Australian (ASX) Stock Market Forum

Bitcoin price discussion and analysis

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Value Collector said:
In my opinion the big difference is that all those other things you list have a use that gives them a real world value, that allows them to be used as a store of value. Bitcoin doesn’t really have a use.

for example fancy art is attractive to some people, So you can buy it knowing that there is a chance that you can sell it to some one else in the future that finds it attractiv.

Same with real estate, it will earn you income while you hold it, so it’s actually an investment in its own right, but knowing that some one else in the future will be attracted to its income potential means you can use it as a store of value.

cars and collectables I put in the same category as art, not a real investment but can be a store of value.

However, bitcoin doesn‘t have those traits.

its not pretty or entertaining, it doesn’t earn an income, it doesn’t have an industrial use, you can’t eat it. So there is nothing really backing its ability to be a store of value except fashion, which might change, there is nothing stopping Bitcoin going to zero.
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Exactly !!!!!!!!!!!!!!!
 
Is the Bitcoin price in a Bear phase? It seems Bitcoin may spend two-thirds of the time going up but will ultimately fall below $38,000.
Will shipping return to normal now passing through the canal but will a second phase open up with new tactics? If so inflation will rise again with higher interest rates putting pressure on Cryptos.
 
noirua said:
Is the Bitcoin price in a Bear phase? It seems Bitcoin may spend two-thirds of the time going up but will ultimately fall below $38,000.
Will shipping return to normal now passing through the canal but will a second phase open up with new tactics? If so inflation will rise again with higher interest rates putting pressure on Cryptos.
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Bitcoin price action is at same point as discussed last week - you could've hibernated for a week and woke up right now, rubbed your eyes and yawned... errr, what happened? Still stuck in a range.

Inflation? Maybe, maybe not. IMO, cryptos are their own beast - a tradeable instrument, best to treat them as such.

1705112554535.png
 
IvoryWolf said:
Bitcoin price action is at same point as discussed last week - you could've hibernated for a week and woke up right now, rubbed your eyes and yawned... errr, what happened? Still stuck in a range.

Inflation? Maybe, maybe not. IMO, cryptos are their own beast - a tradeable instrument, best to treat them as such.

View attachment 168788
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Hi IW,

Just wanted to ask an honest question here, as some one who is far from convinced that Bitcoin will ever be a real currency, I like to test my opinions by reading opposing information.

So I bought a book called the “The Bitcoin Standard” (which I don’t recommend, the guy who wrote it doesn’t seem to know much about the real world economy, and sprouts opinions as facts)

But the issue I have is most of the people that deal in bitcoin seem to hold two views that are opposing in my opinion.

1, They think Bitcoin might be an actual currency one day.

2, They also seem to believe Bitcoins price will continue to rise forever as it becomes more “scarce” and the like they idea of it rising in value.

I have attached a screen shot of the book I am reading where the author even says the continual appreciation of Bitcoin in “vital”.

How can it ever be a real currency when its price is volatile, and destined to rise.

I mean who in their right Mind would sign up to a 30 year home loan promising to pay back a fixed amount of Bitcoin knowing it could sky rocket, and who would lend Bitcoin for 30years knowing it could plummet in value by 50% in a year.

It really doesn’t seem like it can be used in any real business setting for actual transactions.

i know some people do buy things with it, but the prices are never in Bitcoin, they are always linked back to a real currency, eg the price of a pizza might be a stable $20, but the amount of Bitcoin you need to pay to by that $20 pizza changes each hour, so obviously the Bitcoin is not the currency in that moment.

So my question is what are your thoughts, can Bitcoin ever be a real currency? Or is it just always going to be this digital commodity people like to speculate on? And if it is to become a currency, how can the volatility and price changes be over come?

IMG_0313.jpeg
 
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Value Collector said:
Hi IW,

Just wanted to ask an honest question here, as some one who is far from convinced that Bitcoin will ever be a real currency, I like to test my opinions by reading opposing information.

So I bought a book called the “The Bitcoin Standard” (which I don’t recommend, the guy who wrote it doesn’t seem to know much about the real world economy, and sprouts opinions as facts)

But the issue I have is most of the people that deal in bitcoin seem to hold two views that are opposing in my opinion.

