Economy Inflation and Bitcoin.....another look

[Eric Silva 2.0]

I'm referring to their only tool in countering inflation.... The Fed raised interest rates from near zero in 2021 to levels not seen in 20 years. I thought this would be common knowledge when discussing inflation.

I would agree that raising interest rates will counter inflation, temporarily. The economy is built on rising prices (low inflation). If prices start falling the economy will fall apart. The problem with high interest rates is that the debt is so high. The interest keeps rising as the debt goes up. The U.S. is in the beginning of a inflationary death spiral that they can't get out of. When the Fed raises interest rates it destroys the economy. The interest expense gets wasted instead of being used for things like social security or healthcare benefits. When the Fed allows inflation to rage on it destroys the economy with high prices and a lower standard of living. This will show up with more homeless people, more people living in vans and campgrounds and more crime and civil unrest. The only question is how slow or fast this all will keep happeing.

 

[LMP]

A big problem with bitcoin is around 30% of all bitcoin in existence is already lost. A lot of smaller investors are banking on bitcoin to be accepted as a world currency, so there is a crazy amount of speculation. The price can be significantly effected by regulation on the market. Regulation on the crypto market could be good or bad.

Claiming bit coin as an asset or currency is pretty wrong, the only way for it to gain value is be not selling or using it. The value is in people holding it indefinitely. This is where the 30% of bitcoin being lost artificially helps inflate the value.

 

[MeatheadMike]

I would agree that raising interest rates will counter inflation, temporarily. The economy is built on rising prices (low inflation). If prices start falling the economy will fall apart. The problem with high interest rates is that the debt is so high. The interest keeps rising as the debt goes up. The U.S. is in the beginning of a inflationary death spiral that they can't get out of. When the Fed raises interest rates it destroys the economy. The interest expense gets wasted instead of being used for things like social security or healthcare benefits. When the Fed allows inflation to rage on it destroys the economy with high prices and a lower standard of living. This will show up with more homeless people, more people living in vans and campgrounds and more crime and civil unrest. The only question is how slow or fast this all will keep happeing.

I'm not bringing it up to make a prediction, only pointing out that the Fed's increase in interest rates easily explains the increase in debt interest and the spike in the graph in your OP.
So that in and of itself isn't an indicator for concern.

As for inflation, the most recent rate was 3.7%, down from a high of 9.1% last year. I think it may still take a while to get it down to the Fed's target of 2%, but by no means does it appear that we are an inflationary death spiral.

 

[HOLA]

When I recently saw Bitcoin was rising again, I knew it was inevitable the Buttcoiners would start proselytizing their funny money again on this board. Then everyone will hop in at the top, it will crash, they'll go into hibernation...only to repeat the cycle over again.

 

[HOLA]

"If the U.S. dollar fails so does Bitcoin"
Incorrect. Bitcoin will be priced in whatever the new currency will be. I'm assuming we won't be on a bitcoin standard which is a small possibility. The current system won't last. It's just a matter of how fast or slow it continues to crumble.

lol.

 

[Rob Battisti]

A big problem with bitcoin is around 30% of all bitcoin in existence is already lost. A lot of smaller investors are banking on bitcoin to be accepted as a world currency, so there is a crazy amount of speculation. The price can be significantly effected by regulation on the market. Regulation on the crypto market could be good or bad.

Claiming bit coin as an asset or currency is pretty wrong, the only way for it to gain value is be not selling or using it. The value is in people holding it indefinitely. This is where the 30% of bitcoin being lost artificially helps inflate the value.

Why does the fact that 30% has been lost make it a problem?

Why is it wrong to call it an asset? It’s very clearly a commodity.

 

[Rob Battisti]

I'm not bringing it up to make a prediction, only pointing out that the Fed's increase in interest rates easily explains the increase in debt interest and the spike in the graph in your OP.
So that in and of itself isn't an indicator for concern.

As for inflation, the most recent rate was 3.7%, down from a high of 9.1% last year. I think it may still take a while to get it down to the Fed's target of 2%, but by no means does it appear that we are an inflationary death spiral.

Not an inflationary death spiral but a debt one for sure

 

[calavera2]

"If the U.S. dollar fails so does Bitcoin"
Incorrect. Bitcoin will be priced in whatever the new currency will be. I'm assuming we won't be on a bitcoin standard which is a small possibility. The current system won't last. It's just a matter of how fast or slow it continues to crumble.

