Per reports, CZ (CEO binance) is going to help Musk with web3 tech for Twitter. There are a few other domain experts joining too.
Twitter being primary SM platform for global who-is-who, this will have positive impact on web3/crypto adoption.
$DOGECOIN has more than doubled in last one week.
The stolen Bitcoin was recovered from hackers. Not sure how.
Out of 850,000 BTC, 140000 was recovered.
FTX and Alameda Research Bankruptcy pushes Crypto Markets to new lows. This Black Swan event has created panic among the users of centralized crypto exchanges, as they seem to be mixing up customer funds with their other liabilities. Exchanges have released proof of reserves, but can we trust them? Only time will answer.
How it started…
Binance rejected the deal and things took a turn for the worse.
Why is Bitcoin rallying you ask?
It mirrors the NASDAQ for the most part except in crisis situations like FTX/3AC/Celsius Bankruptcies and Terra-Luna implosion which coincided with Jerome Powell’s rate hike cycle. Powell’s soft stance in 2023 has allayed the nerves of investors of risk on/growth assets. Inflation ultimately is going to be final arbiter of Fed’s next move.
Unlike Bitcoin though, Altcoins (except Ethereum) have been declared as Stocks by SEC, and won’t have a easy year. A lot will hinge on Ripple vs SEC outcome.
Regulatory action on Major Exchanges/ Stablecoins remains a key risk. Tether is under DOJ investigation and Binance is being (sort off) cut off by its banking partner.
Also there’s reports of Russia evading sanctions and North Korea funding it’s nuclear programme using crypto does not paint the industry in good light.
And there’s this
Bitcoin is back to all time high. Four times it has crashed over 80%, yet every four years it makes another all time high.
Thankfully there is no social media trend of laser eyes, nor anybody calling me to ask about some doge or shiba! Those are still down over 80% though.
Every bull run will attract people hoping to make some quick gains. They will bid up the price aggressively, attracting more like them raising the price even further. Eventually too much leverage will build up causing yet another Bitcoin crash!
But every cycle, more people will take note of its resilience and long term gains. It is volatile, yet it is one of least risky asset as there is very low chance of permanent loss or even a loss lasting more than four years. More such people will start accumulating bitcoin using their income every now and then. Bitcoin being a finite asset with more people accumulating creates strong support for the price and ensures the eventual bottom is still many times higher than the previous bear market lows.
Bitcoin’s value comes from people using it to save their earnings. They use it because of its resilience and returns over long term while the price rise is then driven by more people using it for savings. This circularity is also a characteristic of ponzi schemes but what differentiates Bitcoin is its truly limited supply. There is no authority in control of Bitcoin, nor is it easy or profitable to take control by design, so it is now almost impossible to change its supply. That is also why 99% crypto don’t last beyond one bull run because almost all of them still have someone in control. Thus they meet all the characteristics of ponzi. Interestingly, fiat also has a central authority which can adjust its supply as they see fit. Compared to Bitcoin, Dollar is more like a ponzi than a store of value.
Hi. Can you explain why authorities in high inflation economies like Turkey/Venezuela/Zimbabwe/Argentina are not able to stop people from converting their fiat to BTC? Can’t you repress it on the internet like China does?
Decentralization protects Bitcoin from censorship, similar to how it does for digital media distribution via torrents. In torrent terminology, Bitcoin database has over 20,000 peers worldwide, many behind Tor or VPN making it difficult to identify their location from IP address, and the number of peers are growing every year.
People overestimate government ability to repress internet. It is not possible to truly ban any site on internet unless you are willing to ban the internet itself like North Korea. It’s just that most people don’t find it worth the effort to sidestep ban using a VPN. Like when India banned Tiktok, most people simply shifted to Instagram instead of going an extra mile to access Tiktok. Similarly, most people in China don’t care much about accessing foreign news portal or social media to go that extra mile.
