Paywalled, but based on the title. Crypto isn't going anywhere, love it or hate it.
Edit: read it. Says will mostly only buy and hold bitcoin specifically.
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So it’s staying flat? Cool.
We've been through several boom's and busts for Bitcoin before (and let's be honest, all the rest of crypto rises and falls with Bitcoin).
I see no reason to assume this current bust is permanent.
The last major bust, I lost confidence after a long while and sold off at considerable loss. That turned out to be a massive, life-changing mistake. Oh well, you can't live life regretting missed investments.
I decided not to bet my life savings on the Chiefs winning the superbowl this year. That too was a life changing mistake.
Not “betting” on crypto really isn’t any different. It isn’t like investing in Apple or some solid company with a track record. It’s much closer to just gambling, and people don’t beat themselves up about not gambling.
> It isn’t like investing in Apple or some solid company with a track record. It’s much closer to just gambling, and people don’t beat themselves up about not gambling.
Yeah, like buying Apple at $180, Meta at $300, or Google stock at $140 last year. /s I don't see anyone here screaming that they are glad that they bought at those prices.
The clever strategy was to just wait for the market to crash [0] after the giant run up to 'All time highs' in a short space of time.
Mmm, I think you shouldnt blame yourself here. You probably did a rational thing. BTC largely seems irrational.
Oh it’s quite rational, just asymmetrically so, just like any other penny stock. Such markets consist of manipulators and the manipulated, and the manipulators are the rational ones.
And, apart from price, the crypto markets are just like penny stocks: opaque, obscure, thinly traded, and ripe with manipulation and other fraud.
BTC is completely rational because its controlled by a few whales.
Whenever bad news happens in crypto land they pump the price to restore confidence so there isn't a bank run and the money laundering can continue.
How do large owners of an asset, whales as you call them, pump the price of that asset? And what evidence do you have of this? The evidence I’ve seen points a traditional ponzi actor, who corrupted regulators and governments, publishing fake inflated prices to generate a bull market and attract more deposits to steal. Where are the Bitcoin whales you mention?
"We report that 0.01% of the addresses contain over 58.21% of all Bitcoins in circulation."
Pretty bonkers.
See: https://www.frontiersin.org/articles/10.3389/fbloc.2021.7301...
As usual this is nonsense and irrelevant. Satoshi himself had over 1M coins but the vast majority of early coins are lost. According to that analysis many old lost wallets are these supposed whales.
The observation that is also unjustified is this idea that whales can prop up the price, how does that work exactly? if they hold the asset then selling it would lower the price, so hold on did they sell earlier and are using USD to buy now, but that would generate tax liabilities they would have to pay now and also lose transaction fees, yet supposedly they are propping up Bitcoin price. It’s a nonsensical theory.
If the BTC price is set artificially, it means it is not a rational price, IMO, for a security/investment/currency/market. Rational as in "people will be people" and "can be explained" aye.
Ok I’ll take the bait
> BTC largely seems irrational.
I’d be interested in which parts are irrational.
My argument for why it is irrational is that bitcoin as an asset has nothing backing it. It does not produce anything, it is not a liability on anyone else's balance sheet, and it can't be used for anything other than hoping that a greater fool than you will pay you more for it in the future.
Yes, you could say some similar things about government currency, but in that case there is a large organization that is motivated to keep the buying power of the currency relatively stable. Traditional currency also has the benefit of being much easier to transfer between people, unlike bitcoin which cannot scale to serve the needs of the population due to inherent limitations of the technology.
Bitcoin has the largest decentralized distributed computer network on the planet backing it. Along with numerous technical advancements in the functionality of money. Many serious students on the anthropological history of currency in human history recognize it’s certainly a significant technological innovation in money.
What I meant by nothing backing it is that it cannot be redeemed for any other thing of value, in the same way that at one point we used gold certificates as currency, which were "backed by" gold. At that time you could literally exchange the gold certificate for gold coins at a bank. A share of stock is backed by the value of the company since the stock grants you partial ownership of the company. Bitcoin may have a lot of computers that are burning electricity attempting to mine bitcoin and powering the bitcoin network, but as a bitcoin holder I don't have any ownership of those computers. They just continue to consume resources that we somehow have to pay for by pouring more money into the bitcoin system.
Sure, there are some people that think it is a significant innovation. There are also many people who recognize that it is not solving any real world problem, and that up to this point it has just operated as a giant speculative bubble.
Price of BTC "largely doesn't make sense" really. That's what I mean.
What makes it irrational?
BTC is rational like tulip-bulbs are rational, it isn't rational like USD is rational (you can argue USD is irrational too, of course).
When I said irrational I just meant in the context of things we can relate BTC to (from tulip bulbs to fairly stable fiat to securities).
