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Shorting Bitcoin

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311–320 of 334 posts

Re: Shorting Bitcoin

#311

Earlier quoted context omitted.

On ramps yes, many bitcoin holders are waiting for the day where it's spendable and accepted by more merchants and that's going to take decades.

The core problem is that no mature economy will have any need to accept BTC payments. Their native currency will likely be stable and they'll also have infrastructure to support fast, cheap payments via legacy means. There is really no incentive to accept crpyto for any large merchant. In fact, the number of online merchants I've seen who accept crypto has actually gone down over the last few years.

True and that's why I think it'll take many decades. Merchants accepting before the mass adoption of lightning and other layer twos are way too early, and no one wants to spend it before it reaches mass adoption.

Bitcoin only makes sense for emerging market countries with unstable currencies or formerly stable countries going through a crisis. In the former case it takes a long time for those economies to mature. In the latter case, it might be temporarily adopted by their citizens until they can escape to a more stable country or the country manages to turn itself around. These events take decades.

For now, it's just a store of value. You put it in a portfolio like gold as another uncorrelated asset that tends to go up over time as fiat currencies inflate which is what got some of the recent big macro/portfolio construction crowd interested last year and driving up price in this recent run up, and unfortunately the market cap is too low again for more serious allocation to it without driving up price too much.

We're a decade into an adoption curve that was planned to be over a century long

Re: Shorting Bitcoin

#312
post #156

Earlier quoted context omitted.

Bitcoin, like tesla stock is better predicted by treating it as a religion than a rational investment. So how long are people going to believe a kid who said a god knocked her up to avoid getting stoned?

Tesla has a ton of ip, Bitcoin is pretty cloneable

Though Bitcoin does have brand name recognition. And being listed on major exchanges. Is that what they refer to as network effects, btw?

And if it's akin to religion or a well known brand, it could be easily cloneable but not easily adoptable. I can make a leather handbag or carbonated beverage right now, but unless I slap a Chanel or Coca Cola logo on it, it's not likely to be in demand.

We have the tendency to approach this from a rational perspective - "it's not a currency or store of value", "what about Tether", etc. But I can think of plenty of examples where the name itself is powerful enough. I'm not willing to bet that Christianity (or any major religion) will collapse in the near future. Slow decline, maybe.

Of course, maybe there's only like a tiny minority of true believers, a couple price manipulating whales, some smoke and mirror organizations, and everyone else is a Robin Hood speculator. I don't have the numbers on that.

Re: Shorting Bitcoin

#313
post #126

Earlier quoted context omitted.

About the whole GameStop thing, for me the most interesting thing was how old school the whole stock market is. 2 days until you really own the stock?!? And then even some trading companys are just take your stocks and lend it for shorting?!?

They don't "just take" it, it gets lent out to them by your broker, who charges the shorter a fee for this. This fee (amongst other things) subsidizes your free account and low trading costs. For large investors it is possible to share in this income, though not via one of the currently popular retail brokers as far as I'm aware.

Most brokers here in the UK have an annual custody fee of say 0.25%, capped at some fixed amount per quarter.

Trading tends to be expensive though, say $14/trade.

Re: Shorting Bitcoin

#314
post #132

Earlier quoted context omitted.

It's also worth reflecting on the fact that banking being terrible is predominantly an American problem among the developed nations. Even in 3rd world countries, banking is pretty awesome. Checks have been obsolete for decades, any kind of money transfer takes around 5 seconds after you press send from your bank's app, even during weekends and between different banks. Transfer limits are generally settable from the a…

And crypto gives the entire world that great experience, without needing a bank or a government. It is hard to say that isn't an amazing technical solution to an organizational problem. There are worse countries to manage your finances in than the US by the way. Lebanon is in the midst of a terrible bank and currency crises. People literally are not allowed to take money from the bank. This happens repeatedly through…

Yeah, no. Crypto does not provide (or even support) the experience I talk about when I say "great".

Re: Shorting Bitcoin

#315
post #69

Earlier quoted context omitted.

