Economy Bitcoin Doubters, Come Eat Your Crow

[Der Eisbär]

So, after getting into Litecoin it went up 200%. Does anyone think this is the ceiling and if so, what's the next thing?

Definitely not the ceiling.

 

[Deleted member 457759]

Here's the pump and dump king Jordan Belfort explaining what he says are problems with Bitcoin and Cryptocurrencies. What do the war roomers think of this?



And can someone break down into retard speak what futures are?

 

[PolishHeadlock]

Here's the pump and dump king Jordan Belfort explaining what he says are problems with Bitcoin and Cryptocurrencies. What do the war roomers think of this?



And can someone break down into retard speak what futures are?

You agree to buy or sell a stock/commodity/currency at a future date on a set price.

Let's say you're an airline and you're worried about oil volatility you buy Futures on oil at the current price for a year so you don't worry about oil going up.

If oil goes up you saved money, if oil goes down you lose money.

If you think bitcoin is overvalued you can sell a future at the current price at a future date. When that date comes If the price dropped from $16K to $10K you made $6K.

This was all covered in the documentary Trading Places.

 

[Deleted member 457759]

You agree to buy or sell a stock/commodity/currency at a future date on a set price.

Let's say you're an airline and you're worried about oil volatility you buy Futures on oil at the current price for a year so you don't worry about oil going up.

If oil goes up you saved money, if oil goes down you lose money.

If you think bitcoin is overvalued you can sell a future at the current price at a future date. When that date comes If the price dropped from $16K to $10K you made $6K.

This was all covered in the documentary Trading Places.

Thanks that was actually quite easy to understand.

 

[HIMBOB]

You agree to buy or sell a stock/commodity/currency at a future date on a set price.

Let's say you're an airline and you're worried about oil volatility you buy Futures on oil at the current price for a year so you don't worry about oil going up.

If oil goes up you saved money, if oil goes down you lose money.

If you think bitcoin is overvalued you can sell a future at the current price at a future date. When that date comes If the price dropped from $16K to $10K you made $6K.

This was all covered in the documentary Trading Places.

Good explanation.

I don't understand how they can price it though. Seems like they will have massive counter party risk with such a volatile commodity.

 

[WorldofWarcraft]

There are no "experts" on Bitcoin. Everyone they've interviewed has been wrong. The experts are us. People who buy and sell Bitcoin for profit. They try to get opinions from people who are in the stock market business, who don't know shit about bitcoin and are fucking jealous.

 

[Lead]

Coming back to this finally:

Before getting into this, I want to note that I don't come in these threads to attack people but I'm actually concerned for the average joe that is more likely to put $500 down on Bitcoin rather than towards their 401k/IRA when that may be a significant amount of their investment funds in a year. That to me, is insanely fucked up for anyone to suggest they should go that route and I will continue to post against it for that reason. The person who is well off like WoW or whoever it was that is finding additional ways to throw around their money (high risk/ high reward) aren't who concern me here just in the same way I'm not concerned with those people gambling their excess income at a casino. They are well off and aren't at risk of damaging their long term well being compared to an average joe.

Are you harping on there being no tangible asset to bitcoin?

Nothing tangible backs dollars. Or bonds. Even with stocks, that value is gonna plummet if there's bankruptcy. Not like you show up at the company and take a few desks and a conference table for your shares.

As mentioned by Jack, I don't think comparing this to stocks or bonds and I agree with the definitions he used

Bonds are debt contracts so that one is out, too.
Stocks give you a part ownership in a company. But aside from not being related to the point, I do appreciate the implication of this--that wealth is a legal construct

Which brings us back to the dollars comment. Bitcoin SHOULD be trying to act like a currency which is my entire issue with the instrument. It's a currency that no one is using like a currency because of the way it is fundamentally put together. Owners expect the price to go up and that they are going to get rich holding onto it rather than going out and buying things with it. It isn't irrational on their part to think that way either. Why would you spend something you think will get you way more for in a month or even weeks time? You wouldn't. Currency should have the central goal of being a medium of exchange. Another goal is to be a store of value but that's because if you can't maintain a stable value, the first goal isn't accomplished. No one wants to hold a currency (that is being used as a currency) if it's going to be worth 50% or 200% tomorrow. There's no stability there.

That's what my main critique is with Bitcoin. In a world where I would accept it is where it's price stabilizes and it's users actually begin buying and selling with it rather than seeing it as an investment. Until that changes, its on very dangerous footing because as an investment, there should be little value in what you actually hold for a bitcoin. With a dollar, I know I'm not really holding an investment and that I actually need to do something with it in time or it will actually lose it's value. That is not a flaw (although many point to it as one) with depreciation but a very important thing that keeps an economy alive. With Bitcoin, it's completely put on it's head.

