.

It's interesting to see how Latin America is playing the game.
 

Edited October 3 by Dave86ch

[james22]

[james22]

 

[james22]

 

[Parsad]

https://finance.yahoo.com/news/us-charges-18-people-companies-190616663.html

 

Cheers!

[james22]

There is no second best.

[james22]

With a stock you can buy a real asset in the real economy and you're contributing to something in the real world, but Bitcoin doesn't really have those characteristics.

 

From 13:14

 

 

 

[Parsad]

https://finance.yahoo.com/news/man-accidentally-sent-527m-bitcoins-150831819.html

 

Cheers!

[coc]

On 10/11/2024 at 10:31 PM, james22 said:

With a stock you can buy a real asset in the real economy and you're contributing to something in the real world, but Bitcoin doesn't really have those characteristics.

 

From 13:14

 

 

 

 

Is this what Bitcoin people are on to now? Bitcoin is valuable simply because it takes a lot of computing resources to maintain the network? 

 

Sort of like saying if I hire a few million laborers to dig up ditches and fill them back in, my ditch-digging company should be worth trillions because of the labor power I have under my control. Well, no, they aren't producing anything of economic value, they're just wasting calories. 

 

Buying a bitcoin doesn't give you *access* to those computing resources. If I had a few trillion to buy Amazon and Microsoft I could *use* the computing resources. 

[james22]

8 minutes ago, coc said:

Is this what Bitcoin people are on to now? Bitcoin is valuable simply because it takes a lot of computing resources to maintain the network? 

 

Sort of like saying if I hire a few million laborers to dig up ditches and fill them back in, my ditch-digging company should be worth trillions because of the labor power I have under my control. Well, no, they aren't producing anything of economic value, they're just wasting calories. 

 

Buying a bitcoin doesn't give you *access* to those computing resources. If I had a few trillion to buy Amazon and Microsoft I could *use* the computing resources. 

 

Economic value:

 

Bitcoin's computational network is doing the single most important computational work in human history, which is it is protecting economic value. There is nothing else in the world that protects economic value like this.

[Saluki]

54 minutes ago, james22 said:

 

Economic value:

 

Bitcoin's computational network is doing the single most important computational work in human history, which is it is protecting economic value. There is nothing else in the world that protects economic value like this.

 

Bitcoin is weird because it has diseconomies of scale. Unlike factories making widgets that get more efficient over time, the more people use Bitcoin, the more expensive and energy intensive it is to do a bitcoin transaction on the main blockchain.  Yes, it's more secure if more people use it, but it's also less efficient. 

 

It seems to have staying power, like Latin, then French and now English languages, because other people are willing to use it, not because it makes much sense.  Since it's not Turing complete, it's difficult to hack, making it secure, but it's also of very limited utility, since you can't do other things like smart contracts with the other cryptos, most notably Ethereum. 

 

What I find ridiculous is the use cases claiming anonymity. It's not cash. There is a permanent record of every iota of it that you've received or payed out.  And the methods to disguise it are basically money laundering, and the people doing that are being prosecuted.  Razzlekahn hid for a while, but eventually the government can connect enough dots and figure out who you are if they try hard enough.  

 

A lot of the value in it is pure FOMO. Most of the crypto bros "investing" in it couldn't tell you the difference between two or three cryptos and they use Bitcoin and Blockchain interchangeably. 

 

 

[TwoCitiesCapital]

1 hour ago, Saluki said:

 

Bitcoin is weird because it has diseconomies of scale. Unlike factories making widgets that get more efficient over time, the more people use Bitcoin, the more expensive and energy intensive it is to do a bitcoin transaction on the main blockchain.  Yes, it's more secure if more people use it, but it's also less efficient. 

 

I don't necessarily disagree with you, but gold didn't become a monetary asset because it was "efficient" to haul around in large quantities. It was actually quite difficult to use which is why paper monies were built on top of it and then credit monies built on top of paper. Its superiority in other characteristics made that inconvenience worthwhile. 

 

Bitcoin will be similar. Large transaction settlements of millions of dollars may still occur on the Blockchain, but ultimately most daily economic transactions will occur one a layer 2 or layer 3 solution built on top of BTC where they can be optimized for costs/efficiencies while still maintaining the integrity and security of the ultimate final settlement on the blockchain (i.e. lightning network). The superiority of BTC as a monetary asset will transcend the inconvenience of some of its characteristics. 

 

1 hour ago, Saluki said:

It seems to have staying power, like Latin, then French and now English languages, because other people are willing to use it, not because it makes much sense.  Since it's not Turing complete, it's difficult to hack, making it secure, but it's also of very limited utility, since you can't do other things like smart contracts with the other cryptos, most notably Ethereum. 

