Dave86ch Posted February 20 Posted February 20 14 hours ago, Paarslaars said: When I looked into Bitcoin and started reading the recommended material here, I took 10% position. Not planning on increasing this simply because of risk management but will hold when it grows. It is always a pleasure to see people enjoy qualitative discussions and take bold action on their own meditations.
Luke Posted February 20 Posted February 20 https://www.google.com/amp/s/www.businesstoday.in/amp/crypto/token/story/currency-that-no-one-uses-why-valuation-guru-aswath-damodaran-isnt-bullish-on-bitcoin-395418-2023-08-24 Bitcoin is the currency that nobody uses and a collectible that doesn't behave like a collectible." He also questioned its role as a hedge, stating, "It's gone up as stocks have gone up, it goes down when stocks go down. This is not the way a collectible is supposed to behave." https://aswathdamodaran.blogspot.com/2017/10/the-bitcoin-boom-asset-currency.html?m=1 I don't believe that crypto currencies are now or ever will be an asset class or that these currencies can change fundamental truths about risk, investing and management You cannot value Bitcoin, you can only price it: This follows from the acceptance that Bitcoin is a currency, not an asset or a commodity. Any one who claims to value Bitcoin either has a very different definition of value than I do or is just making up stuff as he or she goes along. It will be judged as a currency: In the long term, the price that you attach to Bitcoin will depend on how well it will performs as a currency. If it is accepted widely as a medium of exchange and is stable enough to be a store of value, it should command a high price. If it becomes gold-like, a fringe currency that investors flee to during crises, its price will be lower. Worse, if it is a transient currency that loses all purchasing power, as it is replaced by something new and different, it will crash and burn.
Luke Posted February 20 Posted February 20 It is incredible unlikely governments will allow bitcoin as a larger scale currency, especially in the current disorderly political climate. And Bitcoin price desperately depends on its free trade and USAGE possibility. China is gone already and 1b+ with it. The EU certainly won't allow it either. The bitcoin fans i know are also often a sort of "truther" and believe in some grande collapse...you tell me what that has to do with investing... Absurd speculation and hopium.
Luke Posted February 20 Posted February 20 1 hour ago, Dave86ch said: It is always a pleasure to see people enjoy qualitative discussions and take bold action on their own meditations. Agreed!
Sweet Posted February 20 Posted February 20 (edited) 1 hour ago, Luca said: https://www.google.com/amp/s/www.businesstoday.in/amp/crypto/token/story/currency-that-no-one-uses-why-valuation-guru-aswath-damodaran-isnt-bullish-on-bitcoin-395418-2023-08-24 Bitcoin is the currency that nobody uses and a collectible that doesn't behave like a collectible." He also questioned its role as a hedge, stating, "It's gone up as stocks have gone up, it goes down when stocks go down. This is not the way a collectible is supposed to behave." https://aswathdamodaran.blogspot.com/2017/10/the-bitcoin-boom-asset-currency.html?m=1 I don't believe that crypto currencies are now or ever will be an asset class or that these currencies can change fundamental truths about risk, investing and management You cannot value Bitcoin, you can only price it: This follows from the acceptance that Bitcoin is a currency, not an asset or a commodity. Any one who claims to value Bitcoin either has a very different definition of value than I do or is just making up stuff as he or she goes along. It will be judged as a currency: In the long term, the price that you attach to Bitcoin will depend on how well it will performs as a currency. If it is accepted widely as a medium of exchange and is stable enough to be a store of value, it should command a high price. If it becomes gold-like, a fringe currency that investors flee to during crises, its price will be lower. Worse, if it is a transient currency that loses all purchasing power, as it is replaced by something new and different, it will crash and burn. I agree with most but not all of that. Whilst I believe btc has no 'instrinsic value', which I define as the old value investing trope of throwing off cash, I do think it is valuable for some people who want to move money around outside of the banking system, and even those who believe it is a store of value. There is a network effect here that is propping up prices, and there is a use there. But I don't own gold, and I don't own bitcoin. Edited February 20 by Sweet
Luke Posted February 20 Posted February 20 19 minutes ago, Sweet said: I agree with most but not all of that. Whilst I believe btc has no 'instrinsic value', which I define as the old value investing trope of throwing off cash, I do think it is valuable for some people who want to move money around outside of the banking system, and even those who believe it is a store of value. There is a network effect here that is propping up prices, and there is a use there. But I don't own gold, and I don't own bitcoin. It has no intrinsic value in the investment sense but it is a currency and used as such. Its hard to say how much of the current price is actually caused by people using it as a legitimate currency or because of traders/gamblers/speculators buying this and pushing up the price. Yes, they can trade bitcoin because of speculative inflows etc, same as speculating on shareprices. You can also of course buy bitcoin as a currency in hopes it will appreciate against the USD but why not buy businesses with wide moats that will be here in 50 years (LVMH etc). People buying bitcoin should not be labeled as brilliant investors but rather as high risk speculators. God, even my dad asked my if he should buy some bitcoin because the noise reaches even boomers. They DONT know what they are buying.
