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If Bitcoin Looks Like It Isn’t Trading, It’s Because It Isn’t

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Re: If Bitcoin Looks Like It Isn’t Trading, It’s Because It Isn’t

#121

Post by account73466 »

hinkley wrote: post #116
account73466 wrote: post #31

Bitcoin has about $133 bil marketcap. NYSE symbols with the twice (2X) this marketcaps according to Yahoo Finance: UNH (UnitedHealth Group) mcap: $262 bil, trading volume: $1.2 bil KO (COCA-COLA) mcap: $231 bil, trading volume: $0.6 bil MRK (MERCK) mcap: $225 bil trading volume: $0.7 bil Therefore, for Bitcoin to be tradeable as similar stocks it has to show $0.25-0.5 bil for $133 bil mcap or $0.5-1.0 bil for $250 bi…

All three of those stocks pay dividends. Doesn't that tend to reduce volume vs float? Also, if you're going to compare Bitcoin to stocks, does that mean you accept that Bitcoin's value is in speculation and not as a currency?

Returns of top S&P 500 stocks would be around 6-8% annually when computing over say 10-20 years. When dividends are included, you end up with something like 10-12%. However, I don't think it impacts volume by more than some one digit percentage (when average over the whole year) since it happens very occasionally.

>> does that mean you accept that Bitcoin's value is in speculation and not as a currency?

Today, it is a speculative asset.

Re: If Bitcoin Looks Like It Isn’t Trading, It’s Because It Isn’t

#122

Post by xur17 »

cwkoss wrote: post #59
paulddraper wrote: post #54

Earlier quoted context omitted.

My understanding is that a gain or loss in that currency is recognized upon spending/trading it. Quick search brought me to https://thismatter.com/money/tax/foreign-currency-transactio... which agrees with that. Like use tax, I suspect it is often just neglected.

Interesting, thanks for correcting me. It looks like there may be an exemption for small amounts under $200 ( https://smallbusiness.chron.com/foreign-currency-exchange-ta... ), which would make Bitcoin much more functional (if it would apply to Bitcoin anyways, mute point as BTC is classified as an asset), but not to the extent of my misconception.

The lack of a de minimis exemption for bitcoin is key here, and a major way in which it's not treated like a foreign currency.

Re: If Bitcoin Looks Like It Isn’t Trading, It’s Because It Isn’t

#123

Post by buboard »

9nGQluzmnq3M wrote: post #102
buboard wrote: post #96

Earlier quoted context omitted.

Their BNB coin used to pay fees outperforms bitcoin past year. Is that wash trading as well?

Not necessarily, it could be a Ponzi scheme instead.

it's a public blockchain. can it even be a ponzi scheme?

Re: If Bitcoin Looks Like It Isn’t Trading, It’s Because It Isn’t

#125

Post by account73466 »

JumpCrisscross wrote: post #101
account73466 wrote: post #87

Earlier quoted context omitted.

>> It's too thinly and opaquely traded That claim about "thinly" contradicts the numbers given in my post above.

> That claim about "thinly" contradicts the numbers given in my post above Most Bitcoin volume is non-economic [1]. Some of it is fraudulent printing. Some of it is wash trading. That said, I don't doubt Binance's figures. The problem with taking a few trades and multiplying it by the outstanding coinage goes back to the aggregate being meaningless. [1] https://www.sec.gov/comments/sr-nysearca-2019-01/srnysearca2...

More than 90% of Bitcoin volume is fake, there is no question about that.

However, if you believe Binance's figures then these figures alone are sufficient to support Bitcoin's current market cap in the sense that its volume / market cap is about the same as for well-traded stocks from S&P500. In other words, the claim that the volume is too small is not well supported because it is as small as for other financial assets, e.g., between 0.2-1% of market cap per day.

Re: If Bitcoin Looks Like It Isn’t Trading, It’s Because It Isn’t

#126

Post by spookthesunset »

buboard wrote: post #123
9nGQluzmnq3M wrote: post #102

Earlier quoted context omitted.

Not necessarily, it could be a Ponzi scheme instead.

it's a public blockchain. can it even be a ponzi scheme?

Most exchange trades aren’t done on-chain.

