Do you think Bitcoin is a safe store of value?

[Cigarbutt]

As I get older, it seems that there are more and more things I don't understand.

Maybe, all that is needed is a "different mental model"?

 

https://www.bloomberg.com/news/videos/2017-12-18/blockchain-capital-sees-bitcoin-on-nasdaq-in-2018-video

 

So, Bitcoin would be a Veblen-type good?

With reflexivity, doesn't it apply both ways in terms of price action?

[rkbabang]

We'll have to agree to disagree. It is very much in the interests of a CB to have a interchangeable paper/digital dollar.

And as soon as you have a digital dollar you also have a zero cost payment system, and it is that - that makes the cards obsolete. Hard to charge a fee to transact when you can easily do it for free.

 

Notable, is that the Bitcoin 'reversal' also appears to be starting ....

https://www.msn.com/en-ca/money/markets/bitcoin-plunges-dollar1000-in-less-than-an-hour/ar-BBH2QSu?li=AAacUQk&ocid=spartandhp

 

SD

 

 

https://ca.reuters.com/article/businessNews/idCAKBN1EE02J-OCABS

 

Down 20% intraday before eventually closing down 4.5% on the day, & suggestions that some of the punters are exiting ……

“However, for Japanese retail investors who are estimated to account for 30 to 50 percent of bitcoin trade worldwide, a more worrying warning may have come from a Japanese day trader guru known as Cis. The individual trader, who claims to own 21 billion yen ($186 million) in assets, tweeted over the last 24 hours that he had sold cryptocurrencies.”

 

Maybe Makoto reads this board? ….

“The listing of two bitcoin futures makes it easier for institutional players to trade bitcoins. Futures also enable players to go short on bitcoins, which was difficult without liquid futures,” said Makoto Sakuma, researcher at NLI Research Institute in Tokyo.

 

SD

 

 

I noticed that Bitcoin Cash went up while Bitcoin was going down.  This drop coincided with Coinbase adding Bitcoin Cash.  It could just be people moving some money around.

 

[rkbabang]

This has probably been answered in one of the prior pages, so apologies for the redundancy, but can someone explain this to me? http://www.bbc.com/news/technology-42409815

 

Mechanically how does someone "steal" crypto, or similarly, how does someone "lose" crypto? This will show how awful my understanding of this stuff is, but if there is a distributed ledger doesn't that track ownership of the asset? If I own a share of BRK through Interactive Brokers, somewhere they have a ledger that has a share of BRK in my name and BRK (or NYSE) has a ledger with a share in IB's name. I assume there's backups made of those ledgers so if someone hacked into IB it would be difficult for them to change IB's ledger from my name to their name. I was thinking the benefit of crypto was that there's another layer of protection because that ledger is now distributed to millions of computers... making it impossible for someone to hack in and change the ledger?

 

In a way you don’t really own your Bitcoin in the same way that you own your house or your car. You own bitcoin in the same way you own the cash in your wallet. It is a bearer instrument. With a $100 bill the piece of paper is the instrument, if someone takes it from you they can spend it.  With Bitcoin the instrument is your private key. If someone knows your private key they can send your Bitcoin to another address (their own presumably).  So if you store your private key on a piece of paper and someone takes it (or even takes a picture of it) then they can access your Bitcoins. If you store your private key on a computer and someone hacks into it they can take your Bitcoins.  This is why I think it is dangerous to hold Bitcoins in a 3rd party account Like an exchange or online wallet like Coinbase.  You are trusting a company to keep the key safe.  I suggest controlling your own keys and keeping them safe yourself.

[SharperDingaan]

We'll have to agree to disagree. It is very much in the interests of a CB to have a interchangeable paper/digital dollar.

And as soon as you have a digital dollar you also have a zero cost payment system, and it is that - that makes the cards obsolete. Hard to charge a fee to transact when you can easily do it for free.