At the very best, I think we could compare Bitcoin to currency exchange trading which is all speculative in it's gains/losses and furthers my point.

Bitcoin either needs to stabilize by actually working like a currency (in which case, people will then realize it's not an real investment) or it will continue to just be a faux investment that must rely on more people buying in to increase the price. It completely relies on new users and that's why people with bitcoin only hold on to it and keep telling people to get on board. That's the most logical thing to do if you get one. Hold it, stare at the price, and tell other people to get it so the price goes up.

 

[Cubo de Sangre]

As mentioned by Jack, I don't think comparing this to stocks or bonds and I agree with the definitions he used

I don't remember him touching on what I wanted to talk about. Sorry you think his input was sufficient. Merry Christmas.

 

[xcvbn]

Coming back to this finally:

Before getting into this, I want to note that I don't come in these threads to attack people but I'm actually concerned for the average joe that is more likely to put $500 down on Bitcoin rather than towards their 401k/IRA when that may be a significant amount of their investment funds in a year. That to me, is insanely fucked up for anyone to suggest they should go that route and I will continue to post against it for that reason. The person who is well off like WoW or whoever it was that is finding additional ways to throw around their money (high risk/ high reward) aren't who concern me here just in the same way I'm not concerned with those people gambling their excess income at a casino. They are well off and aren't at risk of damaging their long term well being compared to an average joe.



As mentioned by Jack, I don't think comparing this to stocks or bonds and I agree with the definitions he used



Which brings us back to the dollars comment. Bitcoin SHOULD be trying to act like a currency which is my entire issue with the instrument. It's a currency that no one is using like a currency because of the way it is fundamentally put together. Owners expect the price to go up and that they are going to get rich holding onto it rather than going out and buying things with it. It isn't irrational on their part to think that way either. Why would you spend something you think will get you way more for in a month or even weeks time? You wouldn't. Currency should have the central goal of being a medium of exchange. Another goal is to be a store of value but that's because if you can't maintain a stable value, the first goal isn't accomplished. No one wants to hold a currency (that is being used as a currency) if it's going to be worth 50% or 200% tomorrow. There's no stability there.

That's what my main critique is with Bitcoin. In a world where I would accept it is where it's price stabilizes and it's users actually begin buying and selling with it rather than seeing it as an investment. Until that changes, its on very dangerous footing because as an investment, there should be little value in what you actually hold for a bitcoin. With a dollar, I know I'm not really holding an investment and that I actually need to do something with it in time or it will actually lose it's value. That is not a flaw (although many point to it as one) with depreciation but a very important thing that keeps an economy alive. With Bitcoin, it's completely put on it's head.

At the very best, I think we could compare Bitcoin to currency exchange trading which is all speculative in it's gains/losses and furthers my point.

Bitcoin either needs to stabilize by actually working like a currency (in which case, people will then realize it's not an real investment) or it will continue to just be a faux investment that must rely on more people buying in to increase the price. It completely relies on new users and that's why people with bitcoin only hold on to it and keep telling people to get on board. That's the most logical thing to do if you get one. Hold it, stare at the price, and tell other people to get it so the price goes up.

I see a lot of well thought out responses like this and they're not necessarily wrong in the right context, but that's the mistake people make. Bitcoin is like nothing we've seen before so there's not a whole lot we can use to rationalize its use or value. This is a very difficult thing for people to acknowledge but I think it's why so many otherwise intelligent people are dead wrong on bitcoin, cryptocurrency in general, and blockchain technology. There simply isn't enough data or history to really determine what is driving the cryptocurrency market- and it has many people in a dizzy.


I'm brainstorming a bit but these are some reasons why I believe bitcoin market prediction is so difficult and why the majority of experts have been dead wrong:

It's a world currency that has no central authority. Nobody has a peek inside the bitcoin machine. There's its source code and that's it. The rest is human psyche, emotion, and likely several more factors we cannot yet determine.

It's inflationary and will continue "minting" new coins for the next 100+ years but it does have a known cap on total coins.

The programming code behind it is open-source free-ware that can change with an introduction of new or altered code which is then "voted on" through a simple wallet update, called a "fork."

It's democratic but also capitalistic. The more bitcoin you control, the greater your vote counts when it comes to forks. I believe we've seen the biggest mad dashes in price strictly due to supply and demand. Sometimes it is the easy answer.


