The total market cap of all crypto assets is less than the market cap of Tesla right now.
If they are remotely right that bitcoin is a liquid inflation protected asset then the demand for such an asset should increase in a world of more and more QE from central banks.
The value of money is not linear compared to its quantity. I remember the calls for high inflation in 2009 with the banks bailout, but it didn't happen.
It's the anticipation of more monetary action...the Fed Balance Sheet peaked in June but yes has been rising slowly lately.
Assets have been rallying across the board after Biden looked like he was going to win. The theory is that because it appears the Republicans will still hold on to the Senate, the government will effectively be gridlocked and the Fed will have no choice but to increase asset buying in absence of big fiscal stimulus.
You can see that in rates crashing Tuesday/Wednesday after rising in anticipation of a "Blue Wave" that never happened and risk assets increasing across the board.
Both are FRED series (CBBTCUSD and WALCL). Rolling one year correlations of one week deltas:
0.3 +-+----+------+------+------+------+-----+------+------+------+----+-+
+ + + + + A + + + + +
| A AA |
0.2 +-+ AA AAAAAAA+
| AAA AA AAA AA |
0.1 +-+ AAAAA AA AA A A +-+
| AAAAA AAA A AA |
| AA A |
0 +-+ A AA AA AAA +-+
| A AA A |
| A AA AAA A |
-0.1 +A+ AAA AA A A +-+
|AAA A AAAAA AAAA |
|A A A |
-0.2 A-+ AAAAA A AAA AA +-+
A AA AA AAAAA |
-0.3 +-+ AA +-+
| A |
+ + + + + + + + + + +
-0.4 +-+----+------+------+------+------+-----+------+------+------+----+-+
2017/1/1 2018/11/25 2020/10/11
Yup, that's my takeaway. You see the same thing when you use future Fed moves as well (which is one way of checking that this graph isn't missing out on some announcement effect, as assets lag announcements).
It will probably fall. Unlick stocks, Bitcoin is purely a function of supply an demand, with no intrinsic value. It is not like Amazon stock gains, which hold. Commodities always have a tendency of giving up gains and lagging stocks, because no shareholder equity can be generated and the supply is always increasing.
Someone has been licking stocks again. If I had a staoshi for each person that said it would go down! It will probably go down. It will probably go back up. It will always go back up, as long as there is a general belief in the population that the tech is worth the cost of running it.
Bitcoin is valuable because it represents an immutable data store which is difficult to change - much like "stocks". The value an immutable-like data stores presents to some business models is more valuable than the idea of publicly traded stock to others.
For example, I could hook up a Bitcoin transaction to this POST, and do it without any authentication or credit card number, yet it would still be paid and secure. That is available to everyone today in the form of Lightning. Once more business models, such as those backed by ML adopt these types of micropayments, there will be no stopping Bitcoin, whether you lick stocks or not.
but how does this translate into bitcoin being worth hundreds of billions of dollars? PHP and Javascript are free and used way more than bitcoin, but is it worth hundreds of billions?
Sure, it's worth billions just like someone thought Uber, Groupon or WeWork was worth billions.
In Bitcoin's case, it's distributed consensus. In the case of startups, it's the investors that control consensus. In the case of the market, it's the market manipulators that do it, in conjunction with public opinion.
As long as public opinion holds that Bitcoin is valuable and it continues to be a secure solution that doesn't require edge case handling (which increases risk) then there's no reason anyone shouldn't think it's a reliable store of immutable values in the near term.
Wild market manipulation / tinfoil hat thoughts: I wonder if that billion dollar wallet movement in the last few days could have any relation to this?
A lot of retrospective analysis of the 2018 run found price painting and similar shady tactics by just a few actors drove the prices up substantially, used as an undergirding to the news hype cycle.
If you had a billion dollars in today's bitcoin value to move, how much could you increase your take for say, $50 million 'invested' in paying price-painting experts to generate bitcoin hype news?
the $1 billion moving should j have been bad for bitcoin because the assumption was those coins were either lost for good or forgotten. now the supply has increased by $1 billion.
> If you had a billion dollars in today's bitcoin value to move, how much could you increase your take for say, $50 million 'invested' in paying price-painting experts to generate bitcoin hype news?
The shady tactic being the Department of Justice doing it for free?
DOJ has flagged the billion dollar wallet for seizure, effectively tainting a large supply of bitcoin until it is magically washed by the US Marshalls when they collect it and auction it off again.
