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Bitcoin and cryptocurrency prices have fallen sharply over the last few days

forbes.com

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Re: Bitcoin and cryptocurrency prices have fallen sharply over the last few days

#61

Post by isk517 »

majormajor wrote: post #6
zionic wrote: post #3

I have to say, the crypto market's strong ties to traditional finance in this crash surprise me. I understand selling off stock because of expected corporate losses, I don't understand mass conversions to FIAT especially when "print more money" seems to be the fed's response to this.

My take on the selloff is people looking for liquid cash. Very similar to stockpiling home supplies. People are looking for stuff they can use or trade in the very short term because they don't know how bad it would get. It's a lot harder to do that today with crypto. I haven't seen anyone with strong reason to believe that companies are gonna be that much worse off a year from now than they were a month ago, or for…

I wouldn't be surprised if there was significant amount of sell off occurring because people are looking to start stockpiling home supplies. I've known more than a few conspiracy minded people that collect crypto currencies due to a belief that it will be a safe haven in the event of a government collapse, and the current Corona virus panic is probably causing a lot of them to realize that all of the bitcoin in the world may not be enough to get you a single roll of toilet paper if that time ever came.

Re: Bitcoin and cryptocurrency prices have fallen sharply over the last few days

#62

Post by unhashable »

weego wrote: post #56
unhashable wrote: post #51

Earlier quoted context omitted.

To address your point more directly: many think that Bitcoin isn’t tangible because you have to trust that the network of full nodes are verifying transactions, and if they stop then Bitcoin ceases to exist. Full nodes have financial incentives to run and they do so today at a scale that rivals the internet. It’s not a favor to Bitcoin, it’s a business. They would only stop if the financial incentive ceased to exist.…

When you think about it, you realize: USD is also virtual currency. Cash is on the way out. You will not be able to spend your USD offline. I mean by that definition anything past barter economies are virtual, so sure if that's your definition then your statement stands. It's completely incorrect by any meaningful definition of virtual though.

Are you actually taking issue with the fundamentals of my argument or just annoyed by my equating USD to a virtual currency?

Re: Bitcoin and cryptocurrency prices have fallen sharply over the last few days

#63

Post by AstralStorm »

klodolph wrote: post #47
tlb wrote: post #42

Earlier quoted context omitted.

Cash was not king during periods of hyperinflation in Germany (30s), Venezuela (ongoing), and many more. It is roughly as common as a stock market crash.

You’re thinking of the early 1920s for Germany, during the Weimar republic.

Or perhaps late 80s Soviet bloc crash.

Re: Bitcoin and cryptocurrency prices have fallen sharply over the last few days

#64

Post by mardifoufs »

basejumping wrote: post #25
unhashable wrote: post #10

It's a common misconception that Bitcoin is a safe haven. It's not. Not even Gold is a safe haven during a liquidity crisis. In sharp downturns, cash is king. Think of Bitcoin and Gold as call options on the entire global monetary system. If Govs become insolvent, Bitcoin and Gold is there. If the masses lose faith in central banks, Bitcoin and Gold is there. If central banks debase currencies too quickly, Bitcoin an…

Why is cash king?

It is for retail investors, but Treasuries are the real "King" when there's a liquidity crunch. Bonds are basically as liquid as it gets, and safer than than cash. That's why yields go down in situations like we see right now.

Not that I think that a liquidity crunch is happening right now anyways since liquidity is readily available if we judge by the Fed rates and how commited towards supporting the repo markets they seem to be. And even just the psychological effect of that strong Fed support make everyone feel safer about their liquidity levels, which makes a run for cash even less likely! Liquidity is probably the biggest self-fulfilling prophecy in Finance.

Re: Bitcoin and cryptocurrency prices have fallen sharply over the last few days

#65

Post by AstralStorm »

rabuse wrote: post #27
basejumping wrote: post #25

Earlier quoted context omitted.

