The Bitcoin (BTC) thread

I am surprised to see so much enthusiasm for BTC. I guess Peter Schiff is not popular here either, but oh well.

My own concerns with it have to do with the "qualities" that make it bad as money:

1) People are (almost always) buying BTC because they want to sell it later at a higher price, which is not how people treat money.
2) Reason #1 makes the price of BTC extremely volatile, because it moves according to speculative impulses, which are very hard to predict.
3) Nothing is currently priced in BTC, but instead is priced in dollars with BTC equivalents.
4) Things can't generally be priced in BTC (can you imagine seeing a 0.000089 BTC price for a hot dog on a menu?).
5) BTC is just one of many cryptos, and there is really an infinite supply of crypto coins, when all other coins are taken into account.
6) BTC is dependent on a network of computers, which is a really fragile foundation in my opinion.
7) BTC is difficult for a normal person to use and store.

Money is supposed to be an instrument that stores the wealth gained by labor and trade, which can be reliably exchanged for goods at any point in the lifetime of the one who earned it. Bitcoins can be easily lost, and whoever buys them has no clue what they'll be worth in 1, 10, or 50 years.

The volatility, fragility and difficulty of use of BTC make it just plain bad money. Claiming that it will go up and up in the future has nothing to do with how good of a currency it is, and currency is what BTC was supposed to be in the first place. So it's price must be driven by something else other than its fittingness as a currency. If that's the case, it's extremely risky to hold.

Please research Aristotles arguments for good money it gives good insights.
1) Ppl consume mindlessly and unconsciously because money looses value rapidly
2) not really, over 4-5 years very easy to predict
3) This is an accounting issue and you can always try to price in btc
4) you can price in sats, very easy to do
5) network effects, there are not too many real projects if at all
6) everything depends on computers. Better how it is organized with btc than with banks
7) yes, steady improvements made.
 

Eusebius Erasmus

Kingfisher
Gold is hardly an inflation hedge ever.
Look at long-term inflation-adjusted gold charts (had posted them earlier): gold steadily goes down over a long period (over decades). Even government CPI-adjusted chart shows loss of gold value over long term (and CPI is usually glossed over), real inflation-adjusted is much worse.

There had been intervals of gold price spiking, when gold serves as speculative asset, as it beats inflation during the run, but after peaking it comes down back to below previous inflation-adjusted low, pretty much. If someone buys gold on high they never recover their money in inflation-adjusted terms; even if they wait until next high - because the next high tends to be a lower high in that downtrend.

Gold is extreme/emergency/shtf hedge, but even that is questionable considering past gold confiscation in the US or high crime outside the US where a regular person often can't safely store significant amounts of gold (and bank deposits boxes are not really safe outside of 1st world jurisdictions). Storing and transporting physical gold will require expenses and risk for most people and risk-adjusted return is going to be especially low - and paper gold has a risk of default.

Gold can be hyperinflation hedge - because hyperinflation usually lasts short periods not reaching over decade - in this case any loss of value of gold due to downturn in macro commodity cycle or other macro reasons (if it happens in parallel) will be negligible compared to potential hyperinflation losses (however when hyperinflation happens, crime spikes a lot and gold starts to carry increased risk. Holding US treasury bonds has a risk of government default, storing physical gold brings a risk of losing your life in collapse/hyperinflation situation/home invasion)

Inflation-adjusted gold charts rely on either the CPI or GDP deflator, both of which understate the true extent of inflation, since they often exclude crucial costs like housing.

Interestingly, CPI is calculated by economists at the Fed or BLS, who aren’t interested in you holding precious metals.

These methods — using CPI and the GDP deflator — undervalue gold, and should not be trusted.
 

Arado

Pelican
Gold Member
I am surprised to see so much enthusiasm for BTC. I guess Peter Schiff is not popular here either, but oh well.

My own concerns with it have to do with the "qualities" that make it bad as money:

1) People are (almost always) buying BTC because they want to sell it later at a higher price, which is not how people treat money.
2) Reason #1 makes the price of BTC extremely volatile, because it moves according to speculative impulses, which are very hard to predict.
3) Nothing is currently priced in BTC, but instead is priced in dollars with BTC equivalents.
4) Things can't generally be priced in BTC (can you imagine seeing a 0.000089 BTC price for a hot dog on a menu?).
5) BTC is just one of many cryptos, and there is really an infinite supply of crypto coins, when all other coins are taken into account.
6) BTC is dependent on a network of computers, which is a really fragile foundation in my opinion.
7) BTC is difficult for a normal person to use and store.

