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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

#71

Post by Finnucane »

mardifoufs wrote: post #68
Finnucane wrote: post #38

Earlier quoted context omitted.

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.

The Fed action today suggests that they do not think a credit crisis is unlikely. And while it is true that big corporations and players in money markets don't hold a lot of actual cash, it does seem to be the case that every asset class is getting punished, and that is actually kind of weird.

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

#72

Post by unhashable »

kaikai wrote: post #50
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…

You don't have to transport a heavy metal, instead all you have to do is ensure an electrical grid, fully functional internet access, and a distributed network of other people! I'm not sure that's any easier than carry around metal :P

I see: you’re concerned with a future where the concept of an internet ceases to exist? I’m afraid money will be the least of our problems then.

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

#73

Post by unhashable »

Ididntdothis wrote: post #35
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…

“Bitcoin let’s you store $1T USD of dollars in your head, transport it anywhere in the world, and there’s not a single thing anyone else can do about it.” As of now the $1T can also disappear and nobody will even notice.

What do you mean it can disappear and nobody will even notice? I can think of a few things but I’d rather not assume. Can you spell it out so I can better reply?

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

#74

Post by lawn »

glofish wrote: post #22
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…

bitcoin is not really "there" the same way as gold is. The whole point of gold is that it is a tangible asset. You can hold gold in your pocket or under your mattress and it costs nothing to store it. You can't prove you have bitcoin if you don't have internet access for example. You can't have bitcoin if miners don't run their nodes. Basically, you are depending on a resource in faraway lands to let you "own" what y…

> What kind of asset is that?

A digital one.

The idea that gold gets its value because it's a tangible asset is wrong. Gold, as a lot of other things, gets most of its value from speculation. The real difference between gold and Bitcoin is the market size, maturity and general trust in gold that people have.

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

#75

Post by unhashable »

dragonwriter wrote: post #69
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.…

> 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/reto…

Physical cash is not long for this world. We are rapidly moving towards always-online and fully-digital ledgers controlled by governments and central banks.

You will not be able to get a hair cut unless you are an outstanding citizen and have your governments blessing.

I wish this were a joke.

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

#76

Post by dageshi »

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.

During the financial crisis circa 2007-8 gold also sold off initially when a lot of gold bugs believed it should rise higher given the financial markets instability.

The reason was that people needed to sell their "winners" in order to cover their "losers". Stocks were down, they sold gold which was way up at that point to cover some of the losses and get cash.

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

#77

Post by s_dev »

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?

Liquidity is King.

Cash is filthy bacteria rags that are pure liquidity. Contactless and Cashless solutions are the future.

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

#78

Post by Ididntdothis »

unhashable wrote: post #73
Ididntdothis wrote: post #35

Earlier quoted context omitted.

“Bitcoin let’s you store $1T USD of dollars in your head, transport it anywhere in the world, and there’s not a single thing anyone else can do about it.” As of now the $1T can also disappear and nobody will even notice.

What do you mean it can disappear and nobody will even notice? I can think of a few things but I’d rather not assume. Can you spell it out so I can better reply?

Nothing is backing up bitcoin. Almost nobody is using it to pay for things. If bitcoin went away I don’t think the regular economy wouldn’t notice anything. Only speculators would notice.

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

#79

Post by lawn »

glofish wrote: post #24
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.

because bitcoin is not money, it is an asset, it is a property that can be traded for money but its value fluctuates and is not tied to anything other than people's perceived future value in it (which can be valuable, don't get me wrong there, all I am saying that it will change all the time)

What should be considered money is subjective and the value of all money comes from people's perceived future value in it. Even gold coins and dollar notes.

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

#80

Post by simonh »

wayoutthere wrote: post #30
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.

I have a hypothesis that Bitcoin post-2018 is largely held by a handful of major banks as a way to sidestep anti money laundering rules. It's widely known (and proven in court) that the major banks routinely serve billionaire-class criminals (real criminals like drug cartels and terror groups) and large crypto holdings and prop trading operations allow them to move money on and off their books with relative ease. A s…

I think this is a misunderstanding about how banks work. The board of directors or CEO of HSBC didn’t decide to get into the cartel money laundering business. Rather, some middle managers decided to turn a blind eye to some dodgy transactions, which got past the Bank’s AML controls, which were not up to scratch. I’m not justifying anything, they reneged on their legal responsibilities, but banks aren’t conscious entities that decide things like that.

Also it’s highly unlikely a bank could hold vast BTC reserves without the regulators finding out about it. Anyway BTC is used for money laundering, but that doesn’t require holding reserves. Most money laundering transactions transit into and out of BTC very quickly. The only reason to keep BTC for very long is speculation.

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