Devils advocate against the tinfoil hat: If you weren't trying to do market manipulation, when would you make the move? It seems that waiting for the price to go up would be the time. As they say, playing the stock market is easy - just buy low and sell high.
It is somewhat disturbing to watch the confusion around bitcoin's price swings when the formula is baked into the code. We're basically talking about two constants here; human nature and the halving of the reward subsidy every four years. Once again, the market has failed to price it in.
That's not true. The demand depends on the liquidity (available supply for trading) and the price, among other things. There have been many cases in the last 10 years when the demand went down.
15000 usdT not usd, as most exchanges trade in tether, not actual dollars. Such price increase is probably related to Tether printing almost 7 billion dollars of (almost definitely) unbacked "USDT" in less than 3 months https://coinmarketcap.com/currencies/tether/
Which all compose only a small percentage of the overall volume. You can't deny there's almost 17 billion "totally fully backed 1:1 by US dollars" tether floating around and almost all crypto trading happens against USDT, not USD
It's 90%+ correct. Almost all trading volume is in Tether, which is erroneously assumed to be 1:1 with usd. Once the "bank run" on tether happens it'll be revealed that most of their billions are not backed by anything and the actual btc:usd price will become clear
I am not changing topics, my point is that when you see a price of $15000 on the exchanges, what you are actually seeing is mostly btc/usdt pairs, that is, you are getting 15k usdt for a bitcoin, not USD. You can see it in e.g. https://coinmarketcap.com/currencies/bitcoin/markets/
It is currently pegged 1:1, so you can exchange it for actual US dollars for the most part, which allows exchanges to claim that USDT=USD and they merge them all into a single thing. But there is no reason to believe USDT is actually equal to USD as they keep printing billions of them without any proof that there's any real money behind it.
Until it isn't. There is zero proof those guys are actually holding their claimed $16,866,411,506 USD in cash somewhere, considering they were kicked out of all the banks years ago
And likewise, BTC fees are also at a local maximum[1]. Unfortunately, nothing has been done to actually scale the BTC blockchain since the last bull run. Onchain transactional capacity is the same as it was 2 years ago (limited to ~400k tx/day globally). Major n^2 transaction validation bottlenecks still remain within the Bitcoin Core software. With no plans to address these bottlenecks and increase onchain capacity, the fundamentals of BTC scaling haven't changed at all since the last time the market went boom and then bust.
Plenty of criticisms to be had about bitcoin's scalability but what you said isn't true.
Quite a bit has changed with the prevalance of Segwit transactions, some-to-many Lightning transactions, a lot of Liquid transactions, and transaction bundling. Specifically in reaction to how the network convulsed last bull market and correction.
Yeah it still sucks and is hardly competitive especially on the layer-2 front, but lets at least be accurate about why it sucks lol.
Wrapped Bitcoin offerings are better than native Bitcoin. There is a lot of money being made in helping people wrap and unwrap their Bitcoin for use and trade (not for custody though). It will be very prevalent this cycle. There are a lot of options for people to be unburdened by Bitcoin's layer-1 while being able to manage risk and capture alpha with the market gyrations, in unlimited amounts. All comes down to if people want to learn, this time, but the landscape is extremely different.
The honest reality is that you will want to watch is if Ethereum's capacity can keep up fast enough. If mentioning the Ethereum Network caused a convulsion, then you really need to re-evaluate what is going on. It is acting as a trading portal and center that has almost nothing to do with the Ether cryptocurrency. It has robust Layer-1 trading systems, 10 competing Layer-2 offerings that already work right now which the Layer-1 systems will very quickly upgrade to (bitcoin has 1 Layer-2 system called Lightning, in incremental progress for 5 years and it doesn't work very well), while also being in the process of updating its own Layer-1 consensus layer to increase throughput by two-three orders of magnitude.
Yes things have been done, but nothing that's effective.
Any layer-2 solution is just a dead end as you still have to pay the high fees to enter and exit. And it's funny, and sad, that you bring up Liquid as a potential solution because it's a centralized solution and we might as well be content with PayPal if we're going that route.
I don't consider it a solution, I consider it a reality.
If you want to transact in unlimited amounts very quickly, there are extremely viable options. If you then want to pay a little bit more to custody your asset in the most secure way onchain, you can do that. Let's step back and look at the criticism: we are still talking about nearly instant on-chain settlement, and by instant I mean within an hour, at any time of day any day of the week.
