#Cryptocrash

[nsacpi]

From the linked page above:

Every asset price has both fundamental and bubble components. In most cases, the bubble component of an assets price is zero and the asset price is driven by its fundamental value. For bitcoin, one can argue that the fundamental component is zero and that the price of bitcoin is entirely driven by behavioral frenzy. Bitcoin has no fundamental value and, really, no intrinsic value.

I don't think this is quite right. Bitcoin has a fundamental source of value. It is used for transactions that some people would like shielded from authorities. For whatever reason. Some of it is criminal activity. Some of it because people have an ideological opposition to government intrusion and regulation. I suspect its value will rise and fall with the number of people who want to use it for these and other reasons. Of course, it could be overtaken by another cryptocurrency. If something else caught on then its value could crash pretty quickly. And there are a LARGE number of bitcoin holders who have bought it for speculative purposes. So there IS likely to be a bubble element to its value in addition to a fundamental element. It is just like real estate in that regard. Some people buy a house or apartment to live in. But there are also flippers looking to make a quick buck. It is a question of proportion. My impression is that there are lots of flippers in the bitcoin market, which is why it's price is so volatile. Given the ease with which new cryptocurrencies can be created bitcoin's fundamental value is likely to be a very small fraction of its current price.

[sturg33]

What is the intrinsic value of the US Dollar?

[goldfly]

I got you worked up by just laughing at a crypto guy making fun of Ponzi schemes. Didn’t even say anything about Bitcoin but I understand why you would want to focus the convo only on that lol


Which is still funny when you look at the amount of pump and dump and nft schemes in that world

But yeah, me making a statement or observation doesn’t mean I want to engage in a convo on that topic with you.

[nsacpi]

*And this is ignoring the unlimited applications of the Blockchain in general.

I agree with this. Blockchain has a lot of legitimate applications. And will have even more in the future. But this has nothing to do with the value of a particular cryptocurrency.

[nsacpi]

What is the intrinsic value of the US Dollar?

It is a social construct. If we elected a president on a platform of defaulting on the debt we would find out. Its value depends on people's assessment of the "full faith and credit of the United States." Lots of currencies have gone poof.

[sturg33]

I agree with this. Blockchain has a lot of legitimate applications. And will have even more in the future. But this has nothing to do with the value of a particular cryptocurrency.

But Bitcoin is unique in it's scarcity (as zito correctly pointed out) and all transactions are visible on the blockchain

If the Blockchain is the future (which I believe it is), then what is the logical crypto currency to be be the reserve on transactions?

[zitothebrave]

You can make an argument they are in a bubble or can be manipulated (like literally every asset)... But it is not a Ponzi scheme in by any potential definition.

It has been by far the best investment in centuries, and it being more.globally adopted every day as a currency*

*And this is ignoring the unlimited applications of the Blockchain in general.

The reason that boomers and seals hate Bitcoin is because it is a.legitimate threat to *actual* Ponzi scheme of fiat currencies

I dunno. Legos are generally a better investment than many traditional investments. And unlike crypto there is a fungibility to them.

[sturg33]

It is a social construct. If we elected a president on a platform of defaulting on the debt we would find out. Its value depends on people's assessment of the "full faith and credit of the United States." Lots of currencies have gone poof.

The social construct has been broken. More than 40% of the dollar supply has been created in the last couple years. This has killed the value of the dollar, which is currently held up by being the world reserve currency and the us military.

Bitcoin solves this

[sturg33]

I dunno. Legos are generally a better investment than many traditional investments. And unlike crypto there is a fungibility to them.

Bitcoin is a widely used and accepted currency globally

[sturg33]

I got you worked up by just laughing at a crypto guy making fun of Ponzi schemes. Didn’t even say anything about Bitcoin but I understand why you would want to focus the convo only on that lol


Which is still funny when you look at the amount of pump and dump and nft schemes in that world

But yeah, me making a statement or observation doesn’t mean I want to engage in a convo on that topic with you.

You are out of your league on this, seal.

Just clap and move on

[goldfly]

You are out of your league on this, seal.

