Bitcoin is still early

[Otolith]

I enjoyed video posted by Outdoors

Couple serious questions. Don't take this as doubt in bitcoin but rather genuine questions.

1. I see how bitcoin can be the future and that it's purpose is not a bubble, my question is what about it suggests its a better investment than say VTI?
2. What if when we talk about bitcoin and the dotcom bubble we have it wrong? What if bitcoin is like packets? Packets were here to stay and are now ubiquitous for internet information transfer. Can we fathom that bitcoin is here to stay and wont go obsolete but maybe its price will...?
3. I may be wrong about this (most recent price drop) but if institutions and whales can affect the price of bitcoin so drastically by their selling how do you see that changing and bitcoin one day having a stable storage of value?

[jacoavlu]

I enjoyed video posted by Outdoors

Couple serious questions. Don't take this as doubt in bitcoin but rather genuine questions.

1. I see how bitcoin can be the future and that it's purpose is not a bubble, my question is what about it suggests its a better investment than say VTI?
2. What if when we talk about bitcoin and the dotcom bubble we have it wrong? What if bitcoin is like packets? Packets were here to stay and are now ubiquitous for internet information transfer. Can we fathom that bitcoin is here to stay and wont go obsolete but maybe its price will...?
3. I may be wrong about this (most recent price drop) but if institutions and whales can affect the price of bitcoin so drastically by their selling how do you see that changing and bitcoin one day having a stable storage of value?

1 - we each define better. id just say different. different asset class, risks, fundamentals, upsides, pluses and minuses.

2 - bitcoin is money. packets and tulips and dotcoms aren’t money. and all other “cryptocurrencies” have features (or flaws) that make them inferior as a money, or not money at all.

price is market response to supply and demand. unlike essentially any other asset bitcoin ultimate supply is inelastic. therefore if demand trends up, price also has to trend up.

3 if your approach is long term buy and hold this doesn’t matter. you don’t get big gains without volatility which means big losses too. that can come from big holders selling, deleveraging cascades, fear and panic selling, all of above. but the trend in these moves is coins generally moving into the hands of long term holders. ask yourself what would a stable store of value even mean? stable price in USD? of course not, if so you would just hold cash equivalent. you want stable purchasing power. probably the most “stable store of value” now in that regard currently is SP500. over the next 40 years? that’s my concern

[Dont_know_mind]

You may be right...a lot of chartists are trying to call the double top that you speak of. Or you may be wrong and this might just be another short consolidation. Or you might be wrong and they all might trade sideways for another 2 years. I can't predict tomorrow. Or 3 months from now.

But long term I agree/disagree with your analysis in its comparison to the internet bubble of the 2000 time frame. The dot com bubble had ridiculous amounts of leverage and cash flowing in projects that were complete scams or had no future. And most of those projects completely failed.

However, wouldn't you love the opportunity to go back and buy Amazon or Apple stock in 2000 when they were trading at the equivalent of 100 dollars and 1 dollar at their 2000 peaks? You would have had to survive a "long winter" of poor returns for a few years after the bubble "popped", but had we not had the experience these companies might not exist.

Are the vast majority of "cryptos" going to go away? Absolutely. >99% will be gone in 5 years IMO. I still don't lump BTC and any other crypto into the same category. Either way, the ride will continue to be wild with fluctuations. But the long term picture is up and to the right.

It's not any charting pattern that worries me, mainly the tether stories do not sound very good. I am not even interested in crypto and it sounds so ripe to blow up soon, I was even thinking of buying a small hedge on my index portfolio last week, but decided not to.

I was investing in 1999. I don't know anyone who distinguished Amazon as a stayer in the 1999-2002 period. It's obvious now, but that's hindsight bias. There were many companies that people were enthusiastic about that didn't do as well as Amazon (yahoo, netscape, Cisco). The opposite is true now, that everyone thinks Bitcoin will be a stayer in that area.

I don't even know if bubble is the right analogy for Bitcoin and crypto. The gains over the last decade are far above Amazon and above any bubble I have heard of, including the 2000 internet bubble. It may be as you describe. I think a more parsimonious and more likely explanation is that it is possibly the largest ponzi, grift of our lifetime.

I lived through a smaller one in the 1999-2001 period and my interpretation was that the 2002-2009 period was a reaction to that. The internet bubble left a bad taste in people's mouths and they wanted more conservative real value holdings. Hence the housing bubble and resources boom in 2001-2009.

[jacoavlu]

It's not any charting pattern that worries me, mainly the tether stories do not sound very good. I am not even interested in crypto and it sounds so ripe to blow up soon, I was even thinking of buying a small hedge on my index portfolio last week, but decided not to.

I was investing in 1999. I don't know anyone who distinguished Amazon as a stayer in the 1999-2002 period. It's obvious now, but that's hindsight bias. There were many companies that people were enthusiastic about that didn't do as well as Amazon (yahoo, netscape, Cisco). The opposite is true now, that everyone thinks Bitcoin will be a stayer in that area.

I don't even know if bubble is the right analogy for Bitcoin and crypto. The gains over the last decade are far above Amazon and above any bubble I have heard of, including the 2000 internet bubble. It may be as you describe. I think a more parsimonious and more likely explanation is that it is possibly the largest ponzi, grift of our lifetime.

