Cryptocurrencies

[Longnose]

It does feel good I was buying btc under 20k. 

 

I do think it's premature to say we're gonna hold up though. Still may collapse again. 

 

Hope you didn't lose to much in celcius.

[jfan]

For those interested in btc mining economics courtesy of horizon kinetics 

Mining-Economics-What-Drives-the-Bitcoin-Price_Sep-2022_Final.pdf

[TwoCitiesCapital]

https://finbold.com/investors-ditch-the-euro-and-pound-for-bitcoin-in-record-numbers-as-their-value-plummets/

 

Record amounts of EUR and GBP buys, not mirrored by USD volumes, suggest people are fleeing those currencies and not just speculating in BTC. 

 

It's also telling that by buying BTC, they're casting a vote of confidence in it being the best store of value/currency alternative b/c they could've bought the USD, gold, or any other currency. 

[UK]

https://www.bloomberg.com/news/articles/2022-10-13/bitcoin-btc-becoming-less-volatile-than-stocks-raises-warning-flag

 

And even though lower volatility is typically welcomed in the stock market, for instance, the combo could spell trouble for Bitcoin, where there tend to be plenty of speculators who enter the space purely for the thrill of the swings. 

 

 

[TwoCitiesCapital]

11 hours ago, UK said:

https://www.bloomberg.com/news/articles/2022-10-13/bitcoin-btc-becoming-less-volatile-than-stocks-raises-warning-flag

 

And even though lower volatility is typically welcomed in the stock market, for instance, the combo could spell trouble for Bitcoin, where there tend to be plenty of speculators who enter the space purely for the thrill of the swings. 

 

 

 

It's correlation to stocks has been falling this and the correlation to gold rising - which is a positive. 

 

But it's still fairly positively correlated to equities. I would like to see it gets back to the pre-2020 trend of zero correlation to equities before becoming super bullish on it again, but the amount of accumulation and "HODLing" is stunning. 

 

Something like 65-70% of BTC circulating supply hasn't moved in the last year despite the continued onlsaught of falling prices. The trend has been more and more leaving exchanges (typically signals an unwillingness to trade it) suggesting this is only going to get tighter. 

 

And "moving" doesn't = selling (or the intention to sell) like me moving all of my BTC deposits off of BlockFi/Ledn/Nexo/etc earlier this year to hold on a hardware wallet. 

 

So less than 30% of existing supply is currently being traded and we're approaching another halving of miner supply in the next 12-15 months further constraining future supply.

 

Any return of retail demand whatsoev is going to result in a massive squeeze. 

[SharperDingaan]

If you live in Europe, the HODL is actually a fairly good investment  Your store of wealth is not trapped in any one country, and its value it likely to rise (in local currency) both from the coming halving, and local currency devaluation. Buying at todays low prices via a BTC dividend fund, also provides an additional margin of safety - there is a reason why 25% of our realized gains have been going into crypto.

 

Not for everyone, but a very good training tool in 'real-world' finance. You will also meet all kinds of other 'interesting' people, who are truly masters at their trade!

 

SD

[rkbabang]

I've stepped up accumulating once again.  I try to make a buy at least once per week.  I'm hoping it drifts lower on low volume as the retail investors disappear and the HODLers mostly HODL.  As long as I can buy cheap that is a good thing.

The retail investors will be back in a few years when they read about new all time highs LOL.

 

[TwoCitiesCapital]

11 minutes ago, rkbabang said:

I've stepped up accumulating once again.  I try to make a buy at least once per week.  I'm hoping it drifts lower on low volume as the retail investors disappear and the HODLers mostly HODL.  As long as I can buy cheap that is a good thing.

The retail investors will be back in a few years when they read about new all time highs LOL.

 

 

I've been trickling in, but I'm thinking as long as the correlation to equities is positive that we probably have lower to go (the recent strength notwithstanding). 

 

If I'm wrong on that over the next ~3 months or so, I'll probably start accelerating my buys.

 

Building cash/short term bonds/intermediate bonds has been working well for me this year and I don't expect that to change until there's a capitulation event in the markets or in the Fed which is where the real bargains will start. 

Edited October 14, 2022 by TwoCitiesCapital

[UK]

https://www.bloomberg.com/features/2022-the-crypto-story/?srnd=premium&leadSource=uverify wall

[Dave86ch]

Druckenmiller

 

"Because we definitely need a change, half the country hates the other half, we have mayopic economic policies, boom and bust policies, we don't really get change unless bad stuff stuff happens to catalyse the change"

 

"I can see cryptocurrencies have a big role in the renaissance"

 

 

 

 

[Aurel]

6 hours ago, Dave86ch said:

Druckenmiller

 

"Because we definitely need a change, half the country hates the other half, we have mayopic economic policies, boom and bust policies, we don't really get change unless bad stuff stuff happens to catalyse the change"

 

"I can see cryptocurrencies have a big role in the renaissance"

 

 

 

 

iirc, he said he sold his BTC.

[rkbabang]

7 hours ago, Aurel said:

iirc, he said he sold his BTC.

 

From the video interview above:

 

“Is Bitcoin for real? Do you still own Bitcoin?”

