Trade or Invest in Bitcoin?

Kaeso

Established member
836 91
The intrinsic value debate of Bitcoin has been done to death so I'll keep this one minimal. Price is driven by supply and demand plain and simple. The more people that want to use Bitcoin as means of value transfer and store of value the more demand there is. Bitcoin is also deflationary with an ever increasing difficulty rate to mine maxing out at 21 million.
To me you are still, essentially, only talking about buying pressure
 

Quantt

Established member
944 57
The only reason bitcoin went up so dramatically last year was the tether manipulation, now that the CFTC is defacto regulating bitcoin, exchanges are scared of large scale market manipulation and that’s why the price is sliding and the real dive is going to happens when US start to shutdown exchanges, the subpoenas already went out few months ago...

The only comparison in the history of humanity is the tulip mania and we are still waiting for the prices to rebound :)
 
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remme001

Member
69 2
The only reason bitcoin went up so dramatically last year was the tether manipulation, now that the CFTC is defacto regulating bitcoin, exchanges are scared of large scale market manipulation and that’s why the price is sliding and the real dive is going to happens when US start to shutdown exchanges, the subpoenas already went out few months ago...

The only comparison in the history of humanity is the tulip mania and we are still waiting for the prices to rebound :)
I disagree with your claim that the BTC rise is purely down to tether manipulation. Crypto exchanges experienced their highest ever level of registrations towards the end of 2017. They are so backlogged with registrations coinbase had to treble their support staff and yet KYC approvals still take weeks to months. It was frequent to see exchanges down due to sheer demand at times.

The BTC chart also falls nicely in place with bitcoin searches on Google trends. If the price was simply manipulated and not driven by adoption this would most likely be flat. I myself know several people that entered the market mid to late 2017.

Coinbase alone added 3.9 million users in 2017. Those 3.9 million users aren't buying fudge cakes on there 😛.

Yes, the whole operation of tether is questionable however I don't see the motivation behind the tether manipulation theory. Simply by being an exchange, Bitfinex was already a very profitable business. Why potentially risk the business and manipulate the market. The market cap of tether relative to Bitcoin is a small percentage at about 1.9%. It is pretty obvious why the US has a problem with USDT and why they subpoenaed Bitfinex.
 

Quantt

Established member
944 57
I disagree with your claim that the BTC rise is purely down to tether manipulation. Crypto exchanges experienced their highest ever level of registrations towards the end of 2017. They are so backlogged with registrations coinbase had to treble their support staff and yet KYC approvals still take weeks to months. It was frequent to see exchanges down due to sheer demand at times.

The BTC chart also falls nicely in place with bitcoin searches on Google trends. If the price was simply manipulated and not driven by adoption this would most likely be flat. I myself know several people that entered the market mid to late 2017.

Coinbase alone added 3.9 million users in 2017. Those 3.9 million users aren't buying fudge cakes on there 😛.

Yes, the whole operation of tether is questionable however I don't see the motivation behind the tether manipulation theory. Simply by being an exchange, Bitfinex was already a very profitable business. Why potentially risk the business and manipulate the market. The market cap of tether relative to Bitcoin is a small percentage at about 1.9%. It is pretty obvious why the US has a problem with USDT and why they subpoenaed Bitfinex.
The “why” we’ll learn in court (I have my popcorn ready), but I suspect because Bitfinex were kicked out of the banking system for other types of market manipulation...
 

Brumby

Established member
593 135
Zoom out. BTCs long-term trend on the log scale is very much intact. I also do not expect BTCs recovery to take as long as the previous years to recover as the now bankrupt Mt Gox exchange at the time accounted for as high as 90% of the trading volume whereas with this current short-term bear trend BTC has not had any major setbacks to match that would cause a prolonged recovery.
Bias confirmation is stretching your reality to breaking point in an effort to justify a position. Converting the chart to log scale may be a convenient means to make an argument but in reality is simply a mathematical expression. Such a mathematical formulation does not equate to a logical expression when tested against reality. It is devoid of logic and reason to posit a view that the recent pullback in prices are consistent with previous pullbacks on a log scale and that the trend is intact. It is cold comfort to those who invested at the recent peak at $20,000 to watch a decline to $7,000 and rationalised it as no different to those who invested at $13 and saw a decline to $4; or that from $200 to $65; or $1,000 to $400 simply because they are equivalent since the log scale says so. I would say you are into delusional territory.

