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S&P Dow Jones Indices to launch cryptocurrency indexes in 2021

reuters.com

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Re: S&P Dow Jones Indices to launch cryptocurrency indexes in 2021

#481

Post by volume »

jkhdigital wrote: post #408
andrewmcwatters wrote: post #401

Earlier quoted context omitted.

Central banking as it exists in the US is designed to encourage spending. One person’s spending becomes another’s income. Having finite dollars and increasing demand leads to a currency that only increases in value. If an asset increases in value, there is an incentive to acquire it and not part with it.

No matter how much I read on the subject, I always feel like the true nature and complexity of money eludes me. I don’t mean to disparage your comments, but I believe they reflect a lack of appreciation for the magnitude of the subject.

what I don't understand is Modern Monetary Theory: https://www.investopedia.com/modern-monetary-theory-mmt-4588...

Could it be that all this worry about printing money really doesn't matter?

Re: S&P Dow Jones Indices to launch cryptocurrency indexes in 2021

#482

Post by simpss »

nadahalli wrote: post #386
andrewmcwatters wrote: post #366

Earlier quoted context omitted.

Yeah, I’m ignorant and flowers can be planted by anyone, so great conversation. If you really want to have discussions with people maybe try not to focus on meaningless pedantry. Your side of the argument is ad hominem. I’m ignorant. OK, great, what’s your point? I should rethink tulips. Why? You don’t actually make an argument yourself; sure I spouted off some things I think are generally bad because my statements i…

There's your argument for Bitcoin. It cannot be planted by anyone, like tulips. Its supply cannot be increased arbitrarily. Tulips, in fact, could be a bit more complicated. Bitcoin is quite simple that way. Spent electricity is stored and traded - and is a good yardstick to measure other things, etc. etc.

wouldn't storing electricity mean that you're able to take some out of storage & use that stored electricity?

I don't see a way to turn bitcoin back into electricity. One could exchange bitcoin to fiat currency and then buy new electricity(created from a different source) but that's not really using stored electricity.

Re: S&P Dow Jones Indices to launch cryptocurrency indexes in 2021

#483

Post by seibelj »

volume wrote: post #481
jkhdigital wrote: post #408

Earlier quoted context omitted.

No matter how much I read on the subject, I always feel like the true nature and complexity of money eludes me. I don’t mean to disparage your comments, but I believe they reflect a lack of appreciation for the magnitude of the subject.

what I don't understand is Modern Monetary Theory: https://www.investopedia.com/modern-monetary-theory-mmt-4588... Could it be that all this worry about printing money really doesn't matter?

As long as the US dollar is the global reserve currency, then forcing all other countries to accept our infinite printing is easier. But MMT will incentivize foreign countries to use alternatives, and when the US dollar is no longer a reserve currency, the game is over. MMT also requires the government to rapidly increase and reduce taxes, from my research on it. All of this makes it intellectual masturbation, plus a very terrible idea IMO.

Re: S&P Dow Jones Indices to launch cryptocurrency indexes in 2021

#484

Post by wsc981 »

vladimirralev wrote: post #362
wsc981 wrote: post #126

Earlier quoted context omitted.

I see Bitcoin as a hedge against the USD and EUR as I feel the currencies will be in trouble in the coming years. I see Bitcoin as a store of value. Keeping some of my assets in Bitcoin keeps some of my assets out of the hands of governments and banks and will not be affected by devaluation. There's no risk of a bail-in [0] for example. I don't invest all my assets in Bitcoin, currently perhaps 10% of my net worth. I…

I have a lot of respect for Raul Pal, but when he talks about crypto you start to see his limits in understanding. He still thinks governments can't ban crypto if they wanted, he is very wrong about that. He also thinks that governments would allow a crypto to rival a state currency. The most likely success story for crypto is it will be only for banks while regular people will be banned from owning it. There is simp…

But if you look at his video, he does say governments might attempt to ban crypto, but it would be hard to totally ban, since other governments might adopt cryptos. For an effective ban all world governments have to work together on this, and that's quite unlikely to happen.

Actually Iran is using cryptos right now to circumvent some bans from the US government. Certainly Iran would not be in favour for banning crypto.