1, They think Bitcoin might be an actual currency one day.

2, They also seem to believe Bitcoins price will continue to rise forever as it becomes more “scarce” and the like they idea of it rising in value.

I have attached a screen shot of the book I am reading where the author even says the continual appreciation of Bitcoin in “vital”.

How can it ever be a real currency when its price is volatile, and destined to rise.

I mean who in their right Mind would sign up to a 30 year home loan promising to pay back a fixed amount of Bitcoin knowing it could sky rocket, and who would lend Bitcoin for 30years knowing it could plummet in value by 50% in a year.

It really doesn’t seem like it can be used in any real business setting for actual transactions.

i know some people do buy things with it, but the prices are never in Bitcoin, they are always linked back to a real currency, eg the price of a pizza might be a stable $20, but the amount of Bitcoin you need to pay to by that $20 pizza changes each hour, so obviously the Bitcoin is not the currency in that moment.

So my question is what are your thoughts, can Bitcoin ever be a real currency? Or is it just always going to be this digital commodity people like to speculate on? And if it is to become a currency, how can the volatility and price changes be over come?

View attachment 169256
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In terms of people taking a 30 year mortgage in Bitcoin that will happen if some people eventually start getting paid their salaries in Bitcoin. Most people like to take their mortgages out in the currency they are getting paid their salary in. If you live in Australia and you are getting paid Australian dollars why would you take out a mortgage in U.S. dollars? Most people would not do that.

Where Bitcoin is actually used as a currency is in foreign remittance to bypass the fees, slowness and government regulations of traditional services like Western union. This is especially true in countries like Iran or Venezuela where capital controls or other restrictions are often put in place. If you live in Venezuela or Cuba Bitcoin is genuinley useful if you want to recieve money from (or send money to) overseas. Also its used in money laundering but lets not go into that.

Also your question essentially boils down to "if Bitcoin is a store of value what is the actual value or utility that is being purported to being stored". The answer to that I believe is that the value that is being stored is its use as a superior form of currency in that it will act like a reserve currency (but superior to USD and other fiat) like gold currently does to some extent. Where it may eventually be used to settle contracts for selling oil or be used as the currency of issuing government bonds or for settling multi-billion dollar financial transactions etc. It will likely not end up being be used as a day to day currency (other cyptos may end up being used for that in addition to fiat and CDBCs). Also it will be useful as a currency in lowering the cost of cross border transactions. Also it may be used as a reserve currency in the crpyto sphere and the digital world in general (who knows in the future online video games might use Bitcoin as one of the in game currencies).
 
Value Hunter said:
In terms of people taking a 30 year mortgage in Bitcoin that will happen if some people eventually start getting paid their salaries in Bitcoin. Most people like to take their mortgages out in the currency they are getting paid their salary in. If you live in Australia and you are getting paid Australian dollars why would you take out a mortgage in U.S. dollars? Most people would not do that.

Where Bitcoin is actually used as a currency is in foreign remittance to bypass the fees, slowness and government regulations of traditional services like Western union. This is especially true in countries like Iran or Venezuela where capital controls or other restrictions are often put in place. If you live in Venezuela or Cuba Bitcoin is genuinley useful if you want to recieve money from (or send money to) overseas. Also its used in money laundering but lets not go into that.

Also your question essentially boils down to "if Bitcoin is a store of value what is the actual value or utility that is being purported to being stored". The answer to that I believe is that the value that is being stored is its use as a superior form of currency in that it will act like a reserve currency (but superior to USD and other fiat) like gold currently does to some extent. Where it may eventually be used to settle contracts for selling oil or be used as the currency of issuing government bonds or for settling multi-billion dollar financial transactions etc. It will likely not end up being be used as a day to day currency (other cyptos may end up being used for that in addition to fiat and CDBCs). Also it will be useful as a currency in lowering the cost of cross border transactions. Also it may be used as a reserve currency in the crpyto sphere and the digital world in general (who knows in the future online video games might use Bitcoin as one of the in game currencies).
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is it really being used as a currency anywhere though? Is Anyone being paid wages in Bitcoin?

