It’s amazing that anybody believed these cryptos were any kind of hedge against the market. It was pure speculation. Always was.
Bitcoin and cryptocurrency prices have fallen sharply over the last few days
101–110 of 259 posts
Re: Bitcoin and cryptocurrency prices have fallen sharply over the last few days
#102It's a common misconception that Bitcoin is a safe haven. It's not. Not even Gold is a safe haven during a liquidity crisis. In sharp downturns, cash is king. Think of Bitcoin and Gold as call options on the entire global monetary system. If Govs become insolvent, Bitcoin and Gold is there. If the masses lose faith in central banks, Bitcoin and Gold is there. If central banks debase currencies too quickly, Bitcoin an…
I suspect that by this time next year Bitcoin will be seen as a safe haven. The events that are about to play out are exactly what Bitcoin was designed for.
There is good chance that narrative re-emerges as Bitcoin proves to be consistently non-correlated. I can see that.
Re: Bitcoin and cryptocurrency prices have fallen sharply over the last few days
#103Earlier quoted context omitted.
You don't have to transport a heavy metal, instead all you have to do is ensure an electrical grid, fully functional internet access, and a distributed network of other people! I'm not sure that's any easier than carry around metal :P
I see: you’re concerned with a future where the concept of an internet ceases to exist? I’m afraid money will be the least of our problems then.
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Re: Bitcoin and cryptocurrency prices have fallen sharply over the last few days
#104Earlier quoted context omitted.
What should be considered money is subjective and the value of all money comes from people's perceived future value in it. Even gold coins and dollar notes.
there's a fairly objective definition of a currency. it's a store of value and it's a means of transaction. Bitcoin is not really a means of transaction except for illegal ones where people are willing to accept the high fees. Also, there is a clear difference in underlying value. Bitcoins value is entirely speculative. The US dollars value is guaranteed by the US government, which in turn is underpinned by real econ…
No, that's not the definition of a currency.
Money has different functions, where store of value, unit of account and medium of exchange are the popular ones. And they have different properties, such as acceptable, fungible, durable and divisible and others (properties also differ.)
The big point is that these are subjective, and exists on a scale, and they vary from community to community. Cigarettes can be considered a currency in some prisons for example.
> Bitcoin is not really a means of transaction except for illegal ones where people are willing to accept the high fees.
I never mentioned Bitcoin. There are many other cryptocurrencies with low fees.
And I've bought VPNs, VPS, domains and computers with them, purchases that are completely legal.
> The US dollars value is guaranteed by the US government
The dollar will only hold value as people believe that the government can manage the dollar correctly, so my statement still holds. There's nothing intrinsically valuable with a dollar note.
Re: Bitcoin and cryptocurrency prices have fallen sharply over the last few days
#105I have made a large amount of money trading cryptocurrency over the years. This correlation is spurious at best. These stories are so wrong it is hilarious. The price action of crypto is unlike any other market. What we have seen over the last month is massive legs down caused by whales flooding the market at specific times. These bart patterns are so obvious I can't believe people can't draw these incredibly easy to…
> This coronavirus panic happens to coincide with a period right before the block reward halving where it is in the interest of miners to drop the price as much as possible
Besides selling at market the handful of coins they mine, by what mechanism can miners control the price?
Re: Bitcoin and cryptocurrency prices have fallen sharply over the last few days
#106Earlier quoted context omitted.
“Bitcoin let’s you store $1T USD of dollars in your head, transport it anywhere in the world, and there’s not a single thing anyone else can do about it.” As of now the $1T can also disappear and nobody will even notice.
This! Bus factor and too many single points of failure. How many lost wallets are out there with a few hundred or thousands of coins from before Bitcoin hit $100?
Single points of failure? Bitcoin is decentralized, like the internet. It’s designed to explicitly avoid points of failure and trusting of node participants.
Lots of Bitcoin has been lost. Good key hygiene should not be taken lightly. What is unfortunate for those losers is fortunate for Bitcoin. As the supply of lost Bitcoin increases the overall scarcity of the asset increases.
