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again, nobody knows nothing
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I can justify a value in the $10-15K range based on costs of mining a new Bitcoin. But I can't justify $30K much less $60K. The only way to justify that is with a belief that Bitcoin will continue to rocket to the moon. My crystal ball is too cloudy for something like that. But BTC goes to $5K while it costs $15K to mine it? That might be worth it for those that are into speculative investments.Helping those who wear the white coat get a fair shake on Wall Street since 2011Comment
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the "cost to mine" narrative is tricky, the only numbers you'll find are from publicly traded miners and there is not any standard accounting rule or whatever in determining a "cost to mine", and frankly those companies are incentivized to report a lower number bc it makes their revenue numbers look better
there are of course then also many non publicly traded miners, small and large, domestic and international, who report no numbers. Heck, no one really even knows what the total network hashrate is, you can only make educated guesses of total hash based upon block times
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BTW - remember how BTC was supposed to decouple from the equity market? Swing & a miss.
In fact, as more institutions come in - it will have an even higher R2 to Spx, albeit at a 3x vol.Comment
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Do you feel bad Napoleon? Many of those folks you talked into investing in Bitcoin are now in the red.Helping those who wear the white coat get a fair shake on Wall Street since 2011Comment
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I posted this fellow physician before and he has been discussing potential downside possibility for BTC since November.
he uses a combination of on chain analytics and technicals in his price analysis. For instance, the last few markets he mentioned that every time we went below 20 week moving average, we go to 50 week, and if below 50 week, we go to 200 week.
we are currently very close to 200 week moving average.Comment
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what about all the people you talked out of investing in bitcoin?
(bitcoin was $770 when you wrote this)Comment
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Absolutely Not.
I have consistently said that if you buy Bitcoin, you should expect volatility and you should expect to hold it for at least 5 years. If someone wants to trade bitcoin or any other crypto for that matter then I wish them luck. I don't recommend that to anyone and I don't think I have recommended it once in this thread (correct me if I'm wrong). I have also never once recommend people buy alternative cryptos.
I still recommend everyone buy Bitcoin no matter the price and then come and talk to me in 5-10 years. I have fairly consistently recommended to my friends and anyone on this thread to invest something in Bitcoin. The correct number of bitcoin to hold is not zero IMO in any portfolio. It is the best asymmetric risk/reward allocation of any asset class at this time. Until that changes, I will continue to recommend it. I will also continue to invest in my index funds, real estate, my business, and alternative investments.
The more knowledge one has, the more BTC they might want to allocate to their portfolio. But even if you have little to no knowledge as many of the commenters on this thread have shown, they should still hold some. They should be prepared to hold it for 5-10 years just like any other part of their portfolio.
It's pretty much Boglehead 101 stuff with the exception of the fact that there is disagreement over the "intrinsic value" of BTC vs stocks.
Do you feel bad that you recommended that someone invest VTSAX in January of 2022 even though that index fund is down ~25% since then?
Rhetorical question of course, but you can see my point with articles like these. They are pretty ridiculous.Comment
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Does crypto trade 24 hrs a day or is it wall street hours?Comment
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The BitCoin hypers can't go away.
There is no way for it to make money for them aside from bringing in other new "investors."
You don't really see oil hype men. You don't see wheat or gold hypers. You don't see QQQ and VOO hypers. You don't see UST bond hypers. You don't see REIT hype men.
You DO see people hawking time shares, tech stocks, crypto, marij stocks, etc. They have bought in and want their shares to rise.
The bottom is zero without fundamentals. This is how the game is played. "Thinly traded" figures are all that you see and what new fools cue off... the last few trade prices, unaware of little real price support. Greater fool theory repeats and repeats. Bubble come and they burst. Sometimes, the bubble lasts awhile, but worthless "assets" are always the first to cave in a bad market...
New product or stock or idea...
Hype train starts, founders hold...
New or existing shares gradually come up available to meet demand...
Price goes up, hype goes up...
Founders sell a bit, price slows or stumbles, hype it back up...
(repeat that last line's cycle as many times as they can)
Eventual crash, race to the bottom.
Occasional dead cat bounce with sharks back in to pump and dump again...
The end.
It can be Beanie Babies or tech IPOs or Miami condos or crypto or Tickle Elmos... doesn't matter. The end result is the same: something without fundamentals got hyped, flew up on greed or perceived scarcity, crashed, died.
As someone who trades options and single stocks (not all that amazing but very "risky" by standards of this forum), I will tell you that bag holding is not wise. Set stop losses. Cut your losers QUICKLY. The funds and sharks or the govt can make quick work of even quite decent stocks sometimes. Take a loss and learn the lesson... there are many other winners. Doubling down and hoping for turnaround is seldom wise even if the equity has fundamentals or core profitability (BTC obviously has none... it's some numbers on a computer you'd be hoping somebody else buys later for more than you did).Comment
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This is good advice in general for any speculation/investment, & is so well-known they have terms.
- Martingale strategy: doubling down on a loss in hopes of making it back.
- Sunk cost fallacy: inability to leave a trade/investment b/c too much money already in it.
- Anchoring bias: in finance, relates to comparing current price to cost basis (very bad in a bubble, since ur anchor is an irrational price to begin with)Comment
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