Bitcoin is still early

[Tim]

This article posted yesterday evening is already out of date. Luna is no long trading at $0.40, it's at $0.00007.

Uhhh, I saw it coming. Fundamental analysis of and crypto is a piece of cake. Sarcastic of course.

[xraygoggles]

I disagree....As Jaco mentions, Bitcoin requires energy to mine it.

But theoretically, let's accept your statement that Bitcoin is a Ponzi and game this out. If this statement is true do you know what is the biggest Ponzi in the world?

The US Dollar.

???

First off, I specifically said BTC is NOT a Ponzi, but a pyramid scheme. They are two different terms with different meanings.

Second, explain how the dollar is a Ponzi (or a pyramid) scheme? I've never heard that before. You might be confusing it with debasement, which is what all inflationary currencies do?

[Dont_know_mind]

Moving along from general philosophical discussions, assuming the crypto space does implode or continue to underperform at the current rate, what does that mean?
1. will it cause systemic issues
2. will it get bailed out in some manner

It’s really sad hearing about the human cost of this on people who are relatively naive to investing. They should have been protected from this in some way, and probably will in the future, but too late for many. The coin offerings IMO should be subject to securities regulation-know your client, full disclosures/documentation, accredited investors only or IPO like diligence.

[jacoavlu]

Moving along from general philosophical discussions, assuming the crypto space does implode or continue to underperform at the current rate, what does that mean?
1. will it cause systemic issues
2. will it get bailed out in some manner

It’s really sad hearing about the human cost of this on people who are relatively naive to investing. They should have been protected from this in some way, and probably will in the future, but too late for many. The coin offerings IMO should be subject to securities regulation-know your client, full disclosures/documentation, accredited investors only or IPO like diligence.

well for sure no there will be no bailout lol

by systemic issues not sure what you mean. At least for bitcoin, the supply limit will continue to be enforced, valid transactions will continue to be allowed without censorship, and blocks will keep coming about every 10 minutes. That’s basically all that matters, for bitcoin

[fatlittlepig]

Moving along from general philosophical discussions, assuming the crypto space does implode or continue to underperform at the current rate, what does that mean?
1. will it cause systemic issues
2. will it get bailed out in some manner

It’s really sad hearing about the human cost of this on people who are relatively naive to investing. They should have been protected from this in some way, and probably will in the future, but too late for many. The coin offerings IMO should be subject to securities regulation-know your client, full disclosures/documentation, accredited investors only or IPO like diligence.

?

[HikingDO]

?

Exactly. Huh?

[SpacemanSpiff12]

well for sure no there will be no bailout lol

This is an oddly refreshing aspect of the crypto financial ecosystem.

There's no "too big to fail". LUNA/UST was a top five coin, it was poorly conceived, and it just... died. Over-levered funds imploded, everyone took their losses on the chin, and the system moved on. There was no cavalry coming to save UST, because it was a bad idea. ("Algorithmic" + "stable coin" = destined to fail, in my opinion)

To be clear, I sympathize with anyone who lost meaningful money in this debacle. People got hurt. More regulation is needed. But the swift and immediate action for misconceived projects, and the lack of bailouts, feels more fair.

[jacoavlu]

there are bailouts that happen in “crypto” - like when some “defi” project is hacked bc of some vulnerability and a bunch of tokens are stolen, sometimes the investors behind the project replace peoples stolen tokens. I think the latest was with wormhole which is some sort of solana - ethereum bridge and 120k ETH were stolen and project backers just replaced them.

[SpacemanSpiff12]

there are bailouts that happen in “crypto” - like when some “defi” project is hacked bc of some vulnerability and a bunch of tokens are stolen, sometimes the investors behind the project replace peoples stolen tokens. I think the latest was with wormhole which is some sort of solana - ethereum bridge and 120k ETH were stolen and project backers just replaced them.

Yes, but in those cases the cost of the bailout is not shared by the entire crypto community. It’s shouldered by whatever VC fund backed the project, because presumably they have more to lose by letting the entire project go under.

Also, I would not be surprised if the appetite for those rescues starts to wane. Already you’re seeing some of losses be not completely recouped. Eg I believe the Ronin side chain hack was only partially covered by investors.

[Dont_know_mind]

???

First off, I specifically said BTC is NOT a Ponzi, but a pyramid scheme. They are two different terms with different meanings.

Second, explain how the dollar is a Ponzi (or a pyramid) scheme? I've never heard that before. You might be confusing it with debasement, which is what all inflationary currencies do?