Luke Posted February 20 Posted February 20 Its a dangerous vicious circle, the higher the price of Bitcoin goes, the smarter the speculators feel and the more inflows happen. "brilliant investor bought bitcoin 5 years ago" yadda yadda. Well, at some point people will start to exit and realize gains and many people will be left holding bags.
Luke Posted February 20 Posted February 20 Anyone on this board buys it to make money and to sell bitcoin after making gains in exchange for REAL assets. I suggest skipping the speculation in the first place and to buy real assets immediately.
Luke Posted February 20 Posted February 20 (edited) People are desperate to make money because capitalism became stagnant and in a stagnant economy people only get richer by taking things from others. Essentially what happened to the bottom 70% since the start of the neoliberal policies in the 1990. So now many young folks but also poorer older folks try to find their luck in crypto because the real economy is not offering what it used to offer. Its no coincidence that the trading mania and speculation is so high right now. But crypto will only make a few rich and many will pay for the few Edited February 20 by Luca
TwoCitiesCapital Posted February 20 Posted February 20 7 hours ago, Luca said: https://www.google.com/amp/s/www.businesstoday.in/amp/crypto/token/story/currency-that-no-one-uses-why-valuation-guru-aswath-damodaran-isnt-bullish-on-bitcoin-395418-2023-08-24 Bitcoin is the currency that nobody uses and a collectible that doesn't behave like a collectible." He also questioned its role as a hedge, stating, "It's gone up as stocks have gone up, it goes down when stocks go down. This is not the way a collectible is supposed to behave." 1) that's EXACTLY the way collectibles behave. They always boom with the economy risk/assets 2) Bitcoin was falling for most of 2014 while stocks were rising. Bitcoin exploded in late 2015 while stocks were falling. Bitcoin was falling in 2018 while market was flat to rising. And in 2021, Bitcoin cratered 50+% between May/July 2021 while stocks were still rising. Bitcoin didn't bottom until early 2022 - months after most stocks had put in their bottoms in 2021. Multiple environments where BTC behaved significantly differently than broad equity markets. It isn't a collectible. And it's correlation to equities ebbs and flows and varies based on the time horizon you're observing it over. 7 hours ago, Luca said: 7 hours ago, Luca said: It is incredible unlikely governments will allow bitcoin as a larger scale currency, especially in the current disorderly political climate. El Salvador and Central African Republic already have. Others are considering it. 7 hours ago, Luca said: 5 hours ago, Luca said: Its a dangerous vicious circle, the higher the price of Bitcoin goes, the smarter the speculators feel and the more inflows happen. "brilliant investor bought bitcoin 5 years ago" yadda yadda. Name a single bubble that survived for more than 15+ years with multiple "busts" that made higher highs and higher lows?