If you've been in the cryptocurrency market for long enough you'll know that due to its sheer volatility 1 month in the cryptocurrency market feels very much equivalent to 1 year in the stock market if not more. BTC is definitely not going to take 15 years to recover. A maximum of 1.7 to 2.35 years according to the log scale on the bearish trend.
Here again you are making a major assumption without any evidence by taking an extrapolation projecting to ad infinitum and compounding that error through log scale. In the real world, events have impact value and implications especially when scaling because in the real world we are dealing with finite resources that are subject to efficiencies and excursion limits and are not simply mathematical formulations. There is such a thing called reality check. A mathematical world can exist independently which would not exist as a logical possibility in the real world e.g. Hilbert Hotel Paradox.
 
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remme001

Member
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Bias confirmation is stretching your reality to breaking point in an effort to justify a position. Converting the chart to log scale may be a convenient means to make an argument but in reality is simply a mathematical expression. Such a mathematical formulation does not equate to a logical expression when tested against reality. It is devoid of logic and reason to posit a view that the recent pullback in prices are consistent with previous pullbacks on a log scale and that the trend is intact. It is cold comfort to those who invested at the recent peak at $20,000 to watch a decline to $7,000 and rationalised it as no different to those who invested at $13 and saw a decline to $4; or that from $200 to $65; or $1,000 to $400 simply because they are equivalent since the log scale says so. I would say you are into delusional territory.

Here again you are making a major assumption without any evidence by taking an extrapolation projecting to ad infinitum and compounding that error through log scale. In the real world, events have impact value and implications especially when scaling because in the real world we are dealing with finite resources that are subject to efficiencies and excursion limits and are not simply mathematical formulations. There is such a thing called reality check. A mathematical world can exist independently which would not exist as a logical possibility in the real world e.g. Hilbert Hotel Paradox.
Right ok,
Ignore the relative long-term trend on the log scale
Ignore the fact that Bitcoin is deflationary
Ignore the fact that this is a young market which pales in comparison to others by market cap
Ignore the fact that exchanges experienced record registrations in 2017
Ignore the fact that many leaders and influentials of the world have recognised the significance of cryptocurrencies and blockchain tech
Ignore the fact that the blockchain has not EVER been hacked despite being open in its 9 years of existence and despite being open source, meanwhile you see the likes of many data breaches such as Equifax
Ignore the fact that it has real-world applications from streamlined settlement to cross-border payments
Ignore the fact that Bitcoin currently does not have any major setbacks to match the previous bear trend
Ignore the fact that major exchanges are adding Bitcoin futures and ETFs
Ignore the fact that institutional investors are in large standing on the sidelines waiting for proper regulatory guidance
Ignore the fact that it is disrupting industries
Ignore the fact that Bitcoin has survived despite set backs from major exchanges collapsing such as Mt Gox and others
Ignore the fact that central banks across a handful of nations are trying to create an equivalent of Bitcoin and yet it will never be the same because it won't be decentralised and open source
Ignore the fact that it has the capability to 'bank the unbanked'
Ignore the fact that the Bitcoin is growing because of adoption
Ignore the fact that despite several previous crashes Bitcoin has risen again
Ignore the fact that the younger generation much prefer cryptocurrencies compared to gold or stocks
Ignore the fact that Bitcoin serves as a base trade currency for many other cryptocurrencies
Ignore the fact that Bitcoin is decentralised, open source and not a company, it is very hard to kill in this sense
Ignore the fact that for the first time ever it enables people across the world to keep savings without fear of confiscation or debasement. This has never been possible before.

The list goes on...

The trouble my friend is you are just looking at the price and not looking at the drivers behind the price. Markets run in cycles yes, the long term, however, is clear to me. You are playing with fire shorting this market especially considering the volatility of it but you're free to do what you want. Good luck.
 
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Quantt

Established member
944 57
The list goes on...

The trouble my friend is you are just looking at the price and not looking at the drivers behind the price.
Looks like the hype is very strong with you, so let me give you a bit of a reality check, so hopefully you can invest on better information...

Blockchain is not a 9 years old technology; it is actually 25 years old and is still looking for a problem to solve and the reason is simple, it is essentially a distributed database, which makes is very expensive to implement and use. 25 years in this business is an eternity...

Blockchain has been hacked, just read a bit about DAO, not only hacked, but then the whole ledger was rolled back :) Frankly it was fascinating to watch real time and personally for me it was the end of any hopes that blockchain will ever become mainstream technology...

There are no Bitcoin ETFs, if you bother to check the holdings of the 4 major “blockchain” ETFs BLOK, BLCN, LEGR, KOIN, you’ll see they do not hold a single bitcoin, but equities like SAP, VISA, Oracle, Red Hat, Intel, etc… Moreover, the reason why SEC is rejecting all bitcoin ETFs is not volatility (leveraged ETFs are much more volatile then bitcoin), but the broad market manipulation...

