What's going on with Bitcoin?

[bdgan]

Bitcoin isn't like stock in a company. It doesn't make a profit that it can share with owners. It just exists like a limited edition collector's plate. Does limited supply make things valuable?

I know that prices paid to new bitcoin miners is being cut in half which could lead to lower supply but that's not new information. That should have already been priced into the market.

 

[voltz99]

Bitcoin isn't like stock in a company. It doesn't make a profit that it can share with owners. It just exists like a limited edition collector's plate. Does limited supply make things valuable?

I know that prices paid to new bitcoin miners is being cut in half which could lead to lower supply but that's not new information. That should have already been priced into the market.

Still Driven by supply and demand. Bitcoin ETFs started and now the demand is up. Supply is about the same.

Even during the .com bubble there were tech companies with no real customers, no profits, no revenues yet their stock was soaring. Then they crashed.

 

[Obliviax]

Bitcoin isn't like stock in a company. It doesn't make a profit that it can share with owners. It just exists like a limited edition collector's plate. Does limited supply make things valuable?

I know that prices paid to new bitcoin miners is being cut in half which could lead to lower supply but that's not new information. That should have already been priced into the market.

the problem is that the value can be driven by emotion. I am big on Crypto in terms of what it can do for world markets where stable currencies are unavailable. But the govts won't abide by losing control over world currency markets. So I am doubtful, over the long run, Bitcoin will fulfill its promise. On the other hand, it will be difficult to control. So I expect its value to vary greatly week in and week out, for quite some time.

 

[hoflane]

Bitcoin isn't like stock in a company. It doesn't make a profit that it can share with owners. It just exists like a limited edition collector's plate. Does limited supply make things valuable?

I know that prices paid to new bitcoin miners is being cut in half which could lead to lower supply but that's not new information. That should have already been priced into the market.

This isn’t investment advice as I don’t give any. However, I’d take a long look at XRP and XLM…..👌👌

 

[hoflane]

Bitcoin isn't like stock in a company. It doesn't make a profit that it can share with owners. It just exists like a limited edition collector's plate. Does limited supply make things valuable?

I know that prices paid to new bitcoin miners is being cut in half which could lead to lower supply but that's not new information. That should have already been priced into the market.

It’s absolutely GLORIOUS what is going on with Bitcoin!!!

 

[The Spin Meister]

In early summer I considered buying one coin. It sat around $19,000/coin for a long time and had moved to $21,000 and I figured it go up and settle in the low 30s in a year or so giving me a 50% return.

But never pulled the trigger……

Eight months later it is over $72,000 and I would have more than tripled it!🤬🥵🥴😱🔥

 

[ClarkstonMark]

In early summer I considered buying one coin. It sat around $19,000/coin for a long time and had moved to $21,000 and I figured it go up and settle in the low 30s in a year or so giving me a 50% return.

But never pulled the trigger……

Eight months later it is over $72,000 and I would have more than tripled it!🤬🥵🥴😱🔥

I bought a lot of ETH last summer and I am very happy

 

[The Spin Meister]

I bought a lot of ETH last summer and I am very happy

So you are buying at the Blue/White game next month?

 

[SYRCHAZ]

The US debt is over $34 trillion and increasing by a $trillion roughly every 90-100 days. The debt has approximately doubled every 8 years since 1980. Some have projected the debt to reach $100 trillion by 2036. Many have come to the conclusion that de-dollarization is imminent as the debt cycle is spirals out of control. Hence the move into alternatives like gold (just reached all time high, although not in inflation adjusted terms) and bitcoin. The Central Banks (the smart money) have been big buyers of gold. Its all about preserving wealth...

 

[The Spin Meister]

The US debt is over $34 trillion and increasing by a $trillion roughly every 90-100 days. The debt has approximately doubled every 8 years since 1980. Some have projected the debt to reach $100 trillion by 2036. Many have come to the conclusion that de-dollarization is imminent as the debt cycle is spirals out of control. Hence the move into alternatives like gold (just reached all time high, although not in inflation adjusted terms) and bitcoin. The Central Banks (the smart money) have been big buyers of gold. Its all about preserving wealth...

Yep, the debt bomb is ticking and its explosion is unavoidable. It’s only a question of when.