 

Notable, is that the Bitcoin 'reversal' also appears to be starting ....

https://www.msn.com/en-ca/money/markets/bitcoin-plunges-dollar1000-in-less-than-an-hour/ar-BBH2QSu?li=AAacUQk&ocid=spartandhp

 

SD

 

 

https://ca.reuters.com/article/businessNews/idCAKBN1EE02J-OCABS

 

Down 20% intraday before eventually closing down 4.5% on the day, & suggestions that some of the punters are exiting ……

“However, for Japanese retail investors who are estimated to account for 30 to 50 percent of bitcoin trade worldwide, a more worrying warning may have come from a Japanese day trader guru known as Cis. The individual trader, who claims to own 21 billion yen ($186 million) in assets, tweeted over the last 24 hours that he had sold cryptocurrencies.”

 

Maybe Makoto reads this board? ….

“The listing of two bitcoin futures makes it easier for institutional players to trade bitcoins. Futures also enable players to go short on bitcoins, which was difficult without liquid futures,” said Makoto Sakuma, researcher at NLI Research Institute in Tokyo.

 

SD

 

 

I noticed that Bitcoin Cash went up while Bitcoin was going down.  This drop coincided with Coinbase adding Bitcoin Cash.  It could just be people moving some money around.

 

$ flowing out of the high price Bitcoin & into the lower price Bitcoin Cash, is a sign that the retail demand/liquidity of Bitcoin is slowing; retail is seeking cheaper alternates. Problem is that Bitcoin is driving the tide, so as the Bitcoin tide ebbs; all boats fall - including the price of Bitcoin Cash, Etherium, etc. Hence either sell now & buyback later, or short via the futures/options markets for very high premiums.

 

The 'trading' game has changed, and the professionals are now at the table.

Nothing wrong in that, but either know what you're doing or be as least as good as they are.

 

SD

 

 

 

[rkbabang]

We'll have to agree to disagree. It is very much in the interests of a CB to have a interchangeable paper/digital dollar.

And as soon as you have a digital dollar you also have a zero cost payment system, and it is that - that makes the cards obsolete. Hard to charge a fee to transact when you can easily do it for free.

 

Notable, is that the Bitcoin 'reversal' also appears to be starting ....

https://www.msn.com/en-ca/money/markets/bitcoin-plunges-dollar1000-in-less-than-an-hour/ar-BBH2QSu?li=AAacUQk&ocid=spartandhp

 

SD

 

 

https://ca.reuters.com/article/businessNews/idCAKBN1EE02J-OCABS

 

Down 20% intraday before eventually closing down 4.5% on the day, & suggestions that some of the punters are exiting ……

“However, for Japanese retail investors who are estimated to account for 30 to 50 percent of bitcoin trade worldwide, a more worrying warning may have come from a Japanese day trader guru known as Cis. The individual trader, who claims to own 21 billion yen ($186 million) in assets, tweeted over the last 24 hours that he had sold cryptocurrencies.”

 

Maybe Makoto reads this board? ….

“The listing of two bitcoin futures makes it easier for institutional players to trade bitcoins. Futures also enable players to go short on bitcoins, which was difficult without liquid futures,” said Makoto Sakuma, researcher at NLI Research Institute in Tokyo.

 

SD

 

 

I noticed that Bitcoin Cash went up while Bitcoin was going down.  This drop coincided with Coinbase adding Bitcoin Cash.  It could just be people moving some money around.

 

$ flowing out of the high price Bitcoin & into the lower price Bitcoin Cash, is a sign that the retail demand/liquidity of Bitcoin is slowing; retail is seeking cheaper alternates. Problem is that Bitcoin is driving the tide, so as the Bitcoin tide ebbs; all boats fall - including the price of Bitcoin Cash, Etherium, etc. Hence either sell now & buyback later, or short via the futures/options markets for very high premiums.

 

The 'trading' game has changed, and the professionals are now at the table.

Nothing wrong in that, but either know what you're doing or be as least as good as they are.

