Bitcoin price discussion and analysis

[ducati916]

I hope you are right!

In a portfolio, I think that at least 1% in Bitcoin is very important and makes sense. For a small amount of your capital, you have 'insurance' stored in what is hopefully a non-correlated asset to traditional financial markets.

1. Why will there be increasing demand over time?

2. How is it basic economics?

jog on
duc

 

[Value Collector]

A huge conglomerate of businesses generating paper money they promise you will never see.

Trust us bro, we can all get rich together as long as we denominate at in $USD(-34 Trillion)

Good to be back VC

Yeah they generate paper money, but their plan is to turn that paper money back into real assets as fast as the can sensible do so, and they are real assets inside Berkshire, where as there is nothing inside Bitcoin.

As I said imagine if Berkshire has no assets, the stock certificate would be worthless, that’s what Bitcoin is, an empty stock certificate.

And who knows, one day when Warren is gone, and the management decide there they just generate to much cash, they might start paying dividends, and the bigger the company is on that day the bigger the dividends.

or, they might just keep repurchasing shares until I am the last share holder and then I decide what to do with the pile . But if the rest of the world lost interest in Bitcoin, and had sold it all to me, what would I really have???

 

[moXJO]

Lets face it....
Bitcoin is the greatest opportunity to make money. It's a hell of a lot better to trade than stocks.
While I flinch at the word "invest" when it's used with crypto. You can't argue with the returns.

I seem to remember everyone talking of it's demise not that long ago.

 

[moXJO]

No, in investments you look to the asset it’s self to generate a return, you don't have to rely on some one else buying it from you at a higher price to make your return.

if you are relying on price action to make your return, that’s speculation not investment.

for example, let’s say you bought a dozen large farms and leased them to tenant farmers, and each year you earned lease payments from them. Your family could go generations without selling that asset and living off the income, that’s an investment, you might never ever check the price of the land. that’s what I mean by looking to the asset to make your return.

you can’t live off bitcoins like that.

but if you buy the farms hoping they go up next week that’s speculation not investment.

Now of course one day you might hope to sell the farms and make a capital gain, due to the value of the farm rising over time, but that’s still an investment, because it’s a productive asset.

Rare coins, art, sneakers don't generate a return. They hold value due to scarcity.
I've seen "investment" thrown around these instruments. Invest in gold/silver is another one. I suppose you do hold something physical with these though.

 

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1. Why will there be increasing demand over time?

2. How is it basic economics?

jog on
duc

I would have thought the Bitcoin ETFs would lead to constant inflows over time. And the supply is fixed at 21 million BTC. So, with supply being held constant, and demand going up into the future - this would leads to price to respond upwards.

Please correct me if I have the wrong idea!

 

[Value Collector]

Rare coins, art, sneakers don't generate a return. They hold value due to scarcity.
I've seen "investment" thrown around these instruments. Invest in gold/silver is another one. I suppose you do hold something physical with these though.

Yeah, so a rare coin is sort of a hybrid between a regular coin that its worth is face value, and a baseball card that has some sort of additional value to collectors, provided there is enough interested collectors you might be able to sell it one day at a higher price than its face value.

But I wouldn’t call that investing, I would call the value above its face value a “speculative value”, not an “investment value”

So a coin can be valued in 3 ways.

1, its weight in metals

2, its current face value

3, it’s speculative collector value.

these are three different values, some more real than others, and the values can fluctuate according to different drivers

 

[Value Collector]

Lets face it....
Bitcoin is the greatest opportunity to make money. It's a hell of a lot better to trade than stocks.
While I flinch at the word "invest" when it's used with crypto. You can't argue with the returns.

I seem to remember everyone talking of it's demise not that long ago.

Like most speculation there is the possibility of huge profits, eg betting on horses, the lotto, roulette.

but the possibility of being able to double your money in 2 mins on a roulette wheel shouldn’t fool you into thinking it’s a substitute for making wise investments.

if you enjoy speculating on Crypto, set aside some ”entertainment funds” for that purpose and treat it as a gamble, and keep it separate in your mind from your investment activities.

