Can I use this to go short on bitcoin?
S&P Dow Jones Indices to launch cryptocurrency indexes in 2021
281–290 of 571 posts
Re: S&P Dow Jones Indices to launch cryptocurrency indexes in 2021
#282Earlier quoted context omitted.
I don't understand NAV premiums when it comes to ETH. What does this mean?
The fund has 100 ETH. Let's assume the price of ETH is $1. The NAV of the fund is $100. A premium of 100% means that the fund is trading at $200. This means that there is an arbitrage opportunity: https://medium.com/amber-group/grayscale-gbtc-and-ethe-arbit...
That's not an arbitrage due to the lock up period, which exposes you to considerable risk.
Re: S&P Dow Jones Indices to launch cryptocurrency indexes in 2021
#283Earlier quoted context omitted.
Cryptocurrency isn't actually scarce though, it may be "scarce-like" but the scarcity is an artificial property that can be arbitrarily changed, unlike gold's scarcity which is an unalterable property of reality.
Bitcoin is scarce; the consensus mechanism makes it prohibitively difficult to change the supply. It's barely even possible to do widely desired protocol upgrades; anything more is simply out of the question. The scarcity is far more secure than any fiat currency. I think it would actually be easier to increase the supply of gold via asteroid mining than to increase the Bitcoin supply. That doesn't require consensus…
> the consensus mechanism makes it prohibitively difficult to change
This is a cultural property of the community, not an intrinsic property of bitcoin. If Satoshi signed a PGP message with a compelling call to alter the scarcity it would likely happen; maybe you disagree, but the point is that it's very possible to change the scarcity because it's a distributed computer program.
Re: S&P Dow Jones Indices to launch cryptocurrency indexes in 2021
#284Re: S&P Dow Jones Indices to launch cryptocurrency indexes in 2021
#285Someone please explain this to me: How is any cryptocurrency even considered an investment vehicle? I would classify myself as Boglehead and I believe in the fundamentals of investing in stocks because in all it's technicality (and given the buy-and-hold strategy), you are investing in a business by owning a part of it which naturally means that you will and do get the returns on it, both in terms of profits (dividen…
It's forex trading. Currencies gain and lose value relative to each other. Not that hard to understand.
Re: S&P Dow Jones Indices to launch cryptocurrency indexes in 2021
#286Earlier quoted context omitted.
You can't print gold, and BTC is appreciating much faster than gold (or any commodity or store of value or even other cryptocurrencies). It is not appreciating because fiat money is being devalued. That can account for -- at max -- 20% of the price increase. It's appreciating because of speculation.
People also lose bitcoins, I assume easier than losing physical currency or a bank account.
One of the ways I don't feel bad about not making millions in BTC even though I was aware of it long ago is the absolute certainty that I would have simply lost the paper wallet, had a hard-drive failure, etc, etc. There is just no way I would have held onto my keys for the 7 years that I was aware of it. I imagine that the breakage here for early investors is probably pretty high. I never did cash out on my dogecoin...
Re: S&P Dow Jones Indices to launch cryptocurrency indexes in 2021
#287I think there is a lot of confusion here. This is not an index fund . You can't buy it. It's just an index, a number that tells you what the price is. It may be a step toward a future index fund designed to track the index, the way SPY tracks the S&P 500 and DIA tracks the Dow Jones Industrial Average. But for now, it's only an index.
S&P has indices that have options contract directly on them. Which is way more fun! Also, index options enjoy the same better taxation that futures contracts do, as they are both Section 1256 contracts. Where no matter how long the trade is, 60% of the profits are taxed at long term capital gains rates and the other 40% are taxed at short term capital gains rates. Gotta read between the lines :) This is a great step…
Sure, and the futures have been available for a long time already. But an index fund is far simpler and more accessible, and can also be 100% long term capital gains. Most people can't trade options in their 401k.
Re: S&P Dow Jones Indices to launch cryptocurrency indexes in 2021
#288Earlier quoted context omitted.
Bitcoin cash comes in at #7 on coinmarket cap and while I wouldn't call it a scam, it's not a respectable project IMO. And it quickly gets worse from there over the next 10. Strongly agree that the best bucket is going to be composed of a vast majority of bitcoin and ethereum. I don't believe crypto is on the whole in a bubble right now but the fact that Bitcoin Cash has a market cap of >$5B is one of the biggest thi…
That you take Bitcoin Cash as an example of a non-reputable cryptocurrency is pretty sad. (And it's #5 not #7.) Ripple is for instance not a cryptocurrency, and everyone knows about the scam that is Tether. Litecoin has zero development (except to copy what Bitcoin is doing) and the development in Bitcoin itself has some serious issues.
I feel like such a slanted take should come with a disclaimer of your holdings.
Re: S&P Dow Jones Indices to launch cryptocurrency indexes in 2021
#289Earlier quoted context omitted.
Cryptocurrency isn't actually scarce though, it may be "scarce-like" but the scarcity is an artificial property that can be arbitrarily changed, unlike gold's scarcity which is an unalterable property of reality.
In all practical senses it is scarce. It is the protocol and consensus of the people using it that makes it scarce. If you disagree, go ahead just make your own BTC and see how "easy" it is to convince other people to use it instead of BTC or some other mainstream coin. (Some people even tried exactly that...)
You can't really know how easy it might be for me. For example, if my name was Vitalik Buterin or Elon Musk or even Donald Trump, I could trivially create my own cryptocurrency and a lot of people would use it.
Re: S&P Dow Jones Indices to launch cryptocurrency indexes in 2021
#290Earlier quoted context omitted.
Bitcoin is scarce; the consensus mechanism makes it prohibitively difficult to change the supply. It's barely even possible to do widely desired protocol upgrades; anything more is simply out of the question. The scarcity is far more secure than any fiat currency. I think it would actually be easier to increase the supply of gold via asteroid mining than to increase the Bitcoin supply. That doesn't require consensus…
> the consensus mechanism makes it prohibitively difficult to change This is a cultural property of the community, not an intrinsic property of bitcoin. If Satoshi signed a PGP message with a compelling call to alter the scarcity it would likely happen; maybe you disagree, but the point is that it's very possible to change the scarcity because it's a distributed computer program.
The fact that it's a "cultural property of the community" doesn't make it easy to change.
Bitcoin is not just "a computer program", it is a program and a blockchain. The same program with a different blockchain is not Bitcoin (there are plenty of those out there). Adding more supply to the Bitcoin blockchain would require large numbers of people to work against their own interests, decimating the value of their own infrastructure investments and bitcoin holdings.
It would be much, much more difficult to change Bitcoin than e.g. the supply of dollars or euros which are considered scarce enough for most purposes by most of the world. And, I contend, even more difficult than changing the supply of gold via asteroid mining. I doubt that even the second coming of Satoshi would be enough to do it (and I also very much doubt that Satoshi is still alive, or that he would want to if he was, considering his known political/economic stances).