Cryptocurrencies

[JRM]

who gets wiped out first, Saylor or Tether?  I'm rooting for both.

[rkbabang]

8 minutes ago, JRM said:

who gets wiped out first, Saylor or Tether?  I'm rooting for both.

 

My guess is Tether.  Saylor just has to keep holding and maybe adding and he'll be fine.

 

[Longnose]

8 minutes ago, rkbabang said:

 

My guess is Tether.  Saylor just has to keep holding and maybe adding and he'll be fine.

 

 

^^^

 

Saylor is good to go as long as he can remain solvent. I've seen several things that say hes good as long as it doesnt drop below $3000. 

 

Not to say it couldn't go back that low but Id be pretty surprised to see BTC drop back below $10K. 

[alxcii]

5 hours ago, Parsad said:

 

Nope.  Don't own any, and if I did I would smoke it!  

 

I do own a fair amount of OSTK, which has a huge portfolio of blockchain companies they've invested in over the last 7-8 years, that they are growing and will monetize over time. 

 

You get a profitable online retailer, with little debt, tons of cash, owns their own head office and the portfolio of blockchain companies is essentially free at current prices.  Why BUY crypto, when you can own blockchain companies for FREE!

 

I would also rather own the highways than the cars!  Cheers! 

 

If your mental model is that blockchain networks are like highways, blockchain companies are more like carmakers (for example, you need a car get on the highway -> you need a fiat off/onramp to get on the network) or construction firms (you need to maintain/build on the highway -> you need contract auditors/devs to deploy your app). If you want to own the highway (I would say you should since it's clear most of the value in crypto has accrued to the protocol layers) you should really own crypto directly.

[rkbabang]

"We saw what can go wrong if a centralized token, trading on an unregistered exchange, blow up this week," Saylor said in a CNBC interview. "I think the bitcoiners have been predicting this for a long time."

 

"Saylor said that now is a "really good time" to be accumulating bitcoin."

 

https://seekingalpha.com/news/3905742-microstrategys-saylor-we-feel-like-we-are-trapped-in-a-dysfunctional-relationship-with-crypto-and-we-want-out

 

I agree.

 

[Parsad]

8 minutes ago, alxcii said:

 

If your mental model is that blockchain networks are like highways, blockchain companies are more like carmakers (for example, you need a car get on the highway -> you need a fiat off/onramp to get on the network) or construction firms (you need to maintain/build on the highway -> you need contract auditors/devs to deploy your app). If you want to own the highway (I would say you should since it's clear most of the value in crypto has accrued to the protocol layers) you should really own crypto directly.

 

Cryptocurrencies won't replace fiat currency.  Fiat currency will go digital and use blockchain technology for transactions.  Every transaction in the future will be one to one...direct transactions...encrypted...secure.  You want to own the tZeros, etc that facilitate the transaction...especially transactions of private assets.  You will still be using USD in the future...not bitcoin or something else.  But the transaction will be one to one, instantaneous, secure and you will be able to sell any or all assets.  Cheers!

[Spekulatius]

2 hours ago, rkbabang said:

 

The same place your money goes if you had deposits at a bank that went bankrupt before FDIC.  It has been said before and can't be repeated enough:  "Not your keys, not your crypto". 

Putting money into FTX and even COIN is like lending money to a shady bookie in the red light district because I don't trust the banks.

[Longnose]

29 minutes ago, Parsad said:

 

Cryptocurrencies won't replace fiat currency.  Fiat currency will go digital and use blockchain technology for transactions.  Every transaction in the future will be one to one...direct transactions...encrypted...secure.  You want to own the tZeros, etc that facilitate the transaction...especially transactions of private assets.  You will still be using USD in the future...not bitcoin or something else.  But the transaction will be one to one, instantaneous, secure and you will be able to sell any or all assets.  Cheers!

 

BTC is different than other cryptos. The rules of BTC have all been laid out publicly and have proven to be quite secure. Even if governments want to go to a CBDC (digital block chain currency) for I would still be bouncing my money between BTC and the USD or whatever the currency is. If Mr. Powell wants to drasticly expand the supply of USD's he can. But no one can make more than 21M BTC. it can be divided infinitely but it there can never be more. 

 

I bet we will see more INTL companies over the next few decades making shifts to transactions in BTC that is then converted back into thier fiat currencies for every day use. Its simpler, cheaper, and more secure. BTC could prove to be a global internet currency. 

 

I agree fiat currency wont go away. but it will face pressures. 

[Longnose]

11 minutes ago, Spekulatius said:

Putting money into FTX and even COIN is like lending money to a shady bookie in the red light district because I don't trust the banks.

No one who understands crypto is keeping thier crypto on COIN, BINANCE, or FTX or any other exchange. 

 

You move it to a wallet so that no one other than you can screw with it. 

[rkbabang]

4 minutes ago, Spekulatius said:

Putting money into FTX and even COIN is like lending money to a shady bookie in the red light district because I don't trust the banks.