 

[bdgan]

The US debt is over $34 trillion and increasing by a $trillion roughly every 90-100 days. The debt has approximately doubled every 8 years since 1980. Some have projected the debt to reach $100 trillion by 2036. Many have come to the conclusion that de-dollarization is imminent as the debt cycle is spirals out of control. Hence the move into alternatives like gold (just reached all time high, although not in inflation adjusted terms) and bitcoin. The Central Banks (the smart money) have been big buyers of gold. Its all about preserving wealth...

I agree that uncontrolled debt and money printing will ultimately lead to the downfall of the USD as the world's reserve currency. I also think that the only reason it hasn't caught up with us yet is because other developed countries have devalued their currencies too.

But I don't believe Bitcoin is a threat to replace the dollar any time soon. Nor do I believe that the current rate of debt is justification for Bitcoin to have tripled in a couple of months.

 

[Kasparaitis]

I agree that uncontrolled debt and money printing will ultimately lead to the downfall of the USD as the world's reserve currency. I also think that the only reason it hasn't caught up with us yet is because other developed countries have devalued their currencies too.

But I don't believe Bitcoin is a threat to replace the dollar any time soon. Nor do I believe that the current rate of debt is justification for Bitcoin to have tripled in a couple of months.

One reason the US economy, as bad as it is, still leads the world is that the rest are in even far worse shape. How long will that work out? People invested in tulip bulbs in the 17th century. Some people made tremendous returns “investing” with Bernie Madoff too. Its all fun and games until the music stops.

 

[NittanyLionRoar]

Bitcoin acts like it does because it’s more similar to digital gold than a currency. People who don’t understand it and write it off are thinking of it like a currency rather than the store of value it’s more likely to be used as. I get why people misunderstand it because crypto “currency” is in the name, but it’s not used that way and never will be due to the gas fees. Same with Ethereum (digital silver).

Imagine being able to send gold to any part of the world in just a few seconds, or to store it in a way completely inaccessible to anyone else, including governments. Imagine its limited supply is known and can never increase. THAT’S why bitcoin is going up so much and it brings the rest of the crypto market up with it.

There are fewer bitcoin in existence than the number of millionaires worldwide, so not every millionaire will be able to have one. Ethereum now uses a protocol that’s shrinking its supply, so the effect on price will be even more drastic than bitcoin.

While everyone was panic-selling about the recession that never came in 2022, I was panic-buying everyone else’s bitcoin and ether at bottom-barrel prices. I’ve added a number of the other alt coins to my portfolio about 6 months ago and will be steadily moving bitcoin > ether > alt coins over the next 6 months to a year. Once I see ether and alt coins run up in a eurphoric manner, I’ll sell 80-90% of it. That’s just how the cycle works. Bitcoin is above all time highs earlier in the cycle than usual, so I might be selling earlier rather than later, I’ll just have to see if the market continues being overheated in the near-term or if it takes time to cool off.

 

[Kasparaitis]

Bitcoin acts like it does because it’s more similar to digital gold than a currency. People who don’t understand it and write it off are thinking of it like a currency rather than the store of value it’s more likely to be used as. I get why people misunderstand it because crypto “currency” is in the name, but it’s not used that way and never will be due to the gas fees. Same with Ethereum (digital silver).

Imagine being able to send gold to any part of the world in just a few seconds, or to store it in a way completely inaccessible to anyone else, including governments. Imagine its limited supply is known and can never increase. THAT’S why bitcoin is going up so much and it brings the rest of the crypto market up with it.

There are fewer bitcoin in existence than the number of millionaires worldwide, so not every millionaire will be able to have one. Ethereum now uses a protocol that’s shrinking its supply, so the effect on price will be even more drastic than bitcoin.

While everyone was panic-selling about the recession that never came in 2022, I was panic-buying everyone else’s bitcoin and ether at bottom-barrel prices. I’ve added a number of the other alt coins to my portfolio about 6 months ago and will be steadily moving bitcoin > ether > alt coins over the next 6 months to a year. Once I see ether and alt coins run up in a eurphoric manner, I’ll sell 80-90% of it. That’s just how the cycle works. Bitcoin is above all time highs earlier in the cycle than usual, so I might be selling earlier rather than later, I’ll just have to see if the market continues being overheated in the near-term or if it takes time to cool off.

