Merged Bitcoin - Part 3

psionl0 said:
You are assuming that everybody has their holdings insured (with the same carrier) and that the carrier didn't calculate their premiums correctly.
Click to expand...

I don't think so especially. A large event can test the solvency of multiple carriers. And as far as risk calculations--the risk analysis can be perfect, and that doesn't mean the finances are set up correctly to reflect it. In the end there's a DIFFERENT risk analysis: for the shareholders of this hypothetical insurance carrier, whether the personal consequences of defaulting would be outweighed by the benefits of overpromising.
 
Last edited:
I am curious
Crypto is marked to market around 775 billion.
How much of this is fiat currency invested?
How should the purchase of electricity play into the figures?
 
https://english.elpais.com/internat...-in-value-is-deadly-blow-for-el-salvador.html

It is not known with any certainty how much Bukele has invested in bitcoin, but based on his own announcements on social media, it is estimated that losses could be in the range of $70 million, according to Ricardo Castaneda, an economist at the Central American Institute of Fiscal Studies (ICEFI). “This has a very high opportunity cost for a country like El Salvador, because it represents, for example, almost the entire budget of the Ministry of Agriculture in a country where half the population suffers from food insecurity,” said the economist in a telephone interview from San Salvador.
Click to expand...

From something I read earlier, a large driver in going bitcoin was that El Salvador gets a lot of its money from ex-pats sending money home, and Bitcoin allowed them to avoid fees on money transfers.

Sounds good, but there's no free lunch.
 
Puppycow said:
Apparently bitcoin is worth 25% of what it was a year ago. Should I buy the dip?


Haha.
Click to expand...
Everybody who has ever bought bitcoin has eventually seen a profit if they held on to them. Of course, you might be waiting years for a profit and you will see some wild swings in the mean time. Don't you already know this?

Puppycow said:
In my humble opinion the bitcoin has no inherent value.
Click to expand...
:confused: What is this "inherent value" that you speak of?

Puppycow said:
At least the US dollar has an army, a navy, an air force and nuclear weapons to back it up. Does bitcoin?
Click to expand...
How does that work? Do you tell a vendor that you will have his shop nuked if he doesn't accept USD?
 
psionl0 said:
Everybody who has ever bought bitcoin has eventually seen a profit if they held on to them.
Click to expand...
Everybody? How could you possibly know that? I'm pretty certain that's wrong, too because some people have lost their bitcoin wallets and others have had their bitcoin stolen. Just off the top of my head, there was Mt. Gox, and now FTX. Are you quite certain that everybody is still going to profit from this? Also, people don't live forever, so I'm guessing some people have died before making a profit. And it remains to be seen whether the current all-time high will ever be surpassed again.

Of course, you might be waiting years for a profit and you will see some wild swings in the mean time. Don't you already know this?
Click to expand...
And there's no guarantee that you will ever necessarily profit.

:confused: What is this "inherent value" that you speak of?

How does that work? Do you tell a vendor that you will have his shop nuked if he doesn't accept USD?
Click to expand...

No need. It's probably the most widely accepted currency in the world. It's the world's reserve currency as they say. It would probably take a book to explain it all in detail. But I don't think it's a coincidence that the world's reserve currency is issued by the world's largest military power.
 
pzkpfw said:
https://english.elpais.com/internat...-in-value-is-deadly-blow-for-el-salvador.html



From something I read earlier, a large driver in going bitcoin was that El Salvador gets a lot of its money from ex-pats sending money home, and Bitcoin allowed them to avoid fees on money transfers.

Sounds good, but there's no free lunch.
Click to expand...

Harsh. According to the story, the president of El Salvador, a poor country with per capita GDP of less than $5,000 invested a significant amount of public money in bitcoin, and that investment has lost 67% of its value. Not good.
 
Puppycow said:
Everybody?
Click to expand...
Yes. Everybody who has ever bought bitcoin has eventually seen a profit if they held on to them. I don't ignore that it is possible to lose your bitcoins but nobody who has held onto them long enough had to sell at a loss (and many made huge profits).

Puppycow said:
And there's no guarantee that you will ever necessarily profit.
Click to expand...
Yes, past performance is no indicator of future performance. But everybody who has ever said "the price will never recover" has ended up with egg on their face. This thread is littered with the corpses of failed prophets. Are you going to be one of them?