Like you can call penny stocks "rational" and a ponzi scheme "rational" (I don't think BTC goes this far btw so this is for illustrative purposes don't yell at me) you can call BTC "rational" but compared to the SPY or Vanguard target-date funds etc.. these things look pretty "crazy"
> BTC is rational like tulip-bulbs are rational
tulip-bulbs do not have actual utility. they can't feed my family.
i can guess what you'll say next... the volatility of bitcoin won't either!
my response to that is that bitcoin isn't a currency. it is a store of value in that i can borrow against its value. with that borrowing, i can use it to generate value for my family. i can borrow against it (without having to go to a bank or get permission or even a credit check!) and open up a grocery market, sell bananas, generate revenue and pay down the loan. there is value in that and it has nothing to do with volatility as long as my loan-to-value ratio is maintained.
few understand or even consider those aspects of bitcoin and crypto in general.
The volatility of any cryptocurrency "investment" makes it more like a gamble pure and simple than any other investment.
It's irrational to take 10% of your savings, walk into Caesar's Palace, and put it on red.
People are injecting much larger percentages of their savings into cryptocurrency.
No matter how many wins, no matter how high the cryptocurrency market has climbed between crashes, the volatility of it makes it irrational for anything above 1% of your savings... If even that.
It sounds like you think it's unwise, but that's not quite the same thing as irrational. People make different decisions using different sets of information.
I have a significant portion of my savings as Bitcoin (much more than 1%). That decision was made through lots of close observation of the ecosystem, careful reading and thought. I'm very confident in the long-term growth of it, but I don't keep any month to month expense money as Bitcoin because of short-term volatility.
You may disagree, but you can't characterize that as irrational.
This isn’t really true. Even picking the most extreme moves of Bitcoin it has lower volatility than many major tech stocks and many developing country fiat currencies.
Now factor in the variable that the most recent bull rally and crash was mostly instigated, in both directions, by a traditional ponzi bad actor as the FTX scam simply used crypto as a mechanism for an age old financial scam, not really caused by crypto, but instead enabled by outright corruption of regulators and governments, then … are you really sure long term natural Bitcoin downward volatility is actually high?
> are you really sure long term natural Bitcoin downward volatility is actually high?
It appears to be three times more volatile than NASDAQ in the short term, and twice as volatile in the long term. So, yes.
https://medium.com/swissquote-education/bitcoin-vs-risk-unde...
> So it’s staying flat?
Bitcoin being 45% up in two months is not flat, neither is the total crypto market cap up 40%.
The news really has taken a toll on HNers, just like it did when everyone here thought Meta stock was going to zero and doubled in three months from $88.
It’s up like 50% over 2 months. Nimble traders are raking.
The thin silver lining of the stock market is that gains don't necessarily require losers: gains can come from companies increasing revenue, value.
If a coin is up 50%, what does that actually mean other than that there's more bag holders?
If you're seeing gains, it's because someone else took a haircut previously. Maybe even you，lol. Isn't that a zero sum game?
Who cares. Trading anything is about making money. It doesn’t really matter what the thing being traded is so long as there’s alpha in it.
Options are a 0 sum game too. What’s your point?
That it sucks that the entire cryptocurrency trading game requires people to be losing money and holding bags, that the cryptocurrency scene will continue to cannibalize itself, that cryptocurrency is a bad investment, and that cryptocurrency is basically useless.
Why do you care if it sucks or not when you think it's a bad investment and useless? Don't invest in them or trade them if you don't think they are good. It's a great thing about the world we have. You don't have to like everything and things you don't like aren't forced on you so you can ignore them and do the things you like.
A lot of people like trading them because there's so much alpha in them. They know the risks because they are adults and can handle themselves.
If we grant that we like a society that legislates that we wear seatbelts and can't be sold meat and with human feces in it, can't we apply that same logic to the financial arena?
This "they're adults and can choose for themselves" could be said of any Ponzi scheme. Sounds less like an argument for libertarianism and more an argument for the freedom to exploit unmolested a pool of victims.
My ideal is everyone receives the education necessary to make sound financial decisions and be able to avoid getting preyed upon by malcontents. As it stands, when I graduated highschool in the USA, some of my classmates were functionality illiterate. We see boomers get financially scammed regularly through phone calls. Plus there's scams due to straight up lying that no matter your level of education you can't really guard against, like with ftx. Our society should protect against this.
So what? So I want other people to not be scammed or hurt or exploited. If you want a libertarian paradise where people are free to exploit each other I heard there's gonna be some Bitcoin islands, you can try one, meanwhile I don't really see the point of society or government if we don't use it to protect people from exploitation and harm.
What the heck do you think NASDAQ is?
An exchange subject to the regulatory oversight of FINRA? Is that the same thing to you as whatever ftx was lol?