Luke Posted February 21 Posted February 21 7 hours ago, TwoCitiesCapital said: 1) that's EXACTLY the way collectibles behave. They always boom with the economy risk/assets 2) Bitcoin was falling for most of 2014 while stocks were rising. Bitcoin exploded in late 2015 while stocks were falling. Bitcoin was falling in 2018 while market was flat to rising. And in 2021, Bitcoin cratered 50+% between May/July 2021 while stocks were still rising. Bitcoin didn't bottom until early 2022 - months after most stocks had put in their bottoms in 2021. Multiple environments where BTC behaved significantly differently than broad equity markets. It isn't a collectible. And it's correlation to equities ebbs and flows and varies based on the time horizon you're observing it over. El Salvador and Central African Republic already have. Others are considering it. Name a single bubble that survived for more than 15+ years with multiple "busts" that made higher highs and higher lows? A collectible isnt going down -70% and then up 100%+ in a timeframe of half a year to a year. No Picasso ever. It is absolutely no coincidence that bitcoin dropped so hard with tech stocks dropping and same is true with the upside. Ill guarantee you that the common variance with tech stocks is very significant and reasonable high. Arguably bitcoin wasnt as bubbleesque back then as it is now. And el salvador and central african republic are countries that the world looks to for imitation because their societies and economies are so successful? "name a single bubble that survived for 15 years". Thats the danger i pointed out right there. Just because it went this way has no support for the thesis. And the "market" doesn't know either as can be seen in the chart.
TwoCitiesCapital Posted February 21 Posted February 21 (edited) 1 hour ago, Luca said: A collectible isnt going down -70% and then up 100%+ in a timeframe of half a year to a year. No Picasso ever. Collectibles is a broad term that includes more than Picasso. Wines. Whiskeys. Cars. Sports cards. Beanie babies. Absolutely have booms and busts associated with all of them. And many of those have busts, and booms, that absolutely mimic -70% and +100%. Back in the early 90s, you could find used Porsches for cheap. The company's sales halved for new cars and used car prices were in the dump. Now? Cars from that era literally go for 100k + as collectors items. Significantly more than the cars sold new for back then. And cars are traditionally a depreciating asset? How's that for a bust/boom 1 hour ago, Luca said: 1 hour ago, Luca said: It is absolutely no coincidence that bitcoin dropped so hard with tech stocks dropping and same is true with the upside. Ill guarantee you that the common variance with tech stocks is very significant and reasonable high. Arguably bitcoin wasnt as bubbleesque back then as it is now. What makes you say no coincidence? Because the correlation has been negative, zero, and positive several times over the last 5-years. And is currently cratering... Why should BTC behave differently going forward and simply be correlated with equities when historically the correlation is basically zero? What gives you confidence in this view? 1 hour ago, Luca said: And el salvador and central african republic are countries that the world looks to for imitation because their societies and economies are so successful? Of course not. Countries looking for alternatives are ones that have previously failed. I don't why that isn't obvious to everyone out there. The countries who will switch first are countries who have everything to gain, little to lose, and likely have failing currencies. But let me let you in on a little secret - every reserve currency before the USD has failed. So why is it you're so confident the US won't eventually get there? Especially after 5 decades of it losing value against real assets? And why do you believe that the US getting there is the only thing that would justifies BTC having value? 1 hour ago, Luca said: "name a single bubble that survived for 15 years". Thats the danger i pointed out right there. Just because it went this way has no support for the thesis. And the "market" doesn't know either as can be seen in the chart. I mean, you seem to be willing to cast your faith in the USD/fiat currencies when history is literally littered with failures of the majority of them. But you'll also assume it's BTC that is the one-off bubble as opposed to secular growth trend even when no other bubble has previously persisted this long through multiple busts? I tend to to take my chances that history will repeat/rhyme rather than bet that both the USD and BTC are outliers. Especially since the BTC being an outlier of a bubble argues against the USD being an outlier of a fiat currency. And if the USD was an outlier of a fiat currency, then there likely wouldn't be a growing number of people using BTC every year. Edited February 21 by TwoCitiesCapital