I'm curious X-ray,
What has been your % return on crypto investments to date and do you still have much left? Are you still in HFEA ?

I didn't have the mental flexibility to buy BTC when I realized it was a bubble (around 2017).
In retrospect though, that was a mistake.
Anyway, I'm not that good so, but I wish I was.

The most I am aiming for is to pick up some more uranium specs in a washout if VIX>40. The rest of my portfolio does well if there isn't a crypto blow-up, so I don't mind either way.

This is more comfortable than 2000 for me, when I was naive, held internet tech, rode it all the way down (even bought more), before reaching my pain threshold and selling in disgust somewhere around 2002. What's concerning about the crypto marketing is that it's been far more egregious than the 1990's hype, and most of it not subject to SEC regulation, so I think a lot of retail investors will get hurt.

I hope this time it's different for the crypto sector investors.

Thinking about it more, it's very hard to pivot between tech and commodities. Don't know many who can pivot between the 2. I'm not one of them, wish I was.

[Dont_know_mind]

?

Yellen commented on it last week. The treasury seems to have been considering regulating crypto for years, but never gets around to it.
I guess the recent Luna blow-up has people wondering, about a bank run on tether if they weren't already, and whether crytpo exchanges may be affected:

https://www.bloomberg.com/news/articles/2022-05-12/yellen-says-terra-meltdown-demonstrates-crypto-stablecoin-risks

https://www.federalreserve.gov/publi...t-20220509.pdf (page 39-45)

If crytpo melts down further, the people who own crypto may be forced to sell their other investments to cover margin calls. So if they own a lot of tech stocks, or US stocks or whatever.

The systemic risk is if banks or other FI have material exposure to crytpo and the consensus seems to be 1. no and 2, no.

It would be funny for the Bitcoin maximalists and the general public, if the Fed had to put Bitcoin or associated on their balance sheet, like they did with subprime.

[jacoavlu]

Yes, but in those cases the cost of the bailout is not shared by the entire crypto community. It’s shouldered by whatever VC fund backed the project, because presumably they have more to lose by letting the entire project go under.

Also, I would not be surprised if the appetite for those rescues starts to wane. Already you’re seeing some of losses be not completely recouped. Eg I believe the Ronin side chain hack was only partially covered by investors.

I would contend the cost is shared eventually, at least sometimes. Investors are gonna get there’s. If they have to fund a bailout they’re probably just gonna dump more premine tokens on the retail holders

never not funny when these “decentralized” projects need to be saved by what is clearly a centralized entity

[jacoavlu]

Yellen commented on it last week. The treasury seems to have been considering regulating crypto for years, but never gets around to it.
I guess the recent Luna blow-up has people wondering, about a bank run on tether if they weren't already, and whether crytpo exchanges may be affected:

https://www.bloomberg.com/news/articles/2022-05-12/yellen-says-terra-meltdown-demonstrates-crypto-stablecoin-risks

https://www.federalreserve.gov/publi...t-20220509.pdf (page 39-45)

If crytpo melts down further, the people who own crypto may be forced to sell their other investments to cover margin calls. So if they own a lot of tech stocks, or US stocks or whatever.

The systemic risk is if banks or other FI have material exposure to crytpo and the consensus seems to be 1. no and 2, no.

It would be funny for the Bitcoin maximalists and the general public, if the Fed had to put Bitcoin or associated on their balance sheet, like they did with subprime.

Yellen is either stupid or liar when they trot out UST / Luna as an example of stablecoin issues. Like it was known to be basically a ponzi. Not at all like tether, USDC, GUSD which are backed by actual fiat collateral, and not in a fractional reserve way that yours and my bank acccounts are. Tether was redeeming for actual dollars just fine all through this crash

there are very likely crypto exchanges that are running fractional reserves. This is why you don’t hold meaningful amounts on an exchange. You must take self custody. Easy with bitcoin. I don’t know about other coins

[CordMcNally]

Not at all like tether, USDC, GUSD which are backed by actual fiat collateral, and not in a fractional reserve way that yours and my bank acccounts are. Tether was redeeming for actual dollars just fine all through this crash

there are very likely crypto exchanges that are running fractional reserves. This is why you don’t hold meaningful amounts on an exchange. You must take self custody. Easy with bitcoin. I don’t know about other coins

Tether ever submit to an outside audit yet?

[jacoavlu]

Tether ever submit to an outside audit yet?

I think?

https://tether.to/en/transparency/#reports

I don’t follow it closely. The NY state suit was closed with basically a slap on the wrist. They are reducing their commercial paper.