We are talking about fees lower than what trading commissions were for decades, but being mad that it isn't simultaneously better than merchant processing fees or for poor people all the time.
There is just a parallel world here with plenty of options, completely accessible now with atomic swaps or bonded minting/burning in a way that wasn't available even just two years ago. The exchanges are mostly irrelevant except the largest fiat onramps, which have recently expanded too.
That's where we are. If the market really wants to get frothy this time, I think the capacity is quite ready. And for things that aren't ready due to programming or people just not using them, they incentivize is there to be a catalyst.
what high fees to enter and exit. Lightning fees are very low (typically( about 0.00001 pence. Liquid is not needed for lightning. As an end user you can use a lightning wallet and enjoy fast lowest fee transactions.
You need to pay for an expensive on-chain Bitcoin transaction before you can use Lightning. You must also have enough money so you can pay for another on-chain transaction if the channel closes and you must issue a dispute to not lose your funds.
Did I mention that if you open a channel to the wrong hub, you must open yet another channel, with all associated costs?
It's ridiculous to even entertain Lightning as a viable option when there are other low-fee and fully functioning cryptocurrencies that aren't gimped by a tiny blocksize.
I am sorry. As a lighting wallet user, none of that is true anymore. The underlying channel management is abstracted away from the user. The experience is pleasant. I won't jump to another cryptocurrency as BTC with lightning ticks all the marks for me.
The only thing missing in the BTC ecosystem is smart contracts, but I am happy for that to be a separate ecosystem (ETH or otherwise).
Any article about Bitcoin price should mention Tether and how $7B worth of these supposedly USD-backed tokens have been printed recently. There's no evidence that Tether is backed by anything, yet these newly minted cryptodollars are used to buy Bitcoin and thus pump up the price.
It's not that different from Fed stimulus creating money that ends up being used to buy stocks and inflating prices across the market. Fed does it in the open, Tether is doing it surreptitiously. Caveat emptor.
It's mind boggling, few guys in some offshore company claim to be holding almost 17 billion dollars in cash somewhere when it was revealed they were kicked out of all the banks they attempted to use, and they keep printing money in the billions with no consequences
59 comments
[ 1.1 ms ] story [ 81.3 ms ] threadIf they are remotely right that bitcoin is a liquid inflation protected asset then the demand for such an asset should increase in a world of more and more QE from central banks.
Assets have been rallying across the board after Biden looked like he was going to win. The theory is that because it appears the Republicans will still hold on to the Senate, the government will effectively be gridlocked and the Fed will have no choice but to increase asset buying in absence of big fiscal stimulus.
You can see that in rates crashing Tuesday/Wednesday after rising in anticipation of a "Blue Wave" that never happened and risk assets increasing across the board.
https://ibb.co/z7vgwSd https://ibb.co/Zhqzdxk
Can you link raw data?
At this point, the marginal buyer is a leveraged investment firm. So, the hypothesis is not a crazy one.
Bitcoin is valuable because it represents an immutable data store which is difficult to change - much like "stocks". The value an immutable-like data stores presents to some business models is more valuable than the idea of publicly traded stock to others.
For example, I could hook up a Bitcoin transaction to this POST, and do it without any authentication or credit card number, yet it would still be paid and secure. That is available to everyone today in the form of Lightning. Once more business models, such as those backed by ML adopt these types of micropayments, there will be no stopping Bitcoin, whether you lick stocks or not.
In Bitcoin's case, it's distributed consensus. In the case of startups, it's the investors that control consensus. In the case of the market, it's the market manipulators that do it, in conjunction with public opinion.
As long as public opinion holds that Bitcoin is valuable and it continues to be a secure solution that doesn't require edge case handling (which increases risk) then there's no reason anyone shouldn't think it's a reliable store of immutable values in the near term.
perma-bulls should never be in the commodities markets and typically aren't.
they should stay married to the framed stock certificate their grandma gave them and stay out of this market.
A lot of retrospective analysis of the 2018 run found price painting and similar shady tactics by just a few actors drove the prices up substantially, used as an undergirding to the news hype cycle.
If you had a billion dollars in today's bitcoin value to move, how much could you increase your take for say, $50 million 'invested' in paying price-painting experts to generate bitcoin hype news?
The shady tactic being the Department of Justice doing it for free?
