Why the ‘Big Short’ Guys Think Bitcoin Is a Bubble • Hacker News Board

Re: Why the ‘Big Short’ Guys Think Bitcoin Is a Bubble

#101

Post by roywiggins » Mon, Oct 18, 2021, 5:36 AM UTC

ur-whale wrote: post #72

WoodenChair wrote: post #50

Earlier quoted context omitted.

> There is a IMO a very tangible market demand for a financial product that allows one to completely shield value from the myriad of value-eroding propositions that have been baked into the traditional financial system to essentially bleed you dry on a long enough timeline. - "management" fees - capital gain taxes - death taxes (inheritance taxes) - asset seizures (divorces, bankruptcy, random court decisions against…

>Bitcoin does not shield you from capital gains taxes [0] or asset seizures since it's classified as property by the government. At least not in the US. It is my admittedly limited understanding of US tax law that - as long as you don't sell - you aren't getting taxed on gains (unrealized capital gains). Should you then decide to use your coins to directly buy - say - a house in Japan: since no actual Yen-denominated…

Purchases denominated in BTC are treated as realized gains or losses:

> cryptocurrency users must deal with capital gains and losses in addition to whatever sales taxes they might face at the point of sale.

> For example, let's imagine you bought $10 worth of Bitcoin two years ago and it has since appreciated to $100 in value. If you sold it on an exchange, you'd have $90 of realized long-term capital gains, just like you would with any other capital asset.

> If you instead used that same $100 worth of Bitcoin to buy groceries from the supermarket, you'd still have to pay long-term capital gains taxes on the $90 difference between appreciated value and your cost basis.

https://www.kiplinger.com/taxes/capital-gains-tax/603117/how...

> If the fair market value of property received in exchange for virtual currency exceeds the taxpayer’s adjusted basis of the virtual currency, the taxpayer has taxable gain. The taxpayer has a loss if the fair market value of the property received is less than the adjusted basis of the virtual currency.

https://www.irs.gov/pub/irs-drop/n-14-21.pdf

Re: Why the ‘Big Short’ Guys Think Bitcoin Is a Bubble

#102

Post by Ekaros » Mon, Oct 18, 2021, 5:36 AM UTC

OnlineGladiator wrote: post #23

cm2012 wrote: post #12

It has honestly surprised me that a bunch of people I thought were smart really think NFTs are a good long term investment. It clearly has no value beyond speculation and the bubble will pop.

> It has honestly surprised me that a bunch of people I thought were smart... Nobody is universally brilliant. Newton spent as much time on alchemy as he did physics. Maybe NFTs are just the modern alchemy, as they do seem to turn random items into digital gold.

Was it really alchemy or proto-chemistry? After all Newton lived in time when chemistry was only starting to be defined. And it took quite a while to come up with proper ideas.

Re: Why the ‘Big Short’ Guys Think Bitcoin Is a Bubble

#103

Post by omgwtfbyobbq » Mon, Oct 18, 2021, 5:38 AM UTC

rapsey wrote: post #78

wesleywt wrote: post #36

Earlier quoted context omitted.

Intervention by the Central Bank is not a good thing. There are a few economist who are warning against the lack of moral hazard currently pervasive in the Traditional Finance sector. Crypto will be the refuge from aggressive monetary policy going tits up. Aka like in 2008.

Many decades of economic growth speaks for the current economic model. A saying goes: pessimists get to be right, optimists get to be rich.

Another saying goes: Past performance is not indicative of future growth.

YMMV...

Re: Why the ‘Big Short’ Guys Think Bitcoin Is a Bubble

#104

Post by speedgoose » Mon, Oct 18, 2021, 5:38 AM UTC

trixie_ wrote: post #76

Transferring money through banks is such a pain in the ass versus crypto. It really feels like we’re at a tipping point where ACH and wire transfers become the equivalent of writing a check.

What do you mean? For international transfers, I just write the account number and it's done for a small fee. It's also reversible.

For national payments I can use the account number, the phone number, or simply the name of the person using an app (vipps). Everyone has it,also elderly people, and it's actually instant and verified transactions for real.