Why would any developed country want to use Bitcoin as their main currency, it would open them up to all sorts of financial manipulation.

how could it ever really be used as a reserve currency when its price is so volatile? I mean one of the main things you want in a reserve currency is a level of stability.

gold is a store of value because it has real world non financial value, eg gold could never go to $0, bit coin could go to zero.
 
And this @Value Collector and @Value Hunter is an absolutely fascinating discussion - thank you for raising it!

Firstly, I'd like to address @Value Collector's quote here:
Value Collector said:
But the issue I have is most of the people that deal in bitcoin seem to hold two views that are opposing in my opinion.

1, They think Bitcoin might be an actual currency one day.

2, They also seem to believe Bitcoins price will continue to rise forever as it becomes more “scarce” and the like they idea of it rising in value.
Click to expand...

Yes, I deal with Bitcoin (when the trend is appropriate), however I do not believe that it will be an actual currency one day and also do not believe that the price will continue to rise forever - the scarcity effect may have some influence, but everything has peaks and troughs. Of course, I could be proven wrong, and if that's the case, then so be it - not fussed! ;)

OK, back to the awesome discussion. The volatility really is the main crux of all arguments, in my honest opinion. SHOULD Bitcoin ever become a currency of any sort, you'd need to be able to navigate the fluctuations to take advantage of the unit price movements well, otherwise you would end up on the losing side of the conversion quite badly. @Value Hunter used a good example of salary payments - many people have taken advantage of being paid in alternative currencies such as USD, EUR and GBP when working for multinational companies for years, but what if the AUD strengthens? Where does the advantage go?

Back to the Bitcoin discussion for everyday transactions though. Better illustrated with larger purchases, for instance, if you utilised Bitcoin for the purchase of a new car or residence, a quick Google search shows that a new Tesla Model Y Performance Model (picked at random to illustrate the point) currently retails at $92,020. Two weeks ago on Monday 8th Jan before the hoohaa of the Bitcoin ETF kafuffle, Bitcoin traded above the resistance level at $47,000 per coin - you could have purchased that car at that even price of $47,000 per coin with 1.96 BTC. Currently trading at $41,260 per coin, you'd need 2.23 BTC.

Having said that, I have seen first hand the utilisation of cryptocurrencies for services - an example of which was Wilder token (disclosure - no position held), where participants in the game (Wilder World) purchase tokens in exchange for digital assets in the game. As with the example above, should a trader/investor navigate the fluctuations in Wilder token well, they would be able to obtain that cryptocurrency at the best price and obtain the services for the best price also. Not personally for me (at this stage anyway, would need to look into it more), but is an interesting proposition... Back at the time of the Aus Crypto Con in Melbourne in November last year, my friend and I analysed Wilder token and estimated genuine buying interest at about $0.40, which came to fruition in early December. That enthusiasm has died down ever since reaching a high of just under $0.65 shortly after.

All speculative discussion of course, which lends more weight to cryptocurrencies remaining a speculative trading vehicle rather than a currency in the future. More than happy to be proven otherwise, of course - this lends to more trading opportunities! :)
 
Value Collector said:
is it really being used as a currency anywhere though? Is Anyone being paid wages in Bitcoin?

Why would any developed country want to use Bitcoin as their main currency, it would open them up to all sorts of financial manipulation.

how could it ever really be used as a reserve currency when its price is so volatile? I mean one of the main things you want in a reserve currency is a level of stability.

gold is a store of value because it has real world non financial value, eg gold could never go to $0, bit coin could go to zero.
Click to expand...
As for Bitcoin being used as a currency El Salvador has already adopted it as a dual official currency alongside the U.S. dollar.

Almost nobody's wages are being paid in Bitcoin but in some countries its being used as a remittance currency and also the people that receive it are not always immediately selling the whole lot because they know their own currency will devalue quickly (e.g. Venezuela, Iran, Argentina, Cuba, African countries, etc)

El Salvador could be the starting point that could eventually lead to other developing economies following suite with some developed economies much later going on a bitcoin or partial bitcoin standard as the U.S. currency continues to weaken in its reserve status.

As for the volatility deterring bitcoins use as a currency the Bitcoin holders believe that when Bitcoin gets to maturity (i.e. a high enough market capitalization and has enough widespread adoption) volatility will be much lower.
 
