Announcement

Collapse
No announcement yet.

Bitcoin is still early

Collapse
X
 
  • Filter
  • Time
  • Show
Clear All
new posts

  • Originally posted by jacoavlu View Post

    “cash equivalent” your words not mine, nor what I’ve seen from those CEOs allocating to bitcoin

    treasury reserve asset is the language they are using

    saving for a house down payment etc that’s short term money and you know it same as I do. Straw man argument. No one with a brain is contemplating a BTC allocation as a short term play.
    "it's not pay dividend versus buy bitcoin. It's buy bitcoin versus hold USD cash."

    "Holding USD cash?" You created a new definition.

    Comment


    • I welcome the more experienced forum members to critique my thinking here.

      Is there another investment besides bitcoin with as much reward to risk ratio?

      Worst case is total loss, which is hard to imagine given the amount of human capital as well as nearly 1 trillion market cap. Upside is that it continues to gain small allocations in large institutional funds and perhaps late retail adopters, which would mean an easy 3-5x or more from here.

      So if we’re indexing because we want to own everything and participate in upside from long shot small cap stocks, shouldn’t we also allocate some small amount to the asset that’s outperformed everything by a ton?

      Comment


      • Originally posted by jacoavlu View Post

        the y axis is much smaller of course but you could largely say the same about FAANG stocks. As they say, it's all time highs all the way up. Focusing on the current price and the past performance is intellectual laziness. Evaluate the asset for what it is, its place in the market and what you thing the future will bring.

        .....

        That said, bitcoin does have a denomination problem. The fact there will only be 21M results in the price per btc which people including yourself have focused on. If there were to be 21T the price would currently be $5 and would you feel differently? Or if we talk about the number of satoshis, there will be 2.1 quadrillion so the current price is 0.0005 USD. Does that make you feel differently?


        I think everyone evaluates things differently.

        Facebook IPO in 2012 - $38, currently $256
        Google 2012 - $282, currently $2020
        They have both increased about 9X

        BTC has increased 5000X since 2012, so it is nothing like the FAANG's. The Winklevosses 10M BTC investment in 2012 is now worth in the billions.

        There's always rationalisations we can make for a price move. Price creates it's own narrative.
        Some of these seem crazy in hindsight and I wonder if this will be the case with BTC.

        To me, it seems there is little tethering the price to anything in reality other than people's perceptions.
        You probably view it differently. There are many points of view to make a market. I don't have any skin in the game on it, so it doesn't bother me where it goes.

        It's fascinating to watch though, just as a financial phenomena and a very unusual price move.
        The comeback after 2017 made a lot of people think it's probably not a bubble. But how else can you explain the runup.
        What has actually changed since 2012? There's been increased adoption. The network effect it seems has increased the value by 5000X. In that case it must be the most valuable network effect ever.

        I actually can't think of any asset or publiclly listed share that has increased 5000X in a 10 year period. Can you ?


        Comment


        • Originally posted by Tim View Post

          "it's not pay dividend versus buy bitcoin. It's buy bitcoin versus hold USD cash."

          "Holding USD cash?" You created a new definition.
          Cmon Tim this isn’t that hard, please follow along

          my response was to East Coast talking about corporations that should pay dividends instead of buying bitcoin. Those corps were holding cash before, and alternatively allocated to bitcoin. Hence my statement.

          Comment


          • Originally posted by Dont_know_mind View Post

            I think everyone evaluates things differently.

            Facebook IPO in 2012 - $38, currently $256
            Google 2012 - $282, currently $2020
            They have both increased about 9X

            BTC has increased 5000X since 2012, so it is nothing like the FAANG's. The Winklevosses 10M BTC investment in 2012 is now worth in the billions.

            There's always rationalisations we can make for a price move. Price creates it's own narrative.
            Some of these seem crazy in hindsight and I wonder if this will be the case with BTC.

            To me, it seems there is little tethering the price to anything in reality other than people's perceptions.
            You probably view it differently. There are many points of view to make a market. I don't have any skin in the game on it, so it doesn't bother me where it goes.