Bitcoin features are actually bad news for long-term investors, because they gave CFTC jurisdiction over Bitcoin and the first thing they did was to send subpoenas to all major bitcoin exchanges, with all the data they are gathering is just a matter of time before the Cease & Desist Letter starts flying as well

No real bitcoin adoption, even less adoption now, no major retailer is accepting bitcoin and even the bitcoin conference stopped accepting bitcoin as payment :)

The fact that bitcoin “serves as a base trade currency for many other cryptocurrencies” is also bad news, because selling pressure on any one of the major tokens out there will bring bitcoin and all the rest down. Not to mention most of the top ones are not even decentralized which means if the underlying company shuts down, they will disappear outright... From top 10 by “market cap” (which is a also fake news) only 4 are decartelized.

All in all I think the whole thing is a fascinating psychological experiment in the following sense: we see people who in real life are really boring and never went trough the rebel phase (never had long hair, never played in a rock band, never had motorcycle, never fought the police) of their life and somehow they think by buying few $hitcoins, they are sticking it to the Man and they will lead the next revolution from behind the screen next to the sleeping wife (who does not realize that most of the family savings are being gambled on this)

The only thing that can keep alive bitcoin, (albeit on the fringes and at much lower price) is the strong possibility that the real creators were either NSA, CIA or another similar organization and will continue to use it for national security purposes like tracking terrorist funding. In the end, the bitcoin ledger is public (all coins per wallet and all transactions are known by everybody) , so it is just a mater of mapping wallets to real persons, which NSA is more than capable of doing by essentially snooping the whole internet... And all this will not go well with all the “libertarians” from the above :)

Frankly you are the one who needs good luck and lots of it...
 
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remme001

Member
69 2
Blockchain is not a 9 years old technology; it is actually 25 years old and is still looking for a problem to solve and the reason is simple, it is essentially a distributed database, which makes is very expensive to implement and use. 25 years in this business is an eternity...
The blockchain has not been around for 25 years. If you want to put it in a basket and categorize it as a distributed database go ahead. The blockchain technology itself is not exactly the same as the generalizing category you call distributed databases. The blockchain did not exist before 2008. There is a reason blockchain is getting attention and that's because it is the first to solve the double spending problem that exists when you have a decentralised currency essentially providing users with a means value transfer without needing to rely on trusted middlemen.

Blockchain has been hacked, just read a bit about DAO, not only hacked, but then the whole ledger was rolled back :) Frankly it was fascinating to watch real time and personally for me it was the end of any hopes that blockchain will ever become mainstream technology...
The DAO and the Ethereum blockchain are too different things. The DAO smart contract was exploited through a bug in the solidity programming language which the hacker exploited to transfer millions to a wallet address owned by the hacker. The blockchain was not compromised and functioned as expected. The integrity of the blockchain remained the same. Ethereum blockchain was forked to a time before the hack took place due to the sheer size of the DAO hack and those affected.

There are no Bitcoin ETFs, if you bother to check the holdings of the 4 major “blockchain” ETFs BLOK, BLCN, LEGR, KOIN, you’ll see they do not hold a single bitcoin, but equities like SAP, VISA, Oracle, Red Hat, Intel, etc… Moreover, the reason why SEC is rejecting all bitcoin ETFs is not volatility (leveraged ETFs are much more volatile then bitcoin), but the broad market manipulation...
Look at European Bitcoin ETFs KID documents and you'll see the claim that they don't hold any actual Bitcoin is false. Due to the lack of regulation currency surrounding cryptocurrencies I wouldn't expect them largely to be holding actual Bitcoin either. I would expect them to largely work on derivatives of Bitcoin. I don't see that as a problem, people will want to gain exposure to Bitcoin in various different ways and that's fine.

Bitcoin features are actually bad news for long-term investors, because they gave CFTC jurisdiction over Bitcoin and the first thing they did was to send subpoenas to all major bitcoin exchanges, with all the data they are gathering is just a matter of time before the Cease & Desist Letter starts flying as well
You do realise that Bitfinex doesn't operate in the US anymore right? It's going to be very hard for them to actually do anything and if they do even somehow manage to do so, why does this even matter? Bitcoin survived Mt Gox which was a far bigger exchange in comparison to Bitfinex by trade volume. Decentralised exchanges are the future anyway. Sure an event like that will bring the price down temporarily like last time but it will serve as a good encouragement for people to move towards decentralized exchanges. Bitcoin is a lot more resilient than it seems you're currently giving it credit for and no lol features are not bad for Bitcoin.

