How's bitcoin handling this coronavirus crisis? Not well I see, -40% and still falling.
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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 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.
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(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.
(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.
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.
.... whose report can be found in this linkThe 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.
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
I guess my question here is what is the minimum value of bitcoin if any, is there a cost of production for a bitcoin?
OkayProducing 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.
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.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.
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