Bitcoins/Litecoins/Virtual Currencies
- Thread starter Tripamang
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Mist
Eeyore Enthusiast
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It's all going to zero. The product fundamentally makes no sense in a world where energy costs money.
Sanrith Descartes
Von Clippowicz
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Oh the day hasnt even begun yet. The biggest problem with crypto is the same problem with equities. Human beings are involved and human beings are deeply flawed and corrupt at their core. The waterfall is about to begin...
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Flobee
Vyemm Raider
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Been saying it for a while. Alts need to die a bloody death for the balance to be restored. There is Bitcoin and then there is everything else. A lot of people are going to learn this lesson the hard way it looks like. Bitcoin will survive, but the fractional reserve lending system built on top of it is probably going to explode so price gunna get hit hard.
Good time to think about Bitcoin the NETWORK rather than Bitcoin the asset. The network loses none of its value in a situation like this (USD price is irrelevant). If you think the network has value its a good time to buy. Censorship resistant monetary system that reaches finality within an hour (at least 10 minutes) and can be sent instantly to anywhere in the world essentially for free. Capped supply that cannot be debased and is independently verifiable with no trust relationships required. Thats what you're buying with Bitcoin... good time to wrap your head around that rather than "nUmBeR gO uP!"
Good time to think about Bitcoin the NETWORK rather than Bitcoin the asset. The network loses none of its value in a situation like this (USD price is irrelevant). If you think the network has value its a good time to buy. Censorship resistant monetary system that reaches finality within an hour (at least 10 minutes) and can be sent instantly to anywhere in the world essentially for free. Capped supply that cannot be debased and is independently verifiable with no trust relationships required. Thats what you're buying with Bitcoin... good time to wrap your head around that rather than "nUmBeR gO uP!"
Flobee
Vyemm Raider
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Then you're not looking at Bitcoin... you're looking at its exchange rate with USD. If you can't separate the network from the asset then you don't understand what you're looking at
Flobee
Vyemm Raider
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Thats true. There are two separate things going on here and I think people really have trouble grasping this.
1. BTC asset price - Amount of USD needed to purchase BTC. This is the same as exchange rate between USD/EURO, USD/CAD, USD/RUB etc. Almost 100% of attention is put here because number go up.
2. BTC the network - Ability to send money anywhere in the world instantly and for a very low cost. BTC has disrupted remittance payment providers already (Western Union), and is being adopted very quickly in the "global south" due to its ability to allow the "unbanked" to store and transfer value electronically without permission or third party involvement. Permissionless, censorship resistant monetary system with a static supply that doesn't allow for debasement and you hold/control the money yourself. It acts like gold bullion that you can store under your mattress but send anywhere in the world nearly instantly with next to no cost.
#2 is why BTC has value long term and will eventually displace most fiat currencies in the world. If you're in the US its easy to not see the value in #2 because we've historically had fairly reliable institutions with a relatively stable national currency. If you live in Argentina or basically anywhere in Africa though, then the value proposition of #2 is much higher.
Most of the work that I refer to when saying people don't understand Bitcoin is wrapping your head around why/how #2 above is an accurate description of the system. Currency markets aren't something we think about very often but if you put BTC asset price in that category you start to understand what is happening. BTC price reflects fiat debasement on a longer timescale... rising rate environment strengthens USD and weakens all other assets, obviously the exchange rate will change in that environment... USD can't go up forever though as we'll soon see.
EDIT: As for why Bitcoin is "not treated as money" please see: Gresham's law - Wikipedia
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Sing it along with me kids... As I believe a couple of you might remember me saying this a while back...
"That which once wicked..... Will get candlesticked...."
Although I should add that we're also in uncharted territory in terms of that indicator on the bottom (the Hash Ribbons). Previously it marked out pretty well when market capitulation was happening (which seems to now be in play) and would end with a "buy signal" with the lined re-crossed into positive territory. In the past every time it signaled a buy signal the previous major low became the floor and BTC NEVER went below that floor again. This is the first time BTC has went below the previous major low on the last capitulation cycle (which was around $28.6k). So this is scary new territory we're in now.
