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Coinbase valued above $100B, ahead of direct listing

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Re: Coinbase valued above $100B, ahead of direct listing

#161

Post by csomar »

graeme wrote: post #145

Only tangentially related: How do bitcoin network costs scale with market price? We can expect the marginal cost to mine a coin to scale with price. So if btc worth $52,000 then people will invest on average $52,000 in equipment and electricity. There are 6.5 coins mined every 10 min. So daily network cost approximates to 6.5 * 6 * 24 * $52,000 = $48,000,000 This is not strictly accurate as past equipment costs less…

You are not wrong. However

1= $1m/bitcoin is x20 from here. And here is already a pretty high price.

2= $170bn is a lot of money. But on an international/global scale, it's a drop in the bucket.

Re: Coinbase valued above $100B, ahead of direct listing

#162

Post by eloff »

mewpmewp2 wrote: post #142
eloff wrote: post #136

Earlier quoted context omitted.

I don't think it was wrong then either. I think this is a greater fool style of bubble like the famous tulip bubble, eventually we'll run out of fools. That's my opinion, but we'll see.

The other possibility is that it will be widely used in the future as a store of value or for some other purposes. Might be rational to put at least some percentage of your net worth into it. People need and want something like that to exist where they have complete control over their assets without any worries about government or institutions.

In reality it is probably both.

Unless governments take a hard line against bitcoin by banning it, something they mostly haven't been doing to date, I expect it will have a future as a kind of digital gold. However, gold has tens of thousands of years of history as an asset class, while bitcoin is a little less proven. Don't forget it used to be illegal to own gold in the US, so bitcoin is not as safe from government as people might think.

But all financial assets tend to follow cycles of booms and busts. So the question is, where are we in the cycle? Are we nearing the top in the near term? I think we are, the growth of bitcoin has gone nearly vertical lately.

Re: Coinbase valued above $100B, ahead of direct listing

#163

Post by giarc »

sailingparrot wrote: post #139
sjg007 wrote: post #133

Earlier quoted context omitted.

>Fourth, there is no Bitcoin tracking security on public markets. There are a few in Europe look up Exchange Traded Products.

There is a Bitcoin etf on the TSX since this week, both in CAD and USD

So when markets closed on Friday, BTC was at about $55,000 and BTCC-B closed at $10.83. BTC continues to trade over the weekend obviously and is now at $57,000. Given this inbalance in trading times, should we see BTCC-B pop on Monday morning to catch up to BTC? Could one not buy/sell BTCC-B each morning depending on overnight activity of BTC?

Re: Coinbase valued above $100B, ahead of direct listing

#164

Post by csomar »

Sparkle-san wrote: post #157
tedfernau wrote: post #146

Earlier quoted context omitted.

Isn’t cash losing value the definition of inflation?

Yes, and it's been sitting around or below 2% for some time which economists generally consider a good level for spurring spending.

The 2% is complete b.s. unless you are homeless and surviving on canned food.

Re: Coinbase valued above $100B, ahead of direct listing

#165

Post by eloff »

chillacy wrote: post #45
eloff wrote: post #30

Earlier quoted context omitted.

All bubbles pop eventually. I think there's little doubt crypto is a bubble right now. Maybe it pops tomorrow, maybe it goes on for years. I don't know, nobody really does.

If you value stocks based on book value + dividends and discounted cash flow, this bubble's been going on for almost a hundred years by now. We've just gotten used to the new multiples.

I don't see that. You'll need a source if you want to argue that. We've gone through cycles of higher and lower valuations. You also need to compare that to interest rates, because lower rates make the market more forward looking.

Re: Coinbase valued above $100B, ahead of direct listing

#166

Post by sjg007 »

giarc wrote: post #163
sailingparrot wrote: post #139

Earlier quoted context omitted.

