Bitcoin is still early

[xraygoggles]

Which crypto are people buying on the dip? I own a little bit of Bitcoin, Ethereum, and LiteCoin on Robinhood

Dogecoin & Shiba Inu

[Nysoz]

By store of value to people mean against inflation? How can any cryptocurrency be a good store of value? I would not want to store my value in something that could lose half its value in a couple of weeks.

Just because something has done well for the past 6 months or a year or even a few years does not make it the ultimate store of value.

But maybe if everybody read up more on it and spent more time studying it they would understand the negatives. ( See this can work the other way too)

The whole idea behind the store of value is that there’s a limited amount and can’t be diluted like current currency. What that value is, no one knows yet. That’s the price discovery phase, ups and downs while it happens. Will the market decide before 2140 or will it ever happen?

People can guess $0-1M+ and someone’s going to be right. If you want to play, only play an amount that you’re comfortable with if $0 is the right answer. Then wait years/decades while the market figures it out.

Or you can choose to not play and ignore it completely and still do well.

[billy]

Crypto is not a new form of currency, a paradigm shift, or any other libertarian gibberish you can conjure up.

It's simply a trading asset, you can use to trade & speculate. Buy low, sell high, repeat ad nauseum. Just don't get too levered up, or else you will end up like the many people who crashed & burned yesterday...

This is a rational thought that I can agree with.

Cool Breeze- BTC (and really all cryptos for that matter) were literally invented out of nothing, so not sure what your last paragraph was meant to prove. Did cryptos help with making blockchain technology, sure. But bitcoin has no monopoly on that. That whoever invented bitcoin chose to limit its supply doesn't mean its value can/will only go up. Beanie babies had limited supply, and followers/fanatics who propped up their value causing that craze or bubble all believed they were in possession of a great store of value and non beanie baby owners just "didnt get it". NapoleanDynamite- those who held beanie babies for more than 6 months back then had the same argument you gave as a store of value.

I have no problem with any of you making money off of BTC or cryptos, but just admit that its speculation that has been driving the price up, just like has happened with some individual stocks past and present.

I'll take my leave from this thread again for awhile to avoid repeating stuff. might have to just agree to disagree with some of you on this topic.

[Outdoors]

The last week has been crazy as Elon Musk wiped out thousands of dollars from my portfolio. I don't have extra cash to buy the dip right now, but I think it's a great time for anyone who wants to invest in crypto to start dollar cost averaging.

I'll continue to HODL.

And for those who didn't see it, Michael Saylor just bought some more:

https://www.microstrategy.com/en/investor-relations/financial-documents/microstrategy-acquires-additional-10m-in-bitcoin-at-average-price-of-43-663_05-18-2021

[Otolith]

"A basic characteristic of financial bubbles is the suspension of disbelief by most participants when the speculative price surge is occurring"

to be clear I am not implying that BTC is stupid and worthless...

[Zaphod]

Store of Value has a literal financial definition, no big deal we should just continue making stuff up.

What are the use percentages for Bitcoin then for people in the know? Present me with the data I cannot seem to find, as I tried, that support bitcoin becoming a transactional currency.

The majority use case is trading, and I assume almost all transactions are of this nature. I read a whole wild crime report that pretended to know exact amounts used, but thats ofc false and assumes all known actors and that other exchange transactions are legal. Its also continuing to grow, as you'd expect. Said report also super self serving and zero data on methodology or what other % went to in the 134 pages.

[Tromner_Wielder]

Anybody who has bought into crypto doing any TLH? I put a relatively small amount into various coins early in the year (BTC, ETH, DOT/KSM, ADA, ALGO; kind of my own ETF) and while it isn't worth the hassle at this point since the losses are minor now, if they drop by another 50% it would become worthwhile. From my reading, it looks like the issue of a wash sale in crypto is a gray area, and some advocate to just buy back in the same coin immediately after selling (since crypto is classified as "property" and per their interpretation not subject to a wash sale). Other approaches would be to just wait 30 days (but who knows what could happen in 30 days in such a volatile market) or realize losses in only a few coins and buy different ones (e.g. get rid of ADA, ALGO and DOT and buy ETH; the returns are fairly correlated between all the coins). Not looking for advice, since there is no clear guidance from the IRS, but just curious what others are doing....

