Banking on Bitcoin

[Reign Mack]

It's still a nascent asset class, even with the recent institutional adoption, and highly volatile. Huge gains and deep cuts. But like most investments, you just gotta have a long time horizon.

Still cracks me up how stock traders lose their minds over single digit percentage swings, while crypto traders can brush off 30% swings because it's just another Tuesday in crypto.

yep we call single digit percentage swings “stable coins”

Even the meme stocks like AMC and GameStop have not even come close the swings we see weekly.

 

[Rooscooter]

Yeah I think eth will eventually flip bitcoin it already had more trading volume do the than btc for the first time back in June, I’m not so sure about the move over to proof of stake as it could give centralised exchanges a bit too much power over it but interesting times ahead.

Definitely interesting times ahead. For me, at this point, the risk/reward is no longer in an open market.... it's being pushed to a regulated market which, depending on each jurisdiction, will effect it differently.

We saw a similar thing happen in the US with REIT's in the late 90's through 2007 or so. An asset class that acted in a market somewhat disconnected to the equity markets. You used to see very low volatility and high return based on a properties income. Now they are laden with fees (some seen but most not) and the REITS themselves are now under pressure to create return other ways and as such they went from a .4 correlation to the S&P to a .88. I see similar things with the surviving cryptos in the future.

 

[Reign Mack]

Definitely interesting times ahead. For me, at this point, the risk/reward is no longer in an open market.... it's being pushed to a regulated market which, depending on each jurisdiction, will effect it differently.

We saw a similar thing happen in the US with REIT's in the late 90's through 2007 or so. An asset class that acted in a market somewhat disconnected to the equity markets. You used to see very low volatility and high return based on a properties income. Now they are laden with fees (some seen but most not) and the REITS themselves are now under pressure to create return other ways and as such they went from a .4 correlation to the S&P to a .88. I see similar things with the surviving cryptos in the future.

I fail to see how Defi will be regulated.
I personally keep very little and I mean like 2% of my crypto on any sort centralised exchange, if you don't have the keys to your wallets where you coin is stored then its not your wallets and not your crypto its IOU from a company, no keys no cheese is my moto.

glad you did well on bitcoin but I think it was an insane move to sell it all off in march 2020 just a couple of months before its 4 year halving, halving has always been followed by a bullrun btc would have barely been 9k in march 2020 even now its sitting at a low of 41k and topped 61k in april, I know its hard to tell where the top or bottom is, but before a halving is never the time to sell. it BTC doesnt hit 100k before we go into the next bear market it will certainly do it after the next halving in 2024.

 

[Rooscooter]

I fail to see how Defi will be regulated.
I personally keep very little and I mean like 2% of my crypto on any sort centralised exchange, if you don't have the keys to your wallets where you coin is stored then its not your wallets and not your crypto its IOU from a company, no keys no cheese is my moto.

glad you did well on bitcoin but I think it was an insane move to sell it all off in march 2020 just a couple of months before its 4 year halving, halving has always been followed by a bullrun btc would have barely been 9k in march 2020 even now its sitting at a low of 41k and topped 61k in april, I know its hard to tell where the top or bottom is, but before a halving is never the time to sell. it BTC doesnt hit 100k before we go into the next bear market it will certainly do it after the next halving in 2024.

I move money from asset to asset. I invested into property in crisis in March of last year. Have you seen what property is doing in PHX since August of last year? Mining for a couple years for fun.... adding to it when it was around $200 and putting a kid through college and getting a rental property is more than I could have hoped for. I'm no "trader" of anything asset wise. Typically I'm a contrarian. For example last year I bought into the MLP and Energy stock carnage and have done OK with that as well.

As for regulation. Everyone in Crypto keeps thinking about where you have it stashed..... not what you can do with it. I think it will be hard to use for exchange into regulated currency or goods/services based on said regulated currencies and I do believe that central banks (already working on it) create their own that will be easy to use and by default keep the unregulated stuff as a marginal asset class. That's just my take.... who really knows?

 

[Chris]

I’m still holding on to all my Ether. Maybe one day I’ll get lucky and it will surpass Bitcoin.

 

[Reign Mack]

I’m still holding on to all my Ether. Maybe one day I’ll get lucky and it will surpass Bitcoin.

It won’t surpass bitcoin in actual dollar value if that is what you are waiting for but it will in terms of trading value and use. When eth 2.0 comes out it’s going to become deflationary as some eth will be burned during every transaction when it moves over to proof of stake.

