Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

$130B wiped off crypto markets in 24 hours

cnbc.com

Post reply on HN
Print view View original

141–150 of 382 posts

Re: $130B wiped off crypto markets in 24 hours

#141

Post by fullstop »

ajross wrote: post #121
fullstop wrote: post #78

Earlier quoted context omitted.

I am paying my daughter's college tuition from a 529 plan, so this affects me even though I am not retiring soon.

Tough love: if you are currently making needed payments out of an account invested primarily in volatile assets, you have invested it incorrectly. More likely you left the 529 money in stocks because it's a tax shelter, not because you were actually setting that money aside for tuition. It's the same point above: this is what markets do. Investment strategies are risk management strategies. You can't just dump money…

> Tough love: if you are currently making needed payments out of an account invested primarily in volatile assets, you have invested it incorrectly. More likely you left the 529 money in stocks because it's a tax shelter, not because you were actually setting that money aside for tuition.

Not exactly, so I'm not down 9% in my 529. I set target dates and my financial institution has shifted them to more stable assets based on that. I just checked and it's only 19% stocks.

As an aside, using a 529 for a tax shelter wouldn't work very well because of the penalties incurred if it is not used for education. 100% of the funds I have saved here are for tuition purposes -- I started doing this years before we had children.

Re: $130B wiped off crypto markets in 24 hours

#142

Post by llampx »

xboxnolifes wrote: post #56
lilSebastian wrote: post #27

Earlier quoted context omitted.

> Everything is on sale. Such meaningless phrasing. If something wasn't on sale, nobody could buy it. The crypto meme of dips in the price being 'a sale' is key to hooking the uniformed new fish into the great ponzi scheme.

It's not just a crypto meme to call price dips a sale. Same language has been used on stocks prior to the existence of crypto.

Exactly, and is a little ironic because when it really does go on sale, people become afraid to buy meanwhile deep pockets accumulate.

Re: $130B wiped off crypto markets in 24 hours

#143

Post by matheusmoreira »

schnebbau wrote: post #110
matheusmoreira wrote: post #96

Earlier quoted context omitted.

I've gotten paid for code in XMR. It's great and absolutely useful. I wish everyone used it.

What did you do with the XMR?

I deposited most of it in a binance savings account. Left some in my mobile wallet. Unfortunately I had to cash it out in order to spend it. Wish I didn't have to but nothing else accepted it.

These things will not ever be real if we don't start using them as currencies. I came this close to proposing Monero transactions to a business partner after some banking problems but the market isn't looking good right now, too volatile.

Re: $130B wiped off crypto markets in 24 hours

#144

Post by mmaunder »

This isn’t a crash in historical terms. It’s simply repeating previous patterns. If we do have a true crash that wipes out most of the stored value and takes a decade to recover, like the dot-com crash, the effect on tech sector wealth in particular will be profound.

Right now, this is just the usual ebb and flow.

What I think is interesting about crypto is that it has the potential to go to zero because it has zero intrinsic value, unlike for example dot-com stocks, many of which had some value in the form of cashflow.

The two most likely scenarios that could cause a crash to zero, in my mind, are an unrecoverable vulnerability in a blockchain, or a brutal and global regulatory clampdown. The latter may not cause a crash to zero if some underground activity remains.

The probability of the globe simply falling out of love and discarding this new value store like a wilting tulip is unlikely in my opinion.

Re: $130B wiped off crypto markets in 24 hours

#146

Post by hn_throwaway_99 »

skrebbel wrote: post #19

I own no crypto and I think it's a ridiculous piece of hype, but I think all that reporting (and, on twitter, all that schadenfreude) about bitcoin (etc) going down is nonsense. If you look at a 5 year chart of the BTC value, it's still super insane high and it's been going down hard once before (summer 2021). If I were a crypto fan I'd just tweet HODL like every previous time.

The thing about Bitcoin specifically, though, is that there are only really 2 possible outcomes:

1. The world decides it's "tulips" at some point, and the value goes to 0.

2. The world decides it will be a major part of the financial system, and it goes to 500k or 1 million.

Basically, anything in between is just a probability calculation of whether it will end up at one end or the other.

The problem with this, though, is that the way proof of work works means that it is impossible that it will ever go to a million. The amount of electricity needed to protect the network is directly tied to the price of BTC. This is not just some small, inconvenient detail. It is inherent to how proof of work functions. So if it takes the electrical output of, say, Argentina to run Bitcoin now, it will take the output of China to run it when it's up around a million, and that obviously is untenable.

Other cryptocurrencies have seen the writing on the wall and are moving to proof of stake (not without other issues). But the politics of Bitcoin mining, and the few large mining groups, makes it hard for me to see how this happens.

Re: $130B wiped off crypto markets in 24 hours

#147

Post by thebean11 »

dragontamer wrote: post #87
thebean11 wrote: post #77

Earlier quoted context omitted.

None of those necessarily imply low risk / volatility, and on the long term chart crypto has satisfied all 3

You can't be a store of value if your value drops randomly. You especially can't be an inflation hedge if you drop while inflation goes up.

Although obviously not as dramatic as crypto, gold has had huge drops and multi year bear markets, but it's still considered an inflation hedge. The housing market has had huge dips too.

Neither is as volatile as crypto, but my point is no asset has a guarantee that its value won't "drop randomly", simply not possible. Inflation was positive during the real estate crash of '08 and during multiple gold bear markets. If your time horizon is long enough, a volatile asset can still be a good inflation hedge.

Re: $130B wiped off crypto markets in 24 hours

#148

Post by tartoran »

khuey wrote: post #94
sschueller wrote: post #89

Earlier quoted context omitted.

Please explain to me how Bitcoin is a Ponzi scheme while USD after 1971 (going away from the gold standard) is not. More so explain to me how the USD is less of a Ponzi scheme when it is the super wealthy banks/institutions that are getting zero interest loans allowing them to make even more money while at the same time devaluating the currency.

The USD is backed by the power to tax 330 million people. Bitcoin is not.

By that logic then the more populous a country is the stronger their currency should be. We don’t see that. It’s a bit more complicated than that..

Re: $130B wiped off crypto markets in 24 hours

#149

Post by jrochkind1 »

sschueller wrote: post #126
ethanbond wrote: post #98

Earlier quoted context omitted.

And, ultimately, the power to invade the other few billion people who can’t be taxed

Switzerland's currency is quite strong and considered a safe heaven. Do you think Switzerland has the capability or would invade another country to collected tax from a few billion people?

I am not an expert in how currencies work, but it's worth nothing that Switzerland, like most countries, keeps most of it's own reserves in USD (presumably treasury bills), and has around 1 trillion in USD in reserve. Which is not unrelated to the value of it's own currency and their ability to stabilize it. But I am not claiming to be able to explain the details myself.

https://www.ceicdata.com/en/switzerland/official-reserve-ass...

Re: $130B wiped off crypto markets in 24 hours

#150

Post by sschueller »

dtech wrote: post #140
sschueller wrote: post #118

Earlier quoted context omitted.

But it's not a Ponzi scheme. It's a currency with small adoption like that of a third world nation.

I'd say Ponzi-scheme is a justified classification, since returns are funded by new entrants or additional purchases, instead of the asset producing value itself like a company stock or a house. Even something like gold with no value production - whose price is quite stable because of that by the way - has value because people want it for jewellery and industry.

You could say the same for overvalued stock like TSLA but I don't think anyone would call Tesla a Ponzi scheme. Most of it's value is speculation not actual profits or sales.
Post reply on HN