 

Agreed.  I use COIN's trading services, then get everything right back out.  I was nervous as hell when I sold my crypto last year and had a large dollar amount in Coinbase for a couple of weeks.  I put the entire amount I wanted to sell in all at once and sold it.  I didn't realize Coinbase had a cash withdrawal limit.  I could only transfer a certain amount per day and a certain amount per week into my bank account. Had I realized this I would have sold my crypto over a few weeks rather than all at once.  Live and learn.  I don't trust the exchanges at all.  We've seen blowups in the past and will see more in the future.  People seem not to be able to learn that lesson.

[rkbabang]

4 minutes ago, Longnose said:

 

BTC is different than other cryptos. The rules of BTC have all been laid out publicly and have proven to be quite secure. Even if governments want to go to a CBDC (digital block chain currency) for I would still be bouncing my money between BTC and the USD or whatever the currency is. If Mr. Powell wants to drasticly expand the supply of USD's he can. But no one can make more than 21M BTC. it can be divided infinitely but it there can never be more. 

 

I bet we will see more INTL companies over the next few decades making shifts to transactions in BTC that is then converted back into thier fiat currencies for every day use. Its simpler, cheaper, and more secure. BTC could prove to be a global internet currency. 

 

I agree fiat currency wont go away. but it will face pressures. 

 

The good thing about a CBDC is that it will replace the scammy stable coins like Tether.   It will make exchanges between BTC and USD easier and safer without putting some shady stable coin in the middle.  That will make the market more efficient and less prone to a crisis like what will happen when Tether finally blows up as I expect it will.

 

BTC isn't going away.  The USD is not a safe store of value and never will be, BTC isn't now, but it will eventually become one.

 

[KJP]

36 minutes ago, Longnose said:

 

I bet we will see more INTL companies over the next few decades making shifts to transactions in BTC that is then converted back into thier fiat currencies for every day use. Its simpler, cheaper, and more secure. BTC could prove to be a global internet currency. 

 

 

How is there going to be enough liquidity in BTC to do that?  What portion of BTC is effectively locked away with long-term holders?  Is the available "float" sufficient to support the very high transaction volumes that you envision?  If there's anything to Gresham's Law, it seems to weigh against the future you envision.

 

I believe US deficits currently address this issue by providing dollars to the world that can then be used globally for transactions.  It would be interesting to see this system try to function if the transactional base was deflating (as may be the case in a future with Bitcoin as the transactional medium) versus inflating (as is the case today with USD when the US is in deficit).

 

 

[Sweet]

Noob question, but if your BTC is on a single USB, and for some reason that USB gets wrecked, I presume your money is gone?  This isn’t something you can back up… right?

Edited November 10, 2022 by Sweet

[Spekulatius]

3 hours ago, rkbabang said:

 

The good thing about a CBDC is that it will replace the scammy stable coins like Tether.   It will make exchanges between BTC and USD easier and safer without putting some shady stable coin in the middle.  That will make the market more efficient and less prone to a crisis like what will happen when Tether finally blows up as I expect it will.

 

BTC isn't going away.  The USD is not a safe store of value and never will be, BTC isn't now, but it will eventually become one.

 

I think both IBRK (Paxos)  as well as Fidelity have now buy/sell as well custodial services for bitcoin and major cryptocurrencies. No opinion if those are safe, but I trust them way more than Coinbase.

 

I guess the idea with crypto is that you don't need these services, otherwise there is no point owning them other than speculation.

[thepupil]

I really wish IBKR did not offer it via Paxos. Everything I read about Paxos seemed okay, but I’d rather IBKR not have any ties to the crypto ecosystem. I take comfort in their ruthless margin/risk mgt, but still don’t like it 

[Longnose]

53 minutes ago, Sweet said:

Noon question, but if your BTC is on a single USB, and for some reason that USB gets wrecked, I presume your money is gone?  This isn’t something you can back up… right?

BTC is stored in wallet addresses. on the blockchain. a wallet can be restored to any device if you know the seed phrase that generated it. If I know your seed phrase I can access your wallet on my phone or other device. 

 

There are quality 3rd party wallets out there that provide you with ways to access your BTC without access to the wallet. I keep 80% of my BTC in Muun wallet and about 20% in Exodus wallet. Muun will help you set up an emergency document to recover your BTC if you ever need to extract it from the wallet without having access to the wallet. Hardware wallets are similar in that if you have your keys and your seed phrase the wallet could be recreated on a new device if that device were destroyed or stolen. 

 

Everything comes back to your keys. As long as you know your keys and seed phrase you can access your BTC from any device anywhere in the world. 

[Sweet]

43 minutes ago, Longnose said:

BTC is stored in wallet addresses. on the blockchain. a wallet can be restored to any device if you know the seed phrase that generated it. If I know your seed phrase I can access your wallet on my phone or other device. 

