Now the SBR established, will you make Bitcoin a NEW position?

[james22]

And in both cases, the ETF makes what you hold yourself more valuable.

[Dave86ch]

23 hours ago, james22 said:

And in both cases, the ETF makes what you hold yourself more valuable.

 

Valuable, stable, and liquid.

 

Just a way to provide an exit option for the wealthy and tech-savvy.

A financial ark for which some countries will build harbors.

[SharperDingaan]

If you are are a young person, looking to build your retirement nest egg 35 years from now (age 70); it is extremely stupid NOT to have a significant weighting to an BTC-ETF. The only real question is how much of a weighting you should have, and whether it should be maintained at cost or market value; the lower your risk tolerance, and the shorter your investment horizon, the lower the weighting. At the institutional level; providing company sponsored pension plans, at a 2% weighting for now ... that will rise over time.

 

BTC is just a payment app that was created to demonstrate blockchain technology; if you think that blockchain technology is likely to materially change the world over the next 3-4 decades, it's hard to find a better vehicle than a regulated BTC-ETF. No need to predict who the winners/losers are; just a need to be in the game, and in a vehicle unlikely to sink. 35 years ago this might have been a Berkshire Hathaway share, and at a share price not much different to recent BTC prices.

 

Most people (Joe Sixpack) just want to 'buy and forget'. A BTC-ETF is a fraction of the price of a BTC, and designed for those with zero experience/expertise in crypto; as far as 'Joe' is concerned, the PM is actually a value add and relatively cheap. Over time, the more 'Joe's' that add 2-5% weightings in their portfolios, the higher the demand for BTC goes, and the higher the price. Momentum, halving, etc. just taking price higher still. The adoption curve. 

 

And as price goes higher ...  the more that FOMO kicks in; less than year ago BTC was at USD 32,000; today it's pushing USD 69,000. Not that long ago, we were being questioned for treating BTC as a portfolio 'cash equivalent' - as how could the value of a cash equivalent possibly rise by 50%+! Zero recognition that if you don't want a cash drag on your portfolio, some of that cash needs to be in BTC  

 

Back in the day cars not only replaced the horse and buggy, they replaced all the related infrastructure as well; at the time there was little idea as to how long this would take, similar disbelief prevailed, and then as now - few took up the opportunity. Same thing occurred when steam replaced sail, and wireless replaced landline. Inability to adapt to change.

 

All good, and more for me!

 

SD

 

 

     

[james22]

On 1/10/2024 at 2:08 PM, james22 said:

I'm unconvinced myself if it's an asset class, but I'll probably commit a couple percent to it anyway.

 

Aww, cute kid.

[Dave86ch]

12 hours ago, SharperDingaan said:

If you are are a young person, looking to build your retirement nest egg 35 years from now (age 70); it is extremely stupid NOT to have a significant weighting to an BTC-ETF. The only real question is how much of a weighting you should have, and whether it should be maintained at cost or market value; the lower your risk tolerance, and the shorter your investment horizon, the lower the weighting. At the institutional level; providing company sponsored pension plans, at a 2% weighting for now ... that will rise over time.

 

BTC is just a payment app that was created to demonstrate blockchain technology; if you think that blockchain technology is likely to materially change the world over the next 3-4 decades, it's hard to find a better vehicle than a regulated BTC-ETF. No need to predict who the winners/losers are; just a need to be in the game, and in a vehicle unlikely to sink. 35 years ago this might have been a Berkshire Hathaway share, and at a share price not much different to recent BTC prices.

 

Most people (Joe Sixpack) just want to 'buy and forget'. A BTC-ETF is a fraction of the price of a BTC, and designed for those with zero experience/expertise in crypto; as far as 'Joe' is concerned, the PM is actually a value add and relatively cheap. Over time, the more 'Joe's' that add 2-5% weightings in their portfolios, the higher the demand for BTC goes, and the higher the price. Momentum, halving, etc. just taking price higher still. The adoption curve. 

 

And as price goes higher ...  the more that FOMO kicks in; less than year ago BTC was at USD 32,000; today it's pushing USD 69,000. Not that long ago, we were being questioned for treating BTC as a portfolio 'cash equivalent' - as how could the value of a cash equivalent possibly rise by 50%+! Zero recognition that if you don't want a cash drag on your portfolio, some of that cash needs to be in BTC  

 

Back in the day cars not only replaced the horse and buggy, they replaced all the related infrastructure as well; at the time there was little idea as to how long this would take, similar disbelief prevailed, and then as now - few took up the opportunity. Same thing occurred when steam replaced sail, and wireless replaced landline. Inability to adapt to change.