The price of Bitcoin has been credibly shown to be manipulated through Tether. I'm in that camp that says the price of Bitcoin is a scam through manipulation... Without the backing of a government that we know of.

 

[LMP]

Why does the fact that 30% has been lost make it a problem?

Why is it wrong to call it an asset? It’s very clearly a commodity.

19 million or so "coins" exist. Of that around 13 million are even "tradable". The number of coins will continue to disappear year after year.

There is no intrinsic value, nothing backs the prices. All of the investment is in speculation that it must increase in value, because of scarcity. The only thing driving bitcoin is the bag holders being willing to pay a higher price in hopes that they will too be rich. Bitcoin is a high dollar lottery ticket, buyers stay in the market hoping they can get out at a high value. Unlike stocks, where companies have to show that they can create value for stocks prices to rise. Even still stocks aren't a fool proof investment.

 

[HOLA]

Bitcoin being the 11th most valuble asset in the world is BS btw. I'm assuming it comes from this chart, which I just found while Googling:

There are multiple problems with this. What they basically did was take market price of bitcoin and multiply it by the circulating supply of bitcoins, then compared it to the market capitalization of publicly traded companies...and added in silver, for some reason?

Well, OK, what about gold, then? If you take the current gold price and multiply it by the above ground gold reserves, it's almost $13 trillion.

What about art? Googling it shows me the estimated global value of art is close to $2 trillion as an asset class.

What about the bond market? That's a huge asset class. Etc, etc, etc.

 

[Rob Battisti]

19 million or so "coins" exist. Of that around 13 million are even "tradable". The number of coins will continue to disappear year after year.

There is no intrinsic value, nothing backs the prices. All of the investment is in speculation that it must increase in value, because of scarcity. The only thing driving bitcoin is the bag holders being willing to pay a higher price in hopes that they will too be rich. Bitcoin is a high dollar lottery ticket, buyers stay in the market hoping they can get out at a high value. Unlike stocks, where companies have to show that they can create value for stocks prices to rise. Even still stocks aren't a fool proof investment.

I think we’re pretty far apart on the intrinsic value of bitcoin. I do appreciate you putting your money where your mouth is though with the bet. I’m sorry you will lose.

 

[LMP]

I think we’re pretty far apart on the intrinsic value of bitcoin. I do appreciate you putting your money where your mouth is though with the bet. I’m sorry you will lose.

Do explain the intrinsic vaule of bit coin.

 

[Rob Battisti]

Do explain the intrinsic vaule of bit coin.

Bitcoin's value is largely based on the principles of scarcity, decentralization and the underlying technology of blockchain. The transparency of transaction and limitation of supply is the value in and of itself.

Bitcoin's utility is as a decentralized digital currency, creating borderless and peer-to-peer transactions without the need for intermediaries. Remittance fees go away.

It serves as a store of value and a means of exchange, especially in regions with unstable currencies or limited access to traditional banking services.

It’s a completely secure and transparent way to transfer funds globally.

It could served as a hedge against inflation. It’s possible that it will be a globally recognized store of value similar to gold.

Its underlying technology, the blockchain, also offers opportunities for various applications beyond finance, such as in smart contracts, supply chain management, and DeFi as a master L1.

 

[Eric Silva 2.0]

Bitcoin being the 11th most valuble asset in the world is BS btw. I'm assuming it comes from this chart, which I just found while Googling:

There are multiple problems with this. What they basically did was take market price of bitcoin and multiply it by the circulating supply of bitcoins, then compared it to the market capitalization of publicly traded companies...and added in silver, for some reason?

Well, OK, what about gold, then? If you take the current gold price and multiply it by the above ground gold reserves, it's almost $13 trillion.

What about art? Googling it shows me the estimated global value of art is close to $2 trillion as an asset class.

What about the bond market? That's a huge asset class. Etc, etc, etc.

That is the chart I used.

"What about gold, then?"
Gold is number one. Did you read the chart?
Top Assets by market cap...All assets including public companies, precious metals, crypto, ETF's
https://companiesmarketcap.com/assets-by-market-cap/

"What about art?"
What about it? Do you know the value of the most valuble piece of art?

 

[LMP]

Bitcoin's value is largely based on the principles of scarcity, decentralization and the underlying technology of blockchain. The transparency of transaction and limitation of supply is the value in and of itself.