 

SD

 

The only problem with your theory is that ETH was hitting all time highs at that same moment.

 

I'm not worried about the so-called "professionals".  I've held my own against them in the stock market over the years and I will hold my own against them in crypto as well.  I am focused long term and aren't worried about this quarter or next which is the exact opposite point of view from the vast majority of the "professionals".

 

[Gregmal]

We'll have to agree to disagree. It is very much in the interests of a CB to have a interchangeable paper/digital dollar.

And as soon as you have a digital dollar you also have a zero cost payment system, and it is that - that makes the cards obsolete. Hard to charge a fee to transact when you can easily do it for free.

 

Notable, is that the Bitcoin 'reversal' also appears to be starting ....

https://www.msn.com/en-ca/money/markets/bitcoin-plunges-dollar1000-in-less-than-an-hour/ar-BBH2QSu?li=AAacUQk&ocid=spartandhp

 

SD

 

 

https://ca.reuters.com/article/businessNews/idCAKBN1EE02J-OCABS

 

Down 20% intraday before eventually closing down 4.5% on the day, & suggestions that some of the punters are exiting ……

“However, for Japanese retail investors who are estimated to account for 30 to 50 percent of bitcoin trade worldwide, a more worrying warning may have come from a Japanese day trader guru known as Cis. The individual trader, who claims to own 21 billion yen ($186 million) in assets, tweeted over the last 24 hours that he had sold cryptocurrencies.”

 

Maybe Makoto reads this board? ….

“The listing of two bitcoin futures makes it easier for institutional players to trade bitcoins. Futures also enable players to go short on bitcoins, which was difficult without liquid futures,” said Makoto Sakuma, researcher at NLI Research Institute in Tokyo.

 

SD

 

 

I noticed that Bitcoin Cash went up while Bitcoin was going down.  This drop coincided with Coinbase adding Bitcoin Cash.  It could just be people moving some money around.

 

$ flowing out of the high price Bitcoin & into the lower price Bitcoin Cash, is a sign that the retail demand/liquidity of Bitcoin is slowing; retail is seeking cheaper alternates. Problem is that Bitcoin is driving the tide, so as the Bitcoin tide ebbs; all boats fall - including the price of Bitcoin Cash, Etherium, etc. Hence either sell now & buyback later, or short via the futures/options markets for very high premiums.

 

The 'trading' game has changed, and the professionals are now at the table.

Nothing wrong in that, but either know what you're doing or be as least as good as they are.

 

SD

 

I don't follow the BTC price movements all too closely but of late it definitely seems to be displaying the classic "air slowly leaking from the balloon" syndrome. Whether this is just consolidation after a massive move, or the beginning of the end, who knows.

[DeepSouth]

 

Very good stuff in this blogpost.

Thanks for posting.

 

SD

 

You're welcome.

 

@DeepSouth can you understand you're a masochist from my point of view? Anyway, let's just all vote with our wallets and things will work out at some point :)

 

I honestly don't understand your point of view. I'd say the empirical end result of your policy desires leads to decade long depressions and wild and violent swings in inflation and deflation. It's not masochism to desire an entity with the power to smooth out economic cycles and encourage growth. The federal reserve is one of the few things the US government gets mostly right. If you're terrified of your savings being withered away by low single digit inflation but don't want principal risk for your savings buy TIPS.

 

I own bitcoin because I think the risk/reward is fair from here even though I think most bullish arguments for bitcoin are very stupid.

 

The policy of the last ~120 years led to huge bubbles and (long! 20+ years at times) subsequent recesions while an organic market won't have recesions lasting longer than a few years. I concider loving that ewuivalent with loving pain.

 

On top of that an organic market rewards its participants more fairly in the sense that good decisions lead to financial reward while the current system rewards having the right contacts at the policy maker for the most part.