I lived through a smaller one in the 1999-2001 period and my interpretation was that the 2002-2009 period was a reaction to that. The internet bubble left a bad taste in people's mouths and they wanted more conservative real value holdings. Hence the housing bubble and resources boom in 2001-2009.

you need to get bitcoin and "crypto" separated in your brain. reset, and then reapproach

[xraygoggles]

I don't even know if bubble is the right analogy for Bitcoin and crypto. The gains over the last decade are far above Amazon and above any bubble I have heard of, including the 2000 internet bubble. It may be as you describe. I think a more parsimonious and more likely explanation is that it is possibly the largest ponzi, grift of our lifetime.

99% of altcoins are scams, yes.

But the real projects with the largest network effects (Btc, Eth) and most developer activity (Sol, Avax, Dot, Luna, Matic) will likely remain when the tide recedes. The current market cap for crypto is around 2.5 trillion, so even with a 50% correction, it will remain a trillion dollar MC.

[oysterblues]

99% of altcoins are scams, yes.

But the real projects with the largest network effects (Btc, Eth) and most developer activity (Sol, Avax, Dot, Luna, Matic) will likely remain when the tide recedes. The current market cap for crypto is around 2.5 trillion, so even with a 50% correction, it will remain a trillion dollar MC.

What makes BTC and ETH real projects?

[xraygoggles]

What makes BTC and ETH real projects?

If you are not following the space, it can seem sketchy, I will grant you that. But the two you mentioned above have the largest network effects, and institutional backing. A lot of development is ongoing on these two, and will likely continue going forward.

Plus, bitcoin is sound money, in the strictest sense of the word. Ethereum is basically akin to a 'world computer' of sorts, meaning it is very versatile and malleable.

[nycEMMD]

Anyone putting more money over their regular DCA amount at these prices?

[Lordosis]

I am doubling up on what I am contributing!

[xraygoggles]

I am doubling up on what I am contributing!

hmmm

[xraygoggles]

Anyone putting more money over their regular DCA amount at these prices?

What % of your portfolio is crypto? Did you take any profits this cycle?

[nycEMMD]

What % of your portfolio is crypto? Did you take any profits this cycle?

at the top it was a little over 90% of my portfolio. Only graduated residency in 2018, have been maxing my 401k and roth every year and putting a bit in taxable, everything else has been going into crypto (95% BTC/ETH, 5% altcoins)

Didn't take any profits this cycle, never hit my price target for selling. I use the rainbow chart, would only sell if it reaches max bubble territory, otherwise I'm holding till at least 2025. Will re-assess at that time, might not have to work anymore depending on how this goes

[NapoleanDynamite]

Anyone putting more money over their regular DCA amount at these prices?

Yes...Although it is a pittance compared to my initial investment. I don't buy every little dip....I just keep DCA-ing. But >25% dips I typically buy a little more assuming I have extra cash laying around at that time. This dip qualifies.

The question I continue to ask myself is what asset might have a better risk adjusted upside? Or put another way, what is a better asymmetric risk/reward investment right now?

Equities - Not in my opinion. Plus I already DCA a ton into the market every month. If anything I would argue that most equities are very overpriced right now and equities are my "hedge" against Bitcoin.

Real Estate - There may still be quite a bit of upside to the real estate market at this point, but I'm not convinced it has a better risk adjusted upside.

Gold - I could make an argument for this...but only if the US decides to go back on the gold standard and reprices gold accordingly. (Gold would likely get re-priced at about 40-50K/oz instantly). I think the chance of this is VERY low.

Oil - Maybe, but I'm not gonna start buying oil anytime soon as that is not in my wheel house.

Other "Crypto's" - the upside is likely greater in ETH and other "cryptos"...but the risk is way higher. So it makes no sense for my portfolio.

So...until I see something that looks like it has a good chance of beating the returns of BTC without increasing risk significantly, my extra money will go to BTC on the dips.

FWIW I think the CAGR on BTC will likely be 30-60% over the next 10 years. It's boring, but it will likely do me very well. Of course a lot of things could change this from a macro perspective...WWIII or some other black swan type event come to mind. If I'm wrong about the CAGR, you can all make fun of me. If I'm right, I will be flying on my own jet in 5-10 years.

[CordMcNally]

FWIW I think the CAGR on BTC will likely be 30-60% over the next 10 years. It's boring, but it will likely do me very well.

Did Cathie Wood write this or do you write for her? The numbers you expect and the term boring don’t typically go together. I honestly think the last 10 years, and the last year or two more specifically, have really clouded how people think and what they expect.

[xraygoggles]

at the top it was a little over 90% of my portfolio. Only graduated residency in 2018, have been maxing my 401k and roth every year and putting a bit in taxable, everything else has been going into crypto (95% BTC/ETH, 5% altcoins)

Didn't take any profits this cycle, never hit my price target for selling. I use the rainbow chart, would only sell if it reaches max bubble territory, otherwise I'm holding till at least 2025. Will re-assess at that time, might not have to work anymore depending on how this goes

Well if you have been in the crypto sphere since summer 2020, you have done exceptionally well.

The important thing is to take some profits. Seeing 10x or 25x or 50x or whatever and thinking it will remain at that level is foolish. Even if you have conviction in a project, sell 50-70% and let the rest ride. At least that's what I've done, and I didn't even make crazy numbers in terms of gains. I have friends who made ~5-10M since last summer, speculating in everything outside bitcoin basically. Some have bought stables to lock in gains, but others are kinda in the whole cult and refuse to let go.

Rainbow chart is gibberish - it's a model for price, and while all models have some grain of truth to them, it's now dead. Plan B has become a grifter hawking hats at this point, kinda sad and pathetic.