Puppycow said:
No need. It's probably the most widely accepted currency in the world. It's the world's reserve currency as they say. It would probably take a book to explain it all in detail. But I don't think it's a coincidence that the world's reserve currency is issued by the world's largest military power.
Click to expand...
Totally irrelevant. And your inability to explain the nexus between the US military might and the USD as a reserve currency is noted.
 
Puppycow said:
Apparently bitcoin is worth 25% of what it was a year ago. Should I buy the dip?

Haha.

In my humble opinion the bitcoin has no inherent value.
Click to expand...

In finance the term we use is intrinsic value, which is something I (used to) bring up with students when they talk about investing in crypto. Reading the stories about FTX and JBF it becomes clear that they were holding tons of the crypto that they had themselves created, just waiting for the price to go up. This is like the oldtime scam where someone would buy a mine for, say $50,000 and sell 5,000 shares to the general public for $10 a share and then turn around and sell another 50,000 shares to his relatives for a penny a share.

As was pointed out in the article, this allowed FTX to claim insane values on crypto that would have crashed to zero if they had ever tried to dump their tokens on the market.
 
psionl0 said:
Yes. Everybody who has ever bought bitcoin has eventually seen a profit if they held on to them. I don't ignore that it is possible to lose your bitcoins but nobody who has held onto them long enough had to sell at a loss (and many made huge profits).
Click to expand...

I'm sorry but this just doesn't make sense.

There are lots of people who have bought bitcoin that haven't made a profit, a cursory glance of the bitcoin price graph shows that.

If they have made a profit, that means that they have sold their bitcoin, and that means that they have not held on to those coins.

There is probably a very large cohort of people that bought high that are desperately waiting/hoping for the price to rise again so that they can sell.

I think you are trying to say that it possible that all the people who bought high may eventually make a profit if they hold on long enough...
 
picture.php


Placed here for reference
 
Brainster said:
In finance the term we use is intrinsic value, which is something I (used to) bring up with students when they talk about investing in crypto. Reading the stories about FTX and JBF it becomes clear that they were holding tons of the crypto that they had themselves created, just waiting for the price to go up. This is like the oldtime scam where someone would buy a mine for, say $50,000 and sell 5,000 shares to the general public for $10 a share and then turn around and sell another 50,000 shares to his relatives for a penny a share.

As was pointed out in the article, this allowed FTX to claim insane values on crypto that would have crashed to zero if they had ever tried to dump their tokens on the market.
Click to expand...
So, not bitcoin then.
 
psionl0 said:
Everybody who has ever bought bitcoin has eventually seen a profit if they held on to them.
Click to expand...
That isn't true. It cannot be true. There are a large number of Bitcoin holders who bought at around $60k and are therefore now under water. You could speculate that the price will go above $60k again one day, but who knows.

Furthermore, the only way to make a profit on Bitcoin is to find somebody who is willing to pay you more for your BTC than you paid. That supply of bigger fools is going to run out eventually (perhaps, this time, it already has). It's just not possible for everybody to make a profit on Bitcoin. Some people haver to make losses because there's no way to generate new value with Bitcoin.
 
Meanwhile the technical picture for crypto is bleak.
Wall Street is guaranteed to slump tomorrow, dragging crypto south. There is no floor visible to the trained eye.
 
jeremyp said:
That isn't true. It cannot be true. There are a large number of Bitcoin holders who bought at around $60k and are therefore now under water. You could speculate that the price will go above $60k again one day, but who knows.

Furthermore, the only way to make a profit on Bitcoin is to find somebody who is willing to pay you more for your BTC than you paid. That supply of bigger fools is going to run out eventually (perhaps, this time, it already has). It's just not possible for everybody to make a profit on Bitcoin. Some people haver to make losses because there's no way to generate new value with Bitcoin.
Click to expand...
This "bigger fool theory" is just crap. Bitcoin is traded on the open market just like any other commodity or collectable. Further more, unlike collectables (like used stamps), bitcoin has utility.

Sure lots of people have lost on bitcoin because they bought high then panicked when the price started falling. This is a common strategy for lots of amateur investors.
 
Puppycow said:
It says that they also named celebrities and athletes who endorsed FTX as co-defendants. That seems like a stretch. They were paid to promote the brand, I don't think they had any knowledge or control over the dirty dealings that were happening behind the scenes.
Click to expand...
I suspect the lawyers will play to the jury.
 
You must log in or register to reply here.

Back
Top Bottom