I was unsure and looked it up, so in case it helps someone else: the person that died in Costa Rica is Mircea Popescu.

Yes, and our friend Pomp left this delightful message on Twitter to mark his passing. > Mircea Popescu, a Bitcoin OG, has passed away. He likely owned quite a bit of bitcoin. We may never know how much or if they are lost forever, but reminds me Satoshi said: "Lost coins only make everyone else's coins worth slightly more. Think of it as a donation to everyone." Disgusting. [Edit] To be clear I'm reacting negatively…

Many people die intestate every year and the state takes their net worth. That money, in many ways is a donation to everyone, since it marginally reduces overall tax burden.

Re: Shorting Bitcoin

#316

If BTC price doesn't recover soon and falls further, Microstrategy is what will kill BTC. I don't know why BTC investors are so crazy about Microstrategy buying BTC (This would have never happened back in the early days of Bitcoin), but if BTC price goes down further, Microstrategy will be forced to sell their BTC by their shareholders. Otherwise the Microstrategy stock itself will crash. Also when Microstrategy lose…

Michael Saylor, the CEO, holds 70% of the voting shares. All the other shareholders can kick and scream all they want, but Saylor controls the ship. The only power others have is to exit the ship by selling. Every indication is that Saylor would hold bitcoin into the ground, unless he's totally full of shit. Their main business is still generating enough cash to pay the loans, so where's the pressure to sell?

They could try and sue him

Re: Shorting Bitcoin

#317

If BTC price doesn't recover soon and falls further, Microstrategy is what will kill BTC. I don't know why BTC investors are so crazy about Microstrategy buying BTC (This would have never happened back in the early days of Bitcoin), but if BTC price goes down further, Microstrategy will be forced to sell their BTC by their shareholders. Otherwise the Microstrategy stock itself will crash. Also when Microstrategy lose…

No, they wont have to because all they have to do is pay bondholders slowly over time The corporate credit markets are really flexible, they dont care that they bought bitcoin, they care that they have enough revenue to cover the bonds That was the entire calculus and that is still working The market might assign speculative pricing of MSTR shares with Bitcoin price and sentiment, but that has nothing to do with anyt…

That's not true. Paying the coupon is crucial of course, but hey need the capital to pay back those bonds on maturity.

Re: Shorting Bitcoin

#318
post #275

Earlier quoted context omitted.

Yes puts or calls can get you liquidated by swings. I was trying to get across that a lot of people are using high leverage right now to get-rich-quick and, especially in the crypto space, it is risky to the point of being unwise.. unless you have an edge with backtested, medium-term models that adequately account for the wide range of volatility, with automated take-profit / stop-loss in place.

> Yes puts or calls can get you liquidated by swings. No, when buying puts/calls, you can't get liquidated by swings. The worst that can happen is that they expire worthless. They could get liquidated if you borrowed money to trade them, but that's not in the nature of the put/call, that's in the nature of borrowing money to trade. In this specific instance, I understand the author bought puts with actual money, and…

Indeed, I should have qualified that statement with "on margin"

Re: Shorting Bitcoin

#319
post #91

Earlier quoted context omitted.

Since he bought his puts on 6/26, BTC is up 9.5%, MSTR is up 9.9% and COIN is up 13.5%. He's already pretty deep underwater.

If you are betting something will tank then you don't time the market to get to put at the best price. Buying these puts either pays out a lot if there is a giant dive before they expire or is a cost to cover that time period.

Timing is everything, being early is the same as being wrong.

Re: Shorting Bitcoin

#320
post #275

Earlier quoted context omitted.

> Yes puts or calls can get you liquidated by swings. No, when buying puts/calls, you can't get liquidated by swings. The worst that can happen is that they expire worthless. They could get liquidated if you borrowed money to trade them, but that's not in the nature of the put/call, that's in the nature of borrowing money to trade. In this specific instance, I understand the author bought puts with actual money, and…

Indeed, I should have qualified that statement with "on margin"

Yes, if you buy anything "on margin", swings can get you liquidated. It's the margin that causes the potential forced liquidation, not the puts/calls.
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