I'm not trying to speak from some high and mighty position. I've only been into the crypto scene for ~5 years and that in no way makes me an expert. But what I haven't really seen in this time are any financial experts from reputable firms or groups or talking heads who have been vocally involved for even half that time. It has only been scoffed at and disregarded(Mark Cuban is an absolutely perfect example) over the years only having been recently(<1yr) taken seriously. Many of these people missed out and the majority of those who didn't are what I would describe as financial or investment outsiders. They're not typical investors so it's natural the crypto market won't behave like typical markets.


But I digress. This Founders CBS has me rambling. I'm sure I made at least some sense in there though and I hope some of you will pick up what I'm laying down.


Merry Christmas

 

[Lead]

I don't remember him touching on what I wanted to talk about. Sorry you think his input was sufficient. Merry Christmas.

That whole post is for you. I included jacks post so you could read it before continuing on with my reply to you

 

[Cubo de Sangre]

That whole post is for you. I included jacks post so you could read it before continuing on with my reply to you

Ha! Sorry.

All that makes sense. It's hard to determine the $ price of bitcoin as a currency when investment speculation is going through the roof. Personally, if I could add crypto's to my 401(k) brokerage account I would. I've seen headlines about both Russia and NK using it for transactions. Not sure to what extent there's any truth there.

If people are hording as you suggest then a crash doesn't seem to be coming any time soon.

 

[LMP]

It's very volatile. As others have said their is no real expect on it. Is it the currency of the future? Is this just the current fad heading for a major bust? If looking at fads from the past, history would lead me to believe it could very well be heading towards a major bust. The people who got in when it was dirt cheap are setting very pretty. Anyone looking to get in now could be looking at a major loss.

If regulators make to where no one will accept it as currency and it get banned or replace with an official crypto currency it very well could be worthless in the future. If a major company comes in and set an official price that it is worth you could see major losses from where it is at.

Alternatively it might very well sky rocket. If you are going to invest don't over extend yourself and be willing to take the loss. Like with any investment, don't invest more than you can lose. Good luck to those of you investing hope you get the best case for your investment.

 

[Pickle Rick]

It's very volatile. As others have said their is no real expect on it. Is it the currency of the future? Is this just the current fad heading for a major bust? If looking at fads from the past, history would lead me to believe it could very well be heading towards a major bust. The people who got in when it was dirt cheap are setting very pretty. Anyone looking to get in now could be looking at a major loss.

If regulators make to where no one will accept it as currency and it get banned or replace with an official crypto currency it very well could be worthless in the future. If a major company comes in and set an official price that it is worth you could see major losses from where it is at.

Alternatively it might very well sky rocket. If you are going to invest don't over extend yourself and be willing to take the loss. Like with any investment, don't invest more than you can lose. Good luck to those of you investing hope you get the best case for your investment.

its the beanie babies/cabbage patch dolls of fake money

 

[Lead]

Ha! Sorry.

All that makes sense. It's hard to determine the $ price of bitcoin as a currency when investment speculation is going through the roof. Personally, if I could add crypto's to my 401(k) brokerage account I would. I've seen headlines about both Russia and NK using it for transactions. Not sure to what extent there's any truth there.

If people are hording as you suggest then a crash doesn't seem to be coming any time soon.

Yea, the one thing I would say despite me thinking its a bubble is that it:
-Could stabilize and remain at a current price in which case it's no longer a problem
-Continue to be trendy and never really truly crash completely

For those two reasons, I'd never try to bet against it. I do have a strong interest in economics and the idea itself is pretty cool even though I don't want to use my money on it.

 

[AnGrYcRoW]

You agree to buy or sell a stock/commodity/currency at a future date on a set price.

Let's say you're an airline and you're worried about oil volatility you buy Futures on oil at the current price for a year so you don't worry about oil going up.

If oil goes up you saved money, if oil goes down you lose money.

If you think bitcoin is overvalued you can sell a future at the current price at a future date. When that date comes If the price dropped from $16K to $10K you made $6K.

This was all covered in the documentary Trading Places.

pork bellies, which is used to make bacon--which you might find in a bacon, lettuce, and tomato sandwich

 

[Lead]

I see a lot of well thought out responses like this and they're not necessarily wrong in the right context, but that's the mistake people make. Bitcoin is like nothing we've seen before so there's not a whole lot we can use to rationalize its use or value. This is a very difficult thing for people to acknowledge but I think it's why so many otherwise intelligent people are dead wrong on bitcoin, cryptocurrency in general, and blockchain technology. There simply isn't enough data or history to really determine what is driving the cryptocurrency market- and it has many people in a dizzy.