Luke Posted February 21 Posted February 21 1 hour ago, TwoCitiesCapital said: Collectibles is a broad term that includes more than Picasso. Wines. Whiskeys. Cars. Sports cards. Beanie babies. Absolutely have booms and busts associated with all of them. And many of those have busts, and booms, that absolutely mimic -70% and +100%. Back in the early 90s, you could find used Porsches for cheap. The company's sales halved for new cars and used car prices were in the dump. Now? Cars from that era literally go for 100k + as collectors items. Significantly more than the cars sold new for back then. And cars are traditionally a depreciating asset? How's that for a bust/boom If a collectible falls so hard in value and gains so hard in value within such a short time frame, it is simply not a good collectible. I'd rather buy a collectible that has very high desire from very wealthy clientele and holds/rises in value over time. If you look at very rare collectibles, none of them fall 70% and rise 200% that quickly in a short time frame. It's rather a sign of uncertainty of the value and massive speculation. 1 hour ago, TwoCitiesCapital said: What makes you say no coincidence? Because the correlation has been negative, zero, and positive several times over the last 5-years. And is currently cratering... Why should BTC behave differently going forward and simply be correlated with equities when historically the correlation is basically zero? What gives you confidence in this view? It's not correlated with equities per se but rather with speculative tech equities and behaves as such. Especially if you look at tesla, nvidia etc, there were assuredly significant correlations. 1 hour ago, TwoCitiesCapital said: Of course not. Countries looking for alternatives are ones that have previously failed. I don't why that isn't obvious to everyone out there. The countries who will switch first are countries who have everything to gain, little to lose, and likely have failing currencies. 90% of the central african republic has no access to internet, my own government warns me from going there due to high political instability, terrorism and local fights. 1m+ are fleeing. I dont see any reason why them trying to implement bitcoin is adding to the thesis, its sadly a shithole and currency is not the main reason why they are where they are. 1 hour ago, TwoCitiesCapital said: But let me let you in on a little secret - every reserve currency before the USD has failed. So why is it you're so confident the US won't eventually get there? Especially after 5 decades of it losing value against real assets? Its not that i dont see that currencies depreciate/lose value, i dont see how you are better off buying a "bitcoin" then buying real assets that will be productive 20 years down the road. 1 hour ago, TwoCitiesCapital said: And why do you believe that the US getting there is the only thing that would justifies BTC having value? Bitcoin needs government approval and implementation, any sane democracy understands that controlling the currency is a significant lever countries need to flourish, why would they surrender that control to bitcoin? 1 hour ago, TwoCitiesCapital said: I mean, you seem to be willing to cast your faith in the USD/fiat currencies when history is literally littered with failures of the majority of them. I really dont, cash is trash. Assets is what one wants to own, high quality and on a cheap price. 1 hour ago, TwoCitiesCapital said: But you'll also assume it's BTC that is the one-off bubble as opposed to secular growth trend even when no other bubble has previously persisted this long through multiple busts? Only because the price went up for so long doesnt make it a good thing to buy it now. 1 hour ago, TwoCitiesCapital said: I tend to to take my chances that history will repeat/rhyme rather than bet that both the USD and BTC are outliers. Especially since the BTC being an outlier of a bubble argues against the USD being an outlier of a fiat currency. And if the USD was an outlier of a fiat currency, then there likely wouldn't be a growing number of people using BTC every year. If you exclude speculators and traders, how many people do you know who use bitcoin in their daily life to buy groceries and other important things? I dont know anyone, i dont know anyone who knows anyone doing that either. Yes the wallet numbers is growing and the trade too but how much of that is speculating and buying it to make money instead of actually using the currency? Why would the german, france, UK, US, Chinese government want to lose control of their currencies? What will happen in a depression where stimulus is needed? What with a pandemic? Bitcoin is a bad currency that does not match the flexible needs of a countries economy. Currencies were never meant to be an investment and to hold their value over 100 years. Assets on the other side do.
