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If you look at the buy/sell ratios, BTC is 60-70% buy, regardless of the price. I think the fluctuations are due to whales manipulating it. Even when it was $50k the buy ratio was still like 68%. I'm no trader, but continued buy demand only means one thing doesn't it? Higher price. 

At Dec 31 I reckon we'll see 65k USD/BTC (+/- 50%😂)

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  • 3 weeks later...
I hope it does too!
To your points, the recent selloffs are part of the volatility inherent (at least for now) in Bitcoin, multiple drops of 30% during a bull market are not uncommon. Earlier in the year same thing 40k to 28k, last March it dropped 40% to approx 3k and many thought it had peaked.
Turkey banning it isn't all that concerning, Nigeria did the same thing and usage went up quite a bit after. Countries that ban it usually have a very weak currency and don't want the competition imo. More generally though, it's very difficult to ban an open source decentralized network. 
Biden trying to control/tax it, they'll have the same problem re: open source networks. They might tax it heavily but I don't think it will end up being any different that any other tax you pay on a capital gain. Even still, saying he wants to do it and getting it passed are quite different. If taxes were high and you didn't want to sell you could always short it while holding the asset, effectively being market neutral, and hoping that the law changed. You can even earn interest buy loaning your Bitcoin while doing so. (although that has other risks!)
All this is to say I have no idea where it's going, it might have peaked already and we hang around 30k-50k for a while. But I think it's unlikely and there's still lots of room to go up from here. 

....or a crash. Dropping 32 percent in the last 24hrs and 21percent in the last hour. At 37k cnd now. Ouch


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1 hour ago, Kaptain Karl said:

Wish I would have converted mine into USDT!

Not sure if you are joking but Tether is a huge scam that will eventually pull of all crypto down with it.

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1 hour ago, havanaclub said:


....or a crash. Dropping 32 percent in the last 24hrs and 21percent in the last hour. At 37k cnd now. Ouch


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Kick a guy when he's down haha ;)

I did say we might have peaked, but really still think the bull market for Bitcoin is gonna keep going. It had a couple of 40%+ drops in 2017 before resuming, so there's a precedent for it. Don't know though! 

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If it ever gets back to a couple of weeks ago, a "buy now" of some could be worth the gamble.

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27 minutes ago, amberleaf said:

Not sure if you are joking but Tether is a huge scam that will eventually pull of all crypto down with it.

Temporarily, not a long term. Pretty logical to think that crypto’s were gonna tank after the huge spike 

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5 minutes ago, Fezztone said:

If I don't buy it, it will go up dramatically. If I buy it, it will go down dramatically. It's a proven formula I have mastered.

I thought I was the only one that mastered that formula.  I hope we are a rare bunch.

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Kick a guy when he's down haha
I did say we might have peaked, but really still think the bull market for Bitcoin is gonna keep going. It had a couple of 40%+ drops in 2017 before resuming, so there's a precedent for it. Don't know though! 

Just kidding around. I missed buying more at the big dip. But you were right. Many 30 plus dips only to recover.


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22 minutes ago, RichG-LI-NY said:

What’s everyone’s thoughts re. Ethereum during this current dip and longer term. 

I really dont think any one "coin" will matter in the long run. Its the technology it self thats important. "which coin" is like asking "which currency" to trade. If you know what you're doing should be able to make money trading any number of them. USD may be roughly equivalent to BTC, Eth would be maybe the Euro? There is no "magic" coin.

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10 hours ago, havanaclub said:


Just kidding around. I missed buying more at the big dip. But you were right. Many 30 plus dips only to recover.


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Oh it's all good I wasn't bothered, I enjoy the discussion. I didn't buy more either. 

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No.  I was quoting an old movie:  The Graduate.  

(Showing my age, I guess. Just the first thing that came to mind after skimming through all the bitcoin stuff :)

More on point, rec'd this brief analysis from the FT this morning, thought you all might appreciate it too:

FINANCIAL TIMES
Unhedged: Robert Armstrong dissects the most important market trends and discusses how Wall Street’s best minds respond to them
https%3A%2F%2Fip-ep-ftcom-manual.s3.eu-west-1.amazonaws.com%2F0af52ba7-42bb-4f39-bd19-d0d4d86f6fdf?source=ip-ep-eme-api Robert Armstrong, US Finance Editor 
May 20, 2021

Welcome back to Unhedged. If you have thoughts (and because today’s topic is bitcoin, many of you will), email me: [email protected].

Bitcoin is equity, not money 

Years ago I was hired, with no experience in finance, as a trainee analyst at a hedge fund. I asked my soon-to-be boss how I should prepare. He said: “Get a financial calculator and learn to use the net present value keys. That’s really all there is to it.” 

He was right. I have thought ever since in terms of streams of future cash flows, terminal values, and discount rates. Every other analytical tool I have acquired since has been secondary.

Which is why I am uneasy doing what I need to do today: write about bitcoin, an asset far beyond the comprehension of my HP-12c (millennials may now go look up what that is). The value of the stock of bitcoins fell by 29 per cent at one point today, a decline in value of $225bn. Here is the price of an individual bitcoin through the day on Wednesday (with the final tick on Tuesday included on the left) (data from Bloomberg): 

No alt provided

Furthermore, bitcoin and the overall market trend seemed to be linked. From Refinitiv:

No alt provided

Something needs to be said. So what follows is this old-fashioned analyst’s best guess on what is going on. I look forward to your mail (I think?).

