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S&P Dow Jones Indices to launch cryptocurrency indexes in 2021

reuters.com

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Re: S&P Dow Jones Indices to launch cryptocurrency indexes in 2021

#311

Post by nmlnn »

root_axis wrote: post #299
modeless wrote: post #290

Earlier quoted context omitted.

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 i…

The point is that the scarcity can be trivially changed if certain people decide that it should, which isn't true for things that exist in the real world like gold. Norms shift over time and your suggestion that it's unlikely to change is your opinion based on cultural analysis, not something that can be proven to be true even in principle. > It would be much, much more difficult to change than e.g. the supply of dol…

> can be trivially changed if certain people decide that it should

This is simply not the case - see 2017 bitcoin cash fork or Segwit2X push. At the end of the day money is a human invention, meant to facilitate value exchange between humans. So it requires consensus between the users of the money, if some fraction want to change the rules they are free to.

We went for something we found in nature with properties that were pretty good for that, but with some downsides (not absolutely scarce, difficult to transport, easy to steal) to something created specifically for the purpose.

Re: S&P Dow Jones Indices to launch cryptocurrency indexes in 2021

#312

Post by vmception »

modeless wrote: post #287
vmception wrote: post #267

Earlier quoted context omitted.

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.

They aren't launching an index fund though, so 401K accounts that couldn't hold index options would not benefit in any capacity from this product. This product can only be a reference value and also infrastructure for index options launches.

Re: S&P Dow Jones Indices to launch cryptocurrency indexes in 2021

#313

Post by shrimpx »

puranjay wrote: post #150

I've been dabbling in crypto since the lockdown (all red, but I've had fun) and this space is like the wild west early days of the internet, with even more scammers. We're past the heady ICO days but now, all the scams have moved to Uniswap. And I might be guilty of being elitist, but I rarely, if ever, see founders with A+ tier credentials (Ivy league education, FAANG/Investment banking/Mckinsey et al) starting cryp…

The current 24h BTC volume on Coinbase alone is 280M. For comparison TSLA (which is a hot stock) is 60M and GOOG is a miserable 2-3M...

I know you said "most coins" and I think your statement is true, that the bottom 90% are shit coins, but the coins that everyone knows trade at higher volume than many popular stock tickers.

Re: S&P Dow Jones Indices to launch cryptocurrency indexes in 2021

#314

Post by eldaisfish »

mrlala wrote: post #250
eldaisfish wrote: post #215

Earlier quoted context omitted.

You logic is correct. Gold is not an investment, it is a hedge. Gold does no useful work and produced no measurable output. It's "purpose" is simply that society has assigned it a value that most people will agree to exchange for other forms of value. In exactly the same way, crypto or any fiat currency is not an investment.

>Gold does no useful work and produced no measurable output What? Gold us physically useful and relatively scarce, THAT is why it has value. You are acting like people just got together and said "hey, let's take this useful hunk of garbage and assign it some value to see how rich we all are".

>You are acting like people just got together and said "hey, let's take this useful hunk of garbage and assign it some value to see how rich we all are".

Correct. Gold's value in an industrial sense is no different from any other relatively scarce material. This is precisely why gold is not an investment. Its value is simply a group of people assigning a value to something driven in part by scarcity.

Re: S&P Dow Jones Indices to launch cryptocurrency indexes in 2021

#315

Post by Sargos »

root_axis wrote: post #274
tiwprueowut47 wrote: post #251

Earlier quoted context omitted.

Gold’s scarcity is certainly not unalterable. Gold can be destroyed, increasing its scarcity. Plus we already have the technology to create gold out of other elements in a particle accelerator, decreasing its scarcity. That process happens to be prohibitively expensive, but there is no guarantee it remains so. The scarcity of cryptocurrencies and gold both depend on the actions of other people.

Yes, it's possible to destroy or transmute gold, but as you already stated, it's prohibitively expensive thus with respect to scarcity it might as well be impossible. Yes, that might change in the future but there is no reason to believe that it will.

