Tether printer is rather silent right now. So is USDCoin. Both hit a plateau a week ago.
That's one thing concerning me with this ATH. Large upswings usually coincided with USDT/USDC issuance for the last years, which makes sense, given that fresh money is needed to drive new ATHs and the USDT/USDC market caps are the best-available proxy for the amount of fiat stashed in the crypto ecosystem.
It could be that this hype cycle and new ATH is still being driven by money that has already been in the system (but on the sidelines for a while, probably since the big drop in May of this year), but if that was the case, then it should be rather short-lived if large chunks of new money don't start entering the system soon.
Most likely related to SEC allowing futures ETFs to launch as of yesterday (creating more exposure to retail and retirement accounts), but overall there continues to be inflation pressures across the world that are driving some people to buy it. Others are simply speculating.
if anything, i'd expect $BITO launch to be a sell the news event. lo and behold, didn't happen. i don't believe retail bought several billions of it in the first day and change of trading.
BTCUSD basically forgot what down is on october 1st. a great many things happened in the time between that and today. attributing the current price to just one event is naive - but convenient.
It doesn't matter whether retail traders buy trillions worth of this new ETF or not. The ETF is a futures ETF. It is not backed by any Bitcoin. It's a pure speculation on the future price of BTC.
Hence the only thing this ETF does that affects the BTC price is drive the hype even higher.
There's probably an inflation signal in there, but unless you believe the US dollar has lost 99.9999%-ish of its value since BitCoin first came out about 12 years ago (you can add more 9s depending on exactly when you decide bitcoin got a solid value against the dollar), it probably isn't all of it.
Nah, I meant the "even" hits lows with regards to basic consumer goods "these days". Constant, low inflation should mean it's forever in a state of hitting lows vs consumer goods.
Or an indicative of USD as an asset being less attractive and less valuable, it's more likely to be a conflation of multiple causes: printing USD (flooding the supply), US's economy being less attractive than expected at this time so investments have moved or being deferred (sold USD) and even perhaps pricing in some kind of systemic risk that could be building up in USD-marked economies (mainly the USA).
The probably apocryphal story of Joseph Kennedy Sr. getting stock advice from his shoe shiner and getting out of the market in 1929 before the big crash applies here.
Remember last year when we couldn't even say the word 'inflation' on HN without being flagged and completely stomped by the boots?
The boots are now realizing that inflation is here to stay. Even the most liberal media has admitted (NYTimes). Comparisons with 2009 fiscal stimulus didn't hold up.
Literally all of HN. All you have to do is search threads from 2020. My point is more than this issue - it is how HN treats dissent and diverging opinions.
Assuming Bitcoin is a currency, it would have experienced hyper-deflation.
Under hyper-inflation, your currency would lose value at the end of the month because the price of everything has risen 50% or more.
Under-hyper deflation, the prices of everything plummets at the end of the month.
While this sounds great, deflation also has a negative impact on economies because people are less likely to spend their money today if they know it’s going to appreciate value at the end of the month.
If you’re interested this subject, there’s so many great resources that do an excellent job explaining monetary policy.
Salman Kahn of Khan Academy is actually a pretty great resource for explaining this stuff in simpler terms. Planet Money keeps their shows accessible and do a great job explaining the basics and backstory of policies and ideas.
Yeah, if anything it'll add btc to the market and lower the price, rather than increase it. Anyway it's just the approval, and not the actual distribution.
What I'm always missing from the discussion around bitcoin and its price is: what are reasonable KPI's to measure its success, its impact, its utility etc.
When you want to value an organisation or company, it makes sense to look at these KPIs. They could be purely financial, e.g. profits, revenue, margins. Or they could be more fundamental, number of users, or rather, number of times a person has benefitted (e.g. # of one-night stands or relationships that Tinder generated).
What are these KPIs or metrics for bitcoin, that can tell us it has value, beyond the speculative?