“I don’t own Bitcoin.”

“Crypto?”

“It’s tough for me to own anything like that with central banks tightening. But yeah, I still think, if the Bank of England, what they did, is followed by stuff like that by other central banks in the next 2 or 3 years. If things get really bad.  I could see cryptocurrency having a big role in a renaissance because people just aren’t going to trust the central banks. But right now I like everything I’m hearing out of the Fed and I hope they finish the job. They made a big mistake. They seem to have owned it, but it’s easy to own it when employment is strong. We’ll see what happens if we get a hard landing. I just hope they stick to their guns, because this stuff was terrible in the 70s. You have to slay the dragon and the chair is right, you’re probably going to have some pain.”

 

[Dave86ch]

11 hours ago, Aurel said:

iirc, he said he sold his BTC.

 

He tries to time the market, not my game.

 

The US are not in a great shape in my opinion, and now they are approaching a tough recession.

 

Frankly I doubt the FED can implement the necessary measures to weather this situation.

 

"Because we definitely need a change, half the country hates the other half, we have mayopic economic policies, boom and bust policies, we don't really get change unless bad stuff stuff happens to catalyse the change"

 

Druckenmiller 

Edited October 26, 2022 by Dave86ch

[UK]

https://www.wsj.com/articles/andreessen-horowitz-went-all-in-on-crypto-at-the-worst-possible-time-11666769270?mod=hp_trending_now_article_pos2

[rkbabang]

Looks like Fidelity is going to allow you to buy Bitcoin and Ethereum soon with very limited functionality at least at first: no crypto deposits or withdrawals.

 

https://www.fidelity.com/crypto/trading

 

 

[Longnose]

42 minutes ago, rkbabang said:

Looks like Fidelity is going to allow you to buy Bitcoin and Ethereum soon with very limited functionality at least at first: no crypto deposits or withdrawals.

 

https://www.fidelity.com/crypto/trading

 

 

 

Progress...

 

However 75% of the appeal of crypto to me is that I own it. I dont hold any of my crypto on exchanges. While Fidelity is a name you can "trust" I still want to own my own crypto. 

 

I want to transact in BTC. Cant do that with holding that cant leave the exchange. 

 

*edit* format

Edited November 7, 2022 by Longnose

[thowed]

I have a memory that Druckenmiller said that BTC/Crypto had a high correlation with QQQ, which makes sense to me.

 

It is tempting to start dripping in - if he's correct, it could in the longer-term just work as a levered QQQ play, plus some extra if Crypto comes back again proper.

 

[TwoCitiesCapital]

3 hours ago, thowed said:

I have a memory that Druckenmiller said that BTC/Crypto had a high correlation with QQQ, which makes sense to me.

 

It is tempting to start dripping in - if he's correct, it could in the longer-term just work as a levered QQQ play, plus some extra if Crypto comes back again proper.

 

 

That was true post-2020 when trillions in resulted in ALL risk assets going up and being correlated. 

 

But pre-2020 the correlation was basically zero. And at this point, I believe the correlation to equities is the lowest it's been since 2020 (though still positive). 

 

At some point, I'd expect it could decouple from equities given the difference in audience buying it, the different reasons for doing so, and the secular growth trend it's experiencing. 

[UK]

https://www.bloomberg.com/news/articles/2022-11-08/crypto-exchange-binance-to-buy-rival-ftx-com-terms-undisclosed?srnd=premium-europe&leadSource=uverify wall

 

Billionaire Changpeng “CZ” Zhao consolidated his position atop the crypto world on Tuesday with a stunning move to take over FTX.com, the suddenly troubled firm led by his chief rival and one-time disciple, Sam Bankman-Fried. The letter of acquisition intent by Zhao’s Binance Holdings came after a bitter feud between the two men spilled into the open, with Zhao actively undermining confidence in FTX’s finances and helping spark an exodus of users from the three-year-old FTX.com exchange. A day before reaching a deal, Bankman-Fried said on Twitter that assets on FTX were “fine.” Such moves would be prohibited on Wall Street but aren’t uncommon in this rough-and-tumble corner of finance, which remains largely devoid of regulation about a decade year after its founding. Ironically, it was Bankman-Fried who was pushing for greater regulation, something that Zhao has largely opposed. 

 

https://www.bloomberg.com/news/articles/2022-11-09/ftx-binance-deal-sam-bankman-fried-s-downfall-stuns-crypto-world?srnd=premium-europe

 

Some of FTX’s investors found out about the deal on Twitter, according to people familiar with the matter. These investors are uncertain whether they will receive any money if the agreement with Binance goes through. The list of losers in the collapse includes investors in Bankman-Fried’s exchange, valued at nearly $32 billion in a January financing. Those include blue-chip names like the SoftBank Group Corp.’s Vision Fund, the Ontario Teachers’ Pension Plan, the Singapore wealth fund Temasek Holdings Pte., hedge fund Tiger Global Management and Lightspeed Venture Partners. Following the January fund-raising, Bankman-Fried told Bloomberg the funds would likely go toward mergers and acquisitions, with possible targets including payments businesses, NFT-centric firms and the metaverse.

