Is the Bitcoin Rally Finally Dead?

[Visbek]

It is not the retail investors driving up the price of bitcoin, it is institutions buying bitcoin by truckloads.

You mean, the same institutional investors now credited with the sell-off?

I remember when I bought bitcoin under 10k. A lot of people thought I was overpaying for it. bitcoin to the moon.

Cool story bro. Obviously because BTC has risen in value in the past, it will continue to rise no matter what. "This time, it's different!"

C'mon, man. It's just froth, which can lose half its value in a few days.

 

[nvflash]

Let me preference this by saying, "What the hell do I know!". That is to say, in the very early days of BitCoin, it got up around a dollar, then it tanked to fractions of a penny, I called it BitCon and said it was done, finished.

Tho I had the chance to buy all I wanted for pennies, and I'd be a billionaire if I invested a few grand.

Look, there is no true price discovery on what a bitcoin is worth, because it's not widely accepted in for goods and services in many/any legal marketplace, but it's a real good way to move money in dark and grey markets/underground economies.

So it's not purely speculative. As long as you don't mind being in bed with money launders, drug dealers, legally sanctioned oligarchs, and terrorist, it can have high upside. The drawback is nobody knows what laws are coming to regulate it.

 

[Bergslagstroll]

I find it sad and absurd that companies and other organizations have to stockpile Bitcoin so they can quickly pay off hackers that attack the organizations with ransomware.

UK firms 'stockpile' Bitcoin to pay off ransomware hackers

Ransomware attacks can cripple a business, leading to a rather sad trend in the industry.

www.zdnet.com

 

[Visbek]

bitcoin/crypto is a classic, "I don't really understand it so it must be a fraud/fad."

I understand it.

It's not a fraud. It's a speculative bubble.

It isn't a proper medium of exchange (which it purports to be); it isn't a good store of value; it isn't anonymous (as many people assume); it isn't particularly secure (e.g. nearly 20% of Bitcoin is currently classified as lost).

Most importantly, the perception people have of its success -- its high price -- is actually a major failure as a currency. If your "to the moon" logic is correct, anyone who uses Bitcoin to make a purchase today is actually increasing the amount they paid for an item. If you buy a car today with 1 BTC (i.e. $41k), and a year from now that 1 BTC is worth $80k, then guess what? That car cost you twice as much as the day you bought it.

I remember in 1997 when everyone thought Jeff Bezos was a loon. "Nobody is going to buy books on the internet!" "The internet is a fad!"

I remember when people thought Pets.com was going to be killer, because they had a sock puppet mascot and ran a Superbowl ad.

Just recently lots of investors were saying Facebook wasn't a legitimate business.

"Recently?" Seriously?

Crypto is the future. Those that invest and hold will be extremely wealthy while the curmudgeons will be left in the dust.

sigh

No, crypto is not "the future," nor would that be a reason to speculate on it. You don't buy Euros today because you think people will use Euros in the future.

People have said the exact same thing about every bubble. Many paid dearly for their excessive optimism.

Cash is trash. Don't do something silly by putting the majority of your hard-earned money in a checking account.

What the...?

If you have so few assets that you're putting most of your money into a checking account, you shouldn't be speculating on cybercurrency in the first place.

If you have enough assets to invest in something, you should not put any amount of money into crypto that you can't afford to lose. Crypto is not an "investment," it's a speculation.

 

[JasperL]

bitcoin/crypto is a classic, "I don't really understand it so it must be a fraud/fad."

I remember in 1997 when everyone thought Jeff Bezos was a loon. "Nobody is going to buy books on the internet!" "The internet is a fad!"

Just recently lots of investors were saying Facebook wasn't a legitimate business. "How can they bring in revenue when they don't charge you for membership."

Crypto is the future. Those that invest and hold will be extremely wealthy while the curmudgeons will be left in the dust.

Cash is trash. Don't do something silly by putting the majority of your hard-earned money in a checking account.

You can't compare crypto to a stock. People are often wrong both ways about stocks. They under or over value them, and over time the market sorts itself out. But in any kind of long run, a stock is only worth the discounted future cash flows.

The analogy would be AMZN going to $40,000 this year, just because, so roughly from a market cap of $1.6T to $16T. If I set up an AMZN wallet app and then we all took AMZN shares as payment for cars or illegal drugs or cosmetic surgery or whatever, maybe it does that, and if it does the price isn't related to anything about the company, but people bidding up the price because the price keeps getting bid up.

If you think BTC is worth 100k, why? Why not $1,000/unit or $1 million or $10 million? Why not a $billion per unit? I guess you could value it roughly equivalent to the unit cost to mine BTC, plus a markup, but as best I can tell the cost to mine is about what it's trading for after the drop. Why would I pay $100k for a unit I can mine for $30,000? Convenience? Privacy? I know the supply of BTC is capped, but it's not the only crypto. And arguments that say, well, once the cap is met you can only buy existing BTC, thus raising the value, don't work any more than me arguing the cost of AMZN is going to go up because the shares in AMZN are capped.