You just explained to yourself why Bitcoins supply is fixed and can't feasibly be changed. It was a well made argument, good job.

Re: S&P Dow Jones Indices to launch cryptocurrency indexes in 2021

#316

Post by centimeter »

andrewmcwatters wrote: post #276

I’m enjoying sitting on the sidelines and watching people “invest” in a digital “currency” that you cannot spend, does not produce cash flow, and whose values are determined by other shmucks buying it from previous shmucks. What a time to be alive. No wonder the S&P 500 CAPE ratio is beyond the 1929 high. No one has any idea of what the intrinsic value is of anything. Investing in companies that don’t make a profit,…

> that you cannot spend,

You can spend it.

> does not produce cash flow,

Neither commodities nor currencies produce cash flow. People still reasonably invest in both.

> and whose values are determined by other shmucks buying it from previous shmucks.

The value of every other asset in existence is also determined by this process.

Re: S&P Dow Jones Indices to launch cryptocurrency indexes in 2021

#317

Post by centimeter »

iamspoilt wrote: post #30

Someone 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…

> Isn't it analogous to me investing my money in buying USD or the British Pound

It would be, if those were hard (non-inflationary) monies.

In a hypothetical future equilibrium where Bitcoin is a world reserve asset, buying Bitcoin is approximately isomorphic to buying spoos or other wide-market indices.

Re: S&P Dow Jones Indices to launch cryptocurrency indexes in 2021

#318

Post by MarkPNeyer »

andrewmcwatters wrote: post #301
vmception wrote: post #295

Earlier quoted context omitted.

Although digital asset prices are not a good proxy for their utility, there are plenty of utility for enough people and that expands and the addressable market expands. Crypto businesses are very lucrative so don’t be too busy asking why when you should be asking how

I’m not asking why, because anyone can find instances of mania in history such as this. Beanie babies. Tulips. The law of large numbers, in this case—the speculative experiment of seeking returns from assets that do not produce value, will iron this out. History does not repeat, but it rhymes often enough for those who know the tune to sing along.

The tulip derivative bubble lasted for a few months; beanie babies were a year or two at most. Bitcoin is over ten years old.

Do you have any examples of a bubble which

- lasted more than 5 years - recovered from previous drops in value of more than 50 %?

What kind of evidence would convince you that bitcoin were different from these past bubbles?

Re: S&P Dow Jones Indices to launch cryptocurrency indexes in 2021

#319

Post by imaginenore »

NicoJuicy wrote: post #302
andrewmcwatters wrote: post #276

I’m enjoying sitting on the sidelines and watching people “invest” in a digital “currency” that you cannot spend, does not produce cash flow, and whose values are determined by other shmucks buying it from previous shmucks. What a time to be alive. No wonder the S&P 500 CAPE ratio is beyond the 1929 high. No one has any idea of what the intrinsic value is of anything. Investing in companies that don’t make a profit,…

And where halve of the raise on crypto is because of tether...

I call BS. Bitcoin's trading volume has been between $20 and $50 billion USD per day (in the last year).

Tether's total valuation is $19.4 billion. It's a drop in the bucket.

Re: S&P Dow Jones Indices to launch cryptocurrency indexes in 2021

#320

Post by centimeter »

onlyrealcuzzo wrote: post #132
nostrademons wrote: post #67

Earlier quoted context omitted.

It's analogous to investing money in USD or GBP before those countries were given a license to print as many USD and GBP as they wanted. Before then (1931 for the pound and 1933 for the dollar, though they maintained de-facto parity with gold until 1971), dollars and pounds were considered good investments. That's why we had bank runs: people thought their money would be safer under their mattress, and preferred to o…

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.

> You can't print gold

You can 10x the world gold supply by capturing a single medium-sized metallic asteroid.

You also can't send gold over the internet or store it in a private key. Given that Bitcoin is otherwise quite similar, mutatis mutandis, it's not unreasonable to imagine that Bitcoin might displace gold to some degree as a reserve asset.

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