No real bitcoin adoption, even less adoption now
I showed you the 3.9 million coinbase user statistics previously which by the looks of things you've chosen to ignore. Retail adoption is just one of the spectrums of adoption you can look at. To me, Bitcoin is heading more as a store of value however that's not say the Bitcoin fee problem is a valid criticism if you were to mention it. Segwit and Lightning seeks to improve this a great deal.

The fact that bitcoin “serves as a base trade currency for many other cryptocurrencies” is also bad news, because selling pressure on any one of the major tokens out there will bring bitcoin and all the rest down. Not to mention most of the top ones are not even decentralized which means if the underlying company shuts down, they will disappear outright... From top 10 by “market cap” (which is a also fake news) only 4 are decartelized.
It brings greater use to Bitcoin, sure there are threats but one cryptocurrency being effectively taken down has little bearing on the Bitcoin price as shown by the recent Bitconnect debacle which was valued in billions at one point.

The only thing that can keep alive bitcoin, (albeit on the fringes and at much lower price) is the strong possibility that the real creators were either NSA, CIA or another similar organization and will continue to use it for national security purposes like tracking terrorist funding. In the end, the bitcoin ledger is public (all coins per wallet and all transactions are known by everybody) , so it is just a mater of mapping wallets to real persons, which NSA is more than capable of doing by essentially snooping the whole internet... And all this will not go well with all the “libertarians” from the above :)
Now the conspiracy theories come out :), the creation of wallet addresses is pretty much effortless, sure you can still identify an origin but you can't verify a particular wallet address as belonging to someone unless that address has data tying a person to the address like KYC data on cryptocurrency exchanges. Not all exchanges across the globe require KYC data though and if you need to obscure your transaction history keeping it on an exchange is a bad idea. For complete lack of traceability there is Monero. That's the great thing about cryptocurrencies, many serve various different use cases.
 

Quantt

Established member
944 57
The blockchain has not been around for 25 years. If you want to put it in a basket and categorize it as a distributed database go ahead. The blockchain technology itself is not exactly the same as the generalizing category you call distributed databases. The blockchain did not exist before 2008. There is a reason blockchain is getting attention and that's because it is the first to solve the double spending problem that exists when you have a decentralised currency essentially providing users with a means value transfer without needing to rely on trusted middlemen.
Please, my day job is in security/systems operations (I am leading a team for major corporation SP500 corporation), so I have been following the space for a long time and indeed blockchain was invented 25+ years ago, Satoshi papers were just one implementation:

https://link.springer.com/chapter/10.1007/978-1-4613-9323-8_24

The DAO and the Ethereum blockchain are too different things. The DAO smart contract was exploited through a bug in the solidity programming language which the hacker exploited to transfer millions to a wallet address owned by the hacker. The blockchain was not compromised and functioned as expected. The integrity of the blockchain remained the same. Ethereum blockchain was forked to a time before the hack took place due to the sheer size of the DAO hack and those affected.
In the end it was both hacked and then rolled back

Look at European Bitcoin ETFs KID documents and you'll see the claim that they don't hold any actual Bitcoin is false. Due to the lack of regulation currency surrounding cryptocurrencies I wouldn't expect them largely to be holding actual Bitcoin either. I would expect them to largely work on derivatives of Bitcoin. I don't see that as a problem, people will want to gain exposure to Bitcoin in various different ways and that's fine.
I am sure there is an small ETF on an obscure exchaneg holding a bitcoin, but what netters are the major ETFs on the the major exchanges and again, buying Oracle, VISA and Intel is not exposure to blockchain:

BLOK holdings:
https://amplifyetfs.com/blok-holdings

BLCN holdings:
http://go.realityshares.com/blcn-daily-holdings/

LEGR holdings:
https://www.ftportfolios.com/Retail/Etf/EtfHoldings.aspx?Ticker=LEGR

You do realise that Bitfinex doesn't operate in the US anymore right? It's going to be very hard for them to actually do anything and if they do even somehow manage to do so, why does this even matter? Bitcoin survived Mt Gox which was a far bigger exchange in comparison to Bitfinex by trade volume. Decentralised exchanges are the future anyway. Sure an event like that will bring the price down temporarily like last time but it will serve as a good encouragement for people to move towards decentralized exchanges. Bitcoin is a lot more resilient than it seems you're currently giving it credit for and no lol features are not bad for Bitcoin.
Not hard at all, just the resent example, based on a letter from two state Judges, caused Bitconnect in the UK to close down - they are not convicted of anything yet... How many extraditions to US of traders accused of market manipulation, how many European banks fined billions of dollars by the US...


