Bitcoin price discussion and analysis

[satanoperca]

Just showing what it is worth, nothing but if people believe in it, short term it has some value, long term, no value at all. 50% devaluation in less than a month and you think it will bounce back, lol.

 

[Kryzz]

How's bitcoin handling this coronavirus crisis? Not well I see, -40% and still falling.

View attachment 101269

You almost posted on the day of the exact low here Peter! Put in a low about 10 days prior to the S&P and there seems to be a lot of chat about the correlation re BTC and equities of late.

Side note: have downloaded an app could Bamboo and put some spare coin into ETH & BTC these past few weeks. Handy little tool if anyone's interested.

Be interesting to see what BTC does as it nears the $8k mark, seems to be an interesting level.

 

[sptrawler]

How much bitcoin is out there, and is there a limit to how much is generated.
(I would put in the question marks, but now I've lost the question mark as well as the last letter of the alphabet, that rhymes with ed).
I'm going to have to pull this laptop to bits, is it possible to clean the contact under the keyboard, question mark.

 

[matty77]

How much bitcoin is out there? Its not so much a relevant question to be honest.

What you really need to ask is how much bitcoin out there is usable, not lost, not in wallets that are being watched, not forgotten or burnt? Nobody actually knows the answer to that question. The current circulating supply is around 18,342,737 but again, that doesnt mean a hell of a lot.

You would be amazed how much crypto is stuck in wallets never to be used again... more then most people think.

The max supply is theoretically 21,000,000 BTC but the usable supply is the big question.. The last bitcoin will be mined in? 2140? again nobody knows, plus the cost to mine those coins just might not be worth it anyway, again nobody knows at this point.

Either way I am happy with my BTC investments at the moment, doing a lot better then some other things I have going, plus I can cash out in seconds if need be and I control 100% of the funds so thats a bonus.

 

[matty77]

You almost posted on the day of the exact low here Peter! Put in a low about 10 days prior to the S&P and there seems to be a lot of chat about the correlation re BTC and equities of late.

Side note: have downloaded an app could Bamboo and put some spare coin into ETH & BTC these past few weeks. Handy little tool if anyone's interested.

Be interesting to see what BTC does as it nears the $8k mark, seems to be an interesting level.

Just a quick one on Bamboo, so they monitor your expenses and then effectively use your "spare change"to buy small bits of crypto. I hope you trust these guys 100% because I wouldnt let people have that sort of info ever.

 

[verce]

Just showing what it is worth, nothing but if people believe in it, short term it has some value, long term, no value at all. 50% devaluation in less than a month and you think it will bounce back, lol.

Keep in mind that the market cap for Bitcoin is about 150 billion USD right now. For a global currency/global asset, that is quite a small market cap and naturally means it will be subject to increased volatility. By way of example, the total value of US 100 dollar bills and the total value of Euro 100 dollar notes is about 2.5 trillion. You have to consider the size of the potential economy that Bitcoin might serve in the future - which is undoubtedly global in scope.

Even if you don't think it's pertinent to your area of focus today, it IS emerging as a new asset class, and its current penetration of various financial channels is so small in footprint that prices are inevitably going to go MUCH higher. If Wall Street dedicates resources to this space (and we are starting to see hedge funds and banks do this now e.g. Grayscale, Deutsche Bank) it's going to flourish and become a very important aspect of modern portfolio theory.

People think gold is the only store of value out there. But people also use fancy artwork, real estate, cars and collectibles to store value - that's a ~280 trillion USD market for the primary purpose of parking money. If Bitcoin ends up being just 1% of the global store of value market, that's potentially $150,000 per coin.

From a mile away I can see the value transfer towards Bitcoin happening as digital millennials grow up and inherit wealth. Will they buy more gold like the boomers, or will they prefer something that is more digital and speaks to their generation personally? Time will tell.

Bloomberg put out a report this month which is well worth reading if you can find it.