            It's fascinating to watch though, just as a financial phenomena and a very unusual price move.
            The comeback after 2017 made a lot of people think it's probably not a bubble. But how else can you explain the runup.
            What has actually changed since 2012? There's been increased adoption. The network effect it seems has increased the value by 5000X. In that case it must be the most valuable network effect ever.

            I actually can't think of any asset or publiclly listed share that has increased 5000X in a 10 year period. Can you ?

            obviously nothing has done what BTC did. It literally went from a white paper to a $1T market cap.

            my basic view is here:

            https://forum.whitecoatinvestor.com/...105#post260105

            Perhaps you would like to provide your thoughts

            Comment


            • Originally posted by Dont_know_mind View Post

              I think everyone evaluates things differently.

              Facebook IPO in 2012 - $38, currently $256
              Google 2012 - $282, currently $2020
              They have both increased about 9X

              BTC has increased 5000X since 2012, so it is nothing like the FAANG's. The Winklevosses 10M BTC investment in 2012 is now worth in the billions.

              There's always rationalisations we can make for a price move. Price creates it's own narrative.
              Some of these seem crazy in hindsight and I wonder if this will be the case with BTC.

              To me, it seems there is little tethering the price to anything in reality other than people's perceptions.
              You probably view it differently. There are many points of view to make a market. I don't have any skin in the game on it, so it doesn't bother me where it goes.

              It's fascinating to watch though, just as a financial phenomena and a very unusual price move.
              The comeback after 2017 made a lot of people think it's probably not a bubble. But how else can you explain the runup.
              What has actually changed since 2012? There's been increased adoption. The network effect it seems has increased the value by 5000X. In that case it must be the most valuable network effect ever.

              I actually can't think of any asset or publiclly listed share that has increased 5000X in a 10 year period. Can you ?

              Using a ratio like that is obviously skewed in relation to its original value. Imagine if btc operated in private for 10 years before an IPO. It would have a higher initial price which makes future increases look less outlandish relatively. If you look at Facebooks initial value (essentially 0) to its IPO value obviously that is going to be an insane ratio too

              Personally some kind of x gain over y period doesn’t signify anything to me. We can go back and look at when Apple was worth nothing and say it has had Z crazy percentage gain. Also the flow on information and tech in general allows good ideas to be taken up by more people sooner now which I would argue let’s then hit 10x or 100x faster.

              Comment


              • Originally posted by FreshPaint View Post
                I welcome the more experienced forum members to critique my thinking here.

                Is there another investment besides bitcoin with as much reward to risk ratio?

                Worst case is total loss, which is hard to imagine given the amount of human capital as well as nearly 1 trillion market cap. Upside is that it continues to gain small allocations in large institutional funds and perhaps late retail adopters, which would mean an easy 3-5x or more from here.

                So if we’re indexing because we want to own everything and participate in upside from long shot small cap stocks, shouldn’t we also allocate some small amount to the asset that’s outperformed everything by a ton?
                The other side of the argument is that this is about as good as it gets and what you're chasing is yesterday's performance.
                I tend to be a bit on the bearish side of BTC here. If you put a gun to my head, I would tend to think this could be near the top (but I could be completely wrong).

                Even if it increased 5X from here and and you put 1% of your portfolio in it, it doesn't move the needle much (overall your portfolio would be up 5%). If you put in 1% in 2012 and it held it for a 5000X increase, that would have made a difference. What people are doing currently seems to be putting 5 or 20% of their portfolio in it and that is going to hurt if it goes back to $10.

                Comment


                • Those comparisons aren’t accurate because Bitcoin was publicly traded since day 1. Better to compare Facebook and google to Coinbase IPO.