When I invested in bitcoin in 2013, there was a lot of work to get user-adoption. It was seen as the way forward, also to create a return on your investment. we used to track numbers on # of wallets, # of daily transactions, # of merchants accepting bitcoin, # of volume on exchanges. Over time it began harder to differentiate true numbers from fake numbers, e.g. exchanges became notorious for faking transaction volume as a marketing tool. But overal, the general idea was that after 2015 or so, the number of real-world transactions and active (non-zero volume) merchants either declined, or in later years at least was not growing at remotely the same rates as the price of bitcoin.
Whereas I used to use bitcoin for various things and saw others do it, too, today I can hardly point to a single person or company which has utilised bitcoin in a way that isn't speculative. There's no positive KPI or metric that I can point to, except speculative ones (e.g. price).
If I survey my friends, the only reason they give to buy bitcoin, is that there's an expectation the price will keep going up. Yet, the work on user-adoption of bitcoin (i.e., real-world usage, not merely investing) seems like it's not at all part of anyone's calculus.
That's the reason I sold all my bitcoin some time ago. Although I would not at all be surprised that the price will keep growing, I can forgive myself and justify me having sold. But if the price falls it'd be entirely reasonable, and I wouldn't be able to justify my choice not to sell.
There is obvious real technology here in having a database/ledger that's not under control of 1 centralised party. But a decade later I'm not seeing anyone exploit that value outside of the speculative investment side.
Btw, I believe there's potential long-term value in bitcoin merely as a store of value, a digital gold. But right now there's still a pretense of something more. Second, the store of value ideal only applies to one coin, not the trillion other crypto variants. And it requires trust and faith (over decades/centuries) in one particular fork of Bitcoin. There's only one chemical that's pure gold, but one could create infinitely many bitcoin forks.
A chokehold on international payment remittance. Every single USD transaction in Taiwan passes through a US bank. A handful of countries are organizing their own crosscountry remittance systems. Until then, the US can effectively cut any country off international transactions when they feel like it.
Accepted and used in 99% of every real-world transactions by the biggest economy in the world, used by 99% of the merchants and 99% of the citizens in this economy.
But I'd say that perhaps it's not the best comparison. Few people are looking to purchase dollars for the sake of holding them as an investment. There's of course tons of volume on Forex markets for hedging and speculation, but regular citizens aren't looking to purchase dollars for investments, i.e. in order to generate a return on dollars-held.
Typically people use dollars as a medium of exchange and the way in which prices are commonly expressed. But anyone with sufficient dollars will want to use them to hold assets, whether they're a home, stocks, or simply low-risk treasury bonds, the idea is that dollars give access to these assets, but few are looking to simply buy and hold as many dollaras as they can in order to generate some kind of a return.
Bitcoin is also a technology in a way that the dollar isn't. The dollar is an idea, backed up by lots of different technologies both analog or digital. Those technologies don't necessarily have much to do with the price of the dollar. Nor do dollars have to have a certain price for them to be used, in a way that for many years, people expected individual bitcoins to be value (and thus naturally to go up in price as demand for these tokens went up) because the tokens would be used in various technological applications... That hasn't materialised, which makes the increasing value of the tokens somewhat non-sensical.
>Accepted and used in 99% of every real-world transactions by the biggest economy in the world, used by 99% of the merchants and 99% of the citizens in this economy.
That's attention economy, isn't it? I imagine people who own a few USD aren't as interested in it compared to people who hold a lot of USD.
As I noted in the last piece of my post, I believe there's value in bitcoin being a store of value. It has proven itself there and is a contender to Gold in that respect.
But there's no pretense around gold as having technological uses that require it to have a certain price, or that drive its price due to the technological demand for gold, in a way that people keep claiming for bitcoin tokens. Gold is used in tech applications, but it's not what is generally driving its price.
But insofar as you do want to look at gold's uses, it's pretty easy to link them to KPIs as they benefit end-users/consumers/companies in electronics, jewellery, space, medicine/dentistry.
The fact the responses so far are all comparing bitcoin to gold or dollars as a store of value, not as a medium of exchange, and not as a token or ledger that's useful for anything else (e.g. a notary function, or an open-source finance platform used by most tech companies to exchange value like the internet protocol or email protocol was for exchange of information), seems to me that crypto is not very interesting anymore for entrepreneurs, technologists, developers, users etc.
