Investors start betting against Bitcoin with short-trade products ProShares, the issuer of exchange-traded funds with around $65 billion under management, has launched the first short Bitcoin exchange-traded product in the US, offering a way for investors to make money from the ongoing cryptocurrency meltdown. Dubbed the ProShares Short Bitcoin Strategy, the ETF is set to launch on the New …
The entire ransomware industry was made possible by bitcoin and other cryptocurrencies.
Until legislators around the world smarten up and make payment of ransom illegal (if nothing else make it illegal for INSURANCE to make ransomware payments) there will be some demand for bitcoin.
Though if the price falls far enough that mining becomes unprofitable that may make the house of cards collapse. Without mining activity, transactions can't be processed and it is impossible to transfer bitcoin from one wallet to another. I've read that below $10K mining becomes unprofitable almost everywhere, though that ignores that there are likely some miners who are using stolen electricity so their marginal cost of mining is zero.
If you are calling the US a "tin pot country", I might, depending on my mood & the subject, agree. But in context, I would say that you are at best misleading.
FDR outlawed it. From what little reading I have done, it seems that it is a preparatory step to going off the gold standard, which is why I stretched a bit & called it "generally outlawed".
They're right, though. Cash has value because you can pay taxes and other things with it, but it doesn't have intrinsic value. That is, it only has that value while you can find someone to give you stuff you want in return for it. If we all decided tomorrow that we don't want pounds, then you would only have some paper with anti-counterfeiting measures applied, and unless you wanted that, your value would have been lost.
That said, it isn't a great argument for anything, as basically nothing has as much intrinsic value as it has effective value. Gold has some intrinsic value because you can manufacture stuff with it, from aesthetically pleasing jewelry to electronic components. If both gold and pounds had their monetary value eliminated, the gold would still be useful to someone and you could find them and sell it. However, in this hypothetical environment, your gold would still be worth a lot less than it is today because there would be a lot more available as those who used gold for storing value would no longer need to do so.
That was pretty much my argument. I'm not suggesting anyone should swap their hard earned fiat currency for Bitcoin any time soon, but in reality the only things that have intrinsic value are those that can give you food, shelter, warmth, etc. and then up the pyramid of needs it gets more abstracted. However, my argument still stands. Crypto has no intrinsic value, but neither does cash. It's just cash has been around longer, and (currently) accepted by many more places. A bit like comparing a religion to a cult. Basically the same thing, but one of them has been around longer and accepted by more people.
Bitcoin is still "worth" about £20,000 which is amazing compared to around a decade ago.
Today's sucker price is $20,399.37
YTD range: 17,708.62 - 68,789.62
Warren got it right:
- When the tide goes out you can see who's been swimming naked
- I wouldn't pay $25 for all the BTC in the world
Don't mention the Bitcoin : Tether house of cards
LMAO
I wouldn't pay $25 for all the BTC in the world
Really? I would.
I mean, it'd be a great line to drop at parties. "What do I do? Oh, I work in computers. Also I own all the Bitcoin. Yup, bought it all, shut the whole thing down. Just a hobby, really."
Or: "Yeah, I remember when everyone was talking about Bitcoin a few years back. Whatever happened to that?" "Well, funny you should ask..."
Also, by definition "all the BTC" would be an NFT, and $25 is pretty cheap for one of those. "Sure, I dabbled in the NFT fad, just for a lark. Only spent a few dollars on it. Got all the Bitcoins."
It's the sort of thing Hat from XKCD might do.
5 thumbs down, and no replies (so far). So at least 5 dumbasses on here.
Try telling the people of Hungary in 1946 that their cash had intrinsic value (apart from as a firefighter perhaps, or something to stuff into you mattress to keep you warm, as you can't afford any heating).
Muppets.
I didn't thumbs-down this, but in each case, hyperinflation was a result of government mismanagement, sometimes coupled with external events - such as War.
These countries you mention? - Their own currencies and economies faltered, in isolation.
They are linked to budget deficit, caused by printing money.
In each case, the productive output of the country - the exports - had suffered enormous damage, due to internal and external factors - generally due to running the economy badly.