DOJ has flagged the billion dollar wallet for seizure, effectively tainting a large supply of bitcoin until it is magically washed by the US Marshalls when they collect it and auction it off again.
Edit: Now we know its actually US gov that moved it, so not market manipulation: https://www.vice.com/en/article/akdgz8/us-feds-seize-1-billi...
https://news.ycombinator.com/item?id=19454827
But that's not what you said. You said $15,000 usdT, which is incorrect.
Admit it and move on because changing topics midstream doesn't fool anyone and just exposes how flimsy your reasoning was to begin with.
I am not changing topics, my point is that when you see a price of $15000 on the exchanges, what you are actually seeing is mostly btc/usdt pairs, that is, you are getting 15k usdt for a bitcoin, not USD. You can see it in e.g. https://coinmarketcap.com/currencies/bitcoin/markets/
It is currently pegged 1:1, so you can exchange it for actual US dollars for the most part, which allows exchanges to claim that USDT=USD and they merge them all into a single thing. But there is no reason to believe USDT is actually equal to USD as they keep printing billions of them without any proof that there's any real money behind it.
Until it isn't. There is zero proof those guys are actually holding their claimed $16,866,411,506 USD in cash somewhere, considering they were kicked out of all the banks years ago
https://99bitcoins.com/bitcoin-obituaries/
[1] https://bitinfocharts.com/comparison/bitcoin-transactionfees...
Quite a bit has changed with the prevalance of Segwit transactions, some-to-many Lightning transactions, a lot of Liquid transactions, and transaction bundling. Specifically in reaction to how the network convulsed last bull market and correction.
Yeah it still sucks and is hardly competitive especially on the layer-2 front, but lets at least be accurate about why it sucks lol.
Wrapped Bitcoin offerings are better than native Bitcoin. There is a lot of money being made in helping people wrap and unwrap their Bitcoin for use and trade (not for custody though). It will be very prevalent this cycle. There are a lot of options for people to be unburdened by Bitcoin's layer-1 while being able to manage risk and capture alpha with the market gyrations, in unlimited amounts. All comes down to if people want to learn, this time, but the landscape is extremely different.
The honest reality is that you will want to watch is if Ethereum's capacity can keep up fast enough. If mentioning the Ethereum Network caused a convulsion, then you really need to re-evaluate what is going on. It is acting as a trading portal and center that has almost nothing to do with the Ether cryptocurrency. It has robust Layer-1 trading systems, 10 competing Layer-2 offerings that already work right now which the Layer-1 systems will very quickly upgrade to (bitcoin has 1 Layer-2 system called Lightning, in incremental progress for 5 years and it doesn't work very well), while also being in the process of updating its own Layer-1 consensus layer to increase throughput by two-three orders of magnitude.
Any layer-2 solution is just a dead end as you still have to pay the high fees to enter and exit. And it's funny, and sad, that you bring up Liquid as a potential solution because it's a centralized solution and we might as well be content with PayPal if we're going that route.
If you want to transact in unlimited amounts very quickly, there are extremely viable options. If you then want to pay a little bit more to custody your asset in the most secure way onchain, you can do that. Let's step back and look at the criticism: we are still talking about nearly instant on-chain settlement, and by instant I mean within an hour, at any time of day any day of the week.
We are talking about fees lower than what trading commissions were for decades, but being mad that it isn't simultaneously better than merchant processing fees or for poor people all the time.
There is just a parallel world here with plenty of options, completely accessible now with atomic swaps or bonded minting/burning in a way that wasn't available even just two years ago. The exchanges are mostly irrelevant except the largest fiat onramps, which have recently expanded too.
That's where we are. If the market really wants to get frothy this time, I think the capacity is quite ready. And for things that aren't ready due to programming or people just not using them, they incentivize is there to be a catalyst.
Did I mention that if you open a channel to the wrong hub, you must open yet another channel, with all associated costs?
It's ridiculous to even entertain Lightning as a viable option when there are other low-fee and fully functioning cryptocurrencies that aren't gimped by a tiny blocksize.
The only thing missing in the BTC ecosystem is smart contracts, but I am happy for that to be a separate ecosystem (ETH or otherwise).
So it's basically an asset class correlated with stocks?
Gold had a bit of dip too even, but not as severe ...
It's not that different from Fed stimulus creating money that ends up being used to buy stocks and inflating prices across the market. Fed does it in the open, Tether is doing it surreptitiously. Caveat emptor.
I wonder if the end game has a Tether collapse?