Money is supposed to be an instrument that stores the wealth gained by labor and trade, which can be reliably exchanged for goods at any point in the lifetime of the one who earned it. Bitcoins can be easily lost, and whoever buys them has no clue what they'll be worth in 1, 10, or 50 years.

The volatility, fragility and difficulty of use of BTC make it just plain bad money. Claiming that it will go up and up in the future has nothing to do with how good of a currency it is, and currency is what BTC was supposed to be in the first place. So it's price must be driven by something else other than its fittingness as a currency. If that's the case, it's extremely risky to hold.
Ok it's risky...vs what? The dollar is no longer a viable store of value long term and BTC transactions are quicker, cheaper, and more censorship resistant. 1) To some degree people are buying to sell later to someone at a higher price, but at that 'later' time, there will be many more dollars floating around, and the BTC network and ecosystem will be more developed, so the person buying BTC later isn't necessarily the greater fool. 2) Volatility is the natural process of a new reserve asset coming into existence...did you expect the monetary system to be turned upside down in a straight line?
3) Nothing is priced in BTC yet...but you don't want it to be, because by then the entire fiat system has ended and the world will have gone through a hyperinflationary depression. That you can still in the near future exchange dollars for hard assets is a gift! There are more and more bitcoiners out there getting paid and living life purely on BTC 4) They will be priced in Satoshis (1/100million BTC) not Bitcoin 5) No other crypto has the decentralized network effects and hard limit issuance of BTC 6) How is it fragile? You have thousands of separate computers throughout the world running nodes, the only way to destroy it would be to wipe out all of them or shutting down the world's internet at once. 7) It's getting easier and easier as banks and institutions move in.
 

Coja Petrus Uscan

Hummingbird
Gold Member
Does anyone have their exit plan ready and would share it with us. Might warrant its own thread.

I am meaning to set up a hacky 'reporting suite' that will pull up a number of pertinent charts.

Here are some key cues I am looking for.

1) MACD + RSI on 1W candles

Screenshot-at-2021-02-23-12-27-01.png


Many people have been projecting BTC will move in-line with its previous bull-cycle moves. And so far they have been right. There are some very solid indicators you could have bought BTC on over the last three+ cycles. Picking the sell point is more difficult. If you put all your money into BTC when it was ~ RSI 30 in 1W you would have picked key bottoms that occur one or two times per cycle.

In the above chart, see the red mark, showing RSI grating high, against ~90. The early bull of late '16 and early '17 saw peaks 26 Dec 2016 and 27 Feb 2017. We have a similar movement now for 28 Dec 2020 and 15 Feb 2021. Without the Elon intervention it would probably have been even more of a mirror of 16/17.

If we follow 16/17, and we have been very closely up to this point, expect a month of sideways and then a big move up. My confidence is high we are now in a bear trap. This current move is traced from September to February. It would be very erratic for this to be a few months bull market and crash. I am confident it will go on to the end of the year. We will see the above pattern in the RSI duplicated, with it having multiple grazes up against 90 RSI.

2) Google Trends

Screenshot-at-2021-02-23-12-42-00.png


We are currently around 12X of the search volume this time in 2017; and a little over half the Dec 2017 peak. The sell-point is pretty clear here. By Christmas Day 2017 the search volumes were catapulting down. As you can see, ETH searches continue to rise, as with its price. ETH reached its then ATH on 13 Jan 2017 - along with the search volume. BTC reached it's then ATH on 17 Dec 2017 - along with its search volume.

I am looking for volumes to reach all time highs in a parabolic move.

3) Exchange etc. traffic

Screenshot-at-2021-02-23-12-51-25.png


This chart shows a the Alexa traffic rank for Binance.com. 1,000 = roughly the 1,000th most visited website on the internet. The chart is a three month average, up to late Jan 2018, when it switches to a one week average. The actual peak on daily traffic was around the ATH for BTC. Binance is now the 51st most visited website.

So while the search interest [retail, normies] is not that high, more crypto-minded people are more active.

4) Bitcoin Twitter

Screenshot-at-2021-02-23-12-55-56.png


Source

Peaked on 12 Dec 2017; huge drop on 22 Dec 2017.

