OT: Bitcoin

[dorndawg]

I missed calling the low for YTD by a day; hope Bodawg & Paindonthurt hate-bought heavily that day. Nevertheless, I'm still in no way not convinced it's not funny money. I'm more than happy to keep investing in the finance & tech companies (via mutal funds/ETFs) that have their nerds figuring out how to fool with it.

https://forums.sixpackspeak.com/showthread.php?235870-OT-Where-the-bitcoin-bros-been

View attachment 24185

 

[o_Hot Rock]

I missed calling the low for YTD by a day; hope Bodawg & Paindonthurt hate-bought heavily that day. Nevertheless, I'm still in no way not convinced it's not funny money. I'm more than happy to keep investing in the finance & tech companies (via mutal funds/ETFs) that have their nerds figuring out how to fool with it.

https://forums.sixpackspeak.com/showthread.php?235870-OT-Where-the-bitcoin-bros-been

View attachment 24185

Bitcoin will make some people rich. Of this, I have no doubt but:

There is an inherent problem with it as a currency. All it takes is for a couple big investors to pull out and it's toast. It has no real value. Owning stock in companies that actually produce goods or a service that generate income is limited but it's real.

Some say the Euro and US Dollar are only as good as the governments that back them, this is true but it's not nearly as volatile. I am sure WWIII will bring us all down no matter the currency but these types of bitcoins etc... can fail without a major War or gov't collapse. Go for it, get rich, I may even wish I had gambled with you. It's just not for me.

 

[Smoked Toag]

Bitcoin will make some people rich. Of this, I have no doubt but:

There is an inherent problem with it as a currency. All it takes is for a couple big investors to pull out and it's toast. It has no real value. Owning stock in companies that actually produce goods or a service that generate income is limited but it's real.

Some say the Euro and US Dollar are only as good as the governments that back them, this is true but it's not nearly as volatile. I am sure WWIII will bring us all down no matter the currency but these types of bitcoins etc... can fail without a major War or gov't collapse. Go for it, get rich, I may even wish I had gambled with you. It's just not for me.

Generally when you invest, you actually own THINGS, not currency. Which is why never understood investing in bitcoin. Could you just go invest in the Euro? Yen? It's all definitely funny money, and all those things, even though they differ in number, still should theoretically buy you the same value, depending on location.

 

[Nicephorus]

Generally when you invest, you actually own THINGS, not currency. Which is why never understood investing in bitcoin. Could you just go invest in the Euro? Yen? It's all definitely funny money, and all those things, even though they differ in number, still should theoretically buy you the same value, depending on location.

Only the most diehard Bitcoin purists are still pushing the “currency” narrative. Bitcoin is treated more as a commodity amongst most investors regardless if it is actually called a “cryptocurrency”.

While lacking a “physical” presence like gold, being digital does give btc several advantages to gold. You can transfer it permissionlessly relatively quickly without need to prove “purity” like one would with gold bullion. Assuming you can memorize or at least sufficiently hide a 12 word “seed phrase”, it can be “transported” anywhere with you. There also are plenty of permissionless lending markets where one can borrow against or sell BTC for USDC or other legit stablecoins against it although cashing out stablecoins to actual dollars does typically require linking a legit bank account and being ID’d.

Given recent events in Canada and the Ukraine/Russia conflict, you could see why having a permissionless, portable “store of value” has become more important to many people. Would you rather your savings be in rubles or BTC right now?

Personally think you should hold some BTC just to hedge a shock in the commodity and currency markets given the state of world affairs right now as mentioned in this blog post:

https://cryptohayes.medium.com/energy-cancelled-e9f9e53a50cd

 

[Beretta.sixpack]

There are many places that accept BTC as payment. Strangbrew is one of them....

