Cryptocurrencies

[TwoCitiesCapital]

Bitcoin down bigly over the last two days while markets rumble on Coronavirus concerns.

 

10-year treasuries hitting all time lows and, while down today, GLD is up over the two day period so far.

 

Still don't think Bitcoin behaves like other safe-havens and shouldn't be considered one.

 

And once again....Bitcoin down 43% over the last 24 hours. This is NOT a safe haven asset.

 

 

[Mark Jr.]

Bitcoin down bigly over the last two days while markets rumble on Coronavirus concerns.

 

10-year treasuries hitting all time lows and, while down today, GLD is up over the two day period so far.

 

Still don't think Bitcoin behaves like other safe-havens and shouldn't be considered one.

 

And once again....Bitcoin down 43% over the last 24 hours. This is NOT a safe haven asset.

 

It’s volatile to be sure. For a new asset class that has only existed for a few years, it’s to be expected. Still, up over 33% since this last comment. What I’m really interested in seeing is  how it performs once the wealth taxes, capital controls and bail-ins start happening.

[SharperDingaan]

There's a reason why there is so much volatility.

https://finance.yahoo.com/news/bitcoin-options-market-faces-record-165729812.html

 

SD

[TwoCitiesCapital]

Bitcoin down bigly over the last two days while markets rumble on Coronavirus concerns.

 

10-year treasuries hitting all time lows and, while down today, GLD is up over the two day period so far.

 

Still don't think Bitcoin behaves like other safe-havens and shouldn't be considered one.

 

And once again....Bitcoin down 43% over the last 24 hours. This is NOT a safe haven asset.

 

It’s volatile to be sure. For a new asset class that has only existed for a few years, it’s to be expected. Still, up over 33% since this last comment. What I’m really interested in seeing is  how it performs once the wealth taxes, capital controls and bail-ins start happening.

 

No doubt. To be clear - I own it. I'm not detracting from Bitcoin ownership at all. Just cautioning that it is NOT a safe-haven asset and juxtaposing it's performance against other "safe-haven" or "crisis-hedge" type assets.  If you own this going into a crisis and you're in for a wild-ride like the 50% price dump we saw over-night in March. Safe haven's don't do that.

 

Best case scenario is that it has zero correlation to stocks. Most likely case is that it is slightly correlated to stocks because it is a risk-based asset class for those seeking risk exposure.

[SharperDingaan]

Bitcoin down bigly over the last two days while markets rumble on Coronavirus concerns.

 

10-year treasuries hitting all time lows and, while down today, GLD is up over the two day period so far.

 

Still don't think Bitcoin behaves like other safe-havens and shouldn't be considered one.

 

And once again....Bitcoin down 43% over the last 24 hours. This is NOT a safe haven asset.

 

It’s volatile to be sure. For a new asset class that has only existed for a few years, it’s to be expected. Still, up over 33% since this last comment. What I’m really interested in seeing is  how it performs once the wealth taxes, capital controls and bail-ins start happening.

 

No doubt. To be clear - I own it. I'm not detracting from Bitcoin ownership at all. Just cautioning that it is NOT a safe-haven asset and juxtaposing it's performance against other "safe-haven" or "crisis-hedge" type assets.  If you own this going into a crisis and you're in for a wild-ride like the 50% price dump we saw over-night in March. Safe haven's don't do that.

 

Best case scenario is that it has zero correlation to stocks. Most likely case is that it is slightly correlated to stocks because it is a risk-based asset class for those seeking risk exposure.

 

Think of 'safe haven' - as Long Bitcoin PLUS Long Bitcoin Put.

Every time it drops radically sell the put, buy it back on the bounce, keep the cash difference. Volatility is your friend  ;)

Just keep in mind that Bitcoin options are NOT a deep market. Same thing, but on the major indexes, is a lot safer.

 

SD

 

[TwoCitiesCapital]

Bitcoin down bigly over the last two days while markets rumble on Coronavirus concerns.

 

10-year treasuries hitting all time lows and, while down today, GLD is up over the two day period so far.

 

Still don't think Bitcoin behaves like other safe-havens and shouldn't be considered one.