I've yet to see a compelling argument about value with crypto.

 

[aociswundumho]

So it's not purely speculative. As long as you don't mind being in bed with money launders, drug dealers, legally sanctioned oligarchs, and terrorist, it can have high upside.

Fiat has and is still used by all of the above.

The drawback is nobody knows what laws are coming to regulate it.

Drawback? The fact that no rotten government can control it is crypto's biggest advantage.

 

[aociswundumho]

I've yet to see a compelling argument about value with crypto.

The value is that it cannot be seized or debased or controlled by any filthy state.

Do you think the US government can run trillion-dollar deficits year after year ad infinitum?

There's a very strong demand for sound money, and governments only produce unsound money.

 

[JasperL]

The value is that it cannot be seized or debased or controlled by any filthy state.

Do you think the US government can run trillion-dollar deficits year after year ad infinitum?

There's a very strong demand for sound money, and governments only produce unsound money.

OK, fine. Is that worth $1,000 per unit or $100 million per unit? $40,000 or $400,000? How did you get to that value?

And this isn't "money." Money isn't an 'asset' that can debase by 30% in an afternoon. No economy can run on a currency where to do a deal you have to have the going price of BTC on your screen the moment you're making the transfer. How can you enter into a contract for something 3 months out when the "value" of the 'currency' might halve or triple in 3 months? What if you buy a car and the contract says, 1BTC. If it halves as you wait 3 weeks for delivery, the dealer just lost his ass, and you get a windfall. If it doubles, you lost your ass. No rational dealer works like that nor do rational consumers.

And if you're renting out a building on a 10 year lease, how in the hell do you set payments. Can't be in BTC, so it's in relation to actual, you know, money.

It's speculation, period. People are buying it because it's going up, and they want on the rocket ship. If it just sat there for 3 years in your BTC wallet and fluctuated 0.1% per day or something like a real currency, interest plummets.

 

[nvflash]

Fiat has and is still used by all of the above.

That's true.

 

[SkyChief]

BTC is becoming more popular and more and more businesses are accepting BTC as payment for goods and services. We should expect that BTC Value/Price will go up.

Inflation is hitting the US really hard, which makes BTC attractive because (unlike the US dollar) it is immune to valuation changes with regards to inflation.
We should expect that BTC Value/Price will go up.

Financial giant JPMorgan thinks BTC could surpass $100K by the end of the year.

https://www.livebitcoinnews.com/jpmorgan-thinks-btc-could-surpass-100k-by-the-end-of-the-year/

 

[post]

Breaking noose!

A few minutes ago, Bloomberg Financial reported US Treasury Dept. is finalizing requirement that cryptocurrency transactions
$10,000 or greater must be reported, same as dollar denominated transactions...

Bitcoin USD (BTC-USD) Price, News, Quote & History - Yahoo Finance

Find the latest Bitcoin USD (BTC-USD) price quote, history, news and other vital information to help you with your cryptocurrency trading and investing.

finance.yahoo.com

BTC started dropping from $42,500 to $39,000

Coinbase Global, Inc. (COIN) Stock Price, News, Quote & History - Yahoo Finance

Find the latest Coinbase Global, Inc. (COIN) stock quote, history, news and other vital information to help you with your stock trading and investing.

finance.yahoo.com

Coinbase Global, Inc. (COIN) didn't like that much, either...​

(recovered a little...)

Day's Range

228.31 - 238.79

231.07+6.27 (+2.79%)
As of 12:24PM EDT. Market open.

 

[Geoist]

Not really sure what is meant by 'falls back down to reality.' Bitcoin's value cannot be assessed the same way a corporation can be assessed. There is a limit of 21 million bitcoins that will ever exist. Around 3 million is already lost forever. The value is likely to continue to increase over the years; perhaps a million+ per coin in about a decade or so.

 

[Geoist]

Elon Musk said last week Tesla will no longer accept cryptocurrency for cars. His excuse was something to do with environmental concerns, but he's full of shit. The problem is that the currency is a house of cards and he doesn't want to be holding the bag when it all falls down.

He hasn't sold. At least not yet. Personally, I think it'd be stupid of him to sell.

 

[Geoist]

Can't pay the mortgage with bitcoin. Can't even buy a gallon of milk with it. Elon Musk discovered that he can't pay vendors with it either....lol

Right now it's a store of value. It's too volatile to be a mainstream currency. But it may get there, one day.

 

[Geoist]

What value? What does it do?

What does the USD do?

 

[JasperL]

I understand it.

It's not a fraud. It's a speculative bubble.

It isn't a proper medium of exchange (which it purports to be); it isn't a good store of value; it isn't anonymous (as many people assume); it isn't particularly secure (e.g. nearly 20% of Bitcoin is currently classified as lost).