 

All good, and more for me!

 

SD

 

 

     

 

Timechain.

[Saluki]

The 2 bull cases for BTC going up are 1) the greater fool theory, and 2) some use case for BTC that is better than what we have now.  

 

For the greater fool theory, an ETF could help with that.  I lose/forget/misplace passwords all the time.  I was forced to make a new one for one of my accounts just last week.  If I had a personal wallet with a lot of money in it and it would be worthless if I forgot the password, that money is as good as gone.  If some fund company is doing the safekeeping of the asset, and they have people to take care of the custody aspect, and I could sue them if they lose my BTC, then this is an option that would make it more attractive to me.  But it's still a pass. 

 

People use Bitcoin, blockchain and cryptocurrency interchangeably, but they are not the same thing.  For the past 15 years the true believers have told us about bitcoin will change everything someday.  Here's a reality check.  Pull out your smart phone right now and go your apps.  After 15 years of thinking up killer use cases for bitcoin, find one app on your phone that relies on bitcoin to operate.  Can't find it?  So what is the killer use case? 

 

Pay for things in a store without fees?  Credit cards are free to the consumer (less than free if you include cashback etc) and they are quick. It takes a while to transfer small payments in bitcoin and the merchants don't want it.  So why use it?  Send money to a friend at no cost?  Venmo and Paypal already do that for me. Sure, if I was sending money overseas using Western Union, there might be costs involved, but for most of what people in the developing world do, it's not needed.  Anonymity?  There is a record of every person who ever sent you money and everyone who you ever sent it to, so if they arrest someone who gives up the names of everyone they did business with, it's the opposite of anonymous.  It's worse than cash.  

[TwoCitiesCapital]

1 hour ago, Saluki said:

The 2 bull cases for BTC going up are 1) the greater fool theory, and 2) some use case for BTC that is better than what we have now.  

 

3) more people finding value and using it... as has been the case for the last ~15 years

 

1 hour ago, Saluki said:

 I lose/forget/misplace passwords all the time.  I was forced to make a new one for one of my accounts just last week.  If I had a personal wallet with a lot of money in it and it would be worthless if I forgot the password, that money is as good as gone. 

 

There are pros and cons to self custody. If you had a lot of money in a wallet and didn't take steps to safeguard this potential, it's on you and is a con. 

 

1 hour ago, Saluki said:

So what is the killer use case? 

 

Long term store of value

Online digital payments with immediate settlement

Censorship resistance

Cheaper payment processing than credit cards (when using L2 networks like CC networks are)

Ability to remit payments across borders w/ no unnecessary fees/taxes/intermediaries

 

I'm sure there are more.

 

1 hour ago, Saluki said:

Pay for things in a store without fees?  Credit cards are free to the consumer (less than free if you include cashback etc) and they are quick.

 

They are NOT free as all prices rise to reflect the cost to the business and

They are NOT quick for the receiver. Cash is by far the loser here as you pay the higher prices and get no reward for it. 

 

Everything the consumer sees is a papering over of the problems that the processors/businesses see on the back-end of the financial plumbing. 

 

Some things I don't like as a consumer? 

 

1) I don't like waiting 5-days at Schwab for the money to settle when I'm trying to do a IRA contribution/backdoor conversion. 

 

2) I don't like waiting 3-5 business days when moving cash between one financial institution and another. 

 

3) I don't like waiting 2 days for trades in my brokerage account to settle before the money can be withdrawn or redeployed into other securities with faster settlement. 

 

4) I don't like paying wire fees to ensure large payments need to get where they're going more quickly than the standard 3-5 days when I had to close on my mortgage. 

 

BTC transactions settle in 10 minutes for lower fees than a wire transfer and BTC/blockchain solve the above issues. 

 

And these are just the issues I see as a consumer. It doesn't consider the immense pain/resources/delays that actually occur within the financial plumbing that we expend untold resources/time navigating it. 

 

1 hour ago, Saluki said:

 

It takes a while to transfer small payments in bitcoin and the merchants don't want it. 

 

No, it doesn't. It takes 10 minutes for the payment to be finalized (as opposed to days/weeks with a credit card). 

 

Lightning Network does it in seconds. 