Just clap and move on

out of my league lol

We need to add crypt boys to the list of cross fit, vegans etc lol

[sturg33]

By the way, if we can get a further crash down below $20k, my advice to all would be to back up the truck. I've got buy orders in at $18k and then again at $14k. I'm rooting for it

[nsacpi]

But Bitcoin is unique in it's scarcity (as zito correctly pointed out) and all transactions are visible on the blockchain

If the Blockchain is the future (which I believe it is), then what is the logical crypto currency to be be the reserve on transactions?

I'll just repeat two points I made earlier.

1) The ease of entry for new cryptocurrencies means that bitcoin's fundamental value is going to be pretty low.

2) The current price reflects a mix of fundamental value and bubble (from speculators). I would guess the bubble part is over 99% of its current price. Maybe I'm wrong there. We'll see.

Bubbles grow until the market runs out of new investors (also known as suckers). It is hard to say when this happens. Until it does you will hear all sorts of arguments explaining why the asset is not really a bubble.

During the dot com bubble years I was fascinated by a particular stock. The company's name was Art Technology Group. Based in Cambridge, Massachusetts. I knew one of the founders. And I was dumbfounded by how rich he got based upon a product that was in fact generating little in the way of revenues, much less profits. But it got swept up in the mania. At its bubbilicious peak in 2000 ARTG traded at $126. In the end a larger company bought it for $6 per share. I think Bitcoin is ARTG writ much larger.

[sturg33]

I'll just repeat two points I made earlier.

1) The ease of entry for new cryptocurrencies means that bitcoin's fundamental value is going to be pretty low.

2) The current price reflects a mix of fundamental value and bubble (from speculators). I would guess the bubble part is over 99% of its current price. Maybe I'm wrong there. We'll see.

Bubbles grow until the market runs out of new investors (also known as suckers). It is hard to say when this happens. Until it does you will hear all sorts of arguments explaining why the asset is not really a bubble.

During the dot com bubble years I was fascinated by a particular stock. The company's name was Art Technology Group. Based in Cambridge, Massachusetts. I knew one of the founders. And I was dumbfounded by how rich he got based upon a product that was in fact generating little in the way of revenues, much less profits. But it got swept up in the mania. At its bubbilicious peak ATG traded at $126. In the end a larger company bought it for $6 per share. I think Bitcoin is ATG writ much larger.

Bitcoin has been called a bubble for 11 years. And it's why you were wrong to doubt your students

The US Dollar is not the answer. It has failed and it's why we see leaders today raiding the Treasury. Bitcoin was designed to not be inflated.

1 BTC = 1 BTC... and it will be worth more than the dollar from now until forever

[sturg33]

I can assure you that your students aren't grateful to.l professor nsacpi for discouraging them to invest in BTC a few years ago, despite the recent price action

[chop2chip]

You can make an argument they are in a bubble or can be manipulated (like literally every asset)... But it is not a Ponzi scheme in by any potential definition.

It has been by far the best investment in centuries, and it being more.globally adopted every day as a currency*

*And this is ignoring the unlimited applications of the Blockchain in general.

The reason that boomers and seals hate Bitcoin is because it is a.legitimate threat to *actual* Ponzi scheme of fiat currencies

Blockchain technology is incredible at its core. Cryptocurrency and NFTs are two applications, and not even close to the best possible application (healthcare!)

One could argue whether the juice is ultimately worth the squeeze, but it’s far from being a 19th century gold rush parallel.

[cajunrevenge]

By the way, if we can get a further crash down below $20k, my advice to all would be to back up the truck. I've got buy orders in at $18k and then again at $14k. I'm rooting for it

I see it the same way. Crashes are the best times to buy.

[nsacpi]

In the world of actual currencies the dollar is on the verge of parity with the euro for the first time in 20 years and up to 128 against the yen from 109 a year ago.

And up to 6.75 yuan from 6.43 a year ago.

Up 16% against the pound in the past year. I have to remind my daughter to ask to be paid in dollars when she moves to London.

[sturg33]

In the world of actual currencies the dollar is on the verge of parity with the euro for the first time in 20 years and up to 128 against the year from 109 a year ago.

And up to 6.75 yuan from 6.43 a year ago.

Up 16% against the pound in the past year. I have to remind my daughter to ask to be paid in dollars when she moves to London.

The dollar has lost 99% of it's purchasing power

Why are academics so friggin clueless.

Feel terrible for.your students for trying to disuade them from the best investment of the last decade

[sturg33]

End of a big era

Thanks Brandon