Edited November 9, 2022 by UK

[Viking]

What a bloodbath in crypto. Billions $ are getting eviscerated. What is the next shoe to fall? Where are the skeletons? There is no transparency/oversight in this ‘industry’ which makes the path forward pretty much impossible to call. And so much of this industry is intertwined. 
————-

i wonder how much windfall gains in crypto was fuelling economic growth in 2021. How does this now work in reverse? Is the crypto crash now bigger than the .com crash?

—————

Trust is gone. How does crypto work without trust?

Edited November 9, 2022 by Viking

[SharperDingaan]

We have been lucky, as a good chunk of our QTD gain allocation has not yet been rolled in. From the risk perspective, the smart thing is to swing trade a portion of your holding; in anticipation of a later buyback at a lower price. If/when that takes place, and at what price, is anyone's guess.

 

SD

[Luke]

1 hour ago, Viking said:

What a bloodbath in crypto. Billions $ are getting eviscerated. What is the next shoe to fall? Where are the skeletons? There is no transparency/oversight in this ‘industry’ which makes the path forward pretty much impossible to call. And so much of this industry is intertwined. 
————-

i wonder how much windfall gains in crypto was fuelling economic growth in 2021. How does this now work in reverse? Is the crypto crash now bigger than the .com crash?

—————

Trust is gone. How does crypto work without trust?

I agree with Pabrai here: Crypto will vaporize into nothing. Crypto market was around a few trillion at its all time highs, not a huge part of global wealth but certainly an effect on markets. 

 

Bitcoin is worth nothing to me, not even 1$. 

 

What exactly is crypto? 

 

Three things it could be according to Aswath Damodaran:

 

1. Asset

 

Its not an asset since it doesnt produce anything. 

 

2. Collectible

 

Collectible grow in value in inflation and are stable, look at a picasso painting, will go up in value with inflation long term, doesnt lose lots of the value, even during crisis. This is not true for bitcoin.

 

3. Currency

 

Yes, Bitcoin is a currency. But currency do not have value, they have a price. 

 

A good currency is: Stable and maintains purchasing power+is usable. 

 

Crypto or bitcoin is nothing of those. It is not stable (stable coins excluded) and you cant use it (in the majority of cases). 

 

 

 

Quote Aswath Damodaran: 

 

What the heck are you paying 20k for!!!!!!

 

 

Edited November 9, 2022 by Luca

[TwoCitiesCapital]

11 minutes ago, Luca said:

I agree with Pabrai here: Crypto will vaporize into nothing. Crypto market was around a few trillion at its all time highs, not a huge part of global wealth but certainly an effect on markets. 

 

Bitcoin is worth nothing to me, not even 1$. 

 

What exactly is crypto? 

 

Three things it could be according to Aswath Damodaran:

 

1. Asset

 

Its not an asset since it doesnt produce anything. 

 

2. Collectible

 

Collectible grow in value in inflation and are stable, look at a picasso painting, will go up in value with inflation long term, doesnt lose lots of the value, even during crisis. This is not true for bitcoin.

 

3. Currency

 

Yes, Bitcoin is a currency. But currency do not have value, they have a price. 

 

A good currency is: Stable and maintains purchasing power+is usable. 

 

Crypto or bitcoin is nothing of those. It is not stable (stable coins excluded) and you cant use it (in the majority of cases). 

 

 

 

Quote Aswath Damodaran: 

 

What the heck are you paying 20k for!!!!!!

 

 

 

Seems to me every nearly every fiat currency this year has failed this exact same test. 

 

Is +/- 20-30% really considered "stable"? 

 

Can you point one out that has maintained purchasing power over even the last 10-years? 

 

Because 10-years ago BTC was a fraction of where it's at today no matter which currency or asset you measure it in. Which one "maintained" purchasing power? 

Edited November 9, 2022 by TwoCitiesCapital

[Gamecock-YT]

 

 

Larry was right

[Parsad]

1 hour ago, Luca said:

I agree with Pabrai here: Crypto will vaporize into nothing. Crypto market was around a few trillion at its all time highs, not a huge part of global wealth but certainly an effect on markets. 

 

Bitcoin is worth nothing to me, not even 1$. 

 

What exactly is crypto? 

 

Three things it could be according to Aswath Damodaran:

 

1. Asset

 

Its not an asset since it doesnt produce anything. 

 

2. Collectible

 

Collectible grow in value in inflation and are stable, look at a picasso painting, will go up in value with inflation long term, doesnt lose lots of the value, even during crisis. This is not true for bitcoin.

 

3. Currency

 

Yes, Bitcoin is a currency. But currency do not have value, they have a price. 

 

A good currency is: Stable and maintains purchasing power+is usable. 

 

Crypto or bitcoin is nothing of those. It is not stable (stable coins excluded) and you cant use it (in the majority of cases). 

 

 

 

Quote Aswath Damodaran: 

 

What the heck are you paying 20k for!!!!!!

 

 

 

Crypto was never worth anything.  It's the blockchain backbone that is important.  It will work its way into every asset class in the future and every financial transaction.  Cheers!