It's a controversial topic and indeed, the global monetary system is considerably abstracted from the reality of actual value. There's a great deal of "futures" and "IOU's" and all sorts of horribly complicated infernal mechanisms at play.
However, it _does_ all, eventually, relate back to the trade of goods.
The elephant in the room for cryptocurrency is simple - it isn't being used as a currency to trade goods and services, it is being used for speculation.
Therefore, it has no intrinsic value other than what people are prepared to buy it for.
News Flash, until cryptocurrency is used for purchases and have no ties to traditional currencies - or FIAT as it is called, it is purely a speculative asset.
Yes, FIAT is indeed an abstraction, but it is an internationally recognised abstraction that's been around for ... hell, as long as 5,000 years.
Somewhat more than the 13 years BTC has been around.
I can actually BUY stuff with it. I can buy food, shelter, water, warmth, jelly babies, muppet videos.
Even if it massively devalues due to hyper-inflation, I can _still_ buy stuff with it - although a single Jelly Baby may cost me a months salary.
Yours Sincerely,
Cookie Monster.
Ignore the thumbs down, you are absolutely right.
An ounce of gold 100 years ago would buy you a decent suit. An ounce of gold today will buy you a decent suit. £50 100 years ago would buy you something worthwhile, £50 today will buy you not much.
Paper currency only has real value in two cases. The first is that is backed by actual tangible assets, typically gold or other precious metals (these are precious metals not just in one country but universally). The British pound used to be based exactly like that. Other things also have intrinsic value, such as oil. If you back your currency with n billions of barrels of oil it is probably a fairly stable currency (yes, I know the price of oil goes up and down).
The second is confidence of the general population in this paper, that is the belief (not the actuality) that it is a stable enough currency that it won't lose its value 5 minutes later. This is far more unstable currency because confidence can be lost in hours.
Never for one minute was I suggesting that Bitcoin is a great investment. I think you'd be crazy to buy any right now. Or probably ever again TBH, unless it becomes much more stable and accepted by many more places. Now Dogecoin is a different matter. ;-)
I was only making the point that cash has no inherent value, and I'm sticking with that (I still trust cash for the time being - but I don't even trust the government not to screw that up).
LOL, reminds me of seeing Steve Miller when he toured the UK, Your Cash Ain't Nothing But Trash ... was this predicting bitcoin?
Cash value is based on the size of your economy. You estimate the size of your economy relative to others and then divide that up into a number of units. The units being whatever currency you are using and issue money appropriately.
Things normally tick along. Your economy (normally) gradually grows. If it grows more than others it makes your currency more valuable to import stuff, or you can issue more currency to bring the relative value down.
Where things go pear shaped is when either the economy shrinks (or grows much more slowly than others) and/or you print more money. Either of these will make your currency worth less against other economies leading to more expensive imports and higher inflation. Often as imports become more expensive, governments try to implement price controls to placate the populace, which is when things usually get really bad and you get hyper inflation.
This normally happens due to war (Germany after both world wars), government idiotic policy (Zimbabwe chucking farmers off the land and UK with Brexit) or sanctions (Venezuela, helped by govt idiotic policy with price controls). It will happen to Russia and Ukraine, although hopefully Ukraine can be bailed out. Ideally by diverting some of the seized Russian funds to at least partly get them by.
Since there is no economy backing a crypto coin, it is by definition worthless. Its only worth is when you can sell it to someone else who thinks it actually has some value. At some point, somebody is left holding the thing when the actual value is realised and they take a bath.
Cash is accepted - by fiat if you like - as a medium of exchange in the economy. Its intrinsic value is that of the economy of the country that issues it (or countries in the case of the Euro). It may vary with the fortunes of the economy. If the economy tanks its value tanks. Its value in terms of pints of beer vs loaves of bread vs days' work might vary with the relative values of those items within the economy. There's no evading the effects of the real world but at least it is based on the real world. That's why Bitcoin and the rest are valued in dollars and not the other way around.
Technically, though, OP is correct. That's not "intrinsic value". It's exchange value.