I missed calling the low for YTD by a day; hope Bodawg & Paindonthurt hate-bought heavily that day. Nevertheless, I'm still in no way not convinced it's not funny money. I'm more than happy to keep investing in the finance & tech companies (via mutal funds/ETFs) that have their nerds figuring out how to fool with it.

https://forums.sixpackspeak.com/showthread.php?235870-OT-Where-the-bitcoin-bros-been

View attachment 24185

I trade a lot of crypto currencies....I hold Bitcoin and Ethereum and make 8% on the balance daily.....there are many places that accept Bitcoin as payment for goods.....Strangebrew, the SPS sponsor, accepts Bitcoin, Eth, Litecoin, and Doge (crazy to accept Doge IMO)....


I don't disagree with anything mentioned in this thread so far, but there are a lot of institutions buying into Bitcoin right now....one or two of them dumping it isn't going to affect the price as much as you think...the price of bitcoin right now is skyrocketing because there is a limited supply, and most of the folks are removing it from exchanges to wallets to hold (and make interest----daily)

I have a friend who has made a fortune in crypto and got started 6- 7 years ago....His wallet offers a credit card hedged against his crypto balance....he took that credit card and bought a brand new truck with crypto against his credit card with profits he did not have to pay taxes on....simply paid it back with crypto ...this is why the govt hates this stuff.....im currently number 108K+ on waiting list for a credit card through my wallet provider...

 

[Smoked Toag]

Personally think you should hold some BTC just to hedge a shock in the commodity and currency markets given the state of world affairs right now

Yeah definitely can see the logic there, but my problem is I still just don't understand it, and not from lack of trying. Read about 3 books. I have a little invested in the blockchain. Other than that I'll just have to continue to let it evolve until it becomes mainstream. I figure all my non-cash investments will hold their value, and maybe one day we'll all just be paid in crypto, thus no value lost.

 

[BoomBoom.sixpack]

Only the most diehard Bitcoin purists are still pushing the “currency” narrative. Bitcoin is treated more as a commodity amongst most investors regardless if it is actually called a “cryptocurrency”.

While lacking a “physical” presence like gold, being digital does give btc several advantages to gold. You can transfer it permissionlessly relatively quickly without need to prove “purity” like one would with gold bullion. Assuming you can memorize or at least sufficiently hide a 12 word “seed phrase”, it can be “transported” anywhere with you. There also are plenty of permissionless lending markets where one can borrow against or sell BTC for USDC or other legit stablecoins against it although cashing out stablecoins to actual dollars does typically require linking a legit bank account and being ID’d.

Given recent events in Canada and the Ukraine/Russia conflict, you could see why having a permissionless, portable “store of value” has become more important to many people. Would you rather your savings be in rubles or BTC right now?

Personally think you should hold some BTC just to hedge a shock in the commodity and currency markets given the state of world affairs right now as mentioned in this blog post:

https://cryptohayes.medium.com/energy-cancelled-e9f9e53a50cd

You don't think people can transfer large funds quickly via the modern banking system? Or do you mean criminals or others that may not easily use the modern banking system?

 

[Quincy A. Wagstaff]

Stay and humble and stack sats.

For anyone on this board still making up their mind on bitcoin: Don't look at three-month charts and short-term volatility. bitcoin is best to buy and hold for the long term. People who trade this asset (even the ones who make fiat gains) are made to look silly on a long enough time horizon.

Yearly candles:
View attachment 24186

Four-year simple moving average (has never gone down, not once). This is the best visualization of how wrong the idea that bitcoin is too volatile is. If you think it's too volatile, you need to zoom out.
View attachment 24187
This also acts as a floor during bear markets. We bounced off of it in early 2015, December 2018, and March 2020. The current value of this SMA is above $20k (the previous cycle's blow-off top). Last cycle's top is this cycle's bottom. Same was true 2013 to 2018: 2013 top ~$1200, 2018 bottom never went below $3k.