 

There have been no recessions that lasted 20 years this century, and I just pointed out an example of a decade long depression that occurred in the final decades leading up to the creation of the federal reserve. Per capita real GDP fell 10% over a decade in the US in the latter part of the 1800s. There were massive bubbles before the Federal Reserve (see canals, railroads). These are the facts, you are empirically incorrect, it's not up for debate. Is your persona/feelings so tied up in libertarianism ideology that you are unwilling to use reason and view the world through a historic and empirical prism?

 

Lastly, the idea that most successful people achieved success through inside contacts at the Federal Reserve is a wildly bizarre conspiracy theory that makes no sense.

[wachtwoord]

 

Very good stuff in this blogpost.

Thanks for posting.

 

SD

 

You're welcome.

 

@DeepSouth can you understand you're a masochist from my point of view? Anyway, let's just all vote with our wallets and things will work out at some point :)

 

I honestly don't understand your point of view. I'd say the empirical end result of your policy desires leads to decade long depressions and wild and violent swings in inflation and deflation. It's not masochism to desire an entity with the power to smooth out economic cycles and encourage growth. The federal reserve is one of the few things the US government gets mostly right. If you're terrified of your savings being withered away by low single digit inflation but don't want principal risk for your savings buy TIPS.

 

I own bitcoin because I think the risk/reward is fair from here even though I think most bullish arguments for bitcoin are very stupid.

 

The policy of the last ~120 years led to huge bubbles and (long! 20+ years at times) subsequent recesions while an organic market won't have recesions lasting longer than a few years. I concider loving that ewuivalent with loving pain.

 

On top of that an organic market rewards its participants more fairly in the sense that good decisions lead to financial reward while the current system rewards having the right contacts at the policy maker for the most part.

 

There have been no recessions that lasted 20 years this century, and I just pointed out an example of a decade long depression that occurred in the final decades leading up to the creation of the federal reserve. Per capita real GDP fell 10% over a decade in the US in the latter part of the 1800s. There were massive bubbles before the Federal Reserve (see canals, railroads). These are the facts, you are empirically incorrect, it's not up for debate. Is your persona/feelings so tied up in libertarianism ideology that you are unwilling to use reason and view the world through a historic and empirical prism?

 

Lastly, the idea that most successful people achieved success through inside contacts at the Federal Reserve is a wildly bizarre conspiracy theory that makes no sense.

 

Sept. 3, 1929 until Nov. 23, 1954 is not more than 20 years. Okay, I guess I must suck at math......

[JayGatsby]

This has probably been answered in one of the prior pages, so apologies for the redundancy, but can someone explain this to me? http://www.bbc.com/news/technology-42409815

 

Mechanically how does someone "steal" crypto, or similarly, how does someone "lose" crypto? This will show how awful my understanding of this stuff is, but if there is a distributed ledger doesn't that track ownership of the asset? If I own a share of BRK through Interactive Brokers, somewhere they have a ledger that has a share of BRK in my name and BRK (or NYSE) has a ledger with a share in IB's name. I assume there's backups made of those ledgers so if someone hacked into IB it would be difficult for them to change IB's ledger from my name to their name. I was thinking the benefit of crypto was that there's another layer of protection because that ledger is now distributed to millions of computers... making it impossible for someone to hack in and change the ledger?

 

In a way you don’t really own your Bitcoin in the same way that you own your house or your car. You own bitcoin in the same way you own the cash in your wallet. It is a bearer instrument. With a $100 bill the piece of paper is the instrument, if someone takes it from you they can spend it.  With Bitcoin the instrument is your private key. If someone knows your private key they can send your Bitcoin to another address (their own presumably).  So if you store your private key on a piece of paper and someone takes it (or even takes a picture of it) then they can access your Bitcoins. If you store your private key on a computer and someone hacks into it they can take your Bitcoins.  This is why I think it is dangerous to hold Bitcoins in a 3rd party account Like an exchange or online wallet like Coinbase.  You are trusting a company to keep the key safe.  I suggest controlling your own keys and keeping them safe yourself.