Dave86ch Posted February 21 Posted February 21 (edited) 14 hours ago, TwoCitiesCapital said: 1) that's EXACTLY the way collectibles behave. They always boom with the economy risk/assets 2) Bitcoin was falling for most of 2014 while stocks were rising. Bitcoin exploded in late 2015 while stocks were falling. Bitcoin was falling in 2018 while market was flat to rising. And in 2021, Bitcoin cratered 50+% between May/July 2021 while stocks were still rising. Bitcoin didn't bottom until early 2022 - months after most stocks had put in their bottoms in 2021. Multiple environments where BTC behaved significantly differently than broad equity markets. It isn't a collectible. And it's correlation to equities ebbs and flows and varies based on the time horizon you're observing it over. El Salvador and Central African Republic already have. Others are considering it. Name a single bubble that survived for more than 15+ years with multiple "busts" that made higher highs and higher lows? I would add to the list Lugano, Switzerland https://www.lugano.ch/temi-servizi/lavoro-e-impresa/fatture/cripto/ By the way, Bitcoin is a vector that transfers capital to a new generation of tech-savvy individuals. Bitcoin is a protocol upon the same individuals are building technologies. It isn't a collectible; it's the only technology that binds value to energy, allowing for absolute scarcity while at the same time ensuring absolute portability. Bitcoin is superpartes. Edited February 21 by Dave86ch
Luke Posted February 21 Posted February 21 (edited) 1 hour ago, Dave86ch said: I would add to the list Lugano, Switzerland https://www.lugano.ch/temi-servizi/lavoro-e-impresa/fatture/cripto/ So a city with 60k citizens who implemented some function of paying with bitcoin (questionable how many switched to using that currency considering the swiss frank is still viable..) is now a fundamental in the bitcoin "investment" thesis? That would be similar to buying a micro cap which has 3 customers and then saying "see, customer 4 now also accepts the product, the stock is worth 100x earnings". Please... 1 hour ago, Dave86ch said: By the way, Bitcoin is a vector that transfers capital to a new generation of tech-savvy individuals. Nice way of using sophisticated words to make it look more credible "vector". Where does Bitcoin "transfer" capital to a new generation of users? You simply GIVE your capital (euro, usd whatever) to own a part of this virtual currency, nothing more. 1 hour ago, Dave86ch said: Bitcoin is a protocol upon the same individuals are building technologies. Yes nothing new, technology is also built on the USD or the RMB. Technology is built upon many things but i guess you need to use the buzz word "TECHNOLOGY" as munger said. 1 hour ago, Dave86ch said: It isn't a collectible; it's the only technology that binds value to energy, allowing for absolute scarcity while at the same time ensuring absolute portability. Its literally a currency. A euro is in your thesis also a technology i.e a tool. All other currencies bind "value" to energy. BUT they can be replicated easier and are not limited as everybody knows by now. BTW absolute portability can be enabled with other currencies too if you use similar technology. 1 hour ago, Dave86ch said: Bitcoin is superpartes. Why is bitcoin superpartes? Why couldnt a a team of lets say, 50 smart software engineers build a similar product? I see 100+ other coins on coinbase... What about ethereum? Didnt everybody also own that awhile ago? And HEY? Its a similar looking chart? Or Solana?!!! Edited February 21 by Luca
Luke Posted February 21 Posted February 21 Has been said in the thread before, ultimately we should be very happy about the fact that the 2T crypto market is capital thats not chasing high quality real assets which leaves them cheaper for us! I am hoping that this bubble gets juiced more, that people leave BRK for cryptocoins so i can buy more
TwoCitiesCapital Posted February 21 Posted February 21 7 hours ago, Luca said: If a collectible falls so hard in value and gains so hard in value within such a short time frame, it is simply not a good collectible. I'd rather buy a collectible that has very high desire from very wealthy clientele and holds/rises in value over time. Can you name a collectible that has outperformed BTC since 2009? What about since 2019? Just curious why all of these desirable/rare collectibles are a better buy than the thing that continuously trounced them in its adoption/growth/price trend? 7 hours ago, Luca said: i dont see how you are better off buying a "bitcoin" then buying real assets that will be productive 20 years down the road. Good thing they're not mutually exclusive. I own both. But if I had to pick one, I'd pick BTC for any incremental add outside of my residence. 