But rather, that it's just an asset class, one that's highly speculative and volatile vis-a-vis comparisons like gold. Interesting for investors, but not users. Just like gold.
* put differently:
The internet protocol is driving just about every digital tech company. From Facebook to Netflix to Google to Apple. Bitcoin was aiming to be the digital money protocol, but it's not driving the financial infrastructure for any companies or end-users apart from those in a speculative sense.
And that's okay, if it's just a store of value / asset class like gold, but then it should loose that pretence.
> Here's a KPI: do you find it useful for something other than the fact that the price might go up?
I don't personally, I don't use or own it anymore. Could you explain more about your uses?
> I know I do, for a fairly large number of reasons, many of which revolve around "protecting value".
Protecting value seems (without knowing more) to imply a circular reasoning: the price going up protects the value of the token, that's why it's useful. But that's a speculative reason, no different from the price of a tulip bulb going up, has value because it protects the value of a tulip bulb.
I'm almost certainly misreading you but I'm just speculating as you haven't expanded on the large number of reasons you mentioned.
Protecting value as in: other people can't take it from me short of physically torturing me. And that'd be assuming they even know I hold any.
Also: I can donate it to whomever / whatever cause I want, whenever I want without anyone, any law or any government being able to prevent me from doing that.
Also: I could be rich, I could be poor, no one knows, even folks in my close social network. My net worth is my business and mine only. Things only become visible when I actually decide to use some of it in the economy.
Bitcoin allows me to do all of the above. Very few other assets do. I consider this very "useful". The price appreciation, as I said, is just "nice to have".
As far as I can tell, everything you described (Maybe with the exception of donations) is the exact same as a bank account you don't tell anyone about.
Do banks really start to bother you if you have multi-millions in there or something?
What are the KPIs for any store of value? I don’t think you can value Bitcoin in the same way you value a revenue generating business. I think the value makes more sense when you look at it as an abstract and digital store of value to replace existing solutions that require trusting another party and are subject to easier censorship.
I think looking at the total number of transactions on the Bitcoin blockchain doesn’t tell the full story anymore either. There are thousands of new cryptocurrencies and other solutions, each with transactional activity. Increased usage on Ethereum, lightning network, Solana, etc indirectly benefits BTC, since, BTC is the tried and tested protocol with arguably the most decentralisation and no figurehead.
I love Bitcoin the currency, but IMO a major barrier to adoption has been the community's reluctance to embrace "off chain" payment systems. Bitcoin's network is simply too slow and expensive for the majority of day to day transactions. And there are fundamental reasons for that which can't be fixed with a fork or an altcoin. It should be used as a settlement system, for moving between payment systems and for large transactions (e.g. Coinbase -> Hardware wallet, Hardware wallet -> Pay credit card bill, Coinbase <-> Binance, etc.).
Now what if Visa added BTC as a supported currency? That would be big for adoption. Consumers could pay their bills directly in BTC. Merchants could receive BTC from Visa. What if some entity (El Salvador?) issued BTC backed bank notes? BTC could be used just like cash. Basically, all criticism about the Bitcoin payment network would become moot. But the "on chain" system would still exist when you need it and the currency would still retain its important properties.
Unfortunately, the previous paragraph sounds like a nightmarish scenario to the average Bitcoiner.
Is it? When does the growth end? If it keeps at the pace it has been we're talking trillions in a few decades, and bitcoin isn't going to be worth the whole world's GDP, so where does it stop?
This is an interesting line of thinking. As a point of reference (rather than a serious forecast), total market cap for gold is roughly 10x the total market cap for BTC
Everything we do as a species has an environmental impact, even breathing. Perhaps this is one of the group of activities where the benefits outweigh the costs.
Perhaps, as a species, a society, a culture, our value system is completely out of whack in that it remains - at least for a sizable proportion of those in the world who can avail themselves of such 'opportunity' - the "optimal" action to sacrifice a planet in order to gain material/monetary wealth in the short term. I really don't understand bitcoin or crypto currencies but it feels to me like so much opportunism at the expense of, well, life as we have come to know it.