 

1 hour ago, Saluki said:

Send money to a friend at no cost?  Venmo and Paypal already do that for me. Sure, if I was sending money overseas using Western Union, there might be costs involved, but for most of what people in the developing world do, it's not needed.  Anonymity?  There is a record of every person who ever sent you money and everyone who you ever sent it to, so if they arrest someone who gives up the names of everyone they did business with, it's the opposite of anonymous.  It's worse than cash.  

 

Bitcoin doesn't SOLVE every problem.

 

But it's superior to cash/credit cards in the ways that matter (long term wealth preservation) with other solutions to make it more competitive in areas of less importance (buying a latte). 

 

 

[james22]

7 hours ago, Saluki said:

So what is the killer use case? 

 

Capital preservation.

 

 

[Dave86ch]

17 hours ago, TwoCitiesCapital said:

 

3) more people finding value and using it... as has been the case for the last ~15 years

 

 

There are pros and cons to self custody. If you had a lot of money in a wallet and didn't take steps to safeguard this potential, it's on you and is a con. 

 

 

Long term store of value

Online digital payments with immediate settlement

Censorship resistance

Cheaper payment processing than credit cards (when using L2 networks like CC networks are)

Ability to remit payments across borders w/ no unnecessary fees/taxes/intermediaries

 

I'm sure there are more.

 

 

They are NOT free as all prices rise to reflect the cost to the business and

They are NOT quick for the receiver. Cash is by far the loser here as you pay the higher prices and get no reward for it. 

 

Everything the consumer sees is a papering over of the problems that the processors/businesses see on the back-end of the financial plumbing. 

 

Some things I don't like as a consumer? 

 

1) I don't like waiting 5-days at Schwab for the money to settle when I'm trying to do a IRA contribution/backdoor conversion. 

 

2) I don't like waiting 3-5 business days when moving cash between one financial institution and another. 

 

3) I don't like waiting 2 days for trades in my brokerage account to settle before the money can be withdrawn or redeployed into other securities with faster settlement. 

 

4) I don't like paying wire fees to ensure large payments need to get where they're going more quickly than the standard 3-5 days when I had to close on my mortgage. 

 

BTC transactions settle in 10 minutes for lower fees than a wire transfer and BTC/blockchain solve the above issues. 

 

And these are just the issues I see as a consumer. It doesn't consider the immense pain/resources/delays that actually occur within the financial plumbing that we expend untold resources/time navigating it. 

 

 

No, it doesn't. It takes 10 minutes for the payment to be finalized (as opposed to days/weeks with a credit card). 

 

Lightning Network does it in seconds. 

 

 

Bitcoin doesn't SOLVE every problem.

 

But it's superior to cash/credit cards in the ways that matter (long term wealth preservation) with other solutions to make it more competitive in areas of less importance (buying a latte). 

 

 

 

Nostr implemented Zapping, which works really well.

I remember the first zap I received from Jack Dorsey as a memorable moment.

 

The fact is that Bitcoin is a base layer where there are already tons of use cases, but it takes time to gain adoption. It is a tool able to adapt, and people prefer to argue based on their biases instead of diving into the technology.

 

This creates opportunities for us.

 

Bitcoin is lollapalooza.

https://dscompounding.com/2023/04/24/compound-your-energy/

Edited March 12, 2024 by Dave86ch

[james22]

For those who don't already hold Bitcoin, does the establishment of a Strategic Bitcoin Reserve elevate it to an "asset class" in your mind?

 

Will you make it a position?

[K2SO]

1 hour ago, james22 said:

For those who don't already hold Bitcoin, does the establishment of a Strategic Bitcoin Reserve elevate it to an "asset class" in your mind?

 

Will you make it a position?

No.

No. 

[Paarslaars]

More interested in seeing what other nations will be doing rather than retail. 

Especially not interested in value investors because we know these guys are too cheap to buy BTC.  

[K2SO]

Biden did the unthinkable and sold off the strategic oil reserve.

How do we know that a future government won't plunder the "strategic" bitcoin reserve to fill a budget hole, or fund a war?

What happens to the price if that happens? Especially if this becomes a partisan issue and the Dems win the next election.

This doesn't change anything, and in fact, the more concentrated ownership becomes, the more dangerous a speculation it is. 

[gfp]

I'm interested to see if the US Marshalls can track down the keys for their bitcoin and if that bitcoin has already been absconded with.  Then the next move, of course, is selling off that government cheese reserve to get some cash to buy bitcoins.  Then a quick revaluing of ft. knox gold gets you plenty of budget neutral bucks for bitcoin purchases.

