Bitcoin is still early

[xraygoggles]

If there ever was a time when crypto (or bitcoin) should get a bump, it's during the current upheaval: currency crumbling before our eyes, equity market tanking like a rock, bank runs, obliteration of savings for native citizens.

This is an actual real-world use-case for crypto, but there are still a few problems cropping up: centralized exchanges limiting certain countries from trading crypto; stablecoins can now be used safely as an alternative route to store wealth digitally, instead of volatile bitcoin.

It will be interesting if this crisis will lead to increased adoption of bitcoin, or whether this is a short term pump.

[chucki]

It's probably a short term pump. I think the real value of bitcoin is in the strength of the network, not adoption. This accretes over time. Price is an imperfect reflection of that value but will continue to rise over time, with extreme volatility.

[chocolatebear11]

At the end of December 2021, Elon Musk and Vitalik (creator of Ethereum) both claimed a bear market will likely come in 2022. It’s foolish to time, but appears crypto market may repeat itself (70%+ drawdown).

[NapoleanDynamite]

And you actually think China and Russia will "allow" Bitcoin for the masses? I think there are a few speed bumps ahead. There are a lot of assumptions there.

Here is what I wrote on 1/26/22. 2 pages back on this thread. This was before Russia invaded Ukraine.

As for what will the next reserve currency be, you are right that I have no clue. But having put some philosophical thought into it, the likely contenders IMO are: 1. The Chinese Yuan/CBDC 2. A future Russian CBDC 3. A return to a global gold standard. 4. A new US Dollar equivalent 5. BTC 6. Another countries monetary equivalent.

If you start to think all of these options through to their logical conclusion BTC is the most optimistic option.
1. Chinese CBDC - this would mean that China now has financial control of all global wealth. It would take a massive losing WW for this to occur. Russia, the US, and the European Union amongst others would do everything they can to prevent this.
2. Russian CBDC - Same as option 1 except switch out Russian and China in this option and it would be following a war that Russia wins
3. Very unlikely as the logistics of this make very little sense. But Russia, China, and likely the US accumulating a ton of gold in their reserves is an argument for this hypopthesis to occur.
4. See options one and two but the US wins a war and keeps its dollar hegemony for some time longer, but it will have to look a lot different than the current situation. So I would argue this is a different "currency" even if the US govt still controls it.
5. BTC - Logistically far simpler than returning to a gold reserve. Capped reserve and game theory plays out as to which countries control the majority of the wealth. Eventually production is rewarded and countries grow more or less wealthy based on the productive force of the country. Played out on a long enough time frame it actually prevents wars between super powers and may even break down global borders. Obviously this is utopian view of BTC.
6. Another country rises to take over reserve status....Unlikely to happen as one of the other major superpowers would likely take control first. Possible that Eurozone unites and tries to reclaim a reserve status with a "Euro" equivalent. Again unlikely due to military powers and natural resource/productive ability of other countries in comparison to a United Eurozone. India theoretically has the man power and some of the natural resources, but doesn't currently have anywhere near the military capacity to take over one of the other major powers.

To answer your question more directly, I think that Russia and China will either be forced to legalize and use BTC or they will force the rest of the world (China more than Russia) to use a currency of their picking.

Interestingly China is very dependent on Russian energy right now, as is Europe. The US less so. So Russia does hold some power as it relates to developing a currency of their picking. If Russia and China decide to team up (also unlikely), they could force US/Europe hand into accepting a new currency or be forced into a WWIII with winner take all consequences. There is some thought that this is behind Putin's invasion of Ukraine. Force the hand of US/Europe.

[Tim]

“Interestingly China is very dependent on Russian energy right now, as is Europe. The US less so. So Russia does hold some power as it relates to developing a currency of their picking. If Russia and China decide to team up (also unlikely), they could force US/Europe hand into accepting a new currency or be forced into a WWIII with winner take all consequences. There is some thought that this is behind Putin's invasion of Ukraine. Force the hand of US/Europe”

Thanks for jogging my memory. I think history may not be repeating, but rhymes are likely. KAOS shows many of the same political factors the global leaders are following scripts.

https://youtu.be/eW3WWotSW54

Get Smart has similarities for sure. Funny then, but not humorous in real life.

[xraygoggles]

It's probably a short term pump. I think the real value of bitcoin is in the strength of the network, not adoption. This accretes over time. Price is an imperfect reflection of that value but will continue to rise over time, with extreme volatility.

I agree with you that the network effect is the real value of bitcoin, but then when I use this argument for ethereum (which is 2nd behind btc), maxis pooh-pooh it. Makes no sense.

[Tangler]

Ok, I listened to a few more podcasts on BTC and I have been reading about crypto. I admit I don't fully understand it. I will continue to try to learn more and figure it out but I have a few questions for you smart folks:

1. BTC; I don't think it is going away. I originally thought it was a "bubble" like a .com stock but it seems like it is going to be here and stay long term. Thoughts? The more I read about it the more it seems like it has staying power.