I showed you the 3.9 million coinbase user statistics previously which by the looks of things you've chosen to ignore. Retail adoption is just one of the spectrums of adoption you can look at. To me, Bitcoin is heading more as a store of value however that's not say the Bitcoin fee problem is a valid criticism if you were to mention it. Segwit and Lightning seeks to improve this a great deal.
This is no adoption, pure speculation, but looking into the price action, looks like the well of gullible people to buy is drying out pretty fast


It brings greater use to Bitcoin, sure there are threats but one cryptocurrency being effectively taken down has little bearing on the Bitcoin price as shown by the recent Bitconnect debacle which was valued in billions at one point.
They are lumped together, the tide will bring all the boats down at the same time, just check the current prices, everyone is going down, only Tether stays the same :)


Now the conspiracy theories come out :), the creation of wallet addresses is pretty much effortless, sure you can still identify an origin but you can't verify a particular wallet address as belonging to someone unless that address has data tying a person to the address like KYC data on cryptocurrency exchanges. Not all exchanges across the globe require KYC data though and if you need to obscure your transaction history keeping it on an exchange is a bad idea. For complete lack of traceability there is Monero. That's the great thing about cryptocurrencies, many serve various different use cases.
Monero is not as secure as you think, but I am not going into that debate...
 

Kaeso

Established member
836 91
.. Retail adoption is just one of the spectrums of adoption you can look at. To me, Bitcoin is heading more as a store of value however that's not say the Bitcoin fee problem is a valid criticism if you were to mention it. Segwit and Lightning seeks to improve this a great deal..
BTC is down about 65% since Dec 2017. Its not a very good store of value :D

On the plus side though, for those interested, the BTC futures contract XBT (= 1 BTC) is a much smaller size now ;)
 

remme001

Member
69 2
BTC is down about 65% since Dec 2017. Its not a very good store of value :D
Never really understood the volatility counterargument there. Look at gold, it's supposed to be the ultimate store of value and yet it fluctuated 45% between 2011 to 2015 and by fluctuated I really mean fell :). Sure it's not as volatile as cryptocurrencies but I wouldn't exactly call it stable either.
 

Brumby

Established member
593 135
The trouble my friend is you are just looking at the price and not looking at the drivers behind the price. Markets run in cycles yes, the long term, however, is clear to me. You are playing with fire shorting this market especially considering the volatility of it but you're free to do what you want. Good luck.
Seriously, the drivers? The hype around it are simply vaporware. Quant is doing an excellent job responding to your so call drivers and I will defer to him. I hope you can keep up with him on the issues.

Never really understood the volatility counterargument there. Look at gold, it's supposed to be the ultimate store of value and yet it fluctuated 45% between 2011 to 2015 and by fluctuated I really mean fell :). Sure it's not as volatile as cryptocurrencies but I wouldn't exactly call it stable either.
A primary store of value property is not in stability but in its longevity. Gold has been around as a store of value for thousands of years and so has a demonstrated track record. As to Bitcoin, the jury is still out on whether it will be around in the next 10 years.
 

Kaeso

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836 91
Very much reminds me of this ha. It's important to keep an open mind, especially with technology. I'll see you guys on the other side of your trades. I'm in it for the long-term.

hmmm..

he responded to people using this quote to discredit his thoughts on Bitcoin:

"...I don't claim any special expertise in technology -- I almost never make technological forecasts, and the only reason there was stuff like that in the 98 piece was because the assignment required that I do that sort of thing.

The issues about Bitcoin, however, are not technological! Everyone agrees that it's technically very sweet. But does it work as money? That's a very different kind of question.

And the fact that people are throwing around my 98 quote actually shows that they don't get this point -- that they're confusing technology with monetary economics"
 
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Brumby

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593 135
Very much reminds me of this ha. It's important to keep an open mind, especially with technology. I'll see you guys on the other side of your trades. I'm in it for the long-term.

I agree with Kaeso. You actually don't understand the difference between technology and commercialisation. The dot com bubble happened because people saw the opportunities in the internet age. The bust happened because people only understood the hype and not the commercialisation process required. The tech giants today like Facebook and Google did not even exist during the dot come bubble but yet are benefiting from the opportunities first recognised during the dot com era. Ebay and Amazon had to endure severe capitalisation hit to reposition themselves to survive.