[Finance] The cryptocurrency (Bitcoin etc) thread

[sydney]

I understand that those who speculated at the start have gained significantly.

However, a winning bet is still a bet.

There has been no real world service or goods provided, there is no utility attached to the coin.

I don’t know of anyone, even those who’ve profited, who would argue with that, regardless of how much they’ve made.

you could alternatively invest in a financial system that arranges for you to buy a property over 30 yrs and ends up charging you double the value of said property in interest..... this is why financial institutions are dead against it even though they are busy buying it which is why the value is increasing...wakey wakey.. there was a thread the other week about cash being discontinued , this is the start of it but the conventional institutions want to retain control ......with bitcoin this is not possible unless they buy it all.

 

[sydney]

Firstly apologies for not answering the question. I think it is missing the point.

Very little Bitcoin is traded. People are sitting on it;

• As insurance against the US government going bust. Strangely from a British persepctive many Americans would genuinely welcome this.
• or as protection against rampant inflation in country, some examples below.

When the bitcoin price is depressed, plenty of people will argue it is a poor store of value. If you have currency controls and rampant inflation the short term price variation is less of a problem. The same applies if you are hedging against a major economic disaster like your own government going bust. In the next two months the reward paid to Bitcoin miners will half. At a time when demand especially from Exchange Traded Funds is high.

You don't need to do anything about this, you can just sit on the sidelines and watch as the madness unfolds.

High Inflation Nations (Jan 2024)
Country	CPI inflation%
Venezuela	189.8
Zimbabwe	26.5
Argentina	211.4
Sudan	71.6
Turkey	64

hyperinflation ....wheres the value in that..?

 

[Mr deez]

So are you buying drugs?

in the real world striking up a meaningful conversation around cryptocurrency is almost a complete non-starter, hence I really value the insight I get from exchanging views here. Apologies if that comes across as arrogant, but the real world utility thing has been done to death from my perspective and I have nothing more to add on that subject.

No, I'm just using it as a speculative gamble like everyone else.

 

[Berty23]

I lost a bit on ETN (but I never sold so if that takes off then it will be a huge win) but made far more than I lost in other things. SwissBorg was my big win. That said I am pretty low stakes. Made a few grand and pulled quite a bit out to pay for golf membership and a new set of clubs. Still got a few grand but also bought some shares in SwissBorg hoping it goes mainstream.

I wrote on here some time ago that they are good for lazy people like me who want someone else to the work. They have created a few crypto bundles. I have some in each of the bundles.

They also have one called gold where the programme decides whether money best in gold or Bitcoin and adjusts accordingly. Out of curiosity i put in 109 quid in July last year and it is now worth 163.

Low stakes but of fun. I regularly take out some profit so will never be loaded from it but had some good nights out and rounds of golf.

 

[chickens]

Firstly apologies for not answering the question. I think it is missing the point.

Very little Bitcoin is traded. People are sitting on it;

• As insurance against the US government going bust. Strangely from a British persepctive many Americans would genuinely welcome this.
• or as protection against rampant inflation in country, some examples below.

When the bitcoin price is depressed, plenty of people will argue it is a poor store of value. If you have currency controls and rampant inflation the short term price variation is less of a problem. The same applies if you are hedging against a major economic disaster like your own government going bust. In the next two months the reward paid to Bitcoin miners will half. At a time when demand especially from Exchange Traded Funds is high.

You don't need to do anything about this, you can just sit on the sidelines and watch as the madness unfolds.

High Inflation Nations (Jan 2024)
Country	CPI inflation%
Venezuela	189.8
Zimbabwe	26.5
Argentina	211.4
Sudan	71.6
Turkey	64

Thank you for your answer, I like this argument more, this is effectively saying “Bitcoin is a store of value” rather like the people suckered in by ZeroHedge back in the day were always talking about how much gold bullion they had in their underground bunkers.