"That which once wicked..... Will get candlesticked...."
Although I should add that we're also in uncharted territory in terms of that indicator on the bottom (the Hash Ribbons). Previously it marked out pretty well when market capitulation was happening (which seems to now be in play) and would end with a "buy signal" with the lined re-crossed into positive territory. In the past every time it signaled a buy signal the previous major low became the floor and BTC NEVER went below that floor again. This is the first time BTC has went below the previous major low on the last capitulation cycle (which was around $28.6k). So this is scary new territory we're in now.
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I think Ukraine's inevitable capitulation to Russia will actually be a positive.
China asserting dominance over Taiwan will be the opposite.
I think the full 4 years of Biden are baked in, as is the anticipation of him facing a Republican congress the last 2 years of it which is perceived as neutering some of his ability to do further damage.
Mist
Eeyore Enthusiast
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None of these arguments make sense. A lack of faith in government should be pushing BTC up, not down, if you listen to crypto adherents.
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OK, let's tackle these individually..
Ukraine capitulating to Russia - Mostly neutral to the crypto markets, except that it has further eroded the all mighty petrodollar. Which could potentially set the stage for more crypto adoption in countries wanting to hedge against the US in general. I'll detail why that's not a big mover for crypto below...
China taking Tiawan - This is a big political and supply chain negative, further accellerating the reliance upon China for manufacturing, which makes the rest of the world more vulnerable. Not a huge mover for crypto markets in my opinion, but for the stock market it will be a negative due to ceding more control of the supply chain to China when it's thought that they're on the edge of a collapse as well fiscally.
Biden's 2 more years and what effect a Republican congress would have. This also is not crypto specific but market affecting, and that is the next topic.
As for your assertion that lack of faith in governments should be driving BTC up and it's not doing that. That is true right now. The point at which lack of faith in governments will truly be a positive driver for crypto in general (and BTC in particular) will be once a key shift takes place. That being that crypto is adopted as a "reserve" or "store of value" or "monetary system" enough to be the active means of transfer. That has simply not happened yet, and as such all crypto markets are still essentially just stock/commodity market adjacent speculative assets. The adherents who are doubling down on crypto are doing so mostly because they believe in a future where BTC is something you buy/sell things in, or it's like gold and a store of wealth while ETH is the transactional style crypto. Both of those things are still in their infancy. Simply put crypto hasn't bifurcated from the stock/commodity markets (yet).
Does that make more sense for you?
Mist
Eeyore Enthusiast
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lol at you trying to ELI5 me with talking points that have been made a billion times before that haven't held up for shit.
Arden
Blackwing Lair Raider
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Nobody with any sense has claimed that BTC (or crypto as a whole) has actually achieved the goal of being hedge against inflation or a refuge from a collapsing USD.
Sure, plenty of people believe it has the potential to do that, and ideally at some point it WILL do that, but thus far it has never crossed the line out of speculative asset territory. Maybe it will at some point, and maybe it won't, but the fact that it isn't there yet is plain as day for anyone who has watched it move in lock-step with the larger market.
If you want a Bull case for crypto you'd probably argue that a collapse of BOTH the trad market and crypto is needed for a realignment that sees BTC recovering far quicker than the trad market and reaching new highs as people lose faith in traditional economic paradigms. This makes a certain amount of sense to me: a collapse of both at the same time makes the ultimate transfer of assets much easier than if crypto prices (and thus the barrier of entry) stayed high while the trad market collapsed.
Anyway, that's the overly optimistic Bull argument, but who knows if that will ever come to pass. The first part is definitely coming true though- both markets are nosediving.
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reavor
I'm With HER ♀
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huh? Big financial institution putting money into BC now having to liquidate because Biden is destroying the US economy and by proxy the worlds is absolutely part of basic understanding of crypto. Crypto is about adoption by financial institutions that are affected by government regulations. Its simple