Activity is again at all time highs, from people embedded in crypto, retail yet to arrive en mass.

If we are in a bull-market, there is more to come.

Overview

As an exit I am looking at parabolic tops in these metrics, combined with my own gut-feeling with the level of mania, which is currently around 33/100. Thus, looking for a price of around $150,000 for BTC.

Cut Profits/Losses

When getting out you have two educated positions - cut your losses or cut your profits. If you cut your losses you sell after a crash begins. The issue is here it will crash very fast, like the cira 20% crash yesterday. If you cut your profits it is much easier to mistime your sell and loose unknown moves up. Expect a very big, sharp move up within hours for the peak. I am looking for $10,000 up in a few hours.

As we come into the final stretch I will be on my computer most of the time, up to my eyeballs in price alarms; and with price alarms set at night.

Then What?

There are some good points raised above about the integrity of the dollar, inflation; as well as other possibility for instability and a crackdown on crypto. These factors may affect my getting out strategy.

In 17/18, we first saw Bitcoin crash on 17 Dec 17, followed by a large bull in alts, which lasted for about a month. I anticipate the same. First I will sell absolutely everything, probably for stablecoins. Gold backed crypto is another option. I will asses the move for alts and may make a big reallocation back into whatever I think may have a good swan song. I will loan out the stablecoins on various platforms. In January 2018 the rate for lending USD was extremely high. It was 3% for three days on Bitfinex, e.g. $1,000,000 loaned out would have netted $90,000, just on those days; and maybe $150,000-200,000 on the month. 3% interest per day is a very good sign of mania. If you are still in at that point pull the ripcord! I will also allocate some small, but significant chunks to Bitcoin shorts and later alt shorts. I like FTX's 3X short BTCBEAR token, which will yield you roughly $3 for every $1 BTC goes down. The good thing about this is there is no risk of being margin called. The downside is the return is less than 3X over multiple days as it is re-balanced like long/short ETF, which causes the asset to terminally shrink. This is negligible over short periods. I will also add a few 5X, 10X shorts. After the first dump (maybe $150,000 to $100,000) I will close the shorts and open a 3X long to catch the bull-trap, before continuing long-burn shorts throughout the bear-market. Then when no one wants to buy, I will asses any buy back choice coins. If the top is ~$150,000, I expect this to be around $30,000 for 1 BTC, in about Jan 2022. The best entries for this cycle were Dec 2018, generally into Feb 2019; and Jan 2015, generally into Aug 2015.

This may change somewhat, depending on factors, i.e. if there is great turmoil in fiat and/or the economy it may be best to get out to gold backed coins. In 2018 there was one called Digix than rallied because it was or did operate a gold-backed token. I'll be looking out for any opportunities like those.

On the possibility of BTC flipping fiat. There is no sign of this at the moment. I will reconsider my plans if and when anything pertinent comes up.
 
Peter Schiff; "[Bitcoin's a monster bubble] If it walks like a duck, quacks like a duck, looks like a duck... it's a duck. Bitcoin's the biggest duck of them all"))

It's not just Peter Schiff making those noises.

A lot of traditional investors are saying the same.

It's them vs Raul Paul/Kaiser Sausay....

Who knows, but for sure there's a mania. and most traditional funds are a long way from dropping client money into BTC.

The 'elephants' Raul Paul and everyone else is betting on aren't getting into the bathtub yet.

[Full diclosure. I had quite a bit of BTC and circumstance dictated that I sell it recently, so maybe I'm just holding out for that to be proven good fortune... rather than an idiot move]
 

Cervantes

Woodpecker
What's your guy's take on the latest drop? Simple correction or is the gravy train over and now its back to business as usual?
This happens every month or so. The price is "crashing" to where it was .... two weeks ago!

If you want to get into crypto, my advice is the same: buy over several weeks to avoid buying all in the middle of a local maximum. If you are following that strategy this temporary pull back is just letting you get in at the prices of two weeks ago.

The reversal of the last few days is not the same as the "bubble crash" of 2018. But supposing it was. Even the biggest "fool" who bought at the peak of 2018 ($20k), right now would have more than doubled his money in about 2 years. Not a bad return.

Crypto is a risky, volatile investment. Don't put money into it that you need short term. But this is a technology that is useful and becoming established. Financial infrastructure is being built around it: payment networks, loans, interest bearing accounts, options trading etc.