As Raoul Pal mentions, this is the state of game theory. One country might ban, another might adopt. If you can't spend (or exchange for fiat) the cryptos in your own country, you might move to another country.

I don't believe Bitcoin will be banned ... at least not while Bitcoin is still a relatively small asset class. Especially since institutional investors are now entering the crypto markets. And perhaps at some point, if enough institutional investors have entered the crypto markets, governments might hesitate to ban crypto, as it could destroy a lot of wealth in pension funds, etc...

Re: S&P Dow Jones Indices to launch cryptocurrency indexes in 2021

#485

Post by vmception »

vmception wrote: post #384
andrewmcwatters wrote: post #366

Earlier quoted context omitted.

Yeah, I’m ignorant and flowers can be planted by anyone, so great conversation. If you really want to have discussions with people maybe try not to focus on meaningless pedantry. Your side of the argument is ad hominem. I’m ignorant. OK, great, what’s your point? I should rethink tulips. Why? You don’t actually make an argument yourself; sure I spouted off some things I think are generally bad because my statements i…

Okay. Truce, one last "ad hominem" and I'll move on > Of all the endless knowledge that humanity produces, you have to ask yourself whether or not there’s meaning in pursuing topics endlessly. This is a verbose way of saying ignorance. Okay moving on. My real argument is that Tulip mania is actually the worst poster child of speculative bubbles, as the spot market was largely unaffected and for a brief period of time…

> My first inclination on that speculative bubble is that it was silly, but I didn't comment on it because I don't know if there were supply and demand conditions to support it

So I researched the Beanie Babies bubble and it also does not seem irrational. Ty Warner encountered a temporary supply chain problem and announced that was permanent, and this was not priced in as in, nobody expected that. Beanie Babies did have high sales before this, and people wanted ones they couldn't get.

The Beanie Babies bubble burst when Ty Warner flooded the market with too many variants at once. He didn't know it at the time and was also more interested in his own revenue.

It is not irrational if the traders factored in the possibility of the market being flooded. Does that include the infamous tale of a divorced couple splitting their Beanie Babies investments on a family courtroom floor? I don't think that matters. This is a hallmark of all markets, a spot commodity that there is more of.

Beanie Babies traded at their retail value after Christmas 1999. It is possible to have sustained above market value, such as with diamonds. Maintain the scarcity properly at the expense of near term revenues.

In relation to crypto, the market doesn't become diluted just because there is "more cryptos", the digital commodities that have known immutable supply and market share occasionally have supply shocks and are expected to have them at greater amplitude.

At this point, I can only draw the line of irrational exuberance at equities and credit market bubbles. And even then, only sometimes. So that gives us South China Sea bubble, and the 90s Tech bubble in the Nasdaq.

Re: S&P Dow Jones Indices to launch cryptocurrency indexes in 2021

#486

Post by dasudasu »

sithlord wrote: post #397
andrewmcwatters wrote: post #276

I’m enjoying sitting on the sidelines and watching people “invest” in a digital “currency” that you cannot spend, does not produce cash flow, and whose values are determined by other shmucks buying it from previous shmucks. What a time to be alive. No wonder the S&P 500 CAPE ratio is beyond the 1929 high. No one has any idea of what the intrinsic value is of anything. Investing in companies that don’t make a profit,…

You don't buy stocks because the company "makes money" you buy stocks because the expectation is that they will make more money in the future than they are now. Also, stocks don't really produce cash flow either - A dividend drops the price of each stock by the equivelent amount. So if you get a 3% dividend a year, the stock price is dropping by the same amount. I will say, it is easier to quantify that Apple/Google/…

No. A company that doesn't grow but has positive cash flow is still worth something. You can view a stock as a bond with a coupon rate that is not fixed and doesn't have to be paid back to you immediately if the company thinks it can reinvest it to make even more money. A company's stock might drop at the ex-dividend date, but it would have gone up incrementally each day before that.