 

And once again....Bitcoin down 43% over the last 24 hours. This is NOT a safe haven asset.

 

It’s volatile to be sure. For a new asset class that has only existed for a few years, it’s to be expected. Still, up over 33% since this last comment. What I’m really interested in seeing is  how it performs once the wealth taxes, capital controls and bail-ins start happening.

 

No doubt. To be clear - I own it. I'm not detracting from Bitcoin ownership at all. Just cautioning that it is NOT a safe-haven asset and juxtaposing it's performance against other "safe-haven" or "crisis-hedge" type assets.  If you own this going into a crisis and you're in for a wild-ride like the 50% price dump we saw over-night in March. Safe haven's don't do that.

 

Best case scenario is that it has zero correlation to stocks. Most likely case is that it is slightly correlated to stocks because it is a risk-based asset class for those seeking risk exposure.

 

Think of 'safe haven' - as Long Bitcoin PLUS Long Bitcoin Put.

Every time it drops radically sell the put, buy it back on the bounce, keep the cash difference. Volatility is your friend  ;)

Just keep in mind that Bitcoin options are NOT a deep market. Same thing, but on the major indexes, is a lot safer.

 

SD

 

You can do this with any asset including an equity. The existence of protective puts does not make it a safe haven. It's just a trade of decreasing risk for decreasing return.

 

Anyways, I'm sure this debate is useless. Those who believe it's a crisis hedge can buy it and ride the vicissitudes of +/- 30-50% swings if they so choose.

 

I'm just not disillusioned into believing this is a replacement for traditional safe haven assets and did not want others to be confused into thinking but was.

 

For a longer term perspective - gold is near all time highs. Treasuries are near all time highs. Bitcoin needs more than a 100% return to get to all time highs. There's obviously something very different about its behavior compared to other traditional safe-havens.

[SharperDingaan]

Agreed, Bitcoin is not what most would consider a safe haven. However, if you are willing to continuously hedge via puts, you ARE protected against price decline during the life of the puts - as you would be in any market. Comes down to the reason for the Bitcoin, and whether the holding is temporary or not.

 

More relevant, is that people are slowly realizing that widespread QE means widespread FX devaluation. Not noticeable if relative to each other, the other major currencies devalue at about the same rate. But much more noticeable if ONE of the currencies (gold) is devaluing at a slower rate (additional net supply of gold/year). The slower depreciating currency appreciates.

 

SD

 

[TwoCitiesCapital]

https://www.coindesk.com/bitcoins-price-correlation-with-sp-500-hits-record-highs

 

Record correlation with S&P 500 at the current time. Obviously a changing relationship, but just another bullet in the "not a safe haven" column.

[Gregmal]

Sooo...lots has and hasn't changed here since all the +1 worthy "it fell when everything else did, I knew it was bs" stuff happened back in March. The larger question regarding the "thesis" here(if you will call it a thesis for the funny money), is still:

 

-scarcity

-acceptance/adoption as store of value

-lack of government interference

 

The first two seemed to have only strengthened with recent events, and while the third issue is still up for debate, it seems less of a risk as incompetence festers elsewhere(all that money printing) and banks now, even some of the TBTF ones, start getting involved. Is there any reason this is not likely to be taking out ATHs?

 

There's certainly a lot of funky stuff trading at bubble type valuations right now, but this at least is in its own universe of uniqueness as an "asset"(if you will give it that benefit of the doubt). It may, as I said much earlier in this thread, be another case of the little guy catching on before the institution, and after a "scare the little guy out and accumulate" campaign from the institutions for the past couple years, it may be time for a new chapter here.

[Fat Pitch]

Sooo...lots has and hasn't changed here since all the +1 worthy "it fell when everything else did, I knew it was bs" stuff happened back in March. The larger question regarding the "thesis" here(if you will call it a thesis for the funny money), is still:

 

-scarcity

-acceptance/adoption as store of value

-lack of government interference

 

The first two seemed to have only strengthened with recent events, and while the third issue is still up for debate, it seems less of a risk as incompetence festers elsewhere(all that money printing) and banks now, even some of the TBTF ones, start getting involved. Is there any reason this is not likely to be taking out ATHs?