The problems with the cryptocurrency fans is, first, they're hoping the exchange value of the particular horses they've picked in a very crowded race for new, unregulated, volatile exchange media, many of them with various other unfortunate properties, will outperform the established top-down (i.e. government-issued) currencies.1 And sometimes they do, for the short term. But it's a highly risky position to take – and the short term is the only term we've had with cryptocurrency. No one knows what that market will look like in ten years.
And second, cryptocurrency only succeeds as a medium of exchange (and thereby has exchange value) if you can actually exchange it for something with use value. Sometimes you can, apparently; that's what made the Silk Road successful. But I sure wouldn't want to depend on it.
So government currencies have superior exchange value to cryptocurrencies now, and they may always (with the possible exception of government-issued cryptocurrencies, which, ugh, I can't even). But they're not different in the type of value they have, just in the amount and liquidity of that value.
1Of course cryptocurrencies aren't the only example of bottom-up consensus currencies, even in the modern era. There are plenty of groups of people in places like Papua New Guinea using those, and for a while in Somalian markets the merchants were circulating their own notes. But historically bottom-up currencies have only succeeded in fairly small markets where there was a strong in-group identity and widely-observed mores against exploiting them.
The difference is that in your example, Dobby only has to win that once.
With "investing", Dobby has to win the majority of the time.
In many ways, investing is worse than gambling*
* to be fair, it's not quite so bad if you invest in well managed funds, but investing in a specific company, or cryptocurrency is definitely worse than gambling
VERY few games are only played for one round. In fact, there are a lot of schemes out there where you must gamble for a significant number of rounds.
But yeah, in no case is the house ever on your side. And the folks making the rules are smarter than you, with faster computers.
I would say that putting money in productive assets (shares) or lending at agreed terms (bonds) is investing. To spread the risk of individual assets it can be done through funds.
Crypto are not (derivatives of) productive assets, and in my world therefore gambling rather than investment. Gold is in principle similar but has thousands of years of history as a store of value.
For what it’s worth, I am a booglehead on investment
You are gambling.
If you buy a share of Dobby then you are investing because if Dobby wins you not only have your share of the prize money but Dobby has gained in value, not just as a more likely prospective winner of more prize money but also as a prospective parent of more race horses. And if Dobby loses Dobby is till Dobby.
It's a speculative investment with a greater than average value of failure but it's an investment because your money's going into something that might generate extra money in income (the prize money) or value (the stud fees).
If I've learned anything about cryptocurrency, it's led by media savvy "insiders" with many followers.
A circle jerk.
The media manipulation is far wider than social media posts, although those make up the bulk of the bait.
It's fairly obvious, a single whale with deep pockets and a social media following, can drum up support for the "asset" they have invested in.
They just need to post about it - and the price rises.
The more the social media following, the bigger the feeding frenzy.
Then we get to more abstract mechanisms - articles about cryptocurrency, news about it - "news" often being pretty much blatant bias.
We get the wonderfully inept "TA" or "Trend Analysis" - when used in the right hands, in the right circumstances, it totally has some value.
When used for cryptocurrency, it mostly doesn't - its tea leaf reading, bone throwing or just ... more hype.
Enter institutional investors - well heeled, soulless, incredibly savvy traders - behind the scenes, no social media needed, invisible = manipulate.
Cryptocurrency just becomes another asset to be used - and WOW, what an asset is can be - a total wild west, where under the right circumstances, a buy and sell can equal 10x profit in an hour - sometimes less.
Where you can just keep rinsing and repeating buy/sell, buy/sell when the volume is there.
A naive rube has close to ZERO chance in this speculative market - may as well go buy a lottery ticket.
Smarter folk can ride the coat tails, knowing full well that the entire thing is a casino, but it's a 24/7 soul destroying task.
Right now, it's a case of pass the parcel - last one gets the bags.
Institutional money is rapidly leaving - the super big bucks - but there may be one more "rinse and repeat" cycle left, one more stab at "tulip mania", to rob a few more dimwits from their hard earned money.
The emperor has NO clothes.
And now? - institutional investors are betting on the entire shit show going bust.
Obviously - wring the last little bit of cash out of it, emotionlessly, move on...
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