Re: S&P Dow Jones Indices to launch cryptocurrency indexes in 2021

#487

Post by jussij »

sithlord wrote: post #397
andrewmcwatters wrote: post #276

I’m enjoying sitting on the sidelines and watching people “invest” in a digital “currency” that you cannot spend, does not produce cash flow, and whose values are determined by other shmucks buying it from previous shmucks. What a time to be alive. No wonder the S&P 500 CAPE ratio is beyond the 1929 high. No one has any idea of what the intrinsic value is of anything. Investing in companies that don’t make a profit,…

You don't buy stocks because the company "makes money" you buy stocks because the expectation is that they will make more money in the future than they are now. Also, stocks don't really produce cash flow either - A dividend drops the price of each stock by the equivelent amount. So if you get a 3% dividend a year, the stock price is dropping by the same amount. I will say, it is easier to quantify that Apple/Google/…

> So if you get a 3% dividend a year, the stock price is dropping by the same amount.

Here is the reason the stock price drops by the dividend amount.

Dividends are issued to the person holding the stock at the date the dividend is issued.

This means it is possible to buy the stock one day before the dividend issue date, hold the stock for another day which then entitles you to the dividend and then sell the stock the following day.

So you can hold the stock for just three days yet still get the dividend and the price drop accounts for this possibility.

If the price did not drop that would effectively equate to free money, as you could take out a three day loan to get the dividend and the interest on that loan would be way less than the dividend amount.

As such it is capital market forces that is causing the share price to drop.

Re: S&P Dow Jones Indices to launch cryptocurrency indexes in 2021

#488

Post by sebmellen »

Afton wrote: post #331
pshc wrote: post #309

Earlier quoted context omitted.

It’s not impossible to make copies of and secure private keys if you have a plan. (But even if you had bought some and preserved it, would you have had the tenacity/foresight to hold onto the BTC for 7+ years?)

> It’s not impossible to make copies of and secure private keys if you have a plan I was 100% discussing my scenario. I would absolutely not have enacted a careful plan with multiple fall-backs. Which is it's own kind of self-indictment tbh, but one that I am at peace with. :D

Also, this holds for 99.99% of the populous. Even hardware wallets aren't a great solution and there you're paying a hundred dollars or so just to get one.

Shovels in a gold rush.

Re: S&P Dow Jones Indices to launch cryptocurrency indexes in 2021

#489

Post by tybit »

doggosphere wrote: post #399
andrewmcwatters wrote: post #276

I’m enjoying sitting on the sidelines and watching people “invest” in a digital “currency” that you cannot spend, does not produce cash flow, and whose values are determined by other shmucks buying it from previous shmucks. What a time to be alive. No wonder the S&P 500 CAPE ratio is beyond the 1929 high. No one has any idea of what the intrinsic value is of anything. Investing in companies that don’t make a profit,…

I'm enjoying sitting on the sidelines and watching people "save" in a fiat "currency" whose value is not linked to anything intrinsic, whose supply can magically be increased at the discretion of a few powerful individuals, and whose value has been declining relative to almost any tradeable assets. What a time to be alive. No wonder the M2 money supply is at an all time high. No one has any idea of what the intrinsic…

Most people aren't investing in fiat, they are investing productive assets like real estate or businesses e.g the share market.

I don't have strong opinions on fiat vs crypto, primarily because it seems like a boring question. Whatever currency is the future, currency isn't the present or the future of investments, productive assets are.

Re: S&P Dow Jones Indices to launch cryptocurrency indexes in 2021

#490

Post by tylerhou »

shawnz wrote: post #470
itsoktocry wrote: post #442

Earlier quoted context omitted.

> I'm enjoying sitting on the sidelines and watching people "save" in a fiat "currency" whose value is not linked to anything intrinsic I'm pro crypto, but this is ridiculous. No intrinsic value? I can spend my dollars anywhere in the world with no input or reliance on any other entity. They might be the most valuable asset on the planet.

That's not intrinsic value though. Fiat currency by definition has no intrinsic value. Fiat literally means "let it be done", i.e. it is given value by a decree and not because of its intrinsic value.

You have to pay taxes in USD. Not being thrown in jail is value... maybe not intrinsic though.

USD in paper form can also be burned for warmth, or used to write on. In coin form, it has the same intrinsic value as the metal.

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