Bitcoin is best thought of as equity in a company whose only asset is a promising but unproven technology — this is not strictly true, but it is the right metaphor. A lot of people talk about it broadly in these terms. Here for example is Bill Miller, a very famous stock investor, in Barron’s a few weeks ago:

“Bitcoin is the solution to a problem that’s bedevilled economies since there were economies, which is government monopoly over the money supply and the banking systems, leading to serial defaults, confiscation with nationalisation, inflation . . . the best way to think about it is as digital gold. Gold is analogue, bitcoin is digital. It’s far superior to gold as a store of value . . .  you can’t flee your country with millions of dollars worth of gold, as it’s bulky and hard to divide, whereas you can send bitcoin anywhere in a fraction of a second at very low cost, and it’s almost infinitely divisible.”

If the bitcoin technology works, that is to say, it will be a new form of money, and one that is superior in money’s particular function as a store of value: inflation safe, transferable without friction and out of the reach of government fiddling. 

Here is Marc Andreessen, a very famous technology investor, writing some years ago, hitting similar points: 

“The bitcoin ledger is a new kind of payment system. Anyone in the world can pay anyone else in the world any amount of value of bitcoin by simply transferring ownership of the corresponding slot in the ledger. Put value in, transfer it, the recipient gets value out, no authorisation required, and in many cases, no fees.”

And if bitcoin does become money, its value will rise a lot. Miller again:

“There’s about $10tn of gold value in the world, some in jewellery, some in central banks, some in things like ETFs. Bitcoin’s market cap is around $1.1tn. I’m highly confident that bitcoin can go up 10 times under certain reasonably assumed conditions — namely, it can be as valuable as gold.” 

Rational people should agree, though, that bitcoin’s technology does not work yet. This should be obvious. Today’s price moves show bitcoin is too volatile to be money; for now, when the really bad stuff goes down, I’ll be fleeing across the border to Mexico with something other than bitcoins.

Just as importantly, transaction costs in bitcoin are generally high and the transactions are slow, and it is only accepted in a few places. Bitcoin is not money, but the idea that it will one day become money is the source of its current value.

When the price of stock in a company whose only asset is an unproven technology fluctuates (and they do, a lot) that doesn’t matter. That’s just market noise, except when there is new information suggesting that the technology asset is more or less likely to succeed.

That is where a lot of bitcoin believers have made a mistake. They think when the price of bitcoin goes up, that is itself evidence that the technology is closer to working, and becoming money. It’s not! Lots of things, from baseball cards to cases of Château Lafite, go up in value. That does not make them money. It makes them assets. Assets are fine things, but the value of the said bitcoin comes from the possibility that it becomes a specific kind of asset, namely money.

Evidence that bitcoin is becoming money would involve people transacting in it more, in more places and more smoothly (whether there is any evidence of that is a topic for another day).

A final point. The nominal reason for the drop in bitcoin’s value on Wednesday was that the Bank of China said that it “should not and cannot be used as currency in the market”. Is that evidence that bitcoin technology will not work, and become money? Maybe, but remember that an essential part of bitcoin’s appeal is that the opinions of third parties and especially governments are not supposed to matter. Yet today’s volatility suggests they do. 

There is an easy way to resolve that contradiction: by positing that much of the current value in bitcoin is pure, untethered speculation, with no connection whatsoever to the fundamental character of the technology.

 

 

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11 hours ago, RichG-LI-NY said:

What’s everyone’s thoughts re. Ethereum during this current dip and longer term. 

Due to gas fees, I suspect that ADA may steal some of ETH’s thunder. 

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  • 4 months later...

Yeah. Just like the stock market, commodities prices, new cars, homes, almost everything is at an "all time high" right now. I've mined several coins worth of eth, daggerhash and a few other currencies, I'll continue to hold them past this spike, but quite honestly, BTC should be at a all time high right now. I would be highly concerned if it wasn't. I'm still running my rig 24 hrs a day though. 

There's 40% more money in the world than there was 18 months ago, if your assets haven't grown more than that, you've actually lost money. Mid March 2020 BTC was hovering around $5k, its now at over $65k, it has far outstripped inflation, but for how long? Yes, 12x growth in 19 months. It's simply not sustainable, especially because nothing real is actually feeding it. 

Lets see how it (and other "stores of wealth") fair when the world governments are finally forced to turn off the taps. Its all built on a bed of sand, traditional and "modern" asset classes alike. I know people think it will spike when things hit the fan, but its historical correlation to other asset classes paints a very different picture. When stocks go up, BTC goes up. When stocks go down, BTC price goes down. The correlation isnt perfect, BTC moves much quicker in both directions, but its there. Its not nearly the "safe haven" that people portray it to be. 

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1 hour ago, Corylax18 said:

 When stocks go up, BTC goes up. When stocks go down, BTC price goes down. The correlation isnt perfect, BTC moves much quicker in both directions, but its there.

I would disagree that it's correlated. Here's an article that compares it to other asset classes:

https://decrypt.co/63468/is-bitcoin-price-correlated-to-stock-market

The main data point of the article is that if you put the correlation on a scale with 1 being they move in perfect tandem and -1 being they move in complete opposites, the most correlated it's ever been is 0.22, which was in 2020 (I don't know what the 2021 is data so far). 

It's definitely gotten more correlated over the years but with a peak of 0.22 in a year when a ton of money was printed it doesn't mean too much imo. 

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Price action on crypto looking pretty good here with BTC leading charge the others like ETH, ADA should take up slack too. They didnt get as beat up during the last equity pullback either. Ring the register soon for at least another $1T+ spending coming, more debt authorized soon, assume JPow keeps his seat ignoring inflation, teeth of commodity costs keep biting people into the winter + energy costs surging now before it even gets cold, Americans beginning to see what a Soviet style grocery store and Xmas without all the usuals begins to look like…all pretty bullish backdrop for crypto into YE


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