So, the thinking is, America keeps running a deficit, it keeps getting larger. Soon a political party (let’s face it, probably some nutty Republican offshoot) will simply refuse outright to keep bailing out the government by allowing debt limit increases, and when the government shuts down, that’s when everyone will start insisting on gold/bitcoin as payment for services.

My first question is: will the day ever come? It feels like a form of political suicide, which the right frequently posture with, but I’m sure I’m not alone in doubting their genuine resolve to do this. Would their electorate ever forgive them?

For those in developing countries prone to high/hyper inflation, I can see reasons for seeking a store of value outside their own currency. Would they not buy dollars? Or gold? Does the technology available to them allow them to securely store, access and convert or use their stored wealth?

Do those nations not generally reset their currencies anyway if the hyperinflation seems to have taken hold irreversibly?

Would America (should the dollar “fail”) not have an alternative ready to implement, why would they move to a Bitcoin standard, it’s already been established that it doesn’t work as a currency.

I remain unconvinced, but hope I’m not annoying you with my responses.

 

[Weststander]

Thank you for your answer, I like this argument more, this is effectively saying “Bitcoin is a store of value” rather like the people suckered in by ZeroHedge back in the day were always talking about how much gold bullion they had in their underground bunkers.

So, the thinking is, America keeps running a deficit, it keeps getting larger. Soon a political party (let’s face it, probably some nutty Republican offshoot) will simply refuse outright to keep bailing out the government by allowing debt limit increases, and when the government shuts down, that’s when everyone will start insisting on gold/bitcoin as payment for services.

My first question is: will the day ever come? It feels like a form of political suicide, which the right frequently posture with, but I’m sure I’m not alone in doubting their genuine resolve to do this. Would their electorate ever forgive them?

For those in developing countries prone to high/hyper inflation, I can see reasons for seeking a store of value outside their own currency. Would they not buy dollars? Or gold? Does the technology available to them allow them to securely store, access and convert or use their stored wealth?

Do those nations not generally reset their currencies anyway if the hyperinflation seems to have taken hold irreversibly?

Would America (should the dollar “fail”) not have an alternative ready to implement, why would they move to a Bitcoin standard, it’s already been established that it doesn’t work as a currency.

I remain unconvinced, but hope I’m not annoying you with my responses.

Gold is at a record price. All the doomsday armageddons, future pandemics, the next Wall Street crash, China collapsing, North Korea/Russia/Iran launching the bomb, are built in.

Investors should be careful. Those who invested in 1981, 1997 or 2013 spent many years repenting at leisure.

 

[CheeseRolls]

Thank you for your answer, I like this argument more, this is effectively saying “Bitcoin is a store of value” rather like the people suckered in by ZeroHedge back in the day were always talking about how much gold bullion they had in their underground bunkers.

So, the thinking is, America keeps running a deficit, it keeps getting larger. Soon a political party (let’s face it, probably some nutty Republican offshoot) will simply refuse outright to keep bailing out the government by allowing debt limit increases, and when the government shuts down, that’s when everyone will start insisting on gold/bitcoin as payment for services.

My first question is: will the day ever come? It feels like a form of political suicide, which the right frequently posture with, but I’m sure I’m not alone in doubting their genuine resolve to do this. Would their electorate ever forgive them?

For those in developing countries prone to high/hyper inflation, I can see reasons for seeking a store of value outside their own currency. Would they not buy dollars? Or gold? Does the technology available to them allow them to securely store, access and convert or use their stored wealth?

Do those nations not generally reset their currencies anyway if the hyperinflation seems to have taken hold irreversibly?

Would America (should the dollar “fail”) not have an alternative ready to implement, why would they move to a Bitcoin standard, it’s already been established that it doesn’t work as a currency.

I remain unconvinced, but hope I’m not annoying you with my responses.