 

[Value Collector]

I would have thought the Bitcoin ETFs would lead to constant inflows over time. And the supply is fixed at 21 million BTC. So, with supply being held constant, and demand going up into the future - this would leads to price to respond upwards.

Please correct me if I have the wrong idea!

Yeah, but Bitcoin could also fall out of fashion and go to zero, and who is going to hold on to their ETF’s as they see the price falling.

it generates no value for the long term holder like dividends etc to make him feel comfortable sitting there or encouraging bargain hunters to jump in, it’s all emotional.

if you want something that with both grow in value and reduce in number over time Buy Berkshire Hathaway shares. That way each share you own actually has a massive portfolio of real world assets backing it, and that portfolio grows and every year the number of shares goes down as they buy them back.

doing this also allows you to feel like your capital is being deployed around the world productively, not just betting on a digital code hoping another sucker will pay you more one day for nothing.

 

[ducati916]

1. I would have thought the Bitcoin ETFs would lead to constant inflows over time.

2. And the supply is fixed at 21 million BTC. So, with supply being held constant,

3. and demand going up into the future - this would leads to price to respond upwards.

Please correct me if I have the wrong idea!

1. The creation of BTC securities (paper) BTC as opposed to the digital (physical stored) BTC allows price manipulation, same as with GLD, SLV, etc. The increase in securitisation has nominally increased supply

2. So is supply actually fixed? What about the other 5999 sh*t coins out there? Do they add to or subtract from supply?

3. Just having a fixed supply does not tell you about the elasticity of demand. Demand could be generated by speculation or use accepted. But demand is not a given based on supply. But currently there is no real use for BTC. It certainly is not 'money'. It can be tracked and hacked. Currently it has all the characteristics of a ponzi scheme. Time will tell.

jog on
duc

 

[moXJO]

Yeah, so a rare coin is sort of a hybrid between a regular coin that its worth is face value, and a baseball card that has some sort of additional value to collectors, provided there is enough interested collectors you might be able to sell it one day at a higher price than its face value.

But I wouldn’t call that investing, I would call the value above its face value a “speculative value”, not an “investment value”

So a coin can be valued in 3 ways.

1, its weight in metals

2, its current face value

3, it’s speculative collector value.

these are three different values, some more real than others, and the values can fluctuate according to different drivers

I'd argue the only value you need in any asset is enough numbers of people throwing their money at it. Well that and a bunch of hype.

That's why I don't believe in the "gambling theory" for most of these types of instruments anymore. Roulette wheel doesn't equate. Now you have the numbers from social media hype bumping your win up in a pretty safe way. It's all "greater fool theory" and has been for the last decade.

Even stocks weren't safe look at game stop.

 

[Value Collector]

I'd argue the only value you need in any asset is enough numbers of people throwing their money at it. Well that and a bunch of hype.

That's why I don't believe in the "gambling theory" for most of these types of instruments anymore. Roulette wheel doesn't equate. Now you have the numbers from social media hype bumping your win up in a pretty safe way. It's all "greater fool theory" and has been for the last decade.

Even stocks weren't safe look at game stop.

Yeah, but hype for collectables like Bitcoin can fade, it’s nice to know what the other underlying causes that give the item value are.

for example Gold can become a speculative bubble every so often, but we know that even if the speculative bubble fades there is other sources of demand that prop up its price, for example worst case scenario gold should never drop below the value of copper because it’s superior to copper for many industrial purposes, and it also has demand for jewellery etc.

But if the collectable/speculative hype of Bitcoin fades, what else can prop up its price? It could go to zero, that’s not out of the question.

but as I said if you enjoy speculating on crypto, go for it.