Interesting. Thanks. So the ledger records all the private keys that are out there? So if I transfer my bitcoin to you, my private key becomes invalidated and you get a new one? What is being recorded on the blockchain?

[rkbabang]

This has probably been answered in one of the prior pages, so apologies for the redundancy, but can someone explain this to me? http://www.bbc.com/news/technology-42409815

 

Mechanically how does someone "steal" crypto, or similarly, how does someone "lose" crypto? This will show how awful my understanding of this stuff is, but if there is a distributed ledger doesn't that track ownership of the asset? If I own a share of BRK through Interactive Brokers, somewhere they have a ledger that has a share of BRK in my name and BRK (or NYSE) has a ledger with a share in IB's name. I assume there's backups made of those ledgers so if someone hacked into IB it would be difficult for them to change IB's ledger from my name to their name. I was thinking the benefit of crypto was that there's another layer of protection because that ledger is now distributed to millions of computers... making it impossible for someone to hack in and change the ledger?

 

In a way you don’t really own your Bitcoin in the same way that you own your house or your car. You own bitcoin in the same way you own the cash in your wallet. It is a bearer instrument. With a $100 bill the piece of paper is the instrument, if someone takes it from you they can spend it.  With Bitcoin the instrument is your private key. If someone knows your private key they can send your Bitcoin to another address (their own presumably).  So if you store your private key on a piece of paper and someone takes it (or even takes a picture of it) then they can access your Bitcoins. If you store your private key on a computer and someone hacks into it they can take your Bitcoins.  This is why I think it is dangerous to hold Bitcoins in a 3rd party account Like an exchange or online wallet like Coinbase.  You are trusting a company to keep the key safe.  I suggest controlling your own keys and keeping them safe yourself.

Interesting. Thanks. So the ledger records all the private keys that are out there? So if I transfer my bitcoin to you, my private key becomes invalidated and you get a new one? What is being recorded on the blockchain?

 

Your key once created never becomes invalid, if you send me all your bitcoin, you will have a zero balance, but if someone sends you more bitcoin you will have a balance again.  Once an address exists I don’t think there is a way to remove it. You could have a zero balance for 100 years then receive new coins. The blockchain records which addresses currently contain which bitcoins.

[rkbabang]

This has probably been answered in one of the prior pages, so apologies for the redundancy, but can someone explain this to me? http://www.bbc.com/news/technology-42409815

 

Mechanically how does someone "steal" crypto, or similarly, how does someone "lose" crypto? This will show how awful my understanding of this stuff is, but if there is a distributed ledger doesn't that track ownership of the asset? If I own a share of BRK through Interactive Brokers, somewhere they have a ledger that has a share of BRK in my name and BRK (or NYSE) has a ledger with a share in IB's name. I assume there's backups made of those ledgers so if someone hacked into IB it would be difficult for them to change IB's ledger from my name to their name. I was thinking the benefit of crypto was that there's another layer of protection because that ledger is now distributed to millions of computers... making it impossible for someone to hack in and change the ledger?

 

In a way you don’t really own your Bitcoin in the same way that you own your house or your car. You own bitcoin in the same way you own the cash in your wallet. It is a bearer instrument. With a $100 bill the piece of paper is the instrument, if someone takes it from you they can spend it.  With Bitcoin the instrument is your private key. If someone knows your private key they can send your Bitcoin to another address (their own presumably).  So if you store your private key on a piece of paper and someone takes it (or even takes a picture of it) then they can access your Bitcoins. If you store your private key on a computer and someone hacks into it they can take your Bitcoins.  This is why I think it is dangerous to hold Bitcoins in a 3rd party account Like an exchange or online wallet like Coinbase.  You are trusting a company to keep the key safe.  I suggest controlling your own keys and keeping them safe yourself.

Interesting. Thanks. So the ledger records all the private keys that are out there? So if I transfer my bitcoin to you, my private key becomes invalidated and you get a new one? What is being recorded on the blockchain?