Maybe because Bitcoin mining is rapidly moving away from dirty coal-fired electricity generation in China, and toward clean and renewable energy sources. We're not there yet, but there's been astounding progress just in the last 12 months.
Or maybe because Bitcoin mining helps solve the intermittancy problem of renewable sources such as wind. Today there's a lot of supply at the times there's low demand, so it doesn't make economic sense to invest in enough wind power to make a difference when demand spikes. Intermittant Bitcoin mining provides a market for the surplus, then goes dark during demand spikes to match supply with demand.
Or maybe because the current monetary and financial system is so fantastically corrupt and broken that it's worth spending a fraction of one percent of the world's energy on an alternative.
Or maybe people use energy for all kinds of things that I think are stupid and wasteful, but I can't tell others how to invest their own resources.
> Maybe because Bitcoin mining is rapidly moving away from dirty coal-fired electricity generation in China, and toward clean and renewable energy sources.
This doesn't solve the problem. Miners are consuming renewable power that would otherwise displace coal/gas elsewhere on the grid.
The narrative that miners are somehow backstopping renewables just doesn't work.
I mean it either prevents new hydrocarbon from being built, or as we’ve seen in a lot of places in the US where coal is wildly uneconomic, it outright displaces coal.
> Miners are consuming renewable power that would otherwise displace coal/gas elsewhere on the grid.
This isn't necessarily true. Transporting electricity over distances is expensive. I've seen the pricing.
Coinmint, in upstate NY, has a direct feed from Moses-Saunders damn. The lines were originally built to feed the Alcoa Aluminum smelter that once existed there (and became a superfund site). There isn't anywhere else that the power company can send the power, without a huge investment.
74 comments
[ 3.2 ms ] story [ 128 ms ] threadEarlier this month already new ATH's in Total Market Cap in us Dollars.
That's one thing concerning me with this ATH. Large upswings usually coincided with USDT/USDC issuance for the last years, which makes sense, given that fresh money is needed to drive new ATHs and the USDT/USDC market caps are the best-available proxy for the amount of fiat stashed in the crypto ecosystem.
It could be that this hype cycle and new ATH is still being driven by money that has already been in the system (but on the sidelines for a while, probably since the big drop in May of this year), but if that was the case, then it should be rather short-lived if large chunks of new money don't start entering the system soon.
https://twitter.com/realpauleverton/status/14508758913624350...
if anything, i'd expect $BITO launch to be a sell the news event. lo and behold, didn't happen. i don't believe retail bought several billions of it in the first day and change of trading.
Hence the only thing this ETF does that affects the BTC price is drive the hype even higher.
US dollar has been hitting all time lows compared to most (all?) asset classes. It even hits lows with regards to basic consumer goods these days.
A lot of people who are participating in this bubble were too young to be affected in 2008.
I'm no economist so this is all speculation.
https://news.ycombinator.com/item?id=28930809
The boots are now realizing that inflation is here to stay. Even the most liberal media has admitted (NYTimes). Comparisons with 2009 fiscal stimulus didn't hold up.
https://fred.stlouisfed.org/series/M1SL
https://www.investopedia.com/terms/h/hyperinflation.asp
Per your definition Bitcoin has hyper inflated in the past month. What’s the result of this?
Under hyper-inflation, your currency would lose value at the end of the month because the price of everything has risen 50% or more.
Under-hyper deflation, the prices of everything plummets at the end of the month.
While this sounds great, deflation also has a negative impact on economies because people are less likely to spend their money today if they know it’s going to appreciate value at the end of the month.
If you’re interested this subject, there’s so many great resources that do an excellent job explaining monetary policy.
Salman Kahn of Khan Academy is actually a pretty great resource for explaining this stuff in simpler terms. Planet Money keeps their shows accessible and do a great job explaining the basics and backstory of policies and ideas.
5% yearly inflation is just plain old inflation.
https://www.trustnodes.com/2021/10/20/99-of-creditors-approv...
Correlation with ATH is a stretch imo, but nice find :)
When you want to value an organisation or company, it makes sense to look at these KPIs. They could be purely financial, e.g. profits, revenue, margins. Or they could be more fundamental, number of users, or rather, number of times a person has benefitted (e.g. # of one-night stands or relationships that Tinder generated).