 

[moXJO]

Yeah, but hype for collectables like Bitcoin can fade, it’s nice to know what the other underlying causes that give the item value are.

for example Gold can become a speculative bubble every so often, but we know that even if the speculative bubble fades there is other sources of demand that prop up its price, for example worst case scenario gold should never drop below the value of copper because it’s superior to copper for many industrial purposes, and it also has demand for jewellery etc.

But if the collectable/speculative hype of Bitcoin fades, what else can prop up its price? It could go to zero, that’s not out of the question.

but as I said if you enjoy speculating on crypto, go for it.

I suppose it's just trend trading. I agree that the attention can fade. I mean look at the signature collectors, antiques, etc.

They can fade because of tech advances. The collectable is niche and the demographic that collects it dies out. Or it goes out of fashion.

Opposite end is which collectable gets the most eyes on, coupled with the age of those collecting and then working out if they have yet to hit peak earnings and the rough longevity.

I think crypto is young in one sense, but the half life of these commodities has shortened dramatically. I don't think I see it hanging around for decades.

 

[farmerge]

As a bit of a side issue with Bitcoin.
I have been getting a lot of texts and e-mails from eople' unknown to me recently.
The format is very similar as it starts off with Dear G****** usually spelt wrong with the usual blah blah blah.
The nuts and bolts are I have a supposedly got a sum of money held in a bitcoin account.
All they require is a bank account to deposit this long lost and forgotten sum into.
I did string one bod along a couple of days ago and then suggested he try something that actually sounded as if it was real.
The ignorant sod hung up on me, and I didn't even get the chance to swear at him, as I usually do to these sort of "people".

 

[Value Collector]

I suppose it's just trend trading. I agree that the attention can fade. I mean look at the signature collectors, antiques, etc.

They can fade because of tech advances. The collectable is niche and the demographic that collects it dies out. Or it goes out of fashion.

Opposite end is which collectable gets the most eyes on, coupled with the age of those collecting and then working out if they have yet to hit peak earnings and the rough longevity.

I think crypto is young in one sense, but the half life of these commodities has shortened dramatically. I don't think I see it hanging around for decades.

Yep, but one factor that I think will burn peoples attention span faster is that as people lose money, they will eventually lose interest.

Now, this is a problem for crypto, because it generates no return itself that it can throw off to keep people interested. So every dollar that some one takes out of crypto as a profit is coming at the loss of some one else, and the fees earned by miners and the people running the new ETF's adds to this losses that must be absorbed by the market.

How long can the average market participant stay interested and keep pumping their savings into the system, when the market average return of the system is negative?

For every winner you have a loser in crypto, plus the system is draining dollars to fund the middle men and even just electricity.

This is not the same as shares and other investments, because they aren't a zero sum game due to the earnings they throw off, which make the market average return positive over time.

 

[Value Collector]

Yep, but one factor that I think will burn peoples attention span faster is that as people lose money, they will eventually lose interest.

Now, this is a problem for crypto, because it generates no return itself that it can throw off to keep people interested. So every dollar that some one takes out of crypto as a profit is coming at the loss of some one else, and the fees earned by miners and the people running the new ETF's adds to this losses that must be absorbed by the market.

How long can the average market participant stay interested and keep pumping their savings into the system, when the market average return of the system is negative?

For every winner you have a loser in crypto, plus the system is draining dollars to fund the middle men and even just electricity.

This is not the same as shares and other investments, because they aren't a zero sum game due to the earnings they throw off, which make the market average return positive over time.

But then again, lots of people get playing the pokies, even though they steadily lose money, Humans are weird hahaha.

 

[noirua]

 

[noirua]

BlackRock Bitcoin ETF now holds more BTC than MicroStrategy

“Bitcoin is technically superior to those asset classes. And that being the case, there’s just no reason to sell the winner to buy the losers.”

cointelegraph.com

 

[grah33]

not much action here ... thoughts on how high it could go before a pullback?

 

[Value Collector]

not much action here ... thoughts on how high it could go before a pullback?

In regards to the south sea bubble 300 years ago Newton said this, it remains true today.

 

[DB008]

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