 

There's certainly a lot of funky stuff trading at bubble type valuations right now, but this at least is in its own universe of uniqueness as an "asset"(if you will give it that benefit of the doubt). It may, as I said much earlier in this thread, be another case of the little guy catching on before the institution, and after a "scare the little guy out and accumulate" campaign from the institutions for the past couple years, it may be time for a new chapter here.

 

There's a shift happening at rapid speed. A software business analytics company decided to allocate 250mm into Bitcoin instead of holding treasuries that pay nothing. People are slowly waking up that Bitcoin isn't a currency to be used day to day, but rather a substitute for the global bond market.

 

Also there's lots of innovation coming out of Ethereum via the "defi" movement which is basically porting all the functionalities of banks, Wall Street, etc onto the Ethereum stack which will probably spread to other smart contract layer 1s.

 

Having been in the space for the last 4 years+ this environment was what Bitcoin was built for. We are going to blow past ATHs and melt faces  8)

[SharperDingaan]

There are really only 2 cryptocurrencies of consequence, BTC and ETH.

Neither of them useful as an actual currency to pay for things.

 

BTC will get its day in the sun, because of collapsing global currencies. Gold is great, and anonymous (once everything is melted together) - but in quantity, not easy to move around. To facilitate movement, BTC is the obvious anonymous choice. ETH will shine, because of its versatile stack, and increasing business understanding as to how to use it - Covid is just accelerating the process. The biggest beneficiary is marketing - as you can't grow a business, until you can sell more product.

 

SD

 

 

 

 

 

 

[LC]

https://thecorrespondent.com/655/blockchain-the-amazing-solution-for-almost-nothing/86649455475-f933fe63

 

[SharperDingaan]

Crypto grew up in the tech community – as the shiny new toy, all very mysterious, very cool, and relatively simple to code. We think currency, because of the success of Bitcoin - the first practical, fully libertarian currency. Combined with options, BTC is by far the ultimate solution for low volume, completely off the grid, anonymous transactions. The innovations are the DL and the Smart Contract.

 

By itself, at the volumes required for practical applications - DL is utter sh1te.

Block verification takes too long, sucks up too much energy, and the mining community is not independent. It is technology with a VERY limited market – the $5 mouse-trap in a 10c market.

 

Almost all practical applications run on a monopoly PL – a master data base integrated with smart contracts. The PL is just another business funded IT project -  business ‘tells’, IT ‘executes’. There are no miners, no utility token sold for cash to pay the coders and developers, and no buy/sell of token as investments. Grown ups rule.

 

For most businesses a PL integrated with smart contracts is becoming essential, and many will just outsource to a cloud provider. What used to require a cast of thousands, and millions of $ – is no longer a barrier to entry. However, the mind set is completely different – coders and developers just don’t have it.

 

The deal-breaker is the corporate social responsibility around implementation.

The initial annual cost for a very modest business may be the equivalent of 3 staff, excluding benefits – but save the cost of 5 staff including benefits and RE space. Assuming 50K/head and 25% benefits – about 162.5K/yr, excluding RE savings. With Covid-19 likely to be with us for some time, and most economies in various phases of ‘re-start’ – not enough to warrant laying people off tomorrow, and in quantity.

 

Obviously, interesting times.

 

SD

 

 

[beerbaron]

Crypto grew up in the tech community – as the shiny new toy, all very mysterious, very cool, and relatively simply to code. We think currency, because of the success of Bitcoin - the first practical, fully libertarian currency. Combined with options, BTC is by far the ultimate solution for low volume, completely off the grid, anonymous transactions. The innovations are the DL and the Smart Contract.

 

By itself, at the volumes required for practical applications - DL is utter sh1te.

Block verification takes too long, sucks up too much energy, and the mining community is not independent. It is technology with a VERY limited market – the $5 mouse-trap in a 10c market.

 

Almost all practical applications run on a monopoly PL – a master data base integrated with smart contracts. The PL is just another business funded IT project -  business ‘tells’, IT ‘executes’. There are no miners, no utility token sold for cash to pay the coders and developers, and no buy/sell of token as investments. Grown ups rule.