 

[Reign Mack]

I move money from asset to asset. I invested into property in crisis in March of last year. Have you seen what property is doing in PHX since August of last year? Mining for a couple years for fun.... adding to it when it was around $200 and putting a kid through college and getting a rental property is more than I could have hoped for. I'm no "trader" of anything asset wise. Typically I'm a contrarian. For example last year I bought into the MLP and Energy stock carnage and have done OK with that as well.

As for regulation. Everyone in Crypto keeps thinking about where you have it stashed..... not what you can do with it. I think it will be hard to use for exchange into regulated currency or goods/services based on said regulated currencies and I do believe that central banks (already working on it) create their own that will be easy to use and by default keep the unregulated stuff as a marginal asset class. That's just my take.... who really knows?

Where you keep you coin "stashed" and which platforms you use are directly related to what you can do with it, it’s literally THE most important thing, in terms of use case, scalability, control, security, privacy, governance, speed of transaction and fees, even if you are only interested in converting back to fiat to spend, the difference in gas fees and speed are astronomical, gas fees range from fraction of pennies to hundreds or even thousands of dollars depending on how much you transfer and when.

The whole concept of trying to regulate Defi shows a huge lack of understanding on how blockchain and smart contracts work on the governments behalf.

JPM Morgan have been trying to push their JPM coin for years claiming that btc would fail now they have been dragged kicking and screaming into offering btc to their customer because their customers demanded it or would take they business else were. The best world governments can do is offer stable coins and banks can offer ease of use to people who don't want to learn to do anything for themselves.

110million worth of bitcoin shorts were liquidated within 10 minutes last weekend when the price rose. This is going to keep happening to companies trying to offer financial services in crypto which out perform hodL'ing.

 

[Rooscooter]

Where you keep you coin "stashed" and which platforms you use are directly related to what you can do with it, it’s literally THE most important thing, in terms of use case, scalability, control, security, privacy, governance, speed of transaction and fees, even if you are only interested in converting back to fiat to spend, the difference in gas fees and speed are astronomical, gas fees range from fraction of pennies to hundreds or even thousands of dollars depending on how much you transfer and when.

The whole concept of trying to regulate Defi shows a huge lack of understanding on how blockchain and smart contracts work on the governments behalf.

JPM Morgan have been trying to push their JPM coin for years claiming that btc would fail now they have been dragged kicking and screaming into offering btc to their customer because their customers demanded it or would take they business else were. The best world governments can do is offer stable coins and banks can offer ease of use to people who don't want to learn to do anything for themselves.

110million worth of bitcoin shorts were liquidated within 10 minutes last weekend when the price rose. This is going to keep happening to companies trying to offer financial services in crypto which out perform hodL'ing.

I'm not as optimistic as you in governments keeping it an open currency alternative. My guess is that over the next 10 years we see governments moving to digital currency and then controlling "exchange" of said digital currency. Then It will not truly matter where you have your crypto because the allowed to be used in commerce may or may not allow exchange with it.

Goldman has already been testing such a currency here in the US.

Trust me, I hope it survives and actually becomes THE form of currency in the world. It would remove a lot of control from the corruption of governments everywhere. But at the same time, I don't underestimate the corruption of governments to stop it either.

 

[Rooscooter]

a good, albeit long and detailed, primer on Ethereum.

https://www.zerohedge.com/crypto/short-and-long-term-bull-cases-ethereum

 

[Chris]

It won’t surpass bitcoin in actual dollar value if that is what you are waiting for but it will in terms of trading value and use. When eth 2.0 comes out it’s going to become deflationary as some eth will be burned during every transaction when it moves over to proof of stake.

I’m just hoping I make some money on it

 

[srimes]

I have some GBTC in my investment accounts. Have done well so far and expect it to do very well going forward.
Will get actual bitcoin at some point I suppose. GBTC is a more convenient way to dip a toe in

 

[Reign Mack]

I’m just hoping I make some money on it

You will

 

[rasband]

You will

Unless you’re watching it daily. People get emotional with “investing” (or speculating).

I’d recommend using specialized order types, things like a trailing stop to either enter in after an upswing or get out after a correction.

 

[Reign Mack]

I'm not as optimistic as you in governments keeping it an open currency alternative. My guess is that over the next 10 years we see governments moving to digital currency and then controlling "exchange" of said digital currency. Then It will not truly matter where you have your crypto because the allowed to be used in commerce may or may not allow exchange with it.

Goldman has already been testing such a currency here in the US.

Trust me, I hope it survives and actually becomes THE form of currency in the world. It would remove a lot of control from the corruption of governments everywhere. But at the same time, I don't underestimate the corruption of governments to stop it either.