Maybe 20 years ago, I worked with a super intelligent young American on a huge salary and we had a lengthy discussion around gun control. He let on he had a bolt hole in the wilderness in case of civil war, with a hidden stash of valuables and ammunition. I can't imagine it happening, but I also can't imagine what this would look like in the UK. We would probably stand in our doorways banging pots and pans or something.

Imagine you have 20k in drongos salted away for your retirement. If the government devalues the drongo, your drongos are now worth 200 drongos in terms of what you can buy.

Holding gold or dollars can protect your from this, but governments put currency controls in place to make this illegal, otherwise the currency will be worth even less. You can buy on the balck market, but if you get caught the punishment is the same whether it is local gangsters, the army or police, you will hand it all over at gun point.

Holding bitcoin is more discrete and secure in these circumstances the dumbest thug can recognise gold or dollars.
If the choice is between losing fingers and handing over the keys though, you may still end up with nothing.

 

[chickens]

you could alternatively invest in a financial system that arranges for you to buy a property over 30 yrs and ends up charging you double the value of said property in interest..... this is why financial institutions are dead against it even though they are busy buying it which is why the value is increasing...wakey wakey.. there was a thread the other week about cash being discontinued , this is the start of it but the conventional institutions want to retain control ......with bitcoin this is not possible unless they buy it all.

This ties into another reason that I distrust Bitcoin, the largely false trope that the regular financial system is looking on in envy and simultaneously desiring Bitcoin (and secretly, always secretly) investing in it.

Bitcoin has a market price and a finite supply. It could easily be bought. In the same way it’s technically possible to own all gold, if you purchase all existing stock of it and all viable mines.

There’s a reason we dropped off the gold standard, it eventually becomes a constraint.

The requirement for holding dollars or gold is a hand. The requirement for holding Bitcoin is either a cold wallet (technically advanced, using technology which will become obsolete over years and decades) or an online exchange, assuming both internet access, the good intentions of those controlling the unregulated exchange, and that despite undergoing updates the online exchange remains perfectly unhackable. The kind of mind that doesn’t trust gold unless it can open the home safe and look at it isn’t going to trust an online exchange.

Will the computers of 2050 still have USB connections or be able to interoperate with versions of Bluetooth or WiFi from the mid 2020s.

If I had something important stored on a 5.25” floppy disk I’d be f***ed if I needed to access it now.

There’s just so much “extra” required in terms of ownership that I doubt it’s viability for the target market, but I accept my fallibility, clearly there is a market for it, to my mind it relies entirely on the “greater fool” theory.

 

[Ding Dong !]

I mainly trade stock and shares but a couple of years ago I did add a very small amount ( £1k ) in to buying Bitcoin. Dropped to to a low of £600, held firm and now currently its worth £1797.

From a little research I have done, it appears 2025 is the year to see significant growth ? Happy to hold and see where it goes.

 

[chickens]

Maybe 20 years ago, I worked with a super intelligent young American on a huge salary and we had a lengthy discussion around gun control. He let on he had a bolt hole in the wilderness in case of civil war, with a hidden stash of valuables and ammunition. I can't imagine it happening, but I also can't imagine what this would look like in the UK. We would probably stand in our doorways banging pots and pans or something.

Imagine you have 20k in drongos salted away for your retirement. If the government devalues the drongo, your drongos are now worth 200 drongos in terms of what you can buy.

Holding gold or dollars can protect your from this, but governments put currency controls in place to make this illegal, otherwise the currency will be worth even less. You can buy on the balck market, but if you get caught the punishment is the same whether it is local gangsters, the army or police, you will hand it all over at gun point.

Holding bitcoin is more discrete and secure in these circumstances the dumbest thug can recognise gold or dollars.
If the choice is between losing fingers and handing over the keys though, you may still end up with nothing.

Off topic slightly, but America at present feels to me like a country actively looking for a civil war. I hope it doesn’t come to pass, but the level of heat/anger over there seems irreconcilable. I do fear that something incredibly stupid could be allowed to happen. Ah well, at least we won’t be to blame for the next one.