 

I would argue sound money is plenty of utility unto itself. Having to constantly run on a treadmill of credit and perpetual growth simply to keep up with inflation eating away at your money in unproductive and obfuscates economic theft that is occurring of your time. 

 

A simpler/sounder money releases a ton of unproductive resources that are in place now due simply to inflation and unsound money principles. 

 

1 hour ago, Saluki said:

 

What I find ridiculous is the use cases claiming anonymity. It's not cash. There is a permanent record of every iota of it that you've received or payed out.  And the methods to disguise it are basically money laundering, and the people doing that are being prosecuted.  Razzlekahn hid for a while, but eventually the government can connect enough dots and figure out who you are if they try hard enough.  

 

Absolutely agree here. Once I started looking into this more heavily in 2019, the whole "bItCoIn iS fOr CrImInAls" argument falls apart entirely. 

 

1 hour ago, Saluki said:

A lot of the value in it is pure FOMO. Most of the crypto bros "investing" in it couldn't tell you the difference between two or three cryptos and they use Bitcoin and Blockchain interchangeably. 

 

I don't disagree, but it's really no different from any stock/investment that is moving up at any given time that attracts a crows of those wanting to get in on it. That doesn't mean there isn't a fundamental truth to the bull case. 

 

And their inability to understand it doesn't change the value of its use. Most people couldn't explain how Visa settles payments or why it takes multiple business days for monetary transactions to settle, or why in a digital age it costs ~$30 in wire fees to move 'bytes' instantaneously... but they still use it. Bitcoin will be no different. 90% of the population will not understand it, but they will end up using and systems/services built on top of its rails. 

Edited October 15 by TwoCitiesCapital

[Seanzy]

Bitcoin is valuable because of its purchasing power. The same thing that backs the USD also backs Bitcoin, confidence.

 

In the old days, you could take your $5 or $100 bill to the bank and redeem its equivalent value in physical gold. But that is no longer the case because there is not enough gold in the world, and because gold and the dollar were politically delinked by President FDR in the 1930's and Nixon in the 1970's.

 

However, after this delinking occurred, people throughout the world continued to accept the physical greenback of USD, which is a just a piece of paper with no inherent value, as purchasing power. The truth is today, even in remote regions of the world, people are willing to provide goods and services to you in exchange for that physical piece of paper, because they are confident it will give them the purchasing power to buy goods and services they want and need. Everyone is confident everyone else will accept it as a form of purchasing power.

 

Indirectly though, the USD is backed by the United States' gold reserves. Who owns the most physical gold in the world that is securely and privately held? The United States government. And who can best defend this gold reserve from attackers? Arguably, the United States military. And who can fund their military by printing more money? The US government. And who can be confident people throughout the world will continue to accept the dollar as a form of purchasing power, even if the dollar gets diluted by inflation? The US Government, because Americans are so economically productive that the government's tax revenues, which are the result of individual and business growth due to ingenuity, productivity, and control over natural resources, can pay off debts the government creates by its money printing. Few would accept Zimbabwe dollars as purchasing power because Zimbabwe lacks these.

 

In other words, the world has good reasons to continue accepting the dollar as purchasing power. Not to mention that there is a tremendous demand for US dollars, because there is a tremendous amount of debt in the world's economy that must be paid back in USD. If your mortgage is in USD, you can't pay your mortgage in yen. You must first convert your yen to dollars. What happens if you don't pay your debts? It affects your credit and livelihood. So individual and business debts that must be paid back create a demand for US dollars, and thus US dollars are actually scarce. Perhaps, in a way, the USD is actually the most scarce fiat money, that's why it is the strongest relative to other currencies.

 

Ultimately, the demand for US dollars is created by the need to pay dollar-denominated debts back and to obtain purchasing power for goods and services. And the US gold reserve, military, and productivity that "backs" our currency have one thing in common: they all require time, energy, and effort to obtain, whether that energy and effort is physical, emotional, spiritual, etc.

 

You see, the original form of money, going back to when humans were tribal primates, was energy. If you wanted food, you had to expend energy to hunt and gather. If you wanted shelter, you had to build it from sticks and stones. You had to invent and develop tools to improve your purchasing power.

 

Eventually, humans began representing energy with physical items like seashells and then eventually gold. Money began to represent the energy someone had expended to get the banana out of a tree, or time required to build a shelter and develop tools. Money is symbolic.

