Cryptocurrencies

[Investmentacct]

A young person would be far better off using the USD 15,400 to learn coding instead, and simply contracting out some of their weeknights/weekends to do coding. Pays way better than McDonalds; at USD 25/hr you only need code an average 25-30 hrs/month to make 50%+/yr on your investment. Not that big a big stretch.

 

This may be true, but I'm not a young person (most on this board aren't).  I already know how to code.  This advice can be given to someone thinking of investing in anything.  If you are a young person, invest in acquiring skills first and foremost, but this is an investment board not a career advice board for young people.

 

Yup that was an empty statement. A young person would be far better off using the USD 15,400 to learn coding instead of <b>buying anything else</b>.

If same young person would able to learn to code from YouTube/Twitter/Coursera universities and get a working job , still would able to save USD 15,400 and putting money in BTC would secure future as BTC’s (287Bln) asymmetric payoffs continue for sometime to match market caps of other asset types.

[Fly]

Good read from Willy Woo

 

https://willywoo.substack.com/p/the-organic-rally

[Gregmal]

https://seekingalpha.com/news/3633845-stanley-druckenmiller-buys-bitcoin

[Chris]

Can you guys explain what Michael J Saylor means here with the incorrectness of the CPI in more detail?

 

I don't really buy the idea that you have to discount every cashflow by 15 or 20 percent. Maybe I don't understand it, but I don't think a lot of big moat businesses face inflationary risk.

Also, I don't think the real inflation is 20%. What about real estate or commodity business that are irreplaceable?

 

I don't get this premise at all. Does he really think we all get 20% poorer each year in real terms buying power? Please enlighten me guys  :D

[SharperDingaan]

He's twisting interpretation to justify his BTC investment, and make it NOT look like the punt it is. One can be pretty sure that he got the long BTC at a deep discount (25-35%), and used some of the 'saving' to hedge it with with put options and futures. As long as the asset (BTC) is volatile, and MTM settlement is guaranteed, he does well. The why he's in BTC.

 

The inflation rant is an exaggeration. CPI is the best measure we have, and it is easy to adjust - the rich man's basket of goods is also very different to the poor man's. If you day-trade all day, including changes in the value of your assets AND your liabilities is valid, but you aren't main street. CPI is a measure of MAIN STREET inflation, not rich man inflation.

 

At 4B invested, the 30% liquidity discount is roughly 1.7B. Deduct 100M to set up option/futures hedges, and even a monkey should well. Smart investment; but it really says that a big player in the BTC space is trying to get out, and is trying to create liquidity events to do it. BTC didn't just run up to 19K/BTC by itself!

 

30%? Typical collateralization requirements on stable-coin are 130-150%.

More collateral for a larger exchange, stop-loss starts at a higher collateralization rate. MORE volatility.

Good for everyone ;D

 

SD

 

[Gregmal]

all time high today

[thowed]

Gregmal - Cheers for the Druckenmiller info, which I'd missed.

 

Some of the Bitcoin fanatics have overegged what he said, of course, but he makes some typically wise remarks about the relative timelines of the 'brands' of both Gold and Bitcoin.

 

 

[SharperDingaan]

Just to throw some numbers out ...

 

5.7B USD/17,500 USD (assumed price.BTC) = 325,000 BTC. And this is just one of a few of these 'elephant' transactions

It is highly unlikely that any one/few parties has this many BTC, unless they were around BEFORE the famous Bitcoin Pizza purchase (10,000 BTC for 2 large pizza). That transaction was May 2010, and we know that Hanyecz accumulated at least 50,000 BTC+ over a lifetime of mining.

 

If the 325,000 BTC is one of a few transactions from a small group (>50% p(x)), this group was mining in 2009 and prior.

The Satoshi Nakamoto  ;) paper was published in 2008 ....

 

https://www.cryptoiqtrading.com/the-bitcoin-pizza-guy-actually-spent-50000-bitcoins-on-pizza-over-the-course-of-his-life/

https://www.newsbtc.com/news/bitcoin/bitcoin-pizza-day-anniversary/

https://news.bitcoin.com/satoshi-nakamotos-bitcoin-white-paper-a-12-year-old-summary-of-robust-unstructured-simplicity/

 

Bitcoin may be anonymous - but it's only if you are doing small transactions.

Good luck to them!

 

SD

 

[Gregmal]

https://seekingalpha.com/news/3641411-cryptocurrency-indexes-coming-to-s-and-p-dow-jones-in-2021

 

 

This is one of the greatest front running opportunities Ive ever seen, happening in slow motion, right in front of everyones faces over the past 12 months and likely to continue for the next several years. The greater the popularity, the more the institutional demand, the tighter the free float gets, so on and so forth. As a wise man once said, to infinity, and beyond!