That’s great. But while you’re waiting for that, if the bottom falls out you’ll lose out. That’s what risk is all about. Good luck.

 

[heckmans]

Bitcoin isn't like stock in a company. It doesn't make a profit that it can share with owners. It just exists like a limited edition collector's plate. Does limited supply make things valuable?

I know that prices paid to new bitcoin miners is being cut in half which could lead to lower supply but that's not new information. That should have already been priced into the market.

Why does the price of gold fluctuate? It's not like stock in a company. It doesn't make a profit? It can literally be made into collector's plates.

 

[bdgan]

Why does the price of gold fluctuate? It's not like stock in a company. It doesn't make a profit? It can literally be made into collector's plates.

Gold has other uses like jewelry, electronics, and dentistry. Like any commodity it can be used as an inflation hedge. It's price is up commensurate with inflation over the past few years.

 

[NittanyLionRoar]

That’s great. But while you’re waiting for that, if the bottom falls out you’ll lose out. That’s what risk is all about. Good luck.

For sure. It’s not a market for the fickle or faint of heart. Can’t put in what your not willing to lose, 100%.

 

[NittanyLionRoar]

Why does the price of gold fluctuate? It's not like stock in a company. It doesn't make a profit? It can literally be made into collector's plates.

One thing I want to point out as well is that things in the market only appear to fluctuate when the dollar is the anchor and lens at which you view things, as if it’s not the dollar fluctuating. What if it’s gold that remains stable value and it’s the dollar bumping up and (mostly) down in comparison to everything else?

It’s like being on earth staring at the starry night. It looks like you’re standing still and the universe is rotating around you, yet the astronaut in space looks at earth and sees that it’s the thing that’s rotating.

An example other than gold… the value of a house is pretty stable and doesn’t really change over the years. It provides a roof, heat, privacy, and a place to live. Owning one is probably not any more or less meaningful than it was 10 years ago. But the dollar price changes a lot, probably because it’s the dollar fluctuating in comparison to the house rather than the other way around.

A lot of the fluctuation we’ve seen in equities and goods lately has been an enormous printing of dollars in 2020-2021, which means that it’s actually the dollar that devalued while most everything else could have stayed relatively stable. It’s why the stock market, gold, bitcoin, food, movie tickets, cars, houses, etc are at all time highs.

Once we stop viewing things in the market in terms of its $$$ dollar amount and start viewing everything as items in a basket to trade (including the dollar), the market makes a lot more sense.

 

[Kasparaitis]

Gold has other uses like jewelry, electronics, and dentistry. Like any commodity it can be used as an inflation hedge. It's price is up commensurate with inflation over the past few years.

It also has performed for centuries, unlike Bitcoin et al. I have a question. What happens to Bitcoin when the grid fails and you can’t access it?

 

[heckmans]

Gold has other uses like jewelry, electronics, and dentistry. Like any commodity it can be used as an inflation hedge. It's price is up commensurate with inflation over the past few years.

Everything you said is correct, but you need to go another layer deeper. Why is gold valuable? The answer is because it's rare and because people accept it as valuable.

The US dollar used to be backed by gold so it had actual value. Now, it's fiat and it technically worthless. The only reason that dollars have value is because people accept hem as valuable. That the government can create more out of thin air and inflate it, effectively stealing from savers and paying debtors(ie Congress), reduces people's confidence in the dollar's value.

Bitcoin is no less fiat than the US Dollar. It has value because people have a measure of trust and confidence in it, mostly because it is designed to have a maximum finite amount so it can never be inflated by profligate pols/bankers. Plus, we now have El Salvador that has made Bitcoin a legal tender.
There certainly may be other inputs, but just like gold, Bitcoin will nevessarily increase in value with inflation of the US dollar.

 

[SYRCHAZ]

Why does the price of gold fluctuate? It's not like stock in a company. It doesn't make a profit? It can literally be made into collector's plates.

The "price" of gold is relatively stable. It goes up (in the US) because the value of the dollar declines and it just takes more fiat dollars to purchase the same amount of gold.