Re: Bitcoin and cryptocurrency prices have fallen sharply over the last few days
#107I have to say, the crypto market's strong ties to traditional finance in this crash surprise me. I understand selling off stock because of expected corporate losses, I don't understand mass conversions to FIAT especially when "print more money" seems to be the fed's response to this.
During the financial crisis circa 2007-8 gold also sold off initially when a lot of gold bugs believed it should rise higher given the financial markets instability. The reason was that people needed to sell their "winners" in order to cover their "losers". Stocks were down, they sold gold which was way up at that point to cover some of the losses and get cash.
One winner of an investment strategy is regularly rebalancing your portfolio to a set of fixed ratios between asset classes.
Let's say you want a 1:1 cash value ratio between stocks and gold. If stocks go up and gold goes down: sell stocks, buy gold. If stocks crash and gold spikes: sell gold, buy stocks. It's an easy way to buy high and sell low without going to extremes.
Re: Bitcoin and cryptocurrency prices have fallen sharply over the last few days
#108Earlier quoted context omitted.
Why is cash king?
Liquidity is King. Cash is filthy bacteria rags that are pure liquidity. Contactless and Cashless solutions are the future.
Liquidity isn't everything. What makes USD bills any better than Hasbro dollars? Why are people trading dollars over the internet when they could be just trading packets, which are infinitely more available (liquid).
You're missing an important piece of the puzzle. People want to trade for something that they perceive to have more value than the thing they are trading. This can't work if you have an infinite dollar printer (or magic numbers somewhere on the internet) because the money will be perceived as worthless (or will become worthless in the not so distant future).
The future is being able to trade something which is perceived as holding (or accruing) value which can't be arbitrarily reduced by policy-makers, and also is highly liquid, difficult to forge, easy to verify, low-cost to transact, and can be used as payment for most services. Any guesses as to what this might be?
Re: Bitcoin and cryptocurrency prices have fallen sharply over the last few days
#109Earlier quoted context omitted.
there's a fairly objective definition of a currency. it's a store of value and it's a means of transaction. Bitcoin is not really a means of transaction except for illegal ones where people are willing to accept the high fees. Also, there is a clear difference in underlying value. Bitcoins value is entirely speculative. The US dollars value is guaranteed by the US government, which in turn is underpinned by real econ…
No, that's not the definition of a currency. Money has different functions, where store of value, unit of account and medium of exchange are the popular ones. And they have different properties, such as acceptable, fungible, durable and divisible and others (properties also differ.) The big point is that these are subjective, and exists on a scale, and they vary from community to community. Cigarettes can be consider…
>so my statement still holds.
No, it doesn't because not every form of belief is equally justified. If you believe your currency has value because the Aztec god of fertility has bestowed value upon it then you'll have a problem when you figure it that not everyone agrees.
The American government and the American economy underpinning the dollar however represent vital goods and services as well as security provided and have an army to back it up so the chance that it magically loses all its value is just about nil.
A mistaken assumption, common among crypto folks for very obvious reasons is that just because a system is the result of social consensus, all such systems are of equal status and equally risky. This is not so.
Re: Bitcoin and cryptocurrency prices have fallen sharply over the last few days
#110I have to say, the crypto market's strong ties to traditional finance in this crash surprise me. I understand selling off stock because of expected corporate losses, I don't understand mass conversions to FIAT especially when "print more money" seems to be the fed's response to this.
Just an hypothesis (which applies to the stock market as well): if you already thought things were overvalued, but were just waiting for the right moment to cash out, then whether this moment makes rational sense or not, you get out now because you were going to get out soon anyway. Also, you may think everyone else is going to be "irrational" in this way, and wish to get out before they do. Sort of like buying toile…
People have been saying for a while the stock market was ripe for a downturn. It had been in one of the longest periods of consistent gains ever. Lots of things were overvalued and with the double hit of a pandemic which is certainly already having economic effects and an oil war within OPEC, one tends to think that companies are going to start making significantly less money (compound with aging population not being replaced with young people). Jumping off a burning ship isn't necessarily irrational.