2. BTC seems like it is on "sale" currently the price is lower than it has been (down 17% in the last 6 mo). I know this is crystal ball type thinking but do you think it is on sale?

3. What is the best way to invest a small amount into BTC? 1-5k? I know this is FOMO to some extent for me (I don't fully understand it) but I now believe it will probably be here long term and worth a thought. I have not pulled the trigger on this before but I might do it. I wish vanguard had a BTC ETF.

4. What is your favorite resource for new folks.

5. What is your favorite crypto? BTC, some other flavor? Why do you love the one you love?

Any and all help appreciated. I will go back through this thread and get more info also. Thanks!

[SpacemanSpiff12]

Ok, I listened to a few more podcasts on BTC and I have been reading about crypto. I admit I don't fully understand it. I will continue to try to learn more and figure it out but I have a few questions for you smart folks:

1. BTC; I don't think it is going away. I originally thought it was a "bubble" like a .com stock but it seems like it is going to be here and stay long term. Thoughts? The more I read about it the more it seems like it has staying power.

2. BTC seems like it is on "sale" currently the price is lower than it has been (down 17% in the last 6 mo). I know this is crystal ball type thinking but do you think it is on sale?

3. What is the best way to invest a small amount into BTC? 1-5k? I know this is FOMO to some extent for me (I don't fully understand it) but I now believe it will probably be here long term and worth a thought. I have not pulled the trigger on this before but I might do it. I wish vanguard had a BTC ETF.

4. What is your favorite resource for new folks.

5. What is your favorite crypto? BTC, some other flavor? Why do you love the one you love?

Any and all help appreciated. I will go back through this thread and get more info also. Thanks!

2. As with future stock prices, nobody knows. BTC could drop another 50% or it could be at ATHs in a month. I think it would be reasonable to buy a small amount now or to slowly DCA into the position of your choice. I would advise against rushing - if BTC goes where its strongest proponents think it's going, it won't really matter whether you bought at 40k or 60k.

3. I would dip your toes in the water with small amounts. Open an account at Coinbase (better UI) or Coinbase Pro (cheaper fees). Link your bank account, transfer $500, buy some BTC, and see how it feels.

4. For podcasts, I've enjoyed Bankless, every Wednesday's episode of We Study Billionaires (always centers on BTC), Animal Spirits (often has a segment on crypto), and The Scoop. Glassnode.com is incredibly interesting - they do very cool on-chain analytics which don't have any great parallel in the stock investing world.

5. I think BTC maxis ignore ETH to their detriment. I'm sure many of the other coins have promise, but I don't have enough time, interest, and/or talent to predict which will "win" and make investments accordingly.

[Dont_know_mind]

Ok, I listened to a few more podcasts on BTC and I have been reading about crypto. I admit I don't fully understand it. I will continue to try to learn more and figure it out but I have a few questions for you smart folks:

1. BTC; I don't think it is going away. I originally thought it was a "bubble" like a .com stock but it seems like it is going to be here and stay long term. Thoughts? The more I read about it the more it seems like it has staying power.

2. BTC seems like it is on "sale" currently the price is lower than it has been (down 17% in the last 6 mo). I know this is crystal ball type thinking but do you think it is on sale?

3. What is the best way to invest a small amount into BTC? 1-5k? I know this is FOMO to some extent for me (I don't fully understand it) but I now believe it will probably be here long term and worth a thought. I have not pulled the trigger on this before but I might do it. I wish vanguard had a BTC ETF.

4. What is your favorite resource for new folks.

5. What is your favorite crypto? BTC, some other flavor? Why do you love the one you love?

Any and all help appreciated. I will go back through this thread and get more info also. Thanks!

1. I thought about buying some in 2017, when I first heard Shiller and Buffett say it was a bubble. I didn’t as I didn’t think it was worth the effort, but it would have been in retrospect, as the % gain is far more than I thought would occur. I should have gone with the maxim, when you hear something is a bubble, go buy some right away.
2. I still think it’s terminal value is zero. Crypto may well be the biggest grift of our lifetimes.
4. Read “narrative economics” by Robert Shiller. Bitcoin was the beneficiary of multiple narratives streams that caught fire.
5. Bitcoin to me shows that narratives are far more powerful and bubbles likely to be larger in the future due to the power of the internet and social media.

I have no interest in Bitcoin now. I think it is yesterdays story and we have seen the peak. Hopefully I am wrong for the Bitcoiners sake.

For a narrative that may catch fire, I think Uranium is interesting.

For deep value contrarian plays, Chinese stocks are getting interesting. Very few people are able to buy Chinese indexes currently.

Have you thought about spending 5k on a uranium ETF or Chinese index ETF instead? There the risk of it going to zero is all too obvious, but I would argue the risk is less than Bitcoin or crypto, and the return may well be better.