High inflation countries like Venezuela, Argentina, Nigeria aren’t concerned about Bitcoin. That’s because of their high level of poverty. A person who must always be prepared for any financial emergency which may require all their savings cannot afford to invest in an asset with 80% drawdown, even if it is short term. That’s why the people in these countries are pouring their money into dollars, and authorities are more concerned about illegal forex exchanges and stablecoins like Tether (USDT) than Bitcoin. The countries which have surrendered to dollarization like El Salvador or Argentina may even prefer Bitcoin because what they truly hate are US capitalists interfering in their country’s politics using dollars. Unfortunately you need a certain amount of affluence to afford volatility, so even if their governments promote Bitcoin, there will be very little adoption for now.
US, China, Europe, India - countries which hold the reserve currency status or hope to achieve it are the ones that see Bitcoin as a threat. But there are internal debates because nobody wants to be left behind in terms of technology. That is why Banks in US are harassing crypto investors on one hand while launching Bitcoin ETF on the other hand which makes it very easy for stock investors to gain exposure to Bitcoin. Similarly, while China has banned Bitcoin in mainland, it is promoting it in Hong Kong. The longer they keep debating, the stronger the voices of opposition will become.
But can’t a government control it’s own currency leaving its banks? For example how do you buy bitcoin in exchange of yuan if you are not allowed to pay yuan using any of the digital payment instruments. Won’t the government just tell banks to not allow any payments outside a trusted set of networks. I am just trying to understand why can this not be controlled by a government
It is volatile, yet it is one of least risky asset as there is very low chance of permanent loss or even a loss lasting more than four years
Is there any reason why there is a very low chance of permanent loss or loss lasting more than 4 years? Any fundamental reason
? Bitcoin doesn’t have any intrinsic value, so I dont see why it can’t go down to zero or what if governments makes it illegal to own bitcoin - isn’t it all over? or even a high tax rate? It is easy to use VPN and access these but its another thing when you get an Income Tax Notice.
Seriously? Blockchain tech has been around since the 80s, although the buzzword gained prominence only during crypto mania. There’s certainly merit in the tech, but it can move on by itself without Bitcoin. Mixing money with tech only leads to perverted incentives, lack of innovation and stagnation. No wonder Bitcoin (+lightning) still feels like payphone, so much transactional friction. Still feels like a liquidity fueled mania that I’d personally stay out of.
But sincere Congratulations to all those stayed put on their Bitcoin bets, y’all deserve it.
Disc: Own an NFT and few shitcoins, can’t cash out due to liquidity / tax reasons. Sold out of 98% crypto pf in March 2023
Are you asking if forex exchanges can be banned? If someone can access digital dollars or USDT, they can buy/sell bitcoin on any crypto exchanges.
So far no country has ever saved their depreciating currency by banning forex exchanges. It only becomes more difficult with USDT in the mix. Currently, Nigerian government is trying to do the same to save Naira. The only thing such bans do is to create black economy and corruption. Moreover our currency value depends on our dollar reserves, and if those dollars themselves are depreciating against bitcoin, our currency will still depreciate even if we manage to somehow stop all private forex exchanges.
It is also possible to cover many private expenses using bitcoin and without using any exchange in many countries including India. I am not sure if it is legally possible to stop people from trading goods and services for bitcoin without encroaching upon individual rights.
Besides, is there even a reason for the government to oppose bitcoin to that extent?
Is there any reason why there is a very low chance of permanent loss or loss lasting more than 4 years? Any fundamental reason
?
I have explained my reasoning in the first post. Value is subjective, you may disagree with me on bitcoin’s value which is why market trades happen. The best way of resolving disagreement in valuations is by producing results. In the case of Bitcoin, the results are in front of you. Bubbles don’t fall by 80% and keep coming back. Not once or twice, but four times, with each low significantly higher than the previous one?
Bitcoin doesn’t have any intrinsic value, so I dont see why it can’t go down to zero or what if governments makes it illegal to own bitcoin - isn’t it all over?
You are expressing two incompatible viewpoints simultaneously. If it is worthless then why is there a need for governments to come together and collaborate to make it illegal? Aren’t you underestimating the time, effort and legal procedures required to do so, not to mention the manpower that needs to be deployed worldwide to implement the ban? Isn’t the core belief of this forum that over long term market price tends towards the value of the asset?
Seriously? Blockchain tech has been around since the 80s, although the buzzword gained prominence only during crypto mania. There’s certainly merit in the tech, but it can move on by itself without Bitcoin.