7 hours ago, Luca said: Bitcoin needs government approval and implementation, any sane democracy understands that controlling the currency is a significant lever countries need to flourish, why would they surrender that control to bitcoin? And yet, so many democracies relinquish control of their currencies to peg to the $.... or relinquish control of their resources to have access to the world bank/IMF funds.... or allow themselves to be puppeteered in global affairs to retain access to the USD banking system. Yea, I wonder why any of them would look to BTC 7 hours ago, Luca said: I really dont, cash is trash. Assets is what one wants to own, high quality and on a cheap price. $50k BTC is as cheap today as 5k BTC was in 2017. 7 hours ago, Luca said: If you exclude speculators and traders, how many people do you know who use bitcoin in their daily life to buy groceries and other important things? I dont know anyone, i dont know anyone who knows anyone doing that either. 1) there are many. 2) there's a law of good money vs bad money that explains why it isn't more 7 hours ago, Luca said: 7 hours ago, Luca said: Why would the german, france, UK, US, Chinese government want to lose control of their currencies? What will happen in a depression where stimulus is needed? What with a pandemic? Bitcoin is a bad currency that does not match the flexible needs of a countries economy. Yes. One absolutely needs a currency that can be devalued so that a country can continue to make the mistake of too much leverage and debt over and over and over and over again. You're absolutely right. There's no other solution. 7 hours ago, Luca said: Currencies were never meant to be an investment and to hold their value over 100 years. Assets on the other side do. Then perhaps you should start seeing BTC as an asset. Because it's both.
Dave86ch Posted February 22 Posted February 22 21 hours ago, Luca said: Has been said in the thread before, ultimately we should be very happy about the fact that the 2T crypto market is capital thats not chasing high quality real assets which leaves them cheaper for us! I am hoping that this bubble gets juiced more, that people leave BRK for cryptocoins so i can buy more You are going to regret your choice.
Luke Posted February 22 Posted February 22 2 hours ago, Dave86ch said: You are going to regret your choice. I like your confidence, i hope it works out.
james22 Posted February 22 Author Posted February 22 On 2/21/2024 at 4:06 AM, Luca said: I am hoping that this bubble gets juiced more ... It's not a bubble, it's an adoption curve.
Vish_ram Posted February 22 Posted February 22 I wrote this a few years ago. I've a better understanding now. My thoughts on cryptocurrencies.pdf
TwoCitiesCapital Posted March 7 Posted March 7 On 2/20/2024 at 8:48 PM, TwoCitiesCapital said: Countries looking for alternatives are ones that have previously failed. I don't why that isn't obvious to everyone out there. The countries who will switch first are countries who have everything to gain, little to lose, and likely have failing currencies. Perhaps Egypt will be the next country where a BTC parallel currency makes the most sense.
tede02 Posted March 8 Posted March 8 Someone has probably already mentioned this but isn't buying BTC within an ETF contradicting one of its supposed main tenants (decentralization, no custodians, etc.). I see BTC and gold to some extent as interesting from a psychological perspective. It's kind of a big experiment. Good for those guys that have made some big money on it. I do worry about some people I know (including family) that believe crypto is their ticket to riches or an early retirement. Maybe it works or maybe they take a huge loss. I will continue to observe with amusement.
rkbabang Posted March 8 Posted March 8 6 hours ago, tede02 said: Someone has probably already mentioned this but isn't buying BTC within an ETF contradicting one of its supposed main tenants (decentralization, no custodians, etc.). I see BTC and gold to some extent as interesting from a psychological perspective. It's kind of a big experiment. Good for those guys that have made some big money on it. I do worry about some people I know (including family) that believe crypto is their ticket to riches or an early retirement. Maybe it works or maybe they take a huge loss. I will continue to observe with amusement. Yes, it is like the difference between owing a gold ETF and holding physical gold in your safe. The ETF lets you speculate on price and trade in and out easily, but in a crisis (governments decides to make owning it illegal or starts confiscating it), or if you simply want to pay for something with it without authorities being able to block the transaction the ETF isn’t going to be of much use.
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