                  Comment


                  • Originally posted by jacoavlu View Post

                    Cmon Tim this isn’t that hard, please follow along

                    my response was to East Coast talking about corporations that should pay dividends instead of buying bitcoin. Those corps were holding cash before, and alternatively allocated to bitcoin. Hence my statement.
                    Which means exactly a cash equivalent in the corporate world. And in personal finance. You are misleading in calling it a place to keep value other than $USD.
                    Actually, you imply it is "better than cash" because of stretching for yield. I completely disagree with your definition. From a risk exposure, probably higher than equating high yield or duress bond funds. It is a very liquid high risk investment. Nothing more or less. Please cut me a break. It is an alternative investment, like gold, diamonds or art. Some more liquid than others. It is not an alternative to cash, it is an alternative investment. Big difference.

                    By the way, you are an extremely intelligent person. Calling it an alternative to cash seems to be a deflection of the market risk in BTC.

                    Comment


                    • Originally posted by Dont_know_mind View Post

                      The other side of the argument is that this is about as good as it gets and what you're chasing is yesterday's performance.
                      I tend to be a bit on the bearish side of BTC here. If you put a gun to my head, I would tend to think this could be near the top (but I could be completely wrong).

                      Even if it increased 5X from here and and you put 1% of your portfolio in it, it doesn't move the needle much (overall your portfolio would be up 5%). If you put in 1% in 2012 and it held it for a 5000X increase, that would have made a difference. What people are doing currently seems to be putting 5 or 20% of their portfolio in it and that is going to hurt if it goes back to $10.
                      Do you realistically think bitcoin would go down to $10? The trajectory of bitcoin and the cryptocurrency space has been upwards for 10 years, obviously with heavy volatility.

                      Thinking it could go to $10 is essentially saying that cryptocurrencies would be completely invalidated after 10 years of growth in the space (including huge institutional committments and highly valued companies like Coinbase). Or you could be arguing that a competing cryptocurrency will completely overtake bitcoin causing catastrophic collapse.


                      Comment


                      • Bitcoin is the new bond, only exponentially better.

                        Comment


                        • Originally posted by jacoavlu View Post

                          obviously nothing has done what BTC did. It literally went from a white paper to a $1T market cap.

                          my basic view is here:

                          https://forum.whitecoatinvestor.com/...105#post260105

                          Perhaps you would like to provide your thoughts
                          I do think it is a new technology and hard to price. Probably it will turn out to be useful.

                          I also think it is remarkable the confidence people have in it as a store of value considering how long it has been in existence.
                          This could be a social narrative phenomenon. Half of it seems like BS to me. But maybe I'm missing something.

                          People do really resent interest rate repression. They have myopic loss aversion with stocks and risk assets, so then buy BTC or gamble instead.
                          If you have a problem with zero return on cash, there's an easy solution to it - just buy anything that yields more than zero and there is a lot of that around still.

                          Comment


                          • Originally posted by FreshPaint View Post

                            Do you realistically think bitcoin would go down to $10? The trajectory of bitcoin and the cryptocurrency space has been upwards for 10 years, obviously with heavy volatility.

                            Thinking it could go to $10 is essentially saying that cryptocurrencies would be completely invalidated after 10 years of growth in the space (including huge institutional committments and highly valued companies like Coinbase). Or you could be arguing that a competing cryptocurrency will completely overtake bitcoin causing catastrophic collapse.

                            I would not bat an eyelid if it went back to $10

                            Comment


                            • Could it theoretically go to 0 or 10 bucks, sure , but similar to what stevens said, I think that risk continues to drop as more and more people and institutions become involved. Apple could go to 0, I think that is less and less likely over time.

                              if you think it could go down to 10k for example I think that is a much more reasonable position than to expect a move to near 0. As you build up all this infrastructure and have corporations with billions invested you have more and more people invested in making it work.

                              An 80% drop with a subsequent rebound to new ATH is quite a bit different than going to 0 from nearly 60k IMO.

                              Comment


                              • Originally posted by Dont_know_mind View Post

                                I would not bat an eyelid if it went back to $10
                                What probability do you assign to that ?

                                it’s very easy to say you wouldn’t be surprised by x happening , what is a rough guess percentage chance it goes to 10 dollars in the next 5 years ?

                                I would say significantly less than 1%

                                Comment

                                Working...
                                X