Re: If Bitcoin Looks Like It Isn’t Trading, It’s Because It Isn’t

#127

Post by mathgenius »

shepardrtc wrote: post #39
account73466 wrote: post #31

Bitcoin has about $133 bil marketcap. NYSE symbols with the twice (2X) this marketcaps according to Yahoo Finance: UNH (UnitedHealth Group) mcap: $262 bil, trading volume: $1.2 bil KO (COCA-COLA) mcap: $231 bil, trading volume: $0.6 bil MRK (MERCK) mcap: $225 bil trading volume: $0.7 bil Therefore, for Bitcoin to be tradeable as similar stocks it has to show $0.25-0.5 bil for $133 bil mcap or $0.5-1.0 bil for $250 bi…

I have a hard time believe its anything other than market makers providing the illusion of trades. Have you seen the price swings? If there was real volume and real transactions asides from trades, how would such insane swings be possible?

Traders use stoploss orders when they enter a position. After a few days or weeks of this, there’s a huge pile of these stoploss orders, on both sides. A bit of movement is all it takes to trigger an avalanche.

Re: If Bitcoin Looks Like It Isn’t Trading, It’s Because It Isn’t

#128

Post by JumpCrisscross »

account73466 wrote: post #125
JumpCrisscross wrote: post #101

Earlier quoted context omitted.

> That claim about "thinly" contradicts the numbers given in my post above Most Bitcoin volume is non-economic [1]. Some of it is fraudulent printing. Some of it is wash trading. That said, I don't doubt Binance's figures. The problem with taking a few trades and multiplying it by the outstanding coinage goes back to the aggregate being meaningless. [1] https://www.sec.gov/comments/sr-nysearca-2019-01/srnysearca2...

More than 90% of Bitcoin volume is fake, there is no question about that. However, if you believe Binance's figures then these figures alone are sufficient to support Bitcoin's current market cap in the sense that its volume / market cap is about the same as for well-traded stocks from S&P500. In other words, the claim that the volume is too small is not well supported because it is as small as for other financial as…

> if you believe Binance's figures then these figures alone are sufficient to support Bitcoin's current market cap in the sense that it market cap / volume is about the same as for well-traded stocks from S&P500

You're defending a metric by citing the metric.

The only utility for market cap with Bitcoin would appear to be to make arguments like this one. Comparing a nonsensical ratio to a similarly-sounding meaningful one. To someone who isn't thinking through what the numbers and their resulting ratios mean, I suppose it sounds authoritative.

Re: If Bitcoin Looks Like It Isn’t Trading, It’s Because It Isn’t

#129

Post by modeless »

paulddraper wrote: post #51
cwkoss wrote: post #44

Earlier quoted context omitted.

I'd argue that IRS tax treatment of Bitcoin as an asset (and thus making every currency-like purchase - even when exchanging for good or services - a taxable event) is another significant factor. Fees may have made this inevitable, but having to deal with taxes has definitely made me much more wary of using it for small purchases. Bitcoin tax accounting is tedious, and I think once a company solves non-custodial reco…

The IRS treats essentially everything ownable as an asset: gold, paper currency, bitcoin, art, postage stamps. You obviously never pay capital gains tax on USD, because it never changes value relative to USD. AFAIK a Bitcoin is no different than a Euro tax-wise.

There's a gigantic difference: an exemption for almost all personal transactions. In practice almost every foreign currency transaction you make is exempt[1]. The IRS doesn't allow that exemption for Bitcoin and technically you are required to calculate and report gains for every single Bitcoin transaction you make (regardless of whether dollars are involved). Imagine reporting every Starbucks purchase on your tax return. It's a completely unreasonable burden for a currency.

[1] The actual rule is $200 of capital gains per transaction, and you'd usually have to spend substantially more than $1000 in a single transaction to get there.

Re: If Bitcoin Looks Like It Isn’t Trading, It’s Because It Isn’t

#130

Post by natmaka »

hinkley wrote: post #116
account73466 wrote: post #31

Bitcoin has about $133 bil marketcap. NYSE symbols with the twice (2X) this marketcaps according to Yahoo Finance: UNH (UnitedHealth Group) mcap: $262 bil, trading volume: $1.2 bil KO (COCA-COLA) mcap: $231 bil, trading volume: $0.6 bil MRK (MERCK) mcap: $225 bil trading volume: $0.7 bil Therefore, for Bitcoin to be tradeable as similar stocks it has to show $0.25-0.5 bil for $133 bil mcap or $0.5-1.0 bil for $250 bi…

All three of those stocks pay dividends. Doesn't that tend to reduce volume vs float? Also, if you're going to compare Bitcoin to stocks, does that mean you accept that Bitcoin's value is in speculation and not as a currency?

Bitcoin seems intrinsically 'neutral' to me, its 'value' (as a tool) is/becomes what its users do with it.
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