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S&P Dow Jones Indices to launch cryptocurrency indexes in 2021
511–520 of 571 posts
Re: S&P Dow Jones Indices to launch cryptocurrency indexes in 2021
#512Earlier quoted context omitted.
As a means of trade, yes, they are powerful because they are widely trusted and preferred. However once you have them, you get rid of them. Good assets don't lose value over time. https://www.statista.com/statistics/1032048/value-us-dollar-...
Good assets also don't get stolen if 51% of the network becomes compromised by a bad actor.
Hm? Stolen assets you say?
https://en.m.wikipedia.org/wiki/Civil_forfeiture_in_the_Unit...
https://en.m.wikipedia.org/wiki/Executive_Order_6102
https://en.m.wikipedia.org/wiki/Greek_austerity_packages
A 51% attack doesn’t let the bad actor steal someone else’s coins. It lets them reverse and double spend their own spending. They can’t directly steal coins. The flexibility of open source software gives opportunities to mitigate such an event, should it happen.
Re: S&P Dow Jones Indices to launch cryptocurrency indexes in 2021
#513Earlier 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.
Central banks are trying to prop up the deflationary structural changes happening in the broader world economies due to aging demographics and technology reducing the value of human labor. The end result is an enormous asset bubble as their only solution is to print money to prevent any actual deflation from happening as that would implode the financial system.
Central banks seem to accept low deflation now. At least here in Germany we have low deflation. The money the central banks print is not for preventing inflation. They would need to put money in the hands of common people, but it just stays in the financial system and keeps asset prices up.
Re: S&P Dow Jones Indices to launch cryptocurrency indexes in 2021
#514Earlier quoted context omitted.
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, that’s pretty much the number one reason someone would purchase equity in a company. I don’t know where the concept of dividends dropping the value of a company came from, but from a transactional point of view it doesn’t make sense. Sure, there are more earnings that have not been retained for increasing future earnings, but the value does not drop correspondingly. That’s just not how companies are valued. 3% of…
> 3% of earnings going to shareholders just does not at all mean the company drops by 3% in value.
But this is not what's being claimed. Dividends are measured relative to stock price, not earnings. And a 3% dividend - that is, a per-share dividend equal to 3% of the share price - absolutely does cause the price to decrease by 3%.
It's pretty clear why this must be the case - it's one of the weakest possible forms of the efficient-markets hypothesis. If it wasn't the case, people would buy (sell) the stock just before the dividend and sell (buy) just after for a nearly guaranteed profit.
Re: S&P Dow Jones Indices to launch cryptocurrency indexes in 2021
#515Earlier quoted context omitted.
Looking at Bitcoin solely through the lens of an investment vehicle is myopic. Bitcoin solves a number of problems right now, for example providing an opportunity for the nearly 2 billion people without access to a traditional banking system to securely participate in the world economy with nothing more than an old Nokia phone that can be bought for a few dollars. Another example is how it is providing a way for peop…
> Bitcoin solves a number of problems right now, for example providing an opportunity for the nearly 2 billion people without access to a traditional banking system to securely participate in the world economy with nothing more than an old Nokia phone that can be bought for a few dollars. This is a fantasy put forth by Bitcoin enthusiasts that's not supported by the facts. The average cost of a bitcoin transaction is…
Re: S&P Dow Jones Indices to launch cryptocurrency indexes in 2021
#516Earlier quoted context omitted.
I think you would agree that the intrinsic value of dollars as backed by the metal in USD coins is negligible compared to how many USD exist, because nobody has them in substantial amounts (due to being impractical). The value of the paper that the dollars are printed on is also negligible compared to the value of the bills themselves, let alone all the USD that exist (as you probably know, the vast majority of which…
> I think you would agree that the intrinsic value of dollars as backed by the metal in USD coins is negligible compared to how many USD exist... Yes, I agree. > Besides, everything you said, including tax payment and keeping out of jail, also applies to the Venezuelan bolivar and quite a few other fiat currencies that completely crashed in value due to hyper-inflation. USD will always be valuable as long as the US g…
> USD will always be valuable as long as the US government exists and taxes its citizens in USD. This means that there will always be demand for USD (again, as long as the US government exists).
For the USD to have value, you need technological innovation and productivity. You need to export more value than you import.
Simply existing and taxing your population does not give your currency value.
Re: S&P Dow Jones Indices to launch cryptocurrency indexes in 2021
#517Earlier quoted context omitted.
When you buy into a Crypto you're investing into the technology itself. If you believe that more and more payments will be handled through it, its value will go up, thus making it a good investment. If you take Bitcoin, there's a small pool of total Bitcoin and that's guaranteed by the technology. Each new coin costs real money to mine, due to needing physical compute resource to do so, and it gets harder and harder…
Can I try and convince you why that's not a good idea? Let's say you and I agree that a day's wages is worth 30 or so units of my currency--well pick any value, it doesn't matter for this example. And yet the currency keeps growing in value week over week. Should I not be paying you less and less over time? If the currency increases in value 7% in a month, should I not decrease your pay proportionally? And are you re…
> If the currency increases in value 7% in a month, should I not decrease your pay proportionally?
The problem you're describing is really nothing new. It sounds like you're just very used to thinking in USD. People all over the world do hedges to control for exactly this risk.
If you want to tether wages to USD, you can use USDC instead of BTC. Also you can pay those wages with such low transaction costs that you could pay by the day instead of by the week or month, using current technology.
Pretty soon the transaction costs will be low enough that you can pay those wages continuously. Eliminating the idea of a "pay day" is a great social good IMO.
On the other side, the receiving party can spend their funds in "USD" with a crypto-backed credit card that draws against their USDC balance.
Re: S&P Dow Jones Indices to launch cryptocurrency indexes in 2021
#518I’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…
“Fiat” money has its value by there being a lot of obligations in it. If I sell stuff for Bitcoin, I still have to pay taxes in Euro to the German State for that. There are a lot of credits in fiat currency that have to be paid off. Currencies are used for valuation and obligations to pay in trade.
Re: S&P Dow Jones Indices to launch cryptocurrency indexes in 2021
#519Earlier 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.
Money is a faith.
Put your faith in the entire human history of scarcity leading to optimization, or you can try the US Federal Reserve and Bretton Woods.
Re: S&P Dow Jones Indices to launch cryptocurrency indexes in 2021
#520Earlier quoted context omitted.
How could you be in the red? the number of risk free arbitrage opportunities is frankly staggering. Everywhere you look: futures, options, defi, etc there are juicy arbs all over the place. For example, short term btc futures are often trading at 30% annualized basis over spot. By taking on zero risk (except for exchange risk), you can easily capture somewhere between a 20 and 30 percent annualized return. It's just…
Aren't size of arbitrage opportunities and exchange risk inversely correlated? I wouldn't discount exchange risk too much...
You're 100% right. Exchange risk is an important component. Even so, there are great profits to be made.