Bitcoin's utility is as a decentralized digital currency, creating borderless and peer-to-peer transactions without the need for intermediaries. Remittance fees go away.

It serves as a store of value and a means of exchange, especially in regions with unstable currencies or limited access to traditional banking services.

It’s a completely secure and transparent way to transfer funds globally.

It could served as a hedge against inflation. It’s possible that it will be a globally recognized store of value similar to gold.

Its underlying technology, the blockchain, also offers opportunities for various applications beyond finance, such as in smart contracts, supply chain management, and DeFi as a master L1.

There are over 1000 blockchains. Bitcoin is a poor currency because of two main reasons no backing and no stability. As more regulations are put on bitcoin the big anonymity that people claimed as bitcoins core reasoning for value have disappeared. It's basically a huge MLM scheme. You have to convince new people to buy into the value to make a profit. You can't use it as a currency because then you are selling the "asset" and will lose out on the price increase. Basically you are stuck holding indefinitely or in on the pumping and dumping.

 

[HOLA]

Bitcoin's value is largely based on the principles of scarcity, decentralization and the underlying technology of blockchain. The transparency of transaction and limitation of supply is the value in and of itself.

Bitcoin's utility is as a decentralized digital currency, creating borderless and peer-to-peer transactions without the need for intermediaries. Remittance fees go away.

It serves as a store of value and a means of exchange, especially in regions with unstable currencies or limited access to traditional banking services.

It’s a completely secure and transparent way to transfer funds globally.

It could served as a hedge against inflation. It’s possible that it will be a globally recognized store of value similar to gold.

Its underlying technology, the blockchain, also offers opportunities for various applications beyond finance, such as in smart contracts, supply chain management, and DeFi as a master L1.

Let's leave the Libertarian derp and technobabble aside for a moment, and think of something more tangible here. It's been like 15 years already. Last time you went to Dunkin' or wherever, and bought a coffee, you paid with what? Bitcoin, or good old fashioned $?

If it has so much utility, and solves all these problems, why does almost nobody actually use it?

 

[Eric Silva 2.0]

19 million or so "coins" exist. Of that around 13 million are even "tradable". The number of coins will continue to disappear year after year.

There is no intrinsic value, nothing backs the prices. All of the investment is in speculation that it must increase in value, because of scarcity. The only thing driving bitcoin is the bag holders being willing to pay a higher price in hopes that they will too be rich. Bitcoin is a high dollar lottery ticket, buyers stay in the market hoping they can get out at a high value. Unlike stocks, where companies have to show that they can create value for stocks prices to rise. Even still stocks aren't a fool proof investment.

"There is no intrinsic value, nothing backs the prices."
Please give a definition of intrinsic value. Also, what is the intrinsic value of a U.S. dollar?

 

[LMP]

"There is no intrinsic value, nothing backs the prices."
Please give a definition of intrinsic value. Also, what is the intrinsic value of a U.S. dollar?

It's an actual currency that you can use to exchange good because of its stability. Bitcoin is not a currency.

 

[HOLA]

That is the chart I used.

"What about gold, then?"
Gold is number one. Did you read the chart?
Top Assets by market cap...All assets including public companies, precious metals, crypto, ETF's
https://companiesmarketcap.com/assets-by-market-cap/

"What about art?"
What about it? Do you know the value of the most valuble piece of art?

Top of the image was cut off. I assumed it was larger companies like Apple. Well, OK, take away gold then.

What about the other ones I mentioned? Yes, art. It's an asset class that rich people invest in. I just Googled quick... According to the Deloitte Art and Finance Report 2019, its value was $1.7 trillion, which is more than a $1 trillion more than Bitcoin.

What about the bond market? You never addressed that.

What about real estate???

 

[Rob Battisti]

There are over 1000 blockchains. Bitcoin is a poor currency because of two main reasons no backing and no stability. As more regulations are put on bitcoin the big anonymity that people claimed as bitcoins core reasoning for value have disappeared. It's basically a huge MLM scheme. You have to convince new people to buy into the value to make a profit. You can't use it as a currency because then you are selling the "asset" and will lose out on the price increase. Basically you are stuck holding indefinitely or in on the pumping and dumping.

Like I said, we’re far apart. The “1000 blockchains” is meaningless when there is 1 blockchain that is a true commodity and immutable.