What are these KPIs or metrics for bitcoin, that can tell us it has value, beyond the speculative?
When I invested in bitcoin in 2013, there was a lot of work to get user-adoption. It was seen as the way forward, also to create a return on your investment. we used to track numbers on # of wallets, # of daily transactions, # of merchants accepting bitcoin, # of volume on exchanges. Over time it began harder to differentiate true numbers from fake numbers, e.g. exchanges became notorious for faking transaction volume as a marketing tool. But overal, the general idea was that after 2015 or so, the number of real-world transactions and active (non-zero volume) merchants either declined, or in later years at least was not growing at remotely the same rates as the price of bitcoin.
Whereas I used to use bitcoin for various things and saw others do it, too, today I can hardly point to a single person or company which has utilised bitcoin in a way that isn't speculative. There's no positive KPI or metric that I can point to, except speculative ones (e.g. price).
If I survey my friends, the only reason they give to buy bitcoin, is that there's an expectation the price will keep going up. Yet, the work on user-adoption of bitcoin (i.e., real-world usage, not merely investing) seems like it's not at all part of anyone's calculus.
That's the reason I sold all my bitcoin some time ago. Although I would not at all be surprised that the price will keep growing, I can forgive myself and justify me having sold. But if the price falls it'd be entirely reasonable, and I wouldn't be able to justify my choice not to sell.
There is obvious real technology here in having a database/ledger that's not under control of 1 centralised party. But a decade later I'm not seeing anyone exploit that value outside of the speculative investment side.
Btw, I believe there's potential long-term value in bitcoin merely as a store of value, a digital gold. But right now there's still a pretense of something more. Second, the store of value ideal only applies to one coin, not the trillion other crypto variants. And it requires trust and faith (over decades/centuries) in one particular fork of Bitcoin. There's only one chemical that's pure gold, but one could create infinitely many bitcoin forks.
Not intended as a gotcha, I'm curious what you mean by it and examples seem a reasonable way to find out.
USA can just bomb them into the approved currency.
But I'd say that perhaps it's not the best comparison. Few people are looking to purchase dollars for the sake of holding them as an investment. There's of course tons of volume on Forex markets for hedging and speculation, but regular citizens aren't looking to purchase dollars for investments, i.e. in order to generate a return on dollars-held.
Typically people use dollars as a medium of exchange and the way in which prices are commonly expressed. But anyone with sufficient dollars will want to use them to hold assets, whether they're a home, stocks, or simply low-risk treasury bonds, the idea is that dollars give access to these assets, but few are looking to simply buy and hold as many dollaras as they can in order to generate some kind of a return.
Bitcoin is also a technology in a way that the dollar isn't. The dollar is an idea, backed up by lots of different technologies both analog or digital. Those technologies don't necessarily have much to do with the price of the dollar. Nor do dollars have to have a certain price for them to be used, in a way that for many years, people expected individual bitcoins to be value (and thus naturally to go up in price as demand for these tokens went up) because the tokens would be used in various technological applications... That hasn't materialised, which makes the increasing value of the tokens somewhat non-sensical.
That's attention economy, isn't it? I imagine people who own a few USD aren't as interested in it compared to people who hold a lot of USD.
But there's no pretense around gold as having technological uses that require it to have a certain price, or that drive its price due to the technological demand for gold, in a way that people keep claiming for bitcoin tokens. Gold is used in tech applications, but it's not what is generally driving its price.
But insofar as you do want to look at gold's uses, it's pretty easy to link them to KPIs as they benefit end-users/consumers/companies in electronics, jewellery, space, medicine/dentistry.
The fact the responses so far are all comparing bitcoin to gold or dollars as a store of value, not as a medium of exchange, and not as a token or ledger that's useful for anything else (e.g. a notary function, or an open-source finance platform used by most tech companies to exchange value like the internet protocol or email protocol was for exchange of information), seems to me that crypto is not very interesting anymore for entrepreneurs, technologists, developers, users etc.
But rather, that it's just an asset class, one that's highly speculative and volatile vis-a-vis comparisons like gold. Interesting for investors, but not users. Just like gold.