One to watch from a safe distance ideally.

 

[CheeseRolls]

This amply demonstrates why it is easy to make "money" in a favourable market, but it counts for nothing until you take the cash and pay the tax man!

 

[sydney]

This ties into another reason that I distrust Bitcoin, the largely false trope that the regular financial system is looking on in envy and simultaneously desiring Bitcoin (and secretly, always secretly) investing in it.

Bitcoin has a market price and a finite supply. It could easily be bought. In the same way it’s technically possible to own all gold, if you purchase all existing stock of it and all viable mines.

There’s a reason we dropped off the gold standard, it eventually becomes a constraint.

The requirement for holding dollars or gold is a hand. The requirement for holding Bitcoin is either a cold wallet (technically advanced, using technology which will become obsolete over years and decades) or an online exchange, assuming both internet access, the good intentions of those controlling the unregulated exchange, and that despite undergoing updates the online exchange remains perfectly unhackable. The kind of mind that doesn’t trust gold unless it can open the home safe and look at it isn’t going to trust an online exchange.

Will the computers of 2050 still have USB connections or be able to interoperate with versions of Bluetooth or WiFi from the mid 2020s.

If I had something important stored on a 5.25” floppy disk I’d be f***ed if I needed to access it now.

There’s just so much “extra” required in terms of ownership that I doubt it’s viability for the target market, but I accept my fallibility, clearly there is a market for it, to my mind it relies entirely on the “greater fool” theory.

at this point in time "the greater fool" is cleaning up.

 

[pb21]

This ties into another reason that I distrust Bitcoin, the largely false trope that the regular financial system is looking on in envy and simultaneously desiring Bitcoin (and secretly, always secretly) investing in it.

Bitcoin has a market price and a finite supply. It could easily be bought. In the same way it’s technically possible to own all gold, if you purchase all existing stock of it and all viable mines.

There’s a reason we dropped off the gold standard, it eventually becomes a constraint.

The requirement for holding dollars or gold is a hand. The requirement for holding Bitcoin is either a cold wallet (technically advanced, using technology which will become obsolete over years and decades) or an online exchange, assuming both internet access, the good intentions of those controlling the unregulated exchange, and that despite undergoing updates the online exchange remains perfectly unhackable. The kind of mind that doesn’t trust gold unless it can open the home safe and look at it isn’t going to trust an online exchange.

Will the computers of 2050 still have USB connections or be able to interoperate with versions of Bluetooth or WiFi from the mid 2020s.

If I had something important stored on a 5.25” floppy disk I’d be f***ed if I needed to access it now.

There’s just so much “extra” required in terms of ownership that I doubt it’s viability for the target market, but I accept my fallibility, clearly there is a market for it, to my mind it relies entirely on the “greater fool” theory.

There is a reason we dropped off the gold standard, and I'm not sure it was necessarily a sound reason, at least how it has transpired.

In the US (and other jurisdictions) you can now hold BTC via an ETF. Ostensibly, that's the reason for the recent price increase, both people buying expecting the price to go up and the actual ETFs buying substantial amounts of BTC, absolutely no secrecy about it, Blackrock no hold 132k BTC, or over $7,000,000,000. You could also buy MSTR stock to have exposure to BTC, who are also buying substantial amounts of BTC

A lot of exchanges are dodgy as feck, but not all, notably coinbase, which is financially regulated.

A cold wallet can be as technologically advanced as 48 letters written on a piece of paper, which can be held in your hand.

Hardware wallets wont be obsolete, they are just a method for storing private keys and signing transactions, which can readily change as tech changes; they are not akin to data on a floppy disk.

 

[chickens]

at this point in time "the greater fool" is cleaning up.

As @CheeseRolls pointed out above, you haven’t cleaned up until you’ve converted back to FIAT and paid the tax man. I wish you well with it, but on the evidence so far it’s not for me.