(Bloomberg Intelligence) -- The stock market's shakeout will temporarily drag on Bitcoin, in our view, but with an outcome more reminiscent of gold's after the 2008 financial crisis. Coming into existence in 2009, the first-born crypto is faring relatively well, down less than a quarter as much as the S&P 500 in 2020 despite being almost 5x as risky on a volatility-weighted basis.

Bitcoin's 24/7 price transparency, and the lack of limits, interruptions or third-party oversight, is an accomplishment for an asset just a decade old. This year marks a key test for Bitcoin's transition toward a quasi-currency like gold, and we expect it to pass. Unlike the stock-market reset but similar to gold's, Bitcoin had its shakeout, stabilizing the foundation amid unprecedented global monetary stimulus and increasing adoption.

 

[verce]

Keep in mind that the market cap for Bitcoin is about 150 billion USD right now. For a global currency/global asset, that is quite a small market cap and naturally means it will be subject to increased volatility. By way of example, the total value of US 100 dollar bills and the total value of Euro 100 dollar notes is about 2.5 trillion. You have to consider the size of the potential economy that Bitcoin might serve in the future - which is undoubtedly global in scope.

Even if you don't think it's pertinent to your area of focus today, it IS emerging as a new asset class, and its current penetration of various financial channels is so small in footprint that prices are inevitably going to go MUCH higher. If Wall Street dedicates resources to this space (and we are starting to see hedge funds and banks do this now e.g. Grayscale, Deutsche Bank) it's going to flourish and become a very important aspect of modern portfolio theory.

People think gold is the only store of value out there. But people also use fancy artwork, real estate, cars and collectibles to store value - that's a ~280 trillion USD market for the primary purpose of parking money. If Bitcoin ends up being just 1% of the global store of value market, that's potentially $150,000 per coin.

From a mile away I can see the value transfer towards Bitcoin happening as digital millennials grow up and inherit wealth. Will they buy more gold like the boomers, or will they prefer something that is more digital and speaks to their generation personally? Time will tell.

Bloomberg put out a report this month which is well worth reading if you can find it.

View attachment 103030
(Bloomberg Intelligence) -- The stock market's shakeout will temporarily drag on Bitcoin, in our view, but with an outcome more reminiscent of gold's after the 2008 financial crisis. Coming into existence in 2009, the first-born crypto is faring relatively well, down less than a quarter as much as the S&P 500 in 2020 despite being almost 5x as risky on a volatility-weighted basis.

Bitcoin's 24/7 price transparency, and the lack of limits, interruptions or third-party oversight, is an accomplishment for an asset just a decade old. This year marks a key test for Bitcoin's transition toward a quasi-currency like gold, and we expect it to pass. Unlike the stock-market reset but similar to gold's, Bitcoin had its shakeout, stabilizing the foundation amid unprecedented global monetary stimulus and increasing adoption.

Where did everybody go?

 

[noirua]

The Bitcoin halving will take place sometime in May 2020 [May 12 2020]. What is the halving, how will it affect the price, and what does it mean for miners and the cryptocurrency's long-term prospects? Here's everything you need to know.
https://www.coindesk.com/bitcoin-halving-explainer

-----

The basic problem for Bitcoin Miners is the increased use of energy and that their software is only really good for the bin. In the words of Max Keiser, "they are toast".

 

[verce]

The energy invested is proof of work which is part of the security of the blockchain. There are far more destructive and wasteful industries people should focus on first before looking at computers.

I don’t understand why it’s good for the bin? Can you elaborate?

 

[derangedlawyer]

(Bloomberg Intelligence) -- The stock market's shakeout will temporarily drag on Bitcoin, in our view, but with an outcome more reminiscent of gold's after the 2008 financial crisis. Coming into existence in 2009, the first-born crypto is faring relatively well, down less than a quarter as much as the S&P 500 in 2020 despite being almost 5x as risky on a volatility-weighted basis.

Bitcoin's 24/7 price transparency, and the lack of limits, interruptions or third-party oversight, is an accomplishment for an asset just a decade old. This year marks a key test for Bitcoin's transition toward a quasi-currency like gold, and we expect it to pass. Unlike the stock-market reset but similar to gold's, Bitcoin had its shakeout, stabilizing the foundation amid unprecedented global monetary stimulus and increasing adoption.