* put differently: The internet protocol is driving just about every digital tech company. From Facebook to Netflix to Google to Apple. Bitcoin was aiming to be the digital money protocol, but it's not driving the financial infrastructure for any companies or end-users apart from those in a speculative sense.
And that's okay, if it's just a store of value / asset class like gold, but then it should loose that pretence.
I know I do, for a fairly large number of reasons, many of which revolve around "protecting value".
And also: the price has a tendency to go up long term, nice icing on the cake.
I don't personally, I don't use or own it anymore. Could you explain more about your uses?
> I know I do, for a fairly large number of reasons, many of which revolve around "protecting value".
Protecting value seems (without knowing more) to imply a circular reasoning: the price going up protects the value of the token, that's why it's useful. But that's a speculative reason, no different from the price of a tulip bulb going up, has value because it protects the value of a tulip bulb.
I'm almost certainly misreading you but I'm just speculating as you haven't expanded on the large number of reasons you mentioned.
Protecting value as in: other people can't take it from me short of physically torturing me. And that'd be assuming they even know I hold any.
Also: I can donate it to whomever / whatever cause I want, whenever I want without anyone, any law or any government being able to prevent me from doing that.
Also: I could be rich, I could be poor, no one knows, even folks in my close social network. My net worth is my business and mine only. Things only become visible when I actually decide to use some of it in the economy.
Bitcoin allows me to do all of the above. Very few other assets do. I consider this very "useful". The price appreciation, as I said, is just "nice to have".
Do banks really start to bother you if you have multi-millions in there or something?
You clearly have never been on the business end of law enforcement gone wrong.
I think looking at the total number of transactions on the Bitcoin blockchain doesn’t tell the full story anymore either. There are thousands of new cryptocurrencies and other solutions, each with transactional activity. Increased usage on Ethereum, lightning network, Solana, etc indirectly benefits BTC, since, BTC is the tried and tested protocol with arguably the most decentralisation and no figurehead.
I love Bitcoin the currency, but IMO a major barrier to adoption has been the community's reluctance to embrace "off chain" payment systems. Bitcoin's network is simply too slow and expensive for the majority of day to day transactions. And there are fundamental reasons for that which can't be fixed with a fork or an altcoin. It should be used as a settlement system, for moving between payment systems and for large transactions (e.g. Coinbase -> Hardware wallet, Hardware wallet -> Pay credit card bill, Coinbase <-> Binance, etc.).
Now what if Visa added BTC as a supported currency? That would be big for adoption. Consumers could pay their bills directly in BTC. Merchants could receive BTC from Visa. What if some entity (El Salvador?) issued BTC backed bank notes? BTC could be used just like cash. Basically, all criticism about the Bitcoin payment network would become moot. But the "on chain" system would still exist when you need it and the currency would still retain its important properties.
Unfortunately, the previous paragraph sounds like a nightmarish scenario to the average Bitcoiner.
A technology designed solely to burn fossil fuels has no place in society.
How is the price still going up after all the conversations we've had on this topic?
Or maybe because Bitcoin mining helps solve the intermittancy problem of renewable sources such as wind. Today there's a lot of supply at the times there's low demand, so it doesn't make economic sense to invest in enough wind power to make a difference when demand spikes. Intermittant Bitcoin mining provides a market for the surplus, then goes dark during demand spikes to match supply with demand.
Or maybe because the current monetary and financial system is so fantastically corrupt and broken that it's worth spending a fraction of one percent of the world's energy on an alternative.
Or maybe people use energy for all kinds of things that I think are stupid and wasteful, but I can't tell others how to invest their own resources.
This doesn't solve the problem. Miners are consuming renewable power that would otherwise displace coal/gas elsewhere on the grid.
The narrative that miners are somehow backstopping renewables just doesn't work.
This isn't necessarily true. Transporting electricity over distances is expensive. I've seen the pricing.
Coinmint, in upstate NY, has a direct feed from Moses-Saunders damn. The lines were originally built to feed the Alcoa Aluminum smelter that once existed there (and became a superfund site). There isn't anywhere else that the power company can send the power, without a huge investment.