 

There are quality 3rd party wallets out there that provide you with ways to access your BTC without access to the wallet. I keep 80% of my BTC in Muun wallet and about 20% in Exodus wallet. Muun will help you set up an emergency document to recover your BTC if you ever need to extract it from the wallet without having access to the wallet. Hardware wallets are similar in that if you have your keys and your seed phrase the wallet could be recreated on a new device if that device were destroyed or stolen. 

 

Everything comes back to your keys. As long as you know your keys and seed phrase you can access your BTC from any device anywhere in the world. 

Thanks for the explanation!

[Parsad]

3 hours ago, Longnose said:

BTC is stored in wallet addresses. on the blockchain. a wallet can be restored to any device if you know the seed phrase that generated it. If I know your seed phrase I can access your wallet on my phone or other device. 

 

There are quality 3rd party wallets out there that provide you with ways to access your BTC without access to the wallet. I keep 80% of my BTC in Muun wallet and about 20% in Exodus wallet. Muun will help you set up an emergency document to recover your BTC if you ever need to extract it from the wallet without having access to the wallet. Hardware wallets are similar in that if you have your keys and your seed phrase the wallet could be recreated on a new device if that device were destroyed or stolen. 

 

Everything comes back to your keys. As long as you know your keys and seed phrase you can access your BTC from any device anywhere in the world. 

 

If you die, and your heirs do not know your seed phrase or keys, they will never recover the coins.  Cheers!

[JRM]

So GBTC is over 40% discount to book, but may have a "significant" amount of tokens on FTX.  Maybe the market hasn't caught up on GBTC yet?

 

https://cointelegraph.com/news/grayscale-bitcoin-trust-closes-with-41-premium-lost-amid-ftx-meltdown

[tnathan]

I've found it very interesting how relatively well ETH + BTC are holding up. If anything, this could provide an ETH tailwind as it's pretty clear that the only true safe place in crypto is on-chain, where everything is out in the open. To me this lack of selling pressure is extremely bullish, but also believe there will be a lot of other news stories that come out and a lot of volatility

[rkbabang]

13 hours ago, Parsad said:

 

If you die, and your heirs do not know your seed phrase or keys, they will never recover the coins.  Cheers!

 

 

This is true.  You need to make arrangements for this with someone you trust while you are still alive.  And maybe a backup if that person is someone you are frequently in a car or plane together with.

[rkbabang]

18 hours ago, Spekulatius said:

I think both IBRK (Paxos)  as well as Fidelity have now buy/sell as well custodial services for bitcoin and major cryptocurrencies. No opinion if those are safe, but I trust them way more than Coinbase.

 

I guess the idea with crypto is that you don't need these services, otherwise there is no point owning them other than speculation.

 

 

I agree.  Fidelity is rolling out their crypto accounts soon, but they will be limited at first.  You will not be able to withdraw your crypto into a private wallet.   Once Fidelity allows crypto withdrawals I doubt that I will ever use Coinbase again.

 

[SharperDingaan]

1 hour ago, rkbabang said:

 

 

This is true.  You need to make arrangements for this with someone you trust while you are still alive.  And maybe a backup if that person is someone you are frequently in a car or plane together with.

 

But also no different to the rest of your banking data. Institutions, accounts, passwords, etc. Things you will rapidly find out comes the day you have to wind up someone's affairs as their executor!

 

SD

[SharperDingaan]

1 hour ago, tnathan said:

I've found it very interesting how relatively well ETH + BTC are holding up. If anything, this could provide an ETH tailwind as it's pretty clear that the only true safe place in crypto is on-chain, where everything is out in the open. To me this lack of selling pressure is extremely bullish, but also believe there will be a lot of other news stories that come out and a lot of volatility

 

The volatility from fund windups and restructurings is still to come. Lot of funds are down 80%+ on the year, and will need to either wind up, recapitalize, or merge into other similar funds within the same 'fund family'. Those who agree will extract 'concessions', those who do not will take further losses as holdings are dumped into a market with few buyers.

 

If you own units in a crypto fund, as an experiment ... see if you can sell some of them without a sudden 'hand-holding' call, and a temporary house 'restriction'. It will tell you quite a few things ..... including a sense as to how material the funds capitalized deferred sales charge is 

 

SD

[TwoCitiesCapital]

1 hour ago, JRM said:

So GBTC is over 40% discount to book, but may have a "significant" amount of tokens on FTX.  Maybe the market hasn't caught up on GBTC yet?

 

https://cointelegraph.com/news/grayscale-bitcoin-trust-closes-with-41-premium-lost-amid-ftx-meltdown

 

I think you misinterpreted it. The "significant" quote was in reference to the cross holdings of FTX tokens capitalizing Alameda and FTX.

 

Not anything to do with GBTC holding their BTC on FTX. The discount is entire based on sentiment which is why ita been widening all year as sentiment has been getting worse each because risk-off is in vogue. 

 

I don't expect it to trade quite at NAV again seeing as there are lower-fee ETF alternatives, but could see it narrowing to ~10% once sentiment improves. 

Edited November 11, 2022 by TwoCitiesCapital