Never look back price:
View attachment 24188

The worst 4-year performance of bitcoin is better than 2x. Worst. If you had the worst timing in the world, you doubled your money in 4 years. Not the worst thing to ever happen to someone. Obviously, most who buy and hold do a lot better than 2x over 4 years. We're up almost 7x since 3/30/2018. Not bad for people who said, "I'm not gonna worry about trying to time this thing. I'm just gonna buy and hold." Those people have also paid 0 cap gains taxes.

The approach should be obvious: Accumulate over time and never sell. Sometimes we avoid the simplest most obvious course of action because of a desire to be the smartest person in the room.

Other resources: casebitcoin.com

 

[Quincy A. Wagstaff]

Some say the Euro and US Dollar are only as good as the governments that back them, this is true but it's not nearly as volatile.

The US dollar isn't volatile?

 

[FreeDawg]

Good post but I’d like to add it trades much more like an equity than a commodity. BTC maxis will disagree but look at the charts. It mimicked the Dow since it’s inception.

 

[FreeDawg]

Great stuff. One thing I’d like to add is that BTC has only existed in a massive stock bull market. In a nutshell, the Dow has done a full .426 fib extension since the great financial crisis. That’s the environment BTC has existed in. I think we have a significant recession on the horizon and let’s see how it performs while equities struggle.

 

[Quincy A. Wagstaff]

Great stuff. One thing I’d like to add is that BTC has only existed in a massive stock bull market. In a nutshell, the Dow has done a full .426 fib extension since the great financial crisis. That’s the environment BTC has existed in. I think we have a significant recession on the horizon and let’s see how it performs while equities struggle.

Very fair point. I'm super bullish long term, but I can't rule out $20k in the short term. If that happens I'll be backing the truck up.

 

[GhostOfJackie]

Generally when you invest, you actually own THINGS, not currency. Which is why never understood investing in bitcoin. Could you just go invest in the Euro? Yen? It's all definitely funny money, and all those things, even though they differ in number, still should theoretically buy you the same value, depending on location.

If you buy at $10 and sell it at $20, you still make $10 off of it right?

So why does it matter what it is? Bitcoin obviously isn't for boomers and it blows their minds, but smart boomers are making a lot of money off of it.

 

[kired]

I trade a lot of crypto currencies....I hold Bitcoin and Ethereum and make 8% on the balance daily.....there are many places that accept Bitcoin as payment for goods.....Strangebrew, the SPS sponsor, accepts Bitcoin, Eth, Litecoin, and Doge (crazy to accept Doge IMO)....

How does that work? Do they sell stuff at a set bitcoin price? Or do you just pay the equivalent dollar amount in BTC instead, based on value at time of the transaction?

 

[Beretta.sixpack]

I think that is correct...

Ive never purchased anything with actual crypto...yet.....but i think you purchase the amount in USD in the equivalent of BTC....Shane gets on here from what I understand, maybe he can answer it in detail if he sees this....

check out his website too

 

[BoomBoom.sixpack]

Great stuff. One thing I’d like to add is that BTC has only existed in a massive stock bull market. In a nutshell, the Dow has done a full .426 fib extension since the great financial crisis. That’s the environment BTC has existed in. I think we have a significant recession on the horizon and let’s see how it performs while equities struggle.

Yes. The main risk with BTC is if it crashes, it probably never comes back up. And that's a lot of risk for an investment.

 

[Nicephorus]

You don't think people can transfer large funds quickly via the modern banking system? Or do you mean criminals or others that may not easily use the modern banking system?

This is a popular misconception about Bitcoin. Money laundering through Bitcoin is just a tiny fraction of what goes through the traditional banking system. While maybe true in the early days, Bitcoin is actually harder to launder large amount of money through than the banking system due to liquidity issues (hard to launder/mix millions of dollars through a “coin mixer” that may only have 5 million of total liquidity in it) and the fact that all transactions are recorded on a public viewable ledger unlike banks. While it may be tough for a human to follow a chain of 1000+ transactions, it’s trivially easy for computer software. Eventually this Bitcoin has to be converted to cash and transferred to a bank if you plan on spending any significant sum of it. While Monero or some other privacy focused coins may be more feasible, these have very limited liquidity.