There is a Bitcoin etf on the TSX since this week, both in CAD and USD

So when markets closed on Friday, BTC was at about $55,000 and BTCC-B closed at $10.83. BTC continues to trade over the weekend obviously and is now at $57,000. Given this inbalance in trading times, should we see BTCC-B pop on Monday morning to catch up to BTC? Could one not buy/sell BTCC-B each morning depending on overnight activity of BTC?

Probably yes. It works the same way with after hours trading on the stock market.

Re: Coinbase valued above $100B, ahead of direct listing

#167

Post by graeme »

csomar wrote: post #161
graeme wrote: post #145

Only tangentially related: How do bitcoin network costs scale with market price? We can expect the marginal cost to mine a coin to scale with price. So if btc worth $52,000 then people will invest on average $52,000 in equipment and electricity. There are 6.5 coins mined every 10 min. So daily network cost approximates to 6.5 * 6 * 24 * $52,000 = $48,000,000 This is not strictly accurate as past equipment costs less…

You are not wrong. However 1= $1m/bitcoin is x20 from here. And here is already a pretty high price. 2= $170bn is a lot of money. But on an international/global scale, it's a drop in the bucket.

Yeah I just want to think through the claims of the maximalists. For example I often hear them say “it’s digital gold, so it has 10x to grow”.

That would be $85 billion for mining, whereas gold mining annually is about $1.3 billion. ~$1000 per ounce mining cost * 130 million ounces mined.

Of course it’s not an exact comparison as you prob ought to add in storage costs for gold but then maybe you’d need to add crypto online wallets and it gets messy. Mining to mining is clear and simple.

It is a drop in the bucket globally, but it also means you need that much capital flowing in to maintain the market price. Just to maintain. So you would want the network to be producing that much value at least.

Re: Coinbase valued above $100B, ahead of direct listing

#168

Post by soared »

graeme wrote: post #145

Only tangentially related: How do bitcoin network costs scale with market price? We can expect the marginal cost to mine a coin to scale with price. So if btc worth $52,000 then people will invest on average $52,000 in equipment and electricity. There are 6.5 coins mined every 10 min. So daily network cost approximates to 6.5 * 6 * 24 * $52,000 = $48,000,000 This is not strictly accurate as past equipment costs less…

> We can expect the marginal cost to mine a coin to scale with price.

This feels correct but I don’t think it is. For example gold has decreased by $200/oz recently - it definitely didn’t just get cheaper to mine. I know mining is different and it’s not a great comparison, but costs don’t scale immediately, miners don’t make decisions entirely based on the price of btc now, etc.

Economic principles like supply and demand meeting on an agreed price are very muddy.

Re: Coinbase valued above $100B, ahead of direct listing

#169

Post by csomar »

graeme wrote: post #167
csomar wrote: post #161

Earlier quoted context omitted.

You are not wrong. However 1= $1m/bitcoin is x20 from here. And here is already a pretty high price. 2= $170bn is a lot of money. But on an international/global scale, it's a drop in the bucket.

Yeah I just want to think through the claims of the maximalists. For example I often hear them say “it’s digital gold, so it has 10x to grow”. That would be $85 billion for mining, whereas gold mining annually is about $1.3 billion. ~$1000 per ounce mining cost * 130 million ounces mined. Of course it’s not an exact comparison as you prob ought to add in storage costs for gold but then maybe you’d need to add crypto…

Think about it this way: There is 7bn people on the planet. $170bn works out an average of $24/person. Or $2/month. Even poor people in poor countries can afford that. It might actually be cheaper for them, many poor countries (think Africa, Argentina, Brazil, etc...) are going through hyperinflation that it is safer and less volatile to hold Bitcoin.

Re: Coinbase valued above $100B, ahead of direct listing

#170

Post by globular-toast »

emehex wrote: post #155

Perhaps a dumb question: why is Coinbase even entertaining an IPO? Give away shares for fiat money? Isn't that antithetical to what they're trying to do?

Maybe you're confused about what they're trying to do. I'm pretty sure they're trying to get rich and nothing else.
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