 

For most businesses a PL integrated with smart contracts is becoming essential, and many will just outsource to a cloud provider. What used to require a cast of thousands, and millions of $ – is no longer a barrier to entry. However, the mind set is completely different – coders and developers just don’t have it.

 

The deal-breaker is the corporate social responsibility around implementation.

The initial annual cost for a very modest business may be the equivalent of 3 staff, excluding benefits – but save the cost of 5 staff including benefits and RE space. Assuming 50K/head and 25% benefits – about 162.5K/yr, excluding RE savings. With Covid-19 likely to be with us for some time, and most economies in various phases of ‘re-start’ – not enough to warrant laying people off tomorrow, and in quantity.

 

Obviously, interesting times.

 

SD

 

What do you mean by DL and PL?

 

Thanks

BeerBaron

[LC]

private ledger vs public (distributed) ledger

[SharperDingaan]

private ledger vs public (distributed) ledger

 

Think of the public ledger (PL) as a ledger that that any member of the public can access, but with only 3 or more copies distributed amongst private entities. New activity updating on each DB in real time, and independently. The individual DB's validating against each other multiple times/day, and resolving any differences via an algorithm. One of the DB's residing at either the Central Bank or the Industry Regulator. It's the ultimate 'toll-booth'.

 

Think of any given nation having MULTIPLE public ledgers, and the worlds public ledgers together - as the Internet of Things (IoT). As with everything there will be consolidation, and the obvious first choice is money itself - the worlds reserve currency NO LONGER being the currency of just one nation (ie: USD).

 

Disruption isn't just a word.

 

SD

[Mark Jr.]

If anyone is interested, I just did a podcast in my weekly series where we interviewed Brenna Smith, who is a crypto reporter and we talked a lot about the difference between government digital currencies, which are coming, and how BTC fits in after that happens.

 

https://axisofeasy.com/podcast/salon-20-brenna-smith-where-does-bitcoin-fit-in-after-nation-states-embrace-digital-currencies/

[SharperDingaan]

Always keep in mind that BTC is just the obverse side of digital currency. It is extremely good at what it does, hedgeable, and highly suitable for large transactions that would otherwise be visible. The problem is that the founding libertarian view of BTC's use, and the criminal view of BTC's use, almost perfectly overlap. 

 

The good news is that it puts a cap on both transaction frequency, and mining cost. Total mining fees for the materially major activity < total cost of laundering, or about 1-3% of aggregate transaction value. The end by-product is reduction in overall money-laundering activity, and recognition of mining fee as a commission. Commission means demonstrate application value, benefit > cost.

 

Good link!

 

SD

 

[mattee2264]

 

Any of you familiar with a product called Bitcoin Tracker One?

 

https://coinshares.com/etps/xbt-provider/bitcoin-tracker-one

 

Unfortunately Grayscale Bitcoin Trust is no longer available in the UK and I was looking for something that could be held within a retirement account so as to avoid capital gains tax. Also I am a bit leery holding bitcoin directly or via Revolut because of security issues.

 

 

[SharperDingaan]

Not familiar with Bitcoin Tracker One, I use Coinsquare and assume that it will be hacked. Move token in/out for the trade, and cold-store directly at Mt Gox. My reliance is on Canadian regulatory BoC/OSFI enforcement, as I assume Coinsquare enforcement is rubbish. https://coinsquare.com/

 

For most uses, BTC as an investment in a retirement account just isn't worth the effort - regulation &/or adequate instruments haven't sufficiently evolved yet. If you insist on speculating in BTC, assume 2-3 swing trades per year, and accept the tax as just another cost of doing business. Sometimes you will be paying tax, sometimes the tax man will be paying you.

 

BTC is also NOT an investment, just as holding a USD is NOT an investment.

Sure you can buy/sell to capture a valuation difference, but BTC is just a parking spot - it could just as easily have been a tulip, or a 2nd property, denominated in the other currency. If the investment objective is protection against inflation, simply hold bullion directly &/or units of a precious metals fund.

 

SD

 

 

 

[Castanza]

 

Any of you familiar with a product called Bitcoin Tracker One?