That didn't age well.

 

[verce]

That didn't age well.

We have all been hoodwinked by the bull trap from 3800 USD to 8800 USD!

 

[verce]

Bitcoin has attributes superior to gold including its portability, divisibility, seizure resistance, liquidity, and verifiability. Try sending gold halfway around the world and assaying its purity within minutes, a practice Bitcoin enables with ease.

Bitcoin is the quintessence of scarcity, as it is the only globally tradable asset that has a known fixed supply cap. Other scarce assets like gold and real estate have irregular production schedules, and new gold mining and construction technologies may lead to a supply glut in the future.

 

[Dona Ferentes]

from the BBC

Bitcoin has just gone through a much-hyped adjustment that reduced the rate at which new coins are created. The world's biggest cryptocurrency's so-called "halving" happens roughly every four years.The digital currency relies on what are known as "miners", who run software that races to solve complex maths puzzles in return for Bitcoins.

Monday's halving event means that the reward for unlocking a "block" has been cut from 12.5 new coins to 6.25.

Halving was written into the cryptocurrency's code by its creator, who is known as Satoshi Nakamoto, to control inflation. This is the third halving since Bitcoin's creation in 2009. The first took place in November, 2012, and the second in July 2016. The next halving is due to take place in May 2024.

Bitcoin's code also means that rewards to miners will continue to halve every 210,000 blocks until they reach zero in around two decades' time, limiting the total number of Bitcoins that will ever exist to 21 million. This is because - unlike currencies such as the dollar, pound or euro - digital currencies have no central banks to regulate their supply.

Supporters of the cryptocurrency say that this scarcity is part of what underpins its value and makes it a potential safe haven against currencies that are vulnerable to devaluation during times of economic crisis. The digital currency has gained more than 20% since the start of this year, touching $10,000 last week. That came after a report that hedge fund manager Paul Tudor Jones has backed the cryptocurrency as a safeguard against inflation. However some investors have highlighted that halving could make the cryptocurrency less attractive to miners. "The incentive is less for miners now to mine Bitcoin. Miners will probably switch to more profitable cryptocurrencies," Stephen Innes from AXI Corp told the BBC.

 

[Dona Ferentes]

The digital currency has gained more than 20% since the start of this year, touching $10,000 last week. That came after a report that hedge fund manager Paul Tudor Jones has backed the cryptocurrency as a safeguard against inflation.

.... whose report can be found in this link
https://www.docdroid.net/H1fuimX/the-great-monetary-inflation-pdf

COVID-19 is a one-of-a-kind virus that has triggered a one-of-a-kind policy response globally. The depth and magnitude of the economic drop-off took modern monetary theory, or the direct monetization of massive fiscal spending, from the theoretical to practice without any debate.
A. Debt Addiction
B. Money Printing is a Hard Habit to Kick
C. Seeking Refuge from the Great Monetary Inflation

There is a host of assets that at one time or another have worked well in reflationary periods:
1. Gold ... A 2,500 year store of value
2. The Yield Curve ... Historically a great defense against stagflation or a central bank intent on inflating. For our purposes we use long 2-year notes and short 30-year bonds
3. NASDAQ100 ... The events of the last decade have shown that quantitative easing can rapidly leak into equity markets
4. Bitcoin ... There is a lengthy discussion of this below
5. US cyclicals (long)/US defensive (short) ... A pure goods’ inflation play historically
6. AUD-JPY ... Long commodity exporter and short commodity importer
7. TIPS (Treasury Inflation-Protected Securities) ... Indexed to CPI to protect against inflation
8. GSCI (Goldman Sachs Commodity Index) ... A basket of 24 commodities that reflects underlying global economic growth
9. JPM Emerging Market Currency Index ... Historically when global growth is high and inflationary pressures are building, emerging market currencies have done quite well.