 

[chickens]

There is a reason we dropped off the gold standard, and I'm not sure it was necessarily a sound reason, at least how it has transpired.

In the US (and other jurisdictions) you can now hold BTC via an ETF. Ostensibly, that's the reason for the recent price increase, both people buying expecting the price to go up and the actual ETFs buying substantial amounts of BTC, absolutely no secrecy about it, Blackrock no hold 132k BTC, or over $7,000,000,000. You could also buy MSTR stock to have exposure to BTC, who are also buying substantial amounts of BTC

A lot of exchanges are dodgy as feck, but not all, notably coinbase, which is financially regulated.

A cold wallet can be as technologically advanced as 48 letters written on a piece of paper, which can be held in your hand.

Hardware wallets wont be obsolete, they are just a method for storing private keys and signing transactions, which can readily change as tech changes; they are not akin to data on a floppy disk.

Yup, I’ve noted the changes that have permitted holding as an ETF in the US recently, but all that says to me is that the grifters can reach a much larger market of greater fools, it hasn’t given BTC a purpose in life. It absolutely explains the “number goes up” of recent weeks though.

I suspect there will be more “number goes up” moments as more markets follow suit and come online. What happens when the world holds Bitcoin is what I’m asking, I suspect the answer isn’t “everyone is rich.”

P.s. I agree that hardware issues with cold wallets are surmountable, but they exist and require time and attention. As for having my wealth only accessible via a security key that I need to remember across multiple years, without using regularly. I wouldn’t, and I wouldn’t want to write it down anywhere. The frustration of having a fortune secreted that you can’t remember the password for, would be mortifying.

 

[Marshy]

institutions are buying bitcoin, so they can sell it to the masses in an ETF etc but not because it has any real utility or is a threat to the banking system

There are 20 or so coins/tokens that really do have value because of the utility they provide/will provide.
Those are the ones you should be interested in and looking at.
The big banks, financial institutions etc will use them, they have too, its well past the stage, adapt or die.

 

[beorhthelm]

or just buy Any Inu on the thesis 1) the ticker is AI, everyone is buying AI, and 2) it comes up second result when searching for AI crypto coins, 3) it's available cross chain.

they might do some functionality too. easy $1bn by summer.

 

[MJsGhost]

This pump in the market is very good news for the lazy HODLers like me. My portfolio value is up 96% in about 5 and a half months.

I haven't put any more money in for about 5 years and barely traded in the same period, but I was fairly active 2017-2019 (mostly bad decisions, but a couple of good ones). There will be a big chunk of tax to pay if I'm lucky enough to cash in at a good time, but I'm looking at a (pre-tax) profit into 6 figures if I did so today. The market will have to drop a VERY long way (90%) for me to make a loss.

I owe a debt of gratitude to a friend who is far more clued up than I am, who gave me the confidence to get in when I did and to ride it out for the long-term gains. I could have saved a lot of time & effort (and losses on individual coins) and had an even healthier asset value today if I had fully taken on board his advice, which was to ignore the alt coins.
He managed to buy a house mostly with crypto profits and now lives in the Alps, snowboarding most days while working remotely in IT (part-time) and taking a healthy rental income from his house in London. If he wasn't such a nice bloke it would be annoying.

 

[Nigella's Cream Pie]

As @CheeseRolls pointed out above, you haven’t cleaned up until you’ve converted back to FIAT and paid the tax man. I wish you well with it, but on the evidence so far it’s not for me.

You can buy bitcoin proxies in an ISA so no tax on gains. E.g. Microstrategy, Coinbase and plenty of miners like CleanSpark.

 

[Barnet Seagull]

I've never lost on crypto from my original stake but have had things in my portfolio that I've lost on and in some cases to quite a large degree % wise. Diversification is important to mitigate risk but it's a punt, whichever way you look at it.