IvoryWolf said:
And this @Value Collector and @Value Hunter is an absolutely fascinating discussion - thank you for raising it!

Firstly, I'd like to address @Value Collector's quote here:


Yes, I deal with Bitcoin (when the trend is appropriate), however I do not believe that it will be an actual currency one day and also do not believe that the price will continue to rise forever - the scarcity effect may have some influence, but everything has peaks and troughs. Of course, I could be proven wrong, and if that's the case, then so be it - not fussed! ;)

OK, back to the awesome discussion. The volatility really is the main crux of all arguments, in my honest opinion. SHOULD Bitcoin ever become a currency of any sort, you'd need to be able to navigate the fluctuations to take advantage of the unit price movements well, otherwise you would end up on the losing side of the conversion quite badly. @Value Hunter used a good example of salary payments - many people have taken advantage of being paid in alternative currencies such as USD, EUR and GBP when working for multinational companies for years, but what if the AUD strengthens? Where does the advantage go?

2, Back to the Bitcoin discussion for everyday transactions though. Better illustrated with larger purchases, for instance, if you utilised Bitcoin for the purchase of a new car or residence, a quick Google search shows that a new Tesla Model Y Performance Model (picked at random to illustrate the point) currently retails at $92,020. Two weeks ago on Monday 8th Jan before the hoohaa of the Bitcoin ETF kafuffle, Bitcoin traded above the resistance level at $47,000 per coin - you could have purchased that car at that even price of $47,000 per coin with 1.96 BTC. Currently trading at $41,260 per coin, you'd need 2.23 BTC.

Having said that, I have seen first hand the utilisation of cryptocurrencies for services - an example of which was Wilder token (disclosure - no position held), where participants in the game (Wilder World) purchase tokens in exchange for digital assets in the game. As with the example above, should a trader/investor navigate the fluctuations in Wilder token well, they would be able to obtain that cryptocurrency at the best price and obtain the services for the best price also. Not personally for me (at this stage anyway, would need to look into it more), but is an interesting proposition... Back at the time of the Aus Crypto Con in Melbourne in November last year, my friend and I analysed Wilder token and estimated genuine buying interest at about $0.40, which came to fruition in early December. That enthusiasm has died down ever since reaching a high of just under $0.65 shortly after.

All speculative discussion of course, which lends more weight to cryptocurrencies remaining a speculative trading vehicle rather than a currency in the future. More than happy to be proven otherwise, of course - this lends to more trading opportunities! :)
Click to expand...
1, That is a problem though, yes you could theoretically sign up for a 30 year home loan using Bitcoin if your wages are paid in Bitcoin, But all you are doing there is passing the volatility risk on to the employer, who of course will not want to sign an employment contract in a fixed amount of Bitcoin Knowing it could bankrupt him.

2, the fact the the price of the model Y in Bitcoin fluctuates with the price of Bitcoin shows that Bitcoin is not the currency ised in the transactions it’s just a commodity being traded in for a certain $$$ amount.
 
Value Hunter said:
As for Bitcoin being used as a currency El Salvador has already adopted it as a dual official currency alongside the U.S. dollar.

Almost nobody's wages are being paid in Bitcoin but in some countries its being used as a remittance currency and also the people that receive it are not always immediately selling the whole lot because they know their own currency will devalue quickly (e.g. Venezuela, Iran, Argentina, Cuba, African countries, etc)

El Salvador could be the starting point that could eventually lead to other developing economies following suite with some developed economies much later going on a bitcoin or partial bitcoin standard as the U.S. currency continues to weaken in its reserve status.

As for the volatility deterring bitcoins use as a currency the Bitcoin holders believe that when Bitcoin gets to maturity (i.e. a high enough market capitalization and has enough widespread adoption) volatility will be much lower.
Click to expand...
If no one is paying wages in it, and no one is signing loans or business contracts in it, then it’s not a real currency, it’s a commodity at best.

————-
Also on a side note, I just learned that about 6 Million bitcoins have been permanently lost, and with the maximum number of bitcoins that will ever be produced set at 21 million, there is a chance that eventually bitcoins will just become obsolete because to many of them just become permanently lost, which is always going to happen.