You have entirely lost me there, there is literally nothing they can do to stop peer to peer exchanges, anymore than they can stop you from walking into your yard picking up a stone and giving it to a member of your family. Every government that has banned bitcoin has simply pushed up the value of bitcoin within their borders and just admitted that they own fiat currency is worthless.
Goldmans and Jp Morgans shitcoins are irrelevant.
Attempts to control some sort of centralised exchange when there isnt one is just a serious lack of understand on how the technology works.

 

[Reign Mack]

Unless you’re watching it daily. People get emotional with “investing” (or speculating).

I’d recommend using specialized order types, things like a trailing stop to either enter in after an upswing or get out after a correction.

But He’s not watching it daily and he brought into eth years ago.
You would have to be moron to lose money on eth if you have held it for more than a year, with or without the use of financial instruments.

 

[Winks42]

Well just got the coinbase debit card. Purchased my first crypto using coinbase a couple years ago but since then Ive moved my crypto to other wallets. There’s 1% back in bitcoin and 4% back in stellar and im pretty sure some store specific cash back rewards too IIRC but i don’t remember exactly.

its worth a shot to try it out. Easy to manage on their app and no fees other than if you pull directly from any coins. We’ll see how it goes.

 

[Rooscooter]

You have entirely lost me there, there is literally nothing they can do to stop peer to peer exchanges, anymore than they can stop you from walking into your yard picking up a stone and giving it to a member of your family. Every government that has banned bitcoin has simply pushed up the value of bitcoin within their borders and just admitted that they own fiat currency is worthless.
Goldmans and Jp Morgans shitcoins are irrelevant.
Attempts to control some sort of centralised exchange when there isnt one is just a serious lack of understand on how the technology works.

Peer to peer only works if you can buy what you want from the peer. if you don't think they can control commerce then you don't understand how taxation and regulation work.

The idea that governments can't control what you use crypto for is completely separate of Blockchain. I fully understand Blockchain but that's not the point. So what if you can store it and keep it away from the government? To have real value you have to be able to buy consumer goods with it. Governments can control that at the regulatory level.

Now I hope they don't.... I love the idea of a currency outside that is above the corruptive powers of government but I'm not deluding myself into thinking that if crypto's become problematic to the Fiat currencies that are controlled by quasi-governmental groups that they won't find a way to make it nearly useless in a way that has a wide value appeal to the average person.... which is the final determinant of a value currency.

 

[Reign Mack]

Peer to peer only works if you can buy what you want from the peer. if you don't think they can control commerce then you don't understand how taxation and regulation work.

The idea that governments can't control what you use crypto for is completely separate of Blockchain. I fully understand Blockchain but that's not the point. So what if you can store it and keep it away from the government? To have real value you have to be able to buy consumer goods with it. Governments can control that at the regulatory level.

Now I hope they don't.... I love the idea of a currency outside that is above the corruptive powers of government but I'm not deluding myself into thinking that if crypto's become problematic to the Fiat currencies that are controlled by quasi-governmental groups that they won't find a way to make it nearly useless in a way that has a wide value appeal to the average person.... which is the final determinant of a value currency.

The government cant control a smart contract or an exchange between two anonymous individuals, that's like believing they could stop me from taking this sheet of used tissue off my desk and handing it to the person behind sitting behind me. How much you get taxed is how much you are willing to tell them you have, its voluntary. I have already purchased consumer goods with crypto and done private exchanges in person, its nuts to believe that individuals cant buy or selll stuff without having the government help the process. .

 

[Rooscooter]

The government cant control a smart contract or an exchange between two anonymous individuals, that's like believing they could stop me from taking this sheet of used tissue off my desk and handing it to the person behind sitting behind me. How much you get taxed is how much you are willing to tell them you have, its voluntary. I have already purchased consumer goods with crypto and done private exchanges in person, its nuts to believe that individuals cant buy or selll stuff without having the government help the process. .

I didn’t say between individuals did I? The wide acceptance of crypto will be tied to consumer transactions with retailers…which can easily be controlled by government. When was the last time you traded a pig for a case of beer At a store? Taxation laws and regulations prohibit that as do they prohibit the use of gold in retail transactions . Peer to peer doesn’t have a wide acceptance nor is it a way to do typical commerce.

I’m pro crypto, but as an investment it’s appreciation potential is tied to scarcity and demand. Without the ability to use it as a typical cash substitute the demand will be limited In my opinion. its a speculative investment at the moment however as “Main Street” gets involved it will be valued as a more typical investment in All likelihood.

 

[Reign Mack]

Crypto itself doesn’t have a wide acceptance, Defi has boomed over the last two years and there is nothing the government can do to stop people from using it despite there attempts, sure there will be people who will always run the arms of middle men and big brother to do things for them, but there is a growing number of us who know they are irrelevant and we will continue to use these system with or without their permission this is happening worldwide.