 

We don't need a strategic petroleum reserve anymore, we have the permian basin.  Occidental's annual production is something close to the entire strategic petroleum reserve.  

[Castanza]

9 minutes ago, gfp said:

I'm interested to see if the US Marshalls can track down the keys for their bitcoin and if that bitcoin has already been absconded with.  Then the next move, of course, is selling off that government cheese reserve to get some cash to buy bitcoins.  Then a quick revaluing of ft. knox gold gets you plenty of budget neutral bucks for bitcoin purchases.

 

We don't need a strategic petroleum reserve anymore, we have the permian basin.  Occidental's annual production is something close to the entire strategic petroleum reserve.  

Lack of refiners is the issue with this isn’t it? 

[gfp]

1 minute ago, Castanza said:

Lack of refiners is the issue with this isn’t it? 

 

Is the US strategic petroleum reserve filled with refined products?

[Castanza]

6 minutes ago, gfp said:

 

Is the US strategic petroleum reserve filled with refined products?

I just meant in general. Never really understood the SPR if we can’t refine the shit ourselves anyways. 
 

As you said just leave it in the ground

Edited Friday at 03:47 PM by Castanza

[james22]

24 minutes ago, K2SO said:

How do we know that a future government won't plunder the "strategic" bitcoin reserve to fill a budget hole, or fund a war?

What happens to the price if that happens? Especially if this becomes a partisan issue and the Dems win the next election.

 

Now do gold.

[K2SO]

Gold has been sold down by many central banks over the decades. It has held down the price over long time periods. The market is deep enough to absorb the selling.

If your bull case on bitcoin is that "central banks will buy," then you have to acknowledge that "central banks will sell" is an equivalent bear case. 

 

[TwoCitiesCapital]

2 minutes ago, K2SO said:

Gold has been sold down by many central banks over the decades. It has held down the price over long time periods. The market is deep enough to absorb the selling.

If your bull case on bitcoin is that "central banks will buy," then you have to acknowledge that "central banks will sell" is an equivalent bear case. 

 

 

And yet has kept up with the S&P 500 for the last ~40 years in terms of returns. I understand we're all Buffet-types here and Buffett never liked gold, but there were obviously times and places for it and was a great portfolio diversifier from a more "modern portfolio theory" framework. 

 

I think Bitcoin will play this role in the future. 

 

All of the naysayers have to consider that they naysayed:

when it was just a hobbyist collectible

naysayed when it first made wide headlines in 2017/2018 for rallying to 20k

naysayed as the financial community started to point out its risk adjusted returns/risk profile

naysayed while companies (and COUNTRIES) started acquiring it for their balance sheets

naysayed when the largest asset manager in the world launched its ETF and advocated for a portfolio position

and are now naysaying while the US government is announcing an official reserve for it 

 

That isn't to say there won't be set-backs, but the direction is CLEAR and becoming more CLEAR every day. There are only 21 million of these things. The ONLY way this can happen is if the market rises enormously to accommodate the demand/flows. 

[gfp]

7 minutes ago, TwoCitiesCapital said:

And yet has kept up with the S&P 500 for the last ~40 years in terms of returns.

 

Really?  Gold has kept up with the S&P500 returns over 40 years?

 

edit: I checked - I'm gonna go ahead and say the S&P 500 outperformed gold by one hell of a lot over that time frame and almost any others

Edited Friday at 04:28 PM by gfp

[TwoCitiesCapital]

9 minutes ago, gfp said:

 

Really?  Gold has kept up with the S&P500 returns over 40 years?

 

edit: I checked - I'm gonna go ahead and say the S&P 500 outperformed gold by one hell of a lot over that time frame and almost any others

 

I'm pretty sure it's right. 

 

Obviously GLD doesn't go back to the 1970s, but from its inception in 2004 to today GLD is up 500+% compared to the SPY's ~380%. So is absolutely true over the last 21. 

 

Would need to find either gold futures or gold bullion history going back to the mid-80s, but am pretty confident it has kept up. 

 

People seem to have this fantasy that the S&P 500 is the only asset class that provides worthwhile returns (or stocks in general). I'm pretty sure long-duration bonds were outperforming the S&P 500 on a rolling 30-year basis until 2022 when they basically logged their worst year ever. Over long time frames, different asset classes do excellently and often outperform stocks over extended periods. 

Edited Friday at 04:35 PM by TwoCitiesCapital

[rkbabang]

Where are we on the capital allocators career risk curve?

[Dave86ch]