[Fat Pitch]

Taking a small victory lap. For those that think you have missed the boat you have to realize we are still early. Bitcoin going towards 6 figures is almost a foregone conclusion.

 

Defi on the other hand look more interesting. Protocols like AAVE have successfully ported all the utility of commercial banks into smart contracts and removed 99.99% of the overhead costs of running such an operation. We are still very early as these protocols start to soak up capital across the globe as a banking platform for everyone. I think we are going to witness these projects surpassing the market capitalization of the current large financial institutions.

 

 

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]

You might want to refresh yourself on the current state of database technology, and Quickbase. Effectively Database 4.0.

 

Unlike ancient times, the data referenced is now a unique registry token and its related blockchain. The database is essentially a library of registry token, where each token represents a 'thing', inclusive of its immutable golden record. ie: each token representing a specific customer of the firm, and an audited record of every transaction between that customer and your firm - with querying driven from specific nodes on the Merkle tree. Simple thing from that to feeding an AI logo, to put the right custom marketing in front of the right customer at the right time. Incremental sales for little more than the cost of electricity and depreciation on the algo. https://www.quickbase.com/articles/timeline-of-database-history.

 

Were you only to do business against a fully funded escrow, secured against a customer deposit, or a letter of credit - you would also almost instantly eliminate the vast bulk of billing, A/R, A/P, collections, and bad debt expense from most companies. The OH saving, and competitive advantage is both stunning - and where the real money is  ;)

 

SD

 

 

 

 

 

[TwoCitiesCapital]

 

MicroStrategy buying another $50 million @ 19.5k in addition to the $250 million they bought a month or two ago.

 

Institutional demand is here and is growing. And if 1-2 buyers are taking 50+% more of new supply (estimated that Pay Pal alone is 70% of new supply at the moment), the price will have to move upwards with every incremental institutional buyer entering the market.

 

 

[Gregmal]

Yup, and unless you have been to the sausage factory, you are prone to underestimate the inevitability of this continuing and accelerating. As more and more institutions begin to get in, which in large part simply means offering "product", this is going to get fun. Why? Because product sellers dont give one shit about price. Druckenmiller and friends might, although its hard to talk about valuations with something like this, but the institutions putting together a crypto ETF or BTC offering? $10k, $50k, $100k, $1M per coin? Makes no difference. They'll be buying as long as demand continues. Buying will beget more buying. Momo will take over. Real float is maybe 12M. I mean you dont even really have widespread, easy + direct access products for retail investors at the brokerages houses yet. And we already know this will work. Look at what indexing and ETF products did for FANGs...

[widenthemoat]

Yup, and unless you have been to the sausage factory, you are prone to underestimate the inevitability of this continuing and accelerating. As more and more institutions begin to get in, which in large part simply means offering "product", this is going to get fun. Why? Because product sellers dont give one shit about price. Druckenmiller and friends might, although its hard to talk about valuations with something like this, but the institutions putting together a crypto ETF or BTC offering? $10k, $50k, $100k, $1M per coin? Makes no difference. They'll be buying as long as demand continues. Buying will beget more buying. Momo will take over. Real float is maybe 12M. I mean you dont even really have widespread, easy + direct access products for retail investors at the brokerages houses yet. And we already know this will work. Look at what indexing and ETF products did for FANGs...

 

Isn’t this literally the definition of a bubble? Buying begets buying? Are you just planning on selling before the music stops?

[rkbabang]

Yup, and unless you have been to the sausage factory, you are prone to underestimate the inevitability of this continuing and accelerating. As more and more institutions begin to get in, which in large part simply means offering "product", this is going to get fun. Why? Because product sellers dont give one shit about price. Druckenmiller and friends might, although its hard to talk about valuations with something like this, but the institutions putting together a crypto ETF or BTC offering? $10k, $50k, $100k, $1M per coin? Makes no difference. They'll be buying as long as demand continues. Buying will beget more buying. Momo will take over. Real float is maybe 12M. I mean you dont even really have widespread, easy + direct access products for retail investors at the brokerages houses yet. And we already know this will work. Look at what indexing and ETF products did for FANGs...

 

Isn’t this literally the definition of a bubble? Buying begets buying? Are you just planning on selling before the music stops?

 

When the bubble gets to its high, maybe BTC $2M then after it crashes it will settle back to $500k.

[widenthemoat]

Yup, and unless you have been to the sausage factory, you are prone to underestimate the inevitability of this continuing and accelerating. As more and more institutions begin to get in, which in large part simply means offering "product", this is going to get fun. Why? Because product sellers dont give one shit about price. Druckenmiller and friends might, although its hard to talk about valuations with something like this, but the institutions putting together a crypto ETF or BTC offering? $10k, $50k, $100k, $1M per coin? Makes no difference. They'll be buying as long as demand continues. Buying will beget more buying. Momo will take over. Real float is maybe 12M. I mean you dont even really have widespread, easy + direct access products for retail investors at the brokerages houses yet. And we already know this will work. Look at what indexing and ETF products did for FANGs...