Most importantly, the perception people have of its success -- its high price -- is actually a major failure as a currency. If your "to the moon" logic is correct, anyone who uses Bitcoin to make a purchase today is actually increasing the amount they paid for an item. If you buy a car today with 1 BTC (i.e. $41k), and a year from now that 1 BTC is worth $80k, then guess what? That car cost you twice as much as the day you bought it.


I remember when people thought Pets.com was going to be killer, because they had a sock puppet mascot and ran a Superbowl ad.


"Recently?" Seriously?


sigh

No, crypto is not "the future," nor would that be a reason to speculate on it. You don't buy Euros today because you think people will use Euros in the future.

People have said the exact same thing about every bubble. Many paid dearly for their excessive optimism.


What the...?

If you have so few assets that you're putting most of your money into a checking account, you shouldn't be speculating on cybercurrency in the first place.

If you have enough assets to invest in something, you should not put any amount of money into crypto that you can't afford to lose. Crypto is not an "investment," it's a speculation.

I agree with all of that. I'll just add that crypto being the "future of money" is NOT a justification for any given value of BTC or any other crypto that exists now or will be introduced later. Maybe that's correct. OK, how does that justify X value for BTC? It doesn't.

Some of us remember the tech bubble. Sure, yes, tech is in fact the FUTURE!!! I remember everyone justifying sky high values of nothing stocks with no revenue, and massive losses using the argument that 'tech is the future' or similar. They were right about THAT but not that 'techysoundingname.com' (had to have the .com) was in fact worth $400 million on $3 million in revenue and losses to date of $50 million. That company might have been AMZN in the early going, or hundreds that went to $0.

I'm not telling you anything you don't know.... Just thought I'd throw that out there. I managed money during the bubble and we got SLAMMED by some clients for not buying shit stocks at insane valuations, that then kept going up. Then the bottom fell out and NASDAQ fell by 80%.

 

[Geoist]

Gold has residual value.

And the dollar?

 

[Geoist]

You mean, the same institutional investors now credited with the sell-off?

Who are the institutional investors selling?

Cool story bro. Obviously because BTC has risen in value in the past, it will continue to rise no matter what. "This time, it's different!"

C'mon, man. It's just froth, which can lose half its value in a few days.

And the naysayers have been saying it's going to zero for close to a decade now.

 

[JasperL]

Not really sure what is meant by 'falls back down to reality.' Bitcoin's value cannot be assessed the same way a corporation can be assessed. There is a limit of 21 million bitcoins that will ever exist. Around 3 million is already lost forever. The value is likely to continue to increase over the years; perhaps a million+ per coin in about a decade or so.

Why not $100 million? A $billion? Or why not $1,000?

And, yeah, BTC has a cap, but the other cryptos don't, and there's no barrier for 100 new cryptos coming online. What's so special about BTC that someone else cannot replicate?

 

[Allan]

And the dollar?

Backed by the government.

 

[Geoist]

Why not $100 million? A $billion? Or why not $1,000?

It just depends on the demand. Higher demand = higher price. If no one wants it then it'll go to zero. I think it's safe to say it's not going to zero. The genie is out of the bottle.

And, yeah, BTC has a cap, but the other cryptos don't, and there's no barrier for 100 new cryptos coming online. What's so special about BTC that someone else cannot replicate?

Well, the deflationary aspect of it is part of what makes it 'special.' Obviously the price would be nowhere where it is right now if it was inflationary. Another aspect of what makes it special is that the blockchain is nearly impossible to hack. It can be stored away with little fear of the government, invading force, whatever stealing it. Meanwhile, the value of the dollar melts away and gold can be confiscated.

 

[Geoist]

Backed by the government.

In other words, there is no real intrinsic value of the dollar.

 

[Geoist]

So it's not purely speculative. As long as you don't mind being in bed with money launders, drug dealers, legally sanctioned oligarchs, and terrorist, it can have high upside. The drawback is nobody knows what laws are coming to regulate it.

This is another common misconception. Criminal activity only accounts for about 2.1% of crypto transactions.

The False Narrative Of Bitcoin’s Role In Illicit Activity

The majority of cryptocurrency is not used for criminal activity. According to an excerpt from Chainalysis’ 2021 report, in 2020, criminal activity only represented .34% of all cryptocurrency transaction volume.

www.forbes.com

 

[Deuce]

Elon Musk said last week Tesla will no longer accept cryptocurrency for cars. His excuse was something to do with environmental concerns, but he's full of shit. The problem is that the currency is a house of cards and he doesn't want to be holding the bag when it all falls down.

It was classic pump and dump.

 

[Deuce]

In other words, there is no real intrinsic value of the dollar.

No, currency works entirely on the basis of the shared agreement that it represents value. This has always been the case. Even backed by gold, this is how currency works because gold never held intrinsic value to match the dollar. It's a shiny rock with minimal industrial use, it's value is what we say it is. Just like any other currency.

Bitcoin isn't the same, though, because it isn't actually a currency. It is mathematically impossible for it to act as one at any real scale.