Why is cash king?

Assets and long term-investments mean nothing during a crisis, so short-term value stores becomes a much higher priority (currency).

Assets are rather useful though, depending on what they are.

If it's living space, that's rental value right there. If it's production hardware, depends on what you produce, from which sources and how easy it is to reconfigure. Farming assets can become extremely valuable. If the asset is a stockpile of a good, again, some goods can become very valuable.

Owned land, depends, unless it's somehow prepared it's likely not useful.

Assets such as office space, hardware and supplies, not so valuable.

Re: Bitcoin and cryptocurrency prices have fallen sharply over the last few days

#66

Post by unhashable »

defterGoose wrote: post #60
unhashable wrote: post #33

Earlier quoted context omitted.

This is another misconception. Gold can be held, yes. It also is expensive to verify, transport, and protect. This has proved problematic for holders of the past. A paper system had to be built on top of Gold, which severely diluted the value proposition as gold was confiscated and stockpiled centrally. Practically speaking, very few individuals hold gold and the utility of doing so is limited when you consider how l…

I'm truly struggling to understand how gold can be censored. Also, left out of this discussion is the fact that gold is actually tangible, divorced from some weird semantic backflips. You can build useful things with it.

Holding Bitcoin is not a semantic backflip. Do you hold the dollars in your bank account?

Also: gold can easily be confiscated and it has been before - https://en.m.wikipedia.org/wiki/Executive_Order_6102.

How much gold do you think you can travel with? Think the TSA would allow even $100k of gold to be carried on your person?

Given golds limited supply, why has the price been relatively stable in dollars (which are unlimited)? Because the gold market can easily be manipulated because central banks and Govs hold most of the supply and they can, and do, suppress with targeted market supply flooding.

Re: Bitcoin and cryptocurrency prices have fallen sharply over the last few days

#68

Post by mardifoufs »

Finnucane wrote: post #38
basejumping wrote: post #25

Earlier quoted context omitted.

Why is cash king?

Because in a deflationary debt crisis that is what you are going to need to pay your creditors. No substitutes will be accepted.

In case of a deflationary economy (unlikely imo), wouldn't Treasuries' yields adjust and still be as widely accepted and safe as they are now? Huge amounts of cash are an extremely risky way to hold liquidity in general, and much more so in a deeply depressed economy. There is simply no way to insure that much money against a potential bank bankruptcy or for banks to hold it without parking it anywhere.

Re: Bitcoin and cryptocurrency prices have fallen sharply over the last few days

#69

Post by dragonwriter »

unhashable wrote: post #51
glofish wrote: post #39

Earlier quoted context omitted.

> This is another misconception. Care to elaborate on what my misconception was? I never said that bitcoin is not an interesting concept on its own. Just that is ain't got what most people think or need when they talk about gold or money. Especially not in time of economic distress. Can you use bitcoin without the internet? Can you use bitcoin without someone else mining and being allowed to connect to these entities…

To address your point more directly: many think that Bitcoin isn’t tangible because you have to trust that the network of full nodes are verifying transactions, and if they stop then Bitcoin ceases to exist. Full nodes have financial incentives to run and they do so today at a scale that rivals the internet. It’s not a favor to Bitcoin, it’s a business. They would only stop if the financial incentive ceased to exist.…

> You will not be able to spend your USD offline. USD is based on a network of centralized banks. You cannot spend your fiat without a computer asking permission from these centralized systems.

Yes, I can, as long as I have it as physical currency, and regularly do. Admittedly, this relies on confidence of all participants that eventually systems (banking, etc.) which are as you describe will work or be replaced/retooled without he online dependency (and there is plenty of historical precedent of systems working with fiat without digital backup which could be reverted to in extreme need), but there is no real-time dependency on online systems for use of physical currency, and as long as systems are up and working it's easy for fiat users to adjust their risk profile regarding potential future system failures by moving funds into or out of physical currency.

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