 

Gold was a great form of money because it met many of the definitions of money: a store of value, medium of exchange, unit of account, transferable, divisible, durable, fungible, fraud resistant (if you could verify its authenticity), and scarce.

 

Later, money technology improved to digital dollars like those we use today, which represented gold, which represented energy. In computer science, we can refer to fiat money as an "abstraction" for energy expenditure, similar to how the steering wheel, gas, and brake pedals of your car are a simple way to operate a complicated vehicle with many moving parts, or how the iPhone's touch screen simplifies the use of an incredibly complex technological device. These are abstractions for complicated but sound technology. It's easy to buy your Starbucks coffee with a credit card, but there are many technological steps that occur to make it happen.

 

And finally, we arrive at Bitcoin, arguably the world's most technologically sound and advanced form of money ever created. It meets all the definitions of money, it is:

• A store of value: (it's a number on a website that says how much purchasing power you have, and it can't easily be changed because of the energy required to do so
• A medium of exchange: (I have a debit card that allows me to spend my Bitcoin and more merchants are accepting it daily
• A unit of account: all goods and services can be priced in terms of Bitcoin
• Transferable: it is digital, borderless, and almost frictionless, meaning it can be sent directly to anyone in the world via the internet without using an intermediary like a bank and without paying excessive fees (work in progress), which makes it arguably more transferable than gold
• Easily divisible: you don't have to buy 1 BTC at a time, you can buy 1 Satoshi, which represents one, one hundred millionth of a Bitcoin, thus better than gold which must be physically carried and divided
• Durable: gold doesn't tarnish, but Bitcoin cannot tarnish, and the network has operated nearly flawlessly, continuously, and reliably since inception
• Fungible: one Bitcoin is replaceable by another. Dollars may actually be cooler in this regard because some physical dollars have become collectors items for various reasons
• Fraud resistant: Bitcoin is a source of truth based on mathematics, computer verification, and publicly auditable code. The Bitcoin network has never been hacked, and the internet only requires a few computers anywhere on earth to connect to each other for the network to remain operational.
• Scarce: all goods and services have gone DOWN when priced in Bitcoin. From a performance perspective, 100% of negative predictions about Bitcoin have been wrong for 14 years. Perhaps it's time to allocate between 1 to 5% of your portfolio into this new asset class as a way to protect your purchasing power.

Of course Bitcoin is volatile, but that's because it is priced in dollars. The mistake most investors make is keeping 100% of their wealth in US dollar denominated assets, i.e. stocks, bonds, cash, real estate, gold, etc. But what do we know will happen to dollars with certainty over time? They will lose purchasing power due to inflation. To me, that is risky.

 

I see Bitcoin as a way to derisk your portfolio by allocating a small portion away from fiat based money systems. It is a rational decision at this point now that all of the world's largest institutions have purchased it, the US government is one of its largest holders, and its purchasing power has increased for 15 years. There has never been an asset bubble that lasted 15 years.

 

Hopefully, this convinces some of the naysayers to start drinking a small cup of the Bitcoin Kool-aid.

 

My clients understand the income I am generating for them result from the massive secular Bitcoin tailwind operating in the strategy's favor, and maybe I'm decent at what I do.

 

[rkbabang]

44 minutes ago, Seanzy said:

Bitcoin is valuable because of its purchasing power. The same thing that backs the USD also backs Bitcoin, confidence.

 

In the old days, you could take your $5 or $100 bill to the bank and redeem its equivalent value in physical gold. But that is no longer the case because there is not enough gold in the world, and because gold and the dollar were politically delinked by President FDR in the 1930's and Nixon in the 1970's.

 

However, after this delinking occurred, people throughout the world continued to accept the physical greenback of USD, which is a just a piece of paper with no inherent value, as purchasing power. The truth is today, even in remote regions of the world, people are willing to provide goods and services to you in exchange for that physical piece of paper, because they are confident it will give them the purchasing power to buy goods and services they want and need. Everyone is confident everyone else will accept it as a form of purchasing power.

 

Indirectly though, the USD is backed by the United States' gold reserves. Who owns the most physical gold in the world that is securely and privately held? The United States government. And who can best defend this gold reserve from attackers? Arguably, the United States military. And who can fund their military by printing more money? The US government. And who can be confident people throughout the world will continue to accept the dollar as a form of purchasing power, even if the dollar gets diluted by inflation? The US Government, because Americans are so economically productive that the government's tax revenues, which are the result of individual and business growth due to ingenuity, productivity, and control over natural resources, can pay off debts the government creates by its money printing. Few would accept Zimbabwe dollars as purchasing power because Zimbabwe lacks these.