The comparisons with the "tulip bubble" are wrong. Tulips have only a decorative function, and they don't last. Tulips can be easily planted and reproduced. Fiat currency - having unlimited supply - is much more like tulips.

Our society is crashing. Media, politicians and the people have lost touch with reality. Money is being printed like crazy. The only place you don't want to have your money is cash. I'm shorting our sick society. My plan is a mix of: crypto, metals and real estate.
 

lonewolf1968

Kingfisher
I am surprised to see so much enthusiasm for BTC. I guess Peter Schiff is not popular here either, but oh well.

My own concerns with it have to do with the "qualities" that make it bad as money:

1) People are (almost always) buying BTC because they want to sell it later at a higher price, which is not how people treat money.
2) Reason #1 makes the price of BTC extremely volatile, because it moves according to speculative impulses, which are very hard to predict.
3) Nothing is currently priced in BTC, but instead is priced in dollars with BTC equivalents.
4) Things can't generally be priced in BTC (can you imagine seeing a 0.000089 BTC price for a hot dog on a menu?).
5) BTC is just one of many cryptos, and there is really an infinite supply of crypto coins, when all other coins are taken into account.
6) BTC is dependent on a network of computers, which is a really fragile foundation in my opinion.
7) BTC is difficult for a normal person to use and store.

Money is supposed to be an instrument that stores the wealth gained by labor and trade, which can be reliably exchanged for goods at any point in the lifetime of the one who earned it. Bitcoins can be easily lost, and whoever buys them has no clue what they'll be worth in 1, 10, or 50 years.

The volatility, fragility and difficulty of use of BTC make it just plain bad money. Claiming that it will go up and up in the future has nothing to do with how good of a currency it is, and currency is what BTC was supposed to be in the first place. So it's price must be driven by something else other than its fittingness as a currency. If that's the case, it's extremely risky to hold.
This is so 2017, bitcoin failed to be considered pure money as its transactions are slow and fees are high compared to other coins. The digital gold narrative is what is driving this bull run for bitcoin, plus the corona hoax and the endless money printing. You don't use gold as a currency, you use it as safe haven and hedge for inflation which seems to be coming. If Bitcoin and its fundamentals take over Gold market cap, which it is around 10 trillion dollars, that's a 10x from here. If bitcoin is better than gold, well that can be a 2,3 or maybe 4 x from 500.000 usd bitcoin.
Why wouldn't Elon take those profits?

What happens when he does?
You can't just place a huge limit order of 1.5 billion usd in bitcoin in an exchange and hope it won't crash the price even lower., Again, I'm not an expert but I think institution purchases are long term given the logistics and also fundamentals. May the experts here correct me if I'm wrong.
 

SilentCal

Sparrow
Ok it's risky...vs what? The dollar is no longer a viable store of value long term and BTC transactions are quicker, cheaper, and more censorship resistant. 1) To some degree people are buying to sell later to someone at a higher price, but at that 'later' time, there will be many more dollars floating around, and the BTC network and ecosystem will be more developed, so the person buying BTC later isn't necessarily the greater fool. 2) Volatility is the natural process of a new reserve asset coming into existence...did you expect the monetary system to be turned upside down in a straight line?
3) Nothing is priced in BTC yet...but you don't want it to be, because by then the entire fiat system has ended and the world will have gone through a hyperinflationary depression. That you can still in the near future exchange dollars for hard assets is a gift! There are more and more bitcoiners out there getting paid and living life purely on BTC 4) They will be priced in Satoshis (1/100million BTC) not Bitcoin 5) No other crypto has the decentralized network effects and hard limit issuance of BTC 6) How is it fragile? You have thousands of separate computers throughout the world running nodes, the only way to destroy it would be to wipe out all of them or shutting down the world's internet at once. 7) It's getting easier and easier as banks and institutions move in.
I’m not comparing it to the dollar, I’m comparing it to gold. Gold cannot disappear, and is almost certainly able to buy the same “basket of goods” now as it ever was, and the same will be true in the future. There will always be non-speculative demand for it, and it’s been used as currency since ancient times until now. It is the lowest risk asset in the world, and in all of history. It is easy to carry and use (especially if we include silver). To think that it will somehow go extinct as money is almost delusional.