[xraygoggles]

Going back to the network value paradigm, the current "fair value" of bitcoin (or more specifically Bitcoin's network value) is right around 20k, which coincidentally falls perfectly in line with it's 200 wk MA. Ofc this is just one person's opinion, but it seems to be much more rational and logically sound than others I have seen.

https://www.barrons.com/articles/bitcoin-value-51642471539

[xraygoggles]

Ok, I listened to a few more podcasts on BTC and I have been reading about crypto. I admit I don't fully understand it. I will continue to try to learn more and figure it out but I have a few questions for you smart folks:

1. BTC; I don't think it is going away. I originally thought it was a "bubble" like a .com stock but it seems like it is going to be here and stay long term. Thoughts? The more I read about it the more it seems like it has staying power.

2. BTC seems like it is on "sale" currently the price is lower than it has been (down 17% in the last 6 mo). I know this is crystal ball type thinking but do you think it is on sale?

3. What is the best way to invest a small amount into BTC? 1-5k? I know this is FOMO to some extent for me (I don't fully understand it) but I now believe it will probably be here long term and worth a thought. I have not pulled the trigger on this before but I might do it. I wish vanguard had a BTC ETF.

4. What is your favorite resource for new folks.

5. What is your favorite crypto? BTC, some other flavor? Why do you love the one you love?

Any and all help appreciated. I will go back through this thread and get more info also. Thanks!

1) You are right - there will always be net buyers under a certain value (whether it's the network value, or some technical indicators like 200 wk moving average, or the value of mining equipment/electricity used to mine 1 btc).

2) It is currently not on sale - if you use any of the aforementioned parameters - see #1.

3) Coinbase Pro, Gemini are safe for US investors. Strike app is good but requires getting used to transferring btc to another cold wallet for long term storage.

4) I don't have a specific one, maybe others will advise. All I would say is avoid the ones where they say "bitcoin to 1 million by 2030" - that's just clickbait. Look for rational discussions about the network value, adoption, regulations, etc.

5) Btc & Eth. I'm personally 80/20. I used to be 50/50 but took some Eth gains.

[Tangler]

1. I thought about buying some in 2017, when I first heard Shiller and Buffett say it was a bubble. I didn’t as I didn’t think it was worth the effort, but it would have been in retrospect, as the % gain is far more than I thought would occur. I should have gone with the maxim, when you hear something is a bubble, go buy some right away.
2. I still think it’s terminal value is zero. Crypto may well be the biggest grift of our lifetimes.
4. Read “narrative economics” by Robert Shiller. Bitcoin was the beneficiary of multiple narratives streams that caught fire.
5. Bitcoin to me shows that narratives are far more powerful and bubbles likely to be larger in the future due to the power of the internet and social media.

I have no interest in Bitcoin now. I think it is yesterdays story and we have seen the peak. Hopefully I am wrong for the Bitcoiners sake.

For a narrative that may catch fire, I think Uranium is interesting.

For deep value contrarian plays, Chinese stocks are getting interesting. Very few people are able to buy Chinese indexes currently.

Have you thought about spending 5k on a uranium ETF or Chinese index ETF instead? There the risk of it going to zero is all too obvious, but I would argue the risk is less than Bitcoin or crypto, and the return may well be better.

I will look at your uranium ETF! interesting! Do you have one you like?

[Dont_know_mind]

I will look at your uranium ETF! interesting! Do you have one you like?

I've been thinking about this lately. I had been watching a uranium junior last year, but it went 10X before I could pull the trigger.

Currently I'm thinking of getting URNM (uranium equities ETF) and 50% u.un or sruuf (uranium physical). The uranium in a can may do better than the equities as some of the majors have significantly sold forward production and may have difficulty if they can't deliver at the previous contracted prices in the future (due to inflation or supply bottlenecks). So I would tend to be underweight majors, overweight juniors and have 50% in the physical.

I really like overthinking a small position in this type of thing, maybe 20k for me.
I really should bite the bullet on the uranium junior I was looking at even though it has 10X.

If you are interested in uranium, look at Kevin Bambrough tweets on twitter.

Behaviourally, I know of no-one who bought the dip on Chinese equities, when it was down 5% in one day, 2 days ago. It's really hard unless you really believe in that asset. But if you did, you probably would have run out of cash 30% above current prices.

Over time, what I strive for isn't only the returns but also something that accords with my personality.

My POV: I think that deep knowledge can only come from watching an asset over decades. You can get lucky on something like Bitcoin, but it's just a fluke. What I love doing is buying something I've been watching for years, which I know has value, and which no one else is. That is so beautiful when it works out. But it's hard to pull the trigger because no one else you know will be doing it. And of course, you could be wrong and it could turn out to be a lemon.

[CordMcNally]

My POV: I think that deep knowledge can only come from watching an asset over decades. You can get lucky on something like Bitcoin, but it's just a fluke. What I love doing is buying something I've been watching for years, which I know has value, and which no one else is. That is so beautiful when it works out. But it's hard to pull the trigger because no one else you know will be doing it. And of course, you could be wrong and it could turn out to be a lemon.

tl:dr - nobody knows.

[Tangler]

Thanks for all the info!