Just google Panama Papers (or watch Ozark) if you want to see what people can get away with in traditional banking.

Elizabeth Warren suffers from this misconception (and probably gets some nice campaign contributions from the banking sector to keep this bias) and tried to force her opinion on a representative of Chainalysis, a leading blockchain tx monitoring company. It’s painful and shows a fundamental misunderstanding of how blockchains work.

https://twitter.com/neerajka/status/1504486035178201090?s=21&t=8sVIqrmxExG2lfCv4QT5TQ

 

[Dawg1969]

Can anyone tell me why gold has a value? I’m in Warren Buffett camp, if you you can’t eat it I don’t want it!!

 

[Quincy A. Wagstaff]

bitcoin never crashes then comes back up?

The main risk with BTC is if it crashes, it probably never comes back up.

Even a cursory glance at bitcoin's history reveals that the above statement is unfounded.

It has had multiple 80%+ corrections and STILL has a 10-year CAGR of 150%. The main criticism of bitcoin is that it volatile in the short term, yet every ROI beyond 2 years outperforms gold and the S&P 500, and that's with that volatility:
View attachment 24190

All bitcoin does is come back and reach new highs after a crash.

 

[FreeDawg]

Yep. I’m waiting on 1 more melt-up on equities and I’m taking most everything off the table. I’ll put in some BTC bids and watch. The c19 sell-off was the opportunity of a lifetime. I didn’t get the bottom there but did very well on discounted ETH from that year.

 

[Quincy A. Wagstaff]

How does that work? Do they sell stuff at a set bitcoin price? Or do you just pay the equivalent dollar amount in BTC instead, based on value at time of the transaction?

Most of the time it is the latter. There are applications that make this very seamless utilizing bitcoin's lightning network (faster and cheaper than the main chain). Your coffee costs $5.03, you select pay with bitcoin, you are presented a QR code, you scan it with your mobile wallet, confirm on your phone with one click, done.

Multinational corporations like Starbucks and McDonald's have already figured this out in El Salvador. I thought it would take them much longer, but the day the bitcoin law took effect people were posting videos on social media of buying a burger at McDonald's with sats. Someone even said, "Hey, someone pay for this burger for me." and posted the QR code on Twitter. The burger was instantly paid for from across the planet by a stranger while he standing at the register.

There are examples of the former in a circular economy, but this is more niche. And it would priced in sats rather than BTC: 10,000 sats vs 0.0001 BTC.

 

[BoomBoom.sixpack]

This is a popular misconception about Bitcoin. Money laundering through Bitcoin is just a tiny fraction of what goes through the traditional banking system. While maybe true in the early days, Bitcoin is actually harder to launder large amount of money through than the banking system due to liquidity issues (hard to launder/mix millions of dollars through a “coin mixer” that may only have 5 million of total liquidity in it) and the fact that all transactions are recorded on a public viewable ledger unlike banks. While it may be tough for a human to follow a chain of 1000+ transactions, it’s trivially easy for computer software. Eventually this Bitcoin has to be converted to cash and transferred to a bank if you plan on spending any significant sum of it. While Monero or some other privacy focused coins may be more feasible, these have very limited liquidity.

Just google Panama Papers (or watch Ozark) if you want to see what people can get away with in traditional banking.

Elizabeth Warren suffers from this misconception (and probably gets some nice campaign contributions from the banking sector to keep this bias) and tried to force her opinion on a representative of Chainalysis, a leading blockchain tx monitoring company. It’s painful and shows a fundamental misunderstanding of how blockchains work.

https://twitter.com/neerajka/status/1504486035178201090?s=21&t=8sVIqrmxExG2lfCv4QT5TQ

I agree. I don't see the ability to quickly move money via BTC as an advantage, at least to me, as I, a non-criminal, can do so via the standard banking system. And as you said, it's really not that good at that for criminals anymore either. Possibly it's only useful function, gone.