 

Isn’t this literally the definition of a bubble? Buying begets buying? Are you just planning on selling before the music stops?

 

When the bubble gets to its high, maybe BTC $2M then after it crashes it will settle back to $500k.

 

 

...so yes. How did you get to $500k? Seems rather arbitrary to me... This stuff is junk and not an investment. In the words of Charlie, even if you make money you’re still a jerk

[Gregmal]

Lots of money can be made in bubbles. And realistically, people call bubbles all the time but dont really even know what they're talking about until its too late. Same with recessions. Amazon was called a bubble stock its entire existence until the bubble callers got tired and just bought it about 3 years ago and now call it a legit investment. Tesla is still called a bubble. Who cares? I'm only interested in being on the side that makes money. I get no more satisfaction or money out of getting 10% on a long term held, vs a short term trade or merger arb, a loan, or flipping potatoes....only thing that matter is the P&L...and frankly, the folks who spend a decade missing out so they can have their 6-12 months of "I was right" can have it, I'd rather make money. This is another instance where the bubble can burst, my current BTC goes to zero, and I still have made out better than folks who sat on the sidelines scoffing and doing nothing.

[widenthemoat]

Lots of money can be made in bubbles. And realistically, people call bubbles all the time but dont really even know what they're talking about until its too late. Same with recessions. Amazon was called a bubble stock its entire existence until the bubble callers got tired and just bought it about 3 years ago and now call it a legit investment. Tesla is still called a bubble. Who cares? I'm only interested in being on the side that makes money. I get no more satisfaction or money out of getting 10% on a long term held, vs a short term trade or merger arb, a loan, or flipping potatoes....only thing that matter is the P&L...and frankly, the folks who spend a decade missing out so they can have their 6-12 months of "I was right" can have it, I'd rather make money. This is another instance where the bubble can burst, my current BTC goes to zero, and I still have made out better than folks who sat on the sidelines scoffing and doing nothing.

 

Sounds pretty arrogant to me to try and predict the madness of men. Not a great long term strategy in my opinion. Good luck

[Gregmal]

Predicting trends(really just momentum), and especially behavior of the masses is actually quite easy once you figure out what to look for.

 

If you are not in the markets to make money you should not be in the markets at all. If you are not able to adapt, well, you'll be like Einhorn, Pabrai, Klarman, Watsa, Tilson, Lampert, Cooperman, etc, etc, etc. I could go on and on. And while for most its comforting being in the same camp as all those guys and their current net worths, stalely quoting dated aphorisms from 50 year old books is often the biggest hurdle for folks to get over if they truly wish to consistently make money. The secret isn't quoting old books and 90 year old men, but maintaining flexibility and fluidity with respect to the current market and its conditions. Thats why Tepper is in a league of his own.

 

"I know this is going to go up but I think its a bubble/scheme/poor valuation" is the dumbest thing I consistently hear from smart people. Either they are full of it, or just not cut out to invest. Because if you know something is going up, and you refuse to take advantage of it, thats stupidity.

[Spekulatius]

The bull case is that it’s just a Ponzi scheme getting started , I guess.

 

It is a bit concerning to the bull case that they’re are so few bears out there, since almost anyone seems to thinks BTC is going up.

[ratiman]

The bitcoin run in 2017 was a wild ride full of thrills and laughs and great memories. This is a grim grind higher driven mostly by strategically timed press releases. It's going to be hilarious when 100 hedge fund managers simultaneously realize that they're the bagholders.

[Gregmal]

My guess is that when that happens it will look like some of the posts/posters on end of page 94/ start of page 95 of this thread....and that will mark another bottom. I always enjoy seeing the "I told you so's". They usually end up being a contrarian indicator.

[ratiman]

Manias don't happen twice. You can't get the public in a frenzy a second time about a distributed public ledger. I'll be glad to come back here again and admit that I was wrong but I think all the sharks cornering the float are like those guys who bought up all the hand sanitizer and had nobody to sell it to.

[widenthemoat]

Bitcoin reminds me of something I heard in a Peter Lynch speech. See link below, starting at 2:40 mark.

 

[Gregmal]

The answers to Lynch's theoretic query can be summed up in as little as 3 words and as many as one sentence.

 

3 words: supply and demand. bonus word: catalyst

 

One sentence: take everything people apply to gold, and it applies to BTC but put on steroids, with one notation; replace the physical brick and mortar aspect with a digital one.