Re: Why the ‘Big Short’ Guys Think Bitcoin Is a Bubble

#105

Post by graeme » Mon, Oct 18, 2021, 5:38 AM UTC

trixie_ wrote: post #76

Transferring money through banks is such a pain in the ass versus crypto. It really feels like we’re at a tipping point where ACH and wire transfers become the equivalent of writing a check.

Are you american? You have a pretty garbage bank transfer system. Europe’s transfer usability matches or beat’s cryptos for transfers within the system.

I’m Canadian. I just tried transferring my free Coinbase crypto to another wallet to withdraw and the process was slower than had I done a transfer between my two bank accounts. And much more fraught!

Re: Why the ‘Big Short’ Guys Think Bitcoin Is a Bubble

#106

Post by Ekaros » Mon, Oct 18, 2021, 5:39 AM UTC

ekianjo wrote: post #47

cm2012 wrote: post #12

It has honestly surprised me that a bunch of people I thought were smart really think NFTs are a good long term investment. It clearly has no value beyond speculation and the bubble will pop.

> It clearly has no value beyond speculation and the bubble will pop. Many things have actually no intrinsic value (like art) yet don't lose value over time that much.

Depends on what art we are talking about. Plenty of it has lost value over time. Ofc, what is popular and big name keeps being popular. But outside that group there is lot of examples that aren't as valuable as it was at one point.

Re: Why the ‘Big Short’ Guys Think Bitcoin Is a Bubble

#107

Post by ur-whale » Mon, Oct 18, 2021, 5:40 AM UTC

Ologn wrote: post #54

SRTP wrote: post #30

I'm really amazed at these comments. Every time Bitcoin goes through a major move, the "bubble" crowd comes out of the woodwork, while having done absolutely no effort in understanding what Bitcoin is.

> having done absolutely no effort in understanding what Bitcoin is To see its value, I don't need to make an effort to understand what a pear is, or a bar of gold, or a house. I and others have looked at Bitcoin, and its trillion dollar market cap (which means Bitcoins are worth more than JP Morgan Chase and Johnson and Johnson put together) and realized it has absolutely no value. At least subprime mortgages, 1999…

> "realized it has absolutely no value."

I wonder how long ago that "realization" occurred, and if you have since then "realized" how much the market has disagreed with your conclusion, or if you've "realized" the size of the opportunity loss?

Re: Why the ‘Big Short’ Guys Think Bitcoin Is a Bubble

#108

Post by rapsey » Mon, Oct 18, 2021, 5:40 AM UTC

wesleywt wrote: post #38

rapsey wrote: post #15

Earlier quoted context omitted.

Crypto is a speculative asset. It was made and promoted itself as money but failed completely in that aspect.

How has it failed?

A useful currency requires at least some reasonable level of price stability. How popular is crypto becoming as a payment mechanism? From what I see it is actually becoming less popular with time. I saw options to pay with crypto way more a few years ago.

Re: Why the ‘Big Short’ Guys Think Bitcoin Is a Bubble

#109

Post by boublepop » Mon, Oct 18, 2021, 5:41 AM UTC

trixie_ wrote: post #76

Transferring money through banks is such a pain in the ass versus crypto. It really feels like we’re at a tipping point where ACH and wire transfers become the equivalent of writing a check.

What do you mean? I regularly transfer money to people from my phone using my net bank, and more often still just using mobile payments. The money is instantly in their accounts and it takes a couple of seconds to type out details.

Compare that to crypto, where buying a cup of coffee takes 3 days, and even failed the last time I tried, where I ended up having to borrow credit from a local. The Cafe only “took crypto” but since transferring such a pain, they actually had a piece of paper with credit/debt notes that people would settle once a month.

How is that shit-fest in any way preferable?

Re: Why the ‘Big Short’ Guys Think Bitcoin Is a Bubble

#110

Post by graeme » Mon, Oct 18, 2021, 5:41 AM UTC

ekianjo wrote: post #49

rapsey wrote: post #3

Crypto has never gone through a major economic crisis and when there were short term panics it always dropped significantly. Being without a central bank also means there is no limit to how far it can drop.

> never gone through a major economic crisis COVID and the massive supply of dollars since last year is not one?

No, those two things go in opposite directions. During the march 2020 plunge crypto fell more than the S and P I think

In a general recession with declining asset values crypto would likely fall more than general assets, and also risks simply having a massive plunge if Tether breaks at the same time.