And btw, did you just suggest EW gets banking industry contributions? Bruh.

 

[Quincy A. Wagstaff]

If the Fed/US government wanted to reduce money laundering they would take the $100 bill out of circulation. It's almost as if they aren't opposed to the demand for USD provided by its use in money laundering.

 

[natchezdawg]

You almost make it sound like a Pyramid Scheme...**

*

 

[Go Budaw]

Are you here to say that BTC’s worst 4-year period in history where money still doubled is sustainable for 50+ years? Because that’s quite a bold statement. It’s still very, very new as an asset, as all crypto is relative to the larger securities market. There’s simply no way that it will continue the rate it has forever. There’s a strong chance that it has already entered a range bound window of its life where it simply fluctuates between $20k ~ $50k or something. Or not. But it’s not going to continue its current course forever. No way in hell.

None of that means it isn’t worth having for diversification instrument, if nothing else. But the days of it turning folks into millionaires overnight are over. Just like anything else, those that invested big and took the risk at the beginning did well….the other 99.9% who didn’t have probably already missed the boat.

 

[BoomBoom.sixpack]

Even a cursory glance at bitcoin's history reveals that the above statement is unfounded.

It has had multiple 80%+ corrections and STILL has a 10-year CAGR of 150%. The main criticism of bitcoin is that it volatile in the short term, yet every ROI beyond 2 years outperforms gold and the S&P 500, and that's with that volatility:
View attachment 24190

All bitcoin does is come back and reach new highs after a crash.

It's seen corrections, but never really crashed IMO. The whales have stayed true.

It serves no real function and has better option competitors that can replace it. Yes, there is a very real risk that it can crash and just never recover.

 

[Quincy A. Wagstaff]

No, that's not what I'm saying.

Are you here to say that BTC’s worst 4-year period in history where money still doubled is sustainable for 50+ years?

The point I was making was that people who have advised others to stay away from bitcoin due to its short-term volatility were wrong given that all you had to do was buy and hold for years to mitigate that short-term volatility risk. The other way to mitigate that risk is size of allocation. That's why "I don't own bitcoin because it's too volatile" makes zero sense.

Our best guess is that about 100 million people own bitcoin. Only about 10 million of those people have a significant amount of their wealth in bitcoin. One day a billion will own it. As adoption grows, bitcoin volatility will decrease. One day there won't be 50% corrections, AND it won't double every 4 years. But I don't think we're there yet. Are you willing to bet it won't be over $90k on 3/31/2026?

Just like anything else, those that invested big and took the risk at the beginning did well….the other 99.9% who didn’t have probably already missed the boat.

Counterpoint: The nation-state adoption phase has barely started. No one has missed the boat.

To put it another way: bitcoin is sound money. There's no such thing as being "too late" for sound money. There will be a point at which bitcoin doesn't outperform the stock market over multiple years, but that doesn't mean that people are too late to preserve the fruits of their labor with sound money.

 

[archdog]

When he went to go and get his tag, how did he not pay taxes on the purchase price of the vehicle to get it registered?

 

[PBDog]

*

Except you can store your life savings

 

[PBDog]

I agree. I don't see the ability to quickly move money via BTC as an advantage, at least to me, as I, a non-criminal, can do so via the standard banking system. And as you said, it's really not that good at that for criminals anymore either. Possibly it's only useful function, gone.

And btw, did you just suggest EW gets banking industry contributions? Bruh.

You don’t see an advantage of peer to peer xfer with instant settlement minus a 3-5% charge to the middleman? Wish to hell I could pay my taxes this way instead of standing a line 20 people deep.

 

[Maroonthirteen]

How much are those bitcoin transaction fees on that cup of coffee?

Cash nor my debit card charge fees.

 

[Quincy A. Wagstaff]

How much are those bitcoin transaction fees on that cup of coffee?