In seeking refuge, he grades these "Stores of Value" with 4 characteristics
1. Purchasing Power
2. Trustworthiness
3. Liquidity
4. Portability

Of course, assuming we will see THE GREAT MONETARY INFLATION

 

[wayneL]

The thing that I don't get with bitcoin is apart from the very subjective value market participants place on it, it seems to be no better in fiat in that regard. Another words equalise on confidence to have any value whatsoever.

On the other hand gold and other precious metals do have a cost of production which serves as some sort of a value floor. On this basis I made some purchases last year in my belief that God was at a value floor, or very close to it anyway.

I guess my question here is what is the minimum value of bitcoin if any, is there a cost of production for a bitcoin? Is there any value in bitcoin beyond what is tantamount to the markets confidence in it?

Cairns Central banks and governments destroy that value?

 

[wayneL]

further when we talk about stores of values there is the assumption that the Stiller value will still exist if things really turn to crap.

Let's imagine a scenario where some belligerent detonates a nuke above Australia and takes out our entire digital system.

What happens to bitcoin then?

One may posit that we would have more problems in that situation than finances, but yet again physical gold would retain some sort of actual value.

I realise that I am going well out, a few sigmas, on the probability curve; but we are currently in a situation that was unpredictable.

The current situation makes a whole host of other situations which were seemingly highly improbable, more probable now.

Repeat my question is how does bitcoin hedge against those situationa, outside of a well-functioning digital world?

 

[So_Cynical]

I guess my question here is what is the minimum value of bitcoin if any, is there a cost of production for a bitcoin?

Producing BTC is called mining, it requires capex, equipment, time, space, expertise and electrical power.

 

[wayneL]

Producing BTC is called mining, it requires capex, equipment, time, space, expertise and electrical power.

Okay

So the question then becomes what is the cost of producing a bitcoin?

Also what happens if the digital economy is destroyed via nuclear attack or whatever. What is the intrinsic value of bitcoin then?

I realise that the same questions apply for gold but in the end you have a metal with certain properties in your hand... Which incidentally functioned before the digital economy.

I'm not a gold bug by any stretch of the imagination but just trying to figure this out.

 

[verce]

Okay

So the question then becomes what is the cost of producing a bitcoin?

Also what happens if the digital economy is destroyed via nuclear attack or whatever. What is the intrinsic value of bitcoin then?

I realise that the same questions apply for gold but in the end you have a metal with certain properties in your hand... Which incidentally functioned before the digital economy.

I'm not a gold bug by any stretch of the imagination but just trying to figure this out.

Hi Wayne

Couple of points:

The last figure I heard quoted regarding the break-even cost of producing a Bitcoin was around 8000 USD (derived from an institutional model developed by a reputable data science team).

What happens if the digital economy is destroyed via a nuclear attack? I think Aussie Stock Forums and investing in general is going to be the LEAST of your concerns at that point, which I deem extremely improbable. But, in the event the world recovered from such an apocalyptic scenario, the blockchain would still be there and can pick up where it left off quite easily.

Gold has thousands of years of history and consensus behind it. Bitcoin is 11 years old. It's doing very well as an emerging asset class. I wouldn't write it off just yet. New things are always uncomfortable and scary at first.

 

[wayneL]

Hi Wayne

Couple of points:

The last figure I heard quoted regarding the break-even cost of producing a Bitcoin was around 8000 USD (derived from an institutional model developed by a reputable data science team).

What happens if the digital economy is destroyed via a nuclear attack? I think Aussie Stock Forums and investing in general is going to be the LEAST of your concerns at that point, which I deem extremely improbable. But, in the event the world recovered from such an apocalyptic scenario, the blockchain would still be there and can pick up where it left off quite easily.

Gold has thousands of years of history and consensus behind it. Bitcoin is 11 years old. It's doing very well as an emerging asset class. I wouldn't write it off just yet. New things are always uncomfortable and scary at first.

Clearly there is a bunch of stuff which I just haven't got my head around with cryptocurrencies... ask me about option pricing models or futures and I can talk for the next 15 hours, but I have no idea what blockchain means etc. Nor how it would $8,000 to produce a bitcoin.

Is there a resource, a website, or a book which can explain it all without insulting my intelligence?