Yes, encryption, chaining, merkle trees, etc have been there since the 80’s. Proof of Work was proposed by Adam Back, published in 2002, which has been referenced by Satoshi. Satoshi’s genius lies in putting all pieces together to create a decentralized, censorship resistant money. But Bitcoin needs a certain level of internet penetration, as well as improvements in network speed, storage, and computation. So even if somebody invented Bitcoin in the 80’s, a practical implementation would only be possible in the 2000’s. Its similar to how neural networks were proposed in 1975, but without all that data and computation power, the present ML applications would not be possible earlier.
Mixing money with tech only leads to perverted incentives, lack of innovation and stagnation.
Banning experimentation in the market, fixing price through decree instead of supply demand dynamics in the market is what leads to lack of innovation and stagnation. Development of human civilization to the current point was only possible through capitalism and at the core of capitalism is a common unit of account which is money. But if the value of money is given by fiat and not through market dynamics, then is it still capitalism? Ergo, free money is probably the greatest invention of all time.
I only see price rising. Where is the mania? Surely this thread won’t be so dead if there was a mania.
I am rooting for Bitcoin due to my libertarian views, but couldn’t build any meaningful allocation to bitcoin. Certain government remarks back in 2017-18 created a strong negative perception of Bitcoin in India. The result, as you can see, there is no reliable and trustworthy means of getting bitcoin exposure in India. The biggest exchanges like WazirX and Zebpay moved abroad, including founders, core employees, and their families. They can very easily run away with customer funds, As such, it is risky to do high value transactions with them. Same with peer to peer trading. I am waiting for perceptions to change and more clean and transparent means being available. No doubt change will come. We cannot afford to keep falling behind like this when the rest of the world is moving ahead. Hopefully this won’t be a repeat of history where the world moved to the gold standard while India, China remained stuck on the silver standard.
Recently I came to know how easy it has become to take exposure in US markets from India by using IndMoney. Apparently Microstrategy is also listed on it. Taking bitcoin exposure by buying a US stock through SEBI registered Bangalore based startup which is being used by many retail investors in India - it couldn’t get any cleaner than that and I don’t think there is any better way of building meaningful exposure. Unfortunately, I didn’t know about it a year earlier. Now the stock which used to trade at discount to its bitcoin holdings during bear market is trading at over 50% premium. So I plan to wait until the next bitcoin crash.
Better than Microstrategy would be Bitcoin Spot ETF once it’s made available (isn’t it already?)
Brilliant point
I have always been confused and equally surprised by how the cryptocurrency prices pick up every time when everyone has written them off.
Still I have tried to stay away from meddling with them, simply because I don’t understand them.
Can anyone help me understand the cash flows of the cryptocurrencies? For example stocks are representative of the part of the cash flows the underlying business is making and the portion that is mine is given by the number of stocks I have.
Do cryptocurrencies have any underlying cash flows? Are there any expectations of underlying cash flows developing and if so, can you list a few so that i can do my research on it.
Yes, it isn’t listed yet on their website.
Can’t speak about cryptocurrencies in general because I don’t understand them either.
Bitcoin is cash itself. Just as rupee depreciates against dollar, dollar is depreciating against bitcoin because of its superior properties. Its supply is fixed and transactions cannot be censored. Just as people maximizing dollar net worth will evaluate investments in terms of dollars - that is whether a certain investment will increase their net worth when measured in dollars - there is a growing community of people maximizing their bitcoin net worth, who will evaluate investments from the perspective of increasing the amount of bitcoin they have. A fixed supply coupled with the growth of earning power of Bitcoin community itself creates a positive trend for purchasing power of bitcoin. The rest are forex traders and they are the main users of crypto exchanges. They could be from either community and are here to take advantage of this rising trend. They provide liquidity and seek to benefit by trading price volatility.
Looking for help: I am looking for funds/hedge funds/investors that primarily invest in crypto – I’ll be very grateful if you can direct me/put me in touch. Many thanks!
here’s one - https://www.brownrice.in/
They are based out of Bangalore. They pitched me recently. I am still evaluating.
which broker in India is safe and charges less brokerage? can anyone suggest