Cash nor my debit card charge fees.

It's not exactly right to say your card doesn't charge fees. Mastercard, Visa, American Express, etc. charge fees that the merchant pays. One way or another the people buying the goods or services pay this cost. Most merchants don't distinguish between customers that pay cash and customers that pay with cards. Some add a fee for card transactions. In either case, the cost of card transactions are passed on to the customer.

bitcoin lightning transactions are cheaper than card transactions. So merchants are able to lower their cost of business by utilizing the lightning network.

Another example of this right now is international remittances. Strike uses the bitcoin lightning network to send fiat across the globe instantly and at extremely low cost. This is in comparison to services like Western Union that charge huge fees and take much longer to settle, not to mention the danger of having to go to centralized places where gangs know people are receiving cash remittances.

A person in the US with the Strike app has USD in their account. They send $100 to a family member in a foreign country. The $100 shows up in the family member's Strike app in their local currency instantly. What they don't have to know is that under the hood Strike converted USD >> bitcoin >> lightning transaction >> converted to local currency. This allows for instant, cost-effective remittances of any amount (including small amounts), all without either party leaving their house.

 

[8dog]

I gotta ask where or why or how you stand in a line 20 deep to pay taxes.

 

[Nicephorus]

You don’t see an advantage of peer to peer xfer with instant settlement minus a 3-5% charge to the middleman? Wish to hell I could pay my taxes this way instead of standing a line 20 people deep.

While not the case in the US, people in countries that have had to deal with a bank run or hyperinflation (which typically is accompanied by the government preventing you from exchanging from the native currency) understand the value of this.

Interestingly if you read the stablecoin paper put out by the treasury department, one of the perceived risks of fully or nearly fully cash backed stablecoins was they would present a clearly superior product to bank deposits in times of economic uncertainty and potentially could cause a bank run as people convert their deposits to 100% backed stablecoins.

Ultimately, in the current system, you’re just “renting” your money from the bank and they ultimately have final control of it. This became clear to some people in Canada recently.

 

[johnson86-1]

I gotta ask where or why or how you stand in a line 20 deep to pay taxes.

I hope he's one of a number of people that stand in line to deliver pennies to the IRS in person to satisfy their tax bill.

 

[PBDog]

I gotta ask where or why or how you stand in a line 20 deep to pay taxes.

No mortgage so I stand in line with people getting a new license plate because I don’t want to pay the cc fee

 

[RBDog82]

I’ve always wondered what actual dollar amount the bitcoin / crypto champions hold in their accounts. You turned $5k into $50k? While a good return, it’s not that impressive in absolute terms IMO. Lightning in a bottle that, if we are honest, you probably knew one or two talking points about when you bought it. I’d rather find out how they make their first million.

 

[BoomBoom.sixpack]

While not the case in the US, people in countries that have had to deal with a bank run or hyperinflation (which typically is accompanied by the government preventing you from exchanging from the native currency) understand the value of this.

Interestingly if you read the stablecoin paper put out by the treasury department, one of the perceived risks of fully or nearly fully cash backed stablecoins was they would present a clearly superior product to bank deposits in times of economic uncertainty and potentially could cause a bank run as people convert their deposits to 100% backed stablecoins.

Ultimately, in the current system, you’re just “renting” your money from the bank and they ultimately have final control of it. This became clear to some people in Canada recently.

US deposit insurance covers this.

I may be short of imagination, but I'm struggling to think of a scenario where things are so dire that I can't get my money from a US bank, but I can from an anonymous phone ap.

Ultimately, investing in BTC is like investing your whole wad in a single stock. It may pay off, you may have great reasons, but I'll pass as I think it's not wise. I've had too many investments where I was dead right on so many things...but some other factor killed the return. In a different financial situation, one where I was more willing to take on risk, I could see the appeal. It definitely looks like a better payoff chance than any single stock that I can think of.