 

Also it is better to think of it as a public address with a private key. Your address is public, that is what you give to other people to send you money and also what you use to check your balance. Think of the private key as a key to unlock your address to enable sending. Ignoring the blockchain for a moment, what using bitcoin is like is imagine a huge room filled with safety deposit boxes. Every box has an address viewable to everyone right on it. Every box has a unbreakable glass door so you can walk around and see what is inside every one. Some boxes may be empty and that is fine. Every box also has a keyhole and a coin slot so that you can put coins in a box without opening it, but you can only get to the coins inside if you have the key. So you might have the key to one box which you can open and take coins and deposit them in another box for which you don’t own the key.  Also some boxes might have coins in them, but the key to get into them is lost, so those coins are forever unavailable to the world.

 

Now of course with the actual blockchain you can not only see every public address and the balance in each one, but you can also see the history of the ledger. You can see every transaction ever made since the start of the blockchain.

 

[Liberty]

BTC hit 10,700 a few minutes ago.

[doughishere]

BTC hit 10,700 a few minutes ago.

 

I can almost see them forking bitcoin for liquidity purposes.

[SharperDingaan]

And now big enough to trigger circuit breakers and start the mass exits on Asia's exchanges. 

Hard to see how it doesn't drop another 50-75% from here over the next month or so.

 

SD

 

[rkbabang]

And now big enough to trigger circuit breakers and start the mass exits on Asia's exchanges. 

Hard to see how it doesn't drop another 50-75% from here over the next month or so.

 

SD

 

 

I sure hope so.  I'm buying more under $9K, under $5K would be ideal.

 

 

[Liberty]

What's the exchange equivalent of a banana republic?

 

https://www.cnbc.com/2017/12/22/coinbase-one-of-the-biggest-bitcoin-marketplaces-says-buying-and-selling-temporarily-disabled-amid-price-rout.html

[Gregmal]

And now big enough to trigger circuit breakers and start the mass exits on Asia's exchanges. 

Hard to see how it doesn't drop another 50-75% from here over the next month or so.

 

SD

 

 

I sure hope so.  I'm buying more under $9K, under $5K would be ideal.

 

Just curious, but how are you determining your price points to add? There is no real way to determine an intrinsic value, so is it just based on regressions or prior trading ranges?

[rkbabang]

And now big enough to trigger circuit breakers and start the mass exits on Asia's exchanges. 

Hard to see how it doesn't drop another 50-75% from here over the next month or so.

 

SD

 

 

I sure hope so.  I'm buying more under $9K, under $5K would be ideal.

 

Just curious, but how are you determining your price points to add? There is no real way to determine an intrinsic value, so is it just based on regressions or prior trading ranges?

 

I can't give you an exact value, but if Bitcoin becomes what I think it will you will have 7 Billion people who want to own and use those 16M-20M coins (depending on how many you think are lost).  I don't know if the price in 10 years is $500K or $25M, but it won't be $5K unless my thesis on bitcoin is entirely wrong.  If that is the case then you probably shouldn't buy it at all as $0 would be my best guess.  I've been buying on the dips since 2014 and it has served me well building my position.  I think the real runup is going to be in the 2020s.  As we go from way less than 1% of people using/owning bitcoin to 20-40%.  Facebook has over 1 Billion users, what happens when a billion+ people want Bitcoin? I still think that there is plenty of time.  This drop will be one of many along the way.

 

[SnarkyPuppy]

And now big enough to trigger circuit breakers and start the mass exits on Asia's exchanges. 

Hard to see how it doesn't drop another 50-75% from here over the next month or so.

 

SD

 

 

I sure hope so.  I'm buying more under $9K, under $5K would be ideal.

 

Just curious, but how are you determining your price points to add? There is no real way to determine an intrinsic value, so is it just based on regressions or prior trading ranges?

 

I can't give you an exact value, but if Bitcoin becomes what I think it will you will have 7 Billion people who want to own and use those 16M-20M coins (depending on how many you think are lost).  I don't know if the price in 10 years is $500K or $25M, but it won't be $5K unless my thesis on bitcoin is entirely wrong.  If that is the case then you probably shouldn't buy it at all as $0 would be my best guess.  I've been buying on the dips since 2014 and it has served me well building my position.  I think the real runup is going to be in the 2020s.  As we go from way less than 1% of people using/owning bitcoin to 20-40%.  Facebook has over 1 Billion users, what happens when a billion+ people want Bitcoin? I still think that there is plenty of time.  This drop will be one of many along the way.

 

It's also just basic expected value.  I personally value based on golds current market cap and reverse engineer breakeven EV probability.  Think we are around ~3% now but forget offhand exact % at $13k.  Is there a >3% chance bitcoin becomes a prominent store of value? 

[Gregmal]

And now big enough to trigger circuit breakers and start the mass exits on Asia's exchanges. 

Hard to see how it doesn't drop another 50-75% from here over the next month or so.

 

SD

 

 

I sure hope so.  I'm buying more under $9K, under $5K would be ideal.

 

Just curious, but how are you determining your price points to add? There is no real way to determine an intrinsic value, so is it just based on regressions or prior trading ranges?

 

I can't give you an exact value, but if Bitcoin becomes what I think it will you will have 7 Billion people who want to own and use those 16M-20M coins (depending on how many you think are lost).  I don't know if the price in 10 years is $500K or $25M, but it won't be $5K unless my thesis on bitcoin is entirely wrong.  If that is the case then you probably shouldn't buy it at all as $0 would be my best guess.  I've been buying on the dips since 2014 and it has served me well building my position.  I think the real runup is going to be in the 2020s.  As we go from way less than 1% of people using/owning bitcoin to 20-40%.  Facebook has over 1 Billion users, what happens when a billion+ people want Bitcoin? I still think that there is plenty of time.  This drop will be one of many along the way.

 

I tend to (kind of, as I'm not a full blown believer in this but see it's merits) agree with your assessment. However, that isn't necessarily what's opened my eyes to following this a little more closing and even gotten me considering a small position. It's this. Never have I really seen Wall Street HATE something like I have with Bitcoin. It is and has been loathed. However I feel like despite this, Bitcoin has become super popular. And now, IMO Wall Street is on the cusp on embracing it for the simple reason that Wall Street eventually finds a way to LOVE anything they can make money selling. There are not many Bitcoin ETF's or products. Funds have little to no exposure to them. Most banks don't have access to it or trading desks to support it. This is all on the cusp on changing, which I think should create a massive tailwind for the next 2-3 years. This current manic move has simple wet the appetite of a lot of people; it has them paying attention now. So your demand will start increasing substantially and on top of that all the institutional products that will be getting involved simply because they can sell it to people and make money will be significant. The small float(21m or whatever but said to really be maybe 50-75% of that) could send this to the moon. Especially if some of the new products coming out allow people to short this.

[SharperDingaan]

And now big enough to trigger circuit breakers and start the mass exits on Asia's exchanges. 

Hard to see how it doesn't drop another 50-75% from here over the next month or so.

 

SD

 

 

I sure hope so.  I'm buying more under $9K, under $5K would be ideal.

 

Just curious, but how are you determining your price points to add? There is no real way to determine an intrinsic value, so is it just based on regressions or prior trading ranges?

 

Primarily gut feel, & thinking like a grocer - as there are no real metrics at this point.

We have a 10 cases of 'specialty' apples on the shop floor, are charging what we think the market will bear; but are taking the risk that some of our cases will never sell (rot, go obsolete, etc). Or we could put them on sale right now, to clear them out immediately. Which of these options is the more valuable to us - going forward?

 

Make the right decision and you eat well. Make the wrong one and you're eating apples for the next little while.

 

SD

 

 

[rkbabang]

To put this current "crash" in perspective.  The 50 day moving average is $12,100 and the 250 day moving average is $5,900.

 

The last time Bitcoin traded under its 250 day moving average was in October 2015.  But it has traded under its 50 day moving average 7 times this year, it just touched it then moved on up higher every time.  We've have multiple 30% drops in 2017 so far.  I'd hardly call the current move anything but normal volatility.  Normal for bitcoin anyway.

[abyli]

Charlie Munger：I think it is perfectly asinine and even pause to think about them. You know it is one thing to think gold has some marvelous store value because man has no way of inventing more gold or getting it very easily, so it has the advantage of rarity. Believe me, man is capable of somehow creating more Bitcoin. They tell you they are not going to do it, but they mean they are not gonna do it unless they want to. That is what they mean when they say they are not going to do it. They have  their rules and they cannot do it , don’t believe them. When there is enough incentive, bad things will happen. It’s bad people, crazy bubble, bad idea luring people into the concept of easy wealth without much insight or work. That’s the last thing on earth you should think about. If it worked, it will be bad for you you could try to do it again. It is totally insane and by the way I just laid out a wonderful life lesson for you. Give a whole lot of things a wide birth, they don’t exist, you know. Crooks, crazies, egomaniacs, people full of resentment, people full of self-pity, people who feel like victims, there is a whole lot of things that aren’t gonna work for you, figure out what they are and avoid them like plague and one of them is Bitcoin. And the worst thing would happened if you won because then you do it again. It is totally insanity and it is so easy to simplify life from all these things there beneath you.

[Cardboard]

You better have a very strong stomach and understanding if you are involved in this.

 

Almost 4 years ago, a stripper asked me about Bitcoins after the DJ had told her that this would be hot! At the time, Bitcoin was just entering a brutal bear market, after a spectacular parabolic up move, that would make it nearly vanish from the scene. No pun intended!!!

 

Now this year, the thing got publicity again as it moved from around $1,000 to near $20,000.

 

Were you invested in 2014 to live through that bear? Are you prepared for say 3 years of potential underperformance?

 

These are questions that one should be able to answer even if they have a strong thesis because whether you like it or not, most now involved in this have no clue and their reaction will be based only on two things which will translate into supply and demand: fear and greed.

 

Cardboard

[rkbabang]

Charlie Munger：I think it is perfectly asinine and even pause to think about them. You know it is one thing to think gold has some marvelous store value because man has no way of inventing more gold or getting it very easily, so it has the advantage of rarity. Believe me, man is capable of somehow creating more Bitcoin. They tell you they are not going to do it, but they mean they are not gonna do it unless they want to. That is what they mean when they say they are not going to do it. They have  their rules and they cannot do it , don’t believe them. When there is enough incentive, bad things will happen. It’s bad people, crazy bubble, bad idea luring people into the concept of easy wealth without much insight or work. That’s the last thing on earth you should think about. If it worked, it will be bad for you you could try to do it again. It is totally insane and by the way I just laid out a wonderful life lesson for you. Give a whole lot of things a wide birth, they don’t exist, you know. Crooks, crazies, egomaniacs, people full of resentment, people full of self-pity, people who feel like victims, there is a whole lot of things that aren’t gonna work for you, figure out what they are and avoid them like plague and one of them is Bitcoin. And the worst thing would happened if you won because then you do it again. It is totally insanity and it is so easy to simplify life from all these things there beneath you.

 

Who is this "they" you are speaking of?

 

Gold isn't really limited there have been times when A LOT more gold has been introduced in circulation in a short amount of time, some say bringing massive amounts of gold home from the new world destroyed the Spanish economy.  Consider the fact that there are near earth asteroids which contain more gold than has ever been mined on Earth.  It is much more likely that gold is inflated massively in our lifetime than it is bitcoin.

 

You will never get half the mining power of bitcoin to agree to destroy its value.  If you did the original unedited chain would simply fork away and continue to exist leaving the new inflation chain to die.