The price of oil has been "relatively" stable when priced in gold over the last 75 or so years, but when priced in dollars, it is volatile. Remember in about 2008 oil priced roughly at $150/barrell and then during Covid its futures actually went negative? There are charts on the internet that show this stability of the price of oil in gold versus the dollar. That is why the so called "Global South"/BRICS+ nations are planning on introducing a "currency" backed by commodities, largely gold, due to its stability.. They may also introduce a currency based on a basket of their own currencies.

An interested reader could look up articles by Pepe Escobar who has written extensively on this subject, including a recent interview he had with Sergei Glazynov (I hope my spelling is correct) who is the main architect of this new currency/currencies.

Also the price of gold has been actively suppressed since since President Nixon took the US off the gold standard and left Bretton Woods in 1971. The COMEX was created in about 1973 or 74 with the purpose of suppressing gold thru paper gold futures contracts. Not a conspiracy, but a well proven fact (see GATA.org). GATA stands for the Gold Anti Trust Action Committee. I and many others believe that this artificial suppression of the price of gold over the past 50 years is coming to an end and expect gold to be significantly revalued higher in the near future.
Only about 0.5% of global assets are invested in precious metals. Even an additional 1% allocation by global investors will push the metals up significantly higher.

 

[heckmans]

One thing I want to point out as well is that things in the market only appear to fluctuate when the dollar is the anchor and lens at which you view things, as if it’s not the dollar fluctuating. What if it’s gold that remains stable value and it’s the dollar bumping up and (mostly) down in comparison to everything else?

It’s like being on earth staring at the starry night. It looks like you’re standing still and the universe is rotating around you, yet the astronaut in space looks at earth and sees that it’s the thing that’s rotating.

An example other than gold… the value of a house is pretty stable and doesn’t really change over the years. It provides a roof, heat, privacy, and a place to live. Owning one is probably not any more or less meaningful than it was 10 years ago. But the dollar price changes a lot, probably because it’s the dollar fluctuating in comparison to the house rather than the other way around.

A lot of the fluctuation we’ve seen in equities and goods lately has been an enormous printing of dollars in 2020-2021, which means that it’s actually the dollar that devalued while most everything else could have stayed relatively stable. It’s why the stock market, gold, bitcoin, food, movie tickets, cars, houses, etc are at all time highs.

Once we stop viewing things in the market in terms of its $$$ dollar amount and start viewing everything as items in a basket to trade (including the dollar), the market makes a lot more sense.

You are not incorrect on much of your post. The dollar is only a representation of something's value.
For significant portions of us history, the dollar was stable. Here is a crazy stat. $1 in 1787 was $4.17 in 1970. Today, $1 in 1787 is worth $33.37. in the last 50 yrs since going off the gold standard, the govt has decimated the value of the dollar. The govt has a plan to intentionally inflate the dollar 2-3% each year. This is done to lower the value of the govt's debt spending, but not so much that the people notice they are slowly being robbed.

Specific to your real estate example, inflation certainly plays a role, but it is a very small portion of the increase. There are two other major factors. 1. Supply and demand. The population is growing, but zoning boards in metro areas are not approving projects to add housing units and increase density. Too many people and too few housing units= very high prices. 2. Lack of confidence in the dollar. With the printing of money and inflation, people are getting rid of dollars and putting them in assets. Real estate is real and finite and the most obvious place to put it.

 

[bdgan]

Everything you said is correct, but you need to go another layer deeper. Why is gold valuable? The answer is because it's rare and because people accept it as valuable.

The US dollar used to be backed by gold so it had actual value. Now, it's fiat and it technically worthless. The only reason that dollars have value is because people accept hem as valuable. That the government can create more out of thin air and inflate it, effectively stealing from savers and paying debtors(ie Congress), reduces people's confidence in the dollar's value.

Bitcoin is no less fiat than the US Dollar. It has value because people have a measure of trust and confidence in it, mostly because it is designed to have a maximum finite amount so it can never be inflated by profligate pols/bankers. Plus, we now have El Salvador that has made Bitcoin a legal tender.
There certainly may be other inputs, but just like gold, Bitcoin will nevessarily increase in value with inflation of the US dollar.