Eventually bit coin miners will have to rely on their transaction fees to earn money, and unless there is enough volume moving to incentivise them to keep burning all that electricity then bitcoin might just shrival up and die.
 
Value Collector said:
If no one is paying wages in it, and no one is signing loans or business contracts in it, then it’s not a real currency, it’s a commodity at best.

————-
Also on a side note, I just learned that about 6 Million bitcoins have been permanently lost, and with the maximum number of bitcoins that will ever be produced set at 21 million, there is a chance that eventually bitcoins will just become obsolete because to many of them just become permanently lost, which is always going to happen.

Eventually bit coin miners will have to rely on their transaction fees to earn money, and unless there is enough volume moving to incentivise them to keep burning all that electricity then bitcoin might just shrival up and die.
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Does anybody receive their wages in gold? But gold is still considered by many to be a currency. It comes down to differences of opinion in exactly what constitutes a currency.
 
Value Hunter said:
Does anybody receive their wages in gold? But gold is still considered by many to be a currency. It comes down to differences of opinion in exactly what constitutes a currency.
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Gold is absolutely a currency, just not a widely accepted currency. If you gave me a troy ounce of 99.9% gold tonight I could easily have about $3,100 in cash in my hand tomorrow. If you gave me a rare gold 1oz coin with a low mintage I would have much more than that. I wouldn't have to visit a bullion dealer either. The internet has endless Facebook groups and other social media venues where people are buying and selling precious metals. Buyers and sellers are rated for their trustworthiness and scamming in established groups is rare. Lots of face to face deals going on for those who don't want to involve their bank or who want to test the metal.

Precious metals are one of the last ways of transacting with others without the government knowing.
 
Value Hunter said:
Does anybody receive their wages in gold? But gold is still considered by many to be a currency. It comes down to differences of opinion in exactly what constitutes a currency.
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Gold isn’t a currency, it’s a commodity.

If you use the gold to manufacture gold coins, and put these in circulation, and people use them to buy and sell goods, make loans and business contracts etc then gold can be a currency, but if you are just talking about gold bars sitting on a shelf, that’s not currency.
 
greggles said:
Gold is absolutely a currency, just not a widely accepted currency. If you gave me a troy ounce of 99.9% gold tonight I could easily have about $3,100 in cash in my hand tomorrow. If you gave me a rare gold 1oz coin with a low mintage I would have much more than that. I wouldn't have to visit a bullion dealer either. The internet has endless Facebook groups and other social media venues where people are buying and selling precious metals. Buyers and sellers are rated for their trustworthiness and scamming in established groups is rare. Lots of face to face deals going on for those who don't want to involve their bank or who want to test the metal.

Precious metals are one of the last ways of transacting with others without the government knowing.
Click to expand...

Notice you said there are buyers and sellers of gold doing deals? and that you could easily have $3100 cash in your hand?

The cash is the currency, the gold is an easily traded commodity.

If the gold itself was a currency you would be talking about spending it, but you can’t easily spend it anywhere with out first selling it to currency.
 
Value Collector said:
Notice you said there are buyers and sellers of gold doing deals? and that you could easily have $3100 cash in your hand?

The cash is the currency, the gold is an easily traded commodity.

If the gold itself was a currency you would be talking about spending it, but you can’t easily spend it anywhere with out first selling it to currency.
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Well, strictly you are correct. But a highly liquid commodity can also serve as a de facto currency. Would you rather have a troy ounce of gold in your pocket or 180,664 Russian Rubles? Rubles are a currency but almost completely useless outside of Russia, especially at the moment. Gold is more easily convertible into local currency anywhere in the world.
 
greggles said:
Well, strictly you are correct. But a highly liquid commodity can also serve as a de facto currency. Would you rather have a troy ounce of gold in your pocket or 180,664 Russian Rubles? Rubles are a currency but almost completely useless outside of Russia, especially at the moment. Gold is more easily convertible into local currency anywhere in the world.
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I Would take any commodity I could carry and walk out of Russia with, Gold, Silver, diamond, platinum, stock certificates of American companies etc etc but still they are commodities. Hell I might even drive out of Russia with a truck full of scrap copper, and that’s probably easier to convert to cash than gold, but copper isn’t a currency.
 

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