I'm brainstorming a bit but these are some reasons why I believe bitcoin market prediction is so difficult and why the majority of experts have been dead wrong:

It's a world currency that has no central authority. Nobody has a peek inside the bitcoin machine. There's its source code and that's it. The rest is human psyche, emotion, and likely several more factors we cannot yet determine.

It's inflationary and will continue "minting" new coins for the next 100+ years but it does have a known cap on total coins.

The programming code behind it is open-source free-ware that can change with an introduction of new or altered code which is then "voted on" through a simple wallet update, called a "fork."

It's democratic but also capitalistic. The more bitcoin you control, the greater your vote counts when it comes to forks. I believe we've seen the biggest mad dashes in price strictly due to supply and demand. Sometimes it is the easy answer.


I'm not trying to speak from some high and mighty position. I've only been into the crypto scene for ~5 years and that in no way makes me an expert. But what I haven't really seen in this time are any financial experts from reputable firms or groups or talking heads who have been vocally involved for even half that time. It has only been scoffed at and disregarded(Mark Cuban is an absolutely perfect example) over the years only having been recently(<1yr) taken seriously. Many of these people missed out and the majority of those who didn't are what I would describe as financial or investment outsiders. They're not typical investors so it's natural the crypto market won't behave like typical markets.


But I digress. This Founders CBS has me rambling. I'm sure I made at least some sense in there though and I hope some of you will pick up what I'm laying down.


Merry Christmas

Most of this again is talking a little past me because I'm not criticizing crypto currency as a whole but specifically how Bitcoin is set up for the reasons I mentioned. I do find it unfortunate this was the first one to arrive because of those flaws because I bet a variety of the ones that came after address the issue I have and could theoretically work. The only issue is because of Bitcoin specifically, everyone is doing the same thing with these other currencies and treating them like stock instead of really trying to build something stable that would be used like a currency.

Also, with the experts thing, I think they overstep to make a prediction on timing with any of this. I certainly wouldn't because a large part of this is based on human behavior. I only know and state the flaws I see with Bitcoin specifically but I am unaware if and when those flaws will cause it to crash and burn. I just know it will never actually serve its intended purpose if it's scene the way it currently is. I will say that the cryptocurrency market as a whole likely will see a crash because theres little reason for a bunch of these to exist and ultimately only a handful or less will survive if they actually do have value as a currency compared what's already out there.

They're not typical investors so it's natural the crypto market won't behave like typical markets.

This again is a comparison of two things that are not alike so I'm glad we are agreeing but I think in different contexts.

 

[LMP]

its the beanie babies/cabbage patch dolls of fake money

If everyone made wise investments there wouldn't be so many boom bust in financial history. As I said though I'm not an expert so I'm not going to tell anyone not to invest, I just hope they don't cut off the nose just to spite their own face. I do think that crypto currency could very well be the future, but I'm not sold on bitcoin being the one. I hope for the investors I'm wrong, because if I'm right a lot of people will lose their ass.

 

[Gandhi]

Good explanation.

I don't understand how they can price it though. Seems like they will have massive counter party risk with such a volatile commodity.

They don't need to price it as long as they find a counter party to take the other side of the transaction. That's how futures work, through an exchange or other contract I agree to buy at a price and the other side agrees to sell.

So in the case we will have two parties agreeing to exchange a nothing for something....

 

[Cubo de Sangre]

Yea, the one thing I would say despite me thinking its a bubble is that it:
-Could stabilize and remain at a current price in which case it's no longer a problem
-Continue to be trendy and never really truly crash completely

For those two reasons, I'd never try to bet against it. I do have a strong interest in economics and the idea itself is pretty cool even though I don't want to use my money on it.

When it first came out I was gonna dump $100 into it. But it seemed like a pain in the ass to acquire and I wasn't sure about using them. Still seems like a pain in the ass and I've sat on the sidelines the entire time. Oh well.

I like the idea of borderless currency so hoping to see crypto's take hold beyond investment speculation and black market activity.

 

[Gandhi]

If everyone made wise investments there wouldn't be so many boom bust in financial history. As I said though I'm not an expert so I'm not going to tell anyone not to invest, I just hope they don't cut off the nose just to spite their own face. I do think that crypto currency could very well be the future, but I'm not sold on bitcoin being the one. I hope for the investors I'm wrong, because if I'm right a lot of people will lose their ass.

It's not an investment, it has no value behind it and it's not a claim on a productive asset. It's at best a limited service black market commidity.