I understand devalued dollars but to be honest that only matters relative to other currencies. If we increase money supply by 10% and the EU does the same thing we haven't lost any ground against them. Bitcoin's recent 50% rise doesn't correlate to inflation.

You can keep up with inflation by owning various commodities. I don't know what makes Bitcoin special. It's a very long way from seeing goods and services priced in Bitcoin. Governments would fight that anyway.

 

[heckmans]

I understand devalued dollars but to be honest that only matters relative to other currencies. If we increase money supply by 10% and the EU does the same thing we haven't lost any ground against them. Bitcoin's recent 50% rise doesn't correlate to inflation.

You can keep up with inflation by owning various commodities. I don't know what makes Bitcoin special. It's a very long way from seeing goods and services priced in Bitcoin. Governments would fight that anyway.

It's pretty simple. Scarcity and trust are the biggest drivers. All of the gold ever mined in the world would fit in a high school gym. And gold can be trusted as it really can't be destroyed. Bitcoin has the same principles(though 100% dependent on electricity and data networks).

The current run up seems to be driven in part, by access. Bitcoin can be traded as an ETF now, so separate wallets and platforms aren't necessary. Then there is El Salvador, making it an official currency. Though ES only has a GDP of $28B, the govt owns 2762 BC. I have no idea what private citizens may own. Finally there is a halving coming and previous halvings have driven an increase in price so people are likely buying more BC in anticipation, potentially creating a bit of a bubble.

Bottom line is that BC has an increasing level of trust (and hedge) against alternative fiat currencies that are manipulated by elites for their own purposes.
If the dollar was soundly managed, there would be no need for bitcoin. If El Salvador wasn't a dumpster fire for decades prior to the current government, Bitcoin wouldn't be attractive. El Salvador is the first country to make BC an official currency. They won't be the last.

 

[heckmans]

Bitcoin acts like it does because it’s more similar to digital gold than a currency. People who don’t understand it and write it off are thinking of it like a currency rather than the store of value it’s more likely to be used as. I get why people misunderstand it because crypto “currency” is in the name, but it’s not used that way and never will be due to the gas fees. Same with Ethereum (digital silver).

THIS!!!!!!!!!!!!!!!!

 

[ClarkstonMark]

It's pretty simple. Scarcity and trust are the biggest drivers. All of the gold ever mined in the world would fit in a high school gym. And gold can be trusted as it really can't be destroyed. Bitcoin has the same principles(though 100% dependent on electricity and data networks).

The current run up seems to be driven in part, by access. Bitcoin can be traded as an ETF now, so separate wallets and platforms aren't necessary. Then there is El Salvador, making it an official currency. Though ES only has a GDP of $28B, the govt owns 2762 BC. I have no idea what private citizens may own. Finally there is a halving coming and previous halvings have driven an increase in price so people are likely buying more BC in anticipation, potentially creating a bit of a bubble.

Bottom line is that BC has an increasing level of trust (and hedge) against alternative fiat currencies that are manipulated by elites for their own purposes.
If the dollar was soundly managed, there would be no need for bitcoin. If El Salvador wasn't a dumpster fire for decades prior to the current government, Bitcoin wouldn't be attractive. El Salvador is the first country to make BC an official currency. They won't be the last.

where did you hear that about all the gold in the world fitting into a high school gym? seems pretty far-fetched to me

 

[The Spin Meister]

where did you hear that about all the gold in the world fitting into a high school gym? seems pretty far-fetched to me

bolume of all.gold - Google Search

According to the World Gold Council at How much gold has been mined? | World Gold Council by the end of 2019 a total of 197,576 tonnes of gold has been mined throughout history. With a density of 19.3 metric tons per cubic meter, the volume works out to be 10,237 cubic meters. The cube root of this is indeed 21.713 meters, as illustrated on their chart

 

[NittanyLionRoar]

Here's a REALLY fascinating brand new debate between Peter Schiff and Raoul Pal for whichever side you fall on. Topics covered include Bitcoin, gold, fiat, stores of value, inflation, governments, the economy, real estate, land, productivity, taxes, debt, etc.

 

[heckmans]

where did you hear that about all the gold in the world fitting into a high school gym? seems pretty far-fetched to me

You can Google this in literally 5 seconds.