 

https://coinshares.com/etps/xbt-provider/bitcoin-tracker-one

 

Unfortunately Grayscale Bitcoin Trust is no longer available in the UK and I was looking for something that could be held within a retirement account so as to avoid capital gains tax. Also I am a bit leery holding bitcoin directly or via Revolut because of security issues.

 

Get a hardware wallet https://www.ledger.com/

[TwoCitiesCapital]

 

Any of you familiar with a product called Bitcoin Tracker One?

 

https://coinshares.com/etps/xbt-provider/bitcoin-tracker-one

 

Unfortunately Grayscale Bitcoin Trust is no longer available in the UK and I was looking for something that could be held within a retirement account so as to avoid capital gains tax. Also I am a bit leery holding bitcoin directly or via Revolut because of security issues.

 

Get a hardware wallet https://www.ledger.com/

 

I second the hardware wallet approach, but not certain that it helps in a retirement account unless if there is some way to do it via self-directed accounts.

 

OP - are you able to access foreign markets? GBTC trades here in the US and is probably accessible through a broker like Interactive Brokers.

[rkbabang]

 

Any of you familiar with a product called Bitcoin Tracker One?

 

https://coinshares.com/etps/xbt-provider/bitcoin-tracker-one

 

Unfortunately Grayscale Bitcoin Trust is no longer available in the UK and I was looking for something that could be held within a retirement account so as to avoid capital gains tax. Also I am a bit leery holding bitcoin directly or via Revolut because of security issues.

 

Get a hardware wallet https://www.ledger.com/

 

I second the hardware wallet approach, but not certain that it helps in a retirement account unless if there is some way to do it via self-directed accounts.

 

OP - are you able to access foreign markets? GBTC trades here in the US and is probably accessible through a broker like Interactive Brokers.

 

I think the point is to keep your BTC in a hardware or paper wallet and not hold it in a retirement account.

 

[Castanza]

Some interesting talks coming up regarding Central Bank Digital Currencies

 

https://meetings.imf.org/en/2020/Annual/Schedule/2020/10/19/imf-cross-border-payments-a-vision-for-the-future

 

Interesting read by Mark Carney

 

https://www.bankofengland.co.uk/-/media/boe/files/speech/2019/the-growing-challenges-for-monetary-policy-speech-by-mark-carney.pdf

[SharperDingaan]

CBDC has been in 'test' for some time (eKrone), and has been very successful. The current push is because of Libra, the digital currency that will be used on Facebook to facilitate payments between Facebook accounts anywhere in the world. Every nation in the world quoting a bid/ask fiat/Libra exchange rate, and every other global Google/Amazon/AliBaba, etc doing much the same thing. Go into an FX exchange and you will see two boards - one for fiat currencies, and one for digital.

 

Transformative, as a Libra would not be under anyone's regulatory control, and backed only by the full faith and credit of Facebook/Zuckerberg. Coin backed by Facebook, Google, Amazon, etc. having a higher credit rating than some sovereigns? Great idea of course, until the one ring that rules them all shows up (Lord of the Rings). A master CBDC, backed by the worlds central bank (and its network of CB's).

 

ONE master digital currency, as the reserve currency of the world, and every transaction in that currency (anywhere in the world) visible to central banks. All the quant data that you could possibly want, materially less tax leakage, and far harder to money-launder. Reduce the quantity of physical bills (issued by CB's), and you have to take payment in goods that keep accumulating. Inventory is a bitch!!!!, and the bigger your acorn pile, the more visible it is, and the more likely your 'friends' are to liberate it. The age-old problem of wealth - easy to get rich, keeping it is something else  ;)

 

The wise accountant would simply dump the inventory at a loss, put the proceeds into Bitcoin, and hedge the value via options/futures. Problem is, the Bitcoin wallet it went into is visible, as well as any transfers out of that wallet - and the ledgers have to be visible to keep the 'system' honest. Ways around this of course, but they cost - and some Oracle, 'somewhere', knows who you are - as they issued the keys to the wallet. Simply make the Oracle an offer that it cannot refuse?

 

Welcome to the 21st century.

My money is on the master digital currency.

 

SD

 

 

 

 

 

 

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