BTC is just another experiment in trying to remove currency from a real asset, like fiat dollars. I just don’t understand why people can be so “based and redpilled” on the Fed and get so hyped up about Bitcoins, apparently just because there’s a huge run in the price. Obviously that is the worst time to buy into anything anyway.
 

Cervantes

Woodpecker
I’m not comparing it to the dollar, I’m comparing it to gold. Gold cannot disappear, and is almost certainly able to buy the same “basket of goods” now as it ever was, and the same will be true in the future. There will always be non-speculative demand for it, and it’s been used as currency since ancient times until now. It is the lowest risk asset in the world, and in all of history. It is easy to carry and use (especially if we include silver). To think that it will somehow go extinct as money is almost delusional.

BTC is just another experiment in trying to remove currency from a real asset, like fiat dollars. I just don’t understand why people can be so “based and redpilled” on the Fed and get so hyped up about Bitcoins, apparently just because there’s a huge run in the price. Obviously that is the worst time to buy into anything anyway.

I agree that gold is a good store of value. I believe that long term the amount of gold it takes to buy a bag of groceries will be about the same. It is ancient and it is at full value already as a currency. There isn't going to be a technological advance that makes it way more useful.

Crypto has similar dynamics: it is a currency with fixed supply. But it has a distinct advantage: it is advancing technologically and getting more useful. It is eliminating middlemen from financial markets. It may not be fully efficient yet - but every year it gets better. The reason crypto has more value now than in 2018 is that there are a lot more serious people, and a lot greater capabilities in crypto markets now than 2 years ago.

There is going to be some speculative spikes and crashes on the way as people FOMO in and out. But the trajectory is going to be inexorably upward. Its ludicrous to think that people are just going to give up on cryptography as a safe way to make exchanges. The only risks I see to any specific currency are either successful government efforts to make them illegal, or that some better crypto technology displaces an older technology.

I just don't believe that governments will be able long term to stop crypto. The current system is run by incompetents and will crash. Besides there are many governments who see an advantage to supporting crypto against the dollar empire. (Russia/China/Brazil)

And we've already seen that its possible for a more sophisticated crypto system to "wrap" an older one like ETH does for BTC, such that you can use the older one as a store of value.
 

Dr. Howard

Peacock
Gold Member
I forgot to add something for you privacy minded folks.

If you have all of your angles covered via strategies like Redbeard's ATM system you may still have the hurdle of the IRS tax return question which is essentially "did you do any cryptocurrency transactions this year"

Stuck right? Wrong. This question does not exist on returns for corporations, partnerships, non profits and non-grantor trusts.
 

aynrus

Pelican
Inflation-adjusted gold charts rely on either the CPI or GDP deflator, both of which understate the true extent of inflation, since they often exclude crucial costs like housing.

Interestingly, CPI is calculated by economists at the Fed or BLS, who aren’t interested in you holding precious metals.

These methods — using CPI and the GDP deflator — undervalue gold, and should not be trusted.
Some of the charts I shared rely on government CPI and others on ShadowStats' "real inflation"-adjusted data (I just don't feel like posting the same images over and over, it's easy to find these charts).

Government official inflation-accounting methods actually overvalue gold because they don't take into account real inflation which tends to be much higher than what government says, usually - so government/CPI-based charts are too kind to gold.
 

Blade Runner

Pelican
I forgot to add something for you privacy minded folks.

If you have all of your angles covered via strategies like Redbeard's ATM system you may still have the hurdle of the IRS tax return question which is essentially "did you do any cryptocurrency transactions this year"

Stuck right? Wrong. This question does not exist on returns for corporations, partnerships, non profits and non-grantor trusts.
So what's your rec
 

Blade Runner

Pelican
I just don't believe that governments will be able long term to stop crypto. The current system is run by incompetents and will crash. Besides there are many governments who see an advantage to supporting crypto against the dollar empire. (Russia/China/Brazil)

And we've already seen that its possible for a more sophisticated crypto system to "wrap" an older one like ETH does for BTC, such that you can use the older one as a store of value.
Indeed.
 

aynrus

Pelican
I just don't believe that governments will be able long term to stop crypto. The current system is run by incompetents and will crash. Besides there are many governments who see an advantage to supporting crypto against the dollar empire. (Russia/China/Brazil)

Russia? Russia just banned all payments in cryptos, for goods or services.
 
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