 

In other words, the world has good reasons to continue accepting the dollar as purchasing power. Not to mention that there is a tremendous demand for US dollars, because there is a tremendous amount of debt in the world's economy that must be paid back in USD. If your mortgage is in USD, you can't pay your mortgage in yen. You must first convert your yen to dollars. What happens if you don't pay your debts? It affects your credit and livelihood. So individual and business debts that must be paid back create a demand for US dollars, and thus US dollars are actually scarce. Perhaps, in a way, the USD is actually the most scarce fiat money, that's why it is the strongest relative to other currencies.

 

Ultimately, the demand for US dollars is created by the need to pay dollar-denominated debts back and to obtain purchasing power for goods and services. And the US gold reserve, military, and productivity that "backs" our currency have one thing in common: they all require time, energy, and effort to obtain, whether that energy and effort is physical, emotional, spiritual, etc.

 

You see, the original form of money, going back to when humans were tribal primates, was energy. If you wanted food, you had to expend energy to hunt and gather. If you wanted shelter, you had to build it from sticks and stones. You had to invent and develop tools to improve your purchasing power.

 

Eventually, humans began representing energy with physical items like seashells and then eventually gold. Money began to represent the energy someone had expended to get the banana out of a tree, or time required to build a shelter and develop tools. Money is symbolic.

 

Gold was a great form of money because it met many of the definitions of money: a store of value, medium of exchange, unit of account, transferable, divisible, durable, fungible, fraud resistant (if you could verify its authenticity), and scarce.

 

Later, money technology improved to digital dollars like those we use today, which represented gold, which represented energy. In computer science, we can refer to fiat money as an "abstraction" for energy expenditure, similar to how the steering wheel, gas, and brake pedals of your car are a simple way to operate a complicated vehicle with many moving parts, or how the iPhone's touch screen simplifies the use of an incredibly complex technological device. These are abstractions for complicated but sound technology. It's easy to buy your Starbucks coffee with a credit card, but there are many technological steps that occur to make it happen.

 

And finally, we arrive at Bitcoin, arguably the world's most technologically sound and advanced form of money ever created. It meets all the definitions of money, it is:

• A store of value: (it's a number on a website that says how much purchasing power you have, and it can't easily be changed because of the energy required to do so
• A medium of exchange: (I have a debit card that allows me to spend my Bitcoin and more merchants are accepting it daily
• A unit of account: all goods and services can be priced in terms of Bitcoin
• Transferable: it is digital, borderless, and almost frictionless, meaning it can be sent directly to anyone in the world via the internet without using an intermediary like a bank and without paying excessive fees (work in progress), which makes it arguably more transferable than gold
• Easily divisible: you don't have to buy 1 BTC at a time, you can buy 1 Satoshi, which represents one, one hundred millionth of a Bitcoin, thus better than gold which must be physically carried and divided
• Durable: gold doesn't tarnish, but Bitcoin cannot tarnish, and the network has operated nearly flawlessly, continuously, and reliably since inception
• Fungible: one Bitcoin is replaceable by another. Dollars may actually be cooler in this regard because some physical dollars have become collectors items for various reasons
• Fraud resistant: Bitcoin is a source of truth based on mathematics, computer verification, and publicly auditable code. The Bitcoin network has never been hacked, and the internet only requires a few computers anywhere on earth to connect to each other for the network to remain operational.
• Scarce: all goods and services have gone DOWN when priced in Bitcoin. From a performance perspective, 100% of negative predictions about Bitcoin have been wrong for 14 years. Perhaps it's time to allocate between 1 to 5% of your portfolio into this new asset class as a way to protect your purchasing power.

Of course Bitcoin is volatile, but that's because it is priced in dollars. The mistake most investors make is keeping 100% of their wealth in US dollar denominated assets, i.e. stocks, bonds, cash, real estate, gold, etc. But what do we know will happen to dollars with certainty over time? They will lose purchasing power due to inflation. To me, that is risky.

 

I see Bitcoin as a way to derisk your portfolio by allocating a small portion away from fiat based money systems. It is a rational decision at this point now that all of the world's largest institutions have purchased it, the US government is one of its largest holders, and its purchasing power has increased for 15 years. There has never been an asset bubble that lasted 15 years.

 

Hopefully, this convinces some of the naysayers to start drinking a small cup of the Bitcoin Kool-aid.

 

My clients understand the income I am generating for them result from the massive secular Bitcoin tailwind operating in the strategy's favor, and maybe I'm decent at what I do.

 

 

Very well said.  I agree that having everything you own in USD is risky, and bitcoin is the hedge.  

As for the energy it takes to secure it: