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It can all go to zero

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Re: It can all go to zero

#171

Post by oreo81 »

saas_co_de wrote: post #143
hbosch wrote: post #76

Earlier quoted context omitted.

The trend of 15-20% swings is well documented in Bitcoin history, no doubts about that. Crypto is a young economy in general, and it's been thrilling for me (on the outside, as I don't speculate or hold) to watch. But I don't know. If you play with the zoom levels on price tracking sites, the $20k peak onward has been a pretty steady downward trend. BTC is down 20% over three days, down nearly 23% over a week. Is tha…

The interesting thing is that this is what a real free market looks like. This is what any market would look like without being rigged by governments and government backed institutions. Bitcoin may be the best proof yet of how deeply flawed the libertarian free market ideology really is.

Flawed? How so?

Re: It can all go to zero

#172

Post by JackFr »

aitrean wrote: post #33

Time for the monthly cryptocurrency panic thread. While I fully agree that most cryptocurrencies are grossly overvalued, these articles always pretend a 20% selloff is the beginning of the end, when, in crypto land, 20% selloffs are a pretty standard bad day for the market.

"Panic", "liquidity crisis", "run" -- when the end comes, it's always much, much faster than players in the market had imagined until that point.

What will happen is that animal spirits will change, and liquidity will slowly recede. At some point many market players will say, "Yes crypto has value, but I prefer to hold more dollars for the time being."

Price levels drop and volatility increases, and the feeling compounds. More people prefer to hold more of their wealth in dollars.

Those who have bought with leverage are force to sell, driving the price further down.

At that point there is a full on panic and crypto exchanges which are unregulated at best and sketchy at worst, and under no legal obligation to clear trades, will first front run their customers and then fail.

Stocks and bonds at this point would hit a floor at the value of the liquidation dividend, often, but not always, zero for the stock, slightly higher for bonds.

Currencies have no floor, but typically have capital restrictions (you can't get out) or a central bank with reserves and an interest rate mechanism The central bank would buy with reserves or raise interest rates to support it.

Cryptos have no central bank and no capital restrictions.

Re: It can all go to zero

#173

Post by nwatson »

charlesdm wrote: post #95
overhang wrote: post #65

Earlier quoted context omitted.

Were you around a few years back to see real estate values drop from $300K to $25K? I saw that. And we are talking about a physical property. $25K is not zero, but it would be hard to distinguish the effective difference if you're leveraged $250K. So, as with any investment, if you're spending monopoly money on cryptocurrencies, scoff away. But if your retirement depends on it...

$300k to $25K? That seems awfully cheap. Where did prices drop so much?

Detroit. And they haven't yet recovered. Real estate has negative worth in some places because the legal obligations to raze the site imply costs greater than what the lot and "improvements" are worth.

Re: It can all go to zero

#174

Post by overhang »

cableshaft wrote: post #18
aphextron wrote: post #7

Earlier quoted context omitted.

Ask yourself what exactly is behind that “~550B”. The answer is nothing but faith. You are comparing the market cap of cryptocurrencies to NASDAQ, a portfolio of the highest profit driving, real asset laden companies on earth. How is this even remotely realistic?

Everything is based on faith to a certain extent. None of us (that I'm aware of) have crystal balls that see the exact future. Even companies that have lots of assets behind them could potentially make catastrophic fuck ups that tank their stock (i.e. BP and their Deepwater Horizon spill) in an instant.

So cryptocurrencies are like Enron? Too big to fail? Too useful? Too what?

Can I interest you in a Venezuelan bolivar fuerte. There are 30,000,000+ people vested in it. There are billions of USD worth of them out in the world. What could possibly go wrong?

Re: It can all go to zero

#175

Post by seannyg »

dnautics wrote: post #109
seannyg wrote: post #60

Bitcoin and many other cryptocurrencies are fiat currencies, nothing more. Bitcoin's value is dependent not on underlying fundamentals, but rather on supply and demand. Its supply is limited and will be fixed, but its demand is based on on its perceived usefulness, either for storing value or making purchases (maybe other things?). Until we see that it is useful for these things, we should assume its fundamental valu…

you're describing currencies, not fiat currencies. Even gold has limited 'intrinsic' value. Pretty much all of it 'real' applications have acceptable, cheaper substitutes. Anyone buying gold-plated connectors for their audio equipment is basically an idiot (source: in high school I used to work for radio shack)

There are many reasons gold has become a valuable currency: it has a distinctive density, a distinctive color, it doesn't oxidize easily, it's not radioactive or toxic, and it's relatively rare (compared to, for example, iron). Its scarcity and distinctiveness, together with its aesthetic appeal, have made it a natural choice as a currency. See, for example, http://www.bbc.com/news/magazine-25255957.

Bitcoin has none of these properties ,which makes me call it a fiat currency (like the U.S. dollar). The only difference is that the U.S. dollar does have transactional value (and limited storage value).

Re: It can all go to zero

#176

Post by fastball »

inyourtenement wrote: post #134
blhack wrote: post #79

Earlier quoted context omitted.

It's also not fair because a company can actually "go away" as in they sell the building and stop operating. You can't really do this with bitcoin. It's never going to "shut down".

If everybody woke up at once, came to their senses, and realized bitcoin was all just a waste of time and literal energy, and turned off their machines, bitcoin would be "shut down".

Nope, because then the next day someone would start mining again in the hope that people would want BTC someday.

Re: It can all go to zero

#177

Post by to3m »

teraflop wrote: post #110
adamnemecek wrote: post #73

Earlier quoted context omitted.

You are fundamentally arguing that cryptocurrencies, all of them, will be gone? That like 30 years from now, there will be 0 things that are basically cryptocurrencies or something that replaced them?

It's a possibility. Maybe they'll still be here, maybe they'll be totally gone; maybe they'll exist, but only in certain niches, or in a form that's unrecognizably different than what they look like now. By analogy: two decades ago, US consumers were buying almost a billion dollars' worth of photographic film a year [1]. Photography hasn't gone anywhere -- people are taking orders of magnitude more photos than they u…

But this time it's different, because you can invest your entire net worth into KODAKCoin: https://www.kodak.com/kodakone/default.htm

Re: It can all go to zero

#178

Post by adamnemecek »

teraflop wrote: post #110
adamnemecek wrote: post #73

Earlier quoted context omitted.

You are fundamentally arguing that cryptocurrencies, all of them, will be gone? That like 30 years from now, there will be 0 things that are basically cryptocurrencies or something that replaced them?

It's a possibility. Maybe they'll still be here, maybe they'll be totally gone; maybe they'll exist, but only in certain niches, or in a form that's unrecognizably different than what they look like now. By analogy: two decades ago, US consumers were buying almost a billion dollars' worth of photographic film a year [1]. Photography hasn't gone anywhere -- people are taking orders of magnitude more photos than they u…

Ok so we disagree on whether Bitcoin has peaked or not. Do you feel like crypto has peaked? There's this half trilion just waiting to be multiplied. Like people just bought in, they wont be selling. In some sense, I wonder if the fact that beginner investors bought in means that it's more resistant to a price dump as they wont have stop losses. If they bought for 1000, they wont sell for 500 thereby keeping the price afloat. Not saying that's the case.

Re: It can all go to zero

#179

Post by coldcode »

nlh wrote: post #165

The chances that BTC (or any given crypto asset) goes to zero right now (or in the near future), with the information we CURRENTLY have, are low...market gyrations will happen, things will fluctuate +/- 20, 30, 50%, maybe they'll all go up 10x, maybe 100x, etc. As long as folks believe there's a get rich quick possibility (or believe in the viability of crypto assets, or whatever), things will keep on as they've kept…

I've always wondered what Bitcoin would be worth if (1) Nuclear war destroys the internet or cloud servers (2) Mining costs more than its worth and no one mines any more (3) It becomes impossible due to legal or other reasons to convert bitcoin to a real currency without extra-legal efforts.

Re: It can all go to zero

#180

Post by oreo81 »

starlust2 wrote: post #128
hbosch wrote: post #76

Earlier quoted context omitted.

The trend of 15-20% swings is well documented in Bitcoin history, no doubts about that. Crypto is a young economy in general, and it's been thrilling for me (on the outside, as I don't speculate or hold) to watch. But I don't know. If you play with the zoom levels on price tracking sites, the $20k peak onward has been a pretty steady downward trend. BTC is down 20% over three days, down nearly 23% over a week. Is tha…

This is what happens when mania dies down. Everyone who "invested" at >10K are not seeing the enormous returns. Those people are more likely to have never heard of bitcoin before this year. They didn't put in money because of a financial revolution. They put money in to make an easy buck. Those people also represent a significantly larger chunk of the market capitalization. When they lose money they won't come back.

>When they lose money they won't come back.

Exactly! This is why casinos never make money.

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