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New study detects lottery-like behavior in cryptocurrency markets

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Re: New study detects lottery-like behavior in cryptocurrency markets

#51

Post by kneel »

endisneigh wrote: post #27

It makes sense. In my experience the primary goal for most crypto holders is to be a part of a new elite. This is why the most popular currencies have a fixed supply. That way, if they're popular earlier adopters get to be a part of the elite. With such a premise it makes sense to treat crypto like the lottery as the gain/loss likelihood is very similar to say, Mega Millions. I do see value in a crypto that's pinned…

>My biggest concern is a fixed-supply currency gives no government the ability to provide stimulus if necessary.

That's... that's the whole point.

Re: New study detects lottery-like behavior in cryptocurrency markets

#52

Post by bko »

endisneigh wrote: post #27

It makes sense. In my experience the primary goal for most crypto holders is to be a part of a new elite. This is why the most popular currencies have a fixed supply. That way, if they're popular earlier adopters get to be a part of the elite. With such a premise it makes sense to treat crypto like the lottery as the gain/loss likelihood is very similar to say, Mega Millions. I do see value in a crypto that's pinned…

> I do see value in a crypto that's pinned at a weighted average of every single currencies' worldwide weight, but it's a perfectly stable currency

If every government in the world is printing money like crazy, how is this "stable". In the US, 23% of the money supply was created in the last year, with no visible inflation (excluding asset prices, home, energy, etc). God knows what it'll be 5 years from now

What has been "stimulated" by the US creating 12 trillion in new asset besides re-inflating stock prices?

It reminds me of a joke about a group being really hungry so deciding to slice their pizza into 10 slices as opposed to 8. Money is supposed to be a unit of account. I think you can try to play games with it but in the end you're messing with complex systems with a high probability of creating unintended consequences (e.g. credit crisis, bail out, hyperinflation etc).

Re: New study detects lottery-like behavior in cryptocurrency markets

#53

Post by chrisco255 »

endisneigh wrote: post #27

It makes sense. In my experience the primary goal for most crypto holders is to be a part of a new elite. This is why the most popular currencies have a fixed supply. That way, if they're popular earlier adopters get to be a part of the elite. With such a premise it makes sense to treat crypto like the lottery as the gain/loss likelihood is very similar to say, Mega Millions. I do see value in a crypto that's pinned…

> My biggest concern is a fixed-supply currency gives no government the ability to provide stimulus if necessary.

New cryptos are being minted all the time. If a government wanted to issue more fiat as a crypto token it could do so directly.

Re: New study detects lottery-like behavior in cryptocurrency markets

#54

Post by brokensegue »

methodin wrote: post #33
andrewmutz wrote: post #17

Earlier quoted context omitted.

Which crypto projects are providing real utility to people outside the crypto space? I can think of using bitcoin for remittances or drug purchases, but other than that I have trouble thinking of compelling examples.

Having only cursory knowledge of this space I'll take a stab at an answer: every consumer of a company that uses crypto internally. AWS doesn't provide any real utility for people outside of the AWS space except for consumers of companies that use AWS. Feel free to point out I'm wrong as again I don't follow this space in-depth.

What companies that I might be a customer of actually use crypto.

Re: New study detects lottery-like behavior in cryptocurrency markets

#55

Post by _rpd »

willis936 wrote: post #4

>the researchers examined the role of speculative behavior in cryptocurrency markets, that is, lottery-like demand Is this an industry-standard term? It seems like an awful definition and awful use of the word “lottery”.

> Bali, Cakici and Whitelaw (2011) adopt extreme positive returns as a proxy for lottery-like payoffs. Their finding indicates that stocks that exhibited the highest daily return (sample maximum of the daily returns) over the prior month (MAX) produced significantly lower returns over the subsequent one-month holding period.

Here's how the paper defines 'lottery-like'.

Re: New study detects lottery-like behavior in cryptocurrency markets

#56

Post by unreal37 »

henvic wrote: post #9

It's trivial. Just say any is pure speculation of thin air and you'll be right. There's no sense in the currently existing crypto currencies. They're all fiat money. Peter Schiff was right back then... https://www.youtube.com/watch?v=sgRGBNekFIw and he's still right now. https://twitter.com/peterschiff/status/1345427870546538509

To be 100% honest, Schiff is 50% trolling. He loves the attention, and being the loudest Bitcoin bear is getting him lots of attention. He does and says things just to get attention.

When someone like Elon Musk or Chamath gives him any ounce of attention, he spends hours talking about it. Classic.

He might be right. But he's 50% seeking attention.

Re: New study detects lottery-like behavior in cryptocurrency markets

#58

Post by frockington1 »

jandrese wrote: post #34
bhouston wrote: post #15

Earlier quoted context omitted.

It is probably very similar when it is stocks that are nearing bankruptcy or otherwise have horrid fundamentals. If the stocks do have fundamentals and the PE ratio makes sense relative to the growth factor, then it isn't pure gambling.

I think there is an argument to be made that as stock growth has outpaced GDP growth for many years now that the connection between the markets and the real world has become tenuous. The fundamentals become less important over time as crazy speculation continues to win out. GME is a symptom of a broken system.

What is broken about it? People were over leveraged and others acted on it. Seems to be working as intended. If GME is at this P/E a year from I'll agree with you

Re: New study detects lottery-like behavior in cryptocurrency markets

#59

Post by vkou »

bko wrote: post #52
endisneigh wrote: post #27

It makes sense. In my experience the primary goal for most crypto holders is to be a part of a new elite. This is why the most popular currencies have a fixed supply. That way, if they're popular earlier adopters get to be a part of the elite. With such a premise it makes sense to treat crypto like the lottery as the gain/loss likelihood is very similar to say, Mega Millions. I do see value in a crypto that's pinned…

> I do see value in a crypto that's pinned at a weighted average of every single currencies' worldwide weight, but it's a perfectly stable currency If every government in the world is printing money like crazy, how is this "stable". In the US, 23% of the money supply was created in the last year, with no visible inflation (excluding asset prices, home, energy, etc). God knows what it'll be 5 years from now What has b…

> If every government in the world is printing money like crazy, how is this "stable".

It's stable because during a recession, as loans are closed out or default or just don't get issued, money gets destroyed/created slower.

The government may be printing money, but fractional reserve banks aren't. This is a point on which most people who talk about printing presses are completely ignorant of.

Re: New study detects lottery-like behavior in cryptocurrency markets

#60

Post by africanboy »

henvic wrote: post #9

It's trivial. Just say any is pure speculation of thin air and you'll be right. There's no sense in the currently existing crypto currencies. They're all fiat money. Peter Schiff was right back then... https://www.youtube.com/watch?v=sgRGBNekFIw and he's still right now. https://twitter.com/peterschiff/status/1345427870546538509

completely unrelated but watching at that Twitter thread looks like bitcoins is a boys only club, putting gender issues aside - I don't think they are particularly interesting here - it's kinda telling IMO.
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