[CordMcNally]

Anybody who has bought into crypto doing any TLH? I put a relatively small amount into various coins early in the year (BTC, ETH, DOT/KSM, ADA, ALGO; kind of my own ETF) and while it isn't worth the hassle at this point since the losses are minor now, if they drop by another 50% it would become worthwhile. From my reading, it looks like the issue of a wash sale in crypto is a gray area, and some advocate to just buy back in the same coin immediately after selling (since crypto is classified as "property" and per their interpretation not subject to a wash sale). Other approaches would be to just wait 30 days (but who knows what could happen in 30 days in such a volatile market) or realize losses in only a few coins and buy different ones (e.g. get rid of ADA, ALGO and DOT and buy ETH; the returns are fairly correlated between all the coins). Not looking for advice, since there is no clear guidance from the IRS, but just curious what others are doing....

My plan is to just hold long term as I think the IRS will likely be trying to crack down as much as they can and I'd prefer not to go through the hassle although I've never done anything shady with my taxes.

[Tromner_Wielder]

My plan is to just hold long term as I think the IRS will likely be trying to crack down as much as they can and I'd prefer not to go through the hassle although I've never done anything shady with my taxes.

Yeah, makes sense to keep it simple. The situation is also complicated by the fact that I am getting staking interest on all these coins (except bitcoin of course) which (per my understanding) are treated essentially as re-invested dividends.

[CordMcNally]

Yeah, makes sense to keep it simple. The situation is also complicated by the fact that I am getting staking interest on all these coins (except bitcoin of course) which (per my understanding) are treated essentially as re-invested dividends.

I haven’t staked for that reason. I haven’t seen an easy way to keep track of that for reporting but honestly I haven’t looked very hard. I could create an Excel spreadsheet but I’ve been too lazy.

[Lordosis]

Is there any validity in this claim about the cost of electricity in generating bitcoin? And is there any ongoing cost for previously mined bitcoin? What amount are we talking about? Is it actually something significant or is this just an excuse.

[Nysoz]

To explain it in a way that I understand it, the Bitcoin blockchain is a big transaction ledger of all Bitcoin currency transactions and exchanges.

Every time a Bitcoin moves it’s verified by all the computers “mining”. All the computers use a lot of electricity and computing power the verify a group of transactions.

The first computer (or group) that verifies the right ledger/puzzle gets rewarded Bitcoin by the algorithm. The others get nothing.

So yes, there’s a lot of electricity being used across the world for this purpose.

Since it uses a lot of electricity, the big miners go to where electricity is the cheapest. Some say that they go to places with a lot of renewable energy so that it’s cheap. Some say it’s big coal mines in China.

They also say that overall it uses less energy than the traditional banking system because how much energy did it take to build all the banks, power all the banks, the people working in the banks, upkeep/renovate banks, servers, etc.

So who knows 🤷♂️ who to believe.

[Brains428]

The energy narrative may have started this downturn (or at least Musk talking about it, it wasn't a novel thought and a pretty common argument against crypto), but the larger issue is the leverage in a speculative system.

In re: TLH- crypto is treated as property by the IRS, not a security. I don't there are wash sale rules (but check with an accountant familiar with crypto). I think there will be some met with some heavy tax bills for trading between coins, assuming the IRS can track all the transactions. FWIW- you can fill out w9 on coinbase.

[xraygoggles]

...but the larger issue is the leverage in a speculative system.

Bingo.

Mark Cuban had a great tweet today which accurately and succinctly summarized the epic crash in altcoins:

"I think this is the "Great Unwind". Traders borrow to buy Eth, used eth to borrow alt/stable coin, used that to LP a high APY Pair, took the SLPs and staked them to maxout yield. The minute Eth drops to their Tragic Number, they had to Unwind. Unstake, Remove Liqudity, Repay."

This, along with lack of any regulation, no circuit breakers, gas fees to introduce latency, etc. was the perfect storm, if you will. House of cards fell all at once. Quite spectacular to witness, in such a short period of time, really.

[TheTodd]

To explain it in a way that I understand it, the Bitcoin blockchain is a big transaction ledger of all Bitcoin currency transactions and exchanges.

Every time a Bitcoin moves it’s verified by all the computers “mining”. All the computers use a lot of electricity and computing power the verify a group of transactions.

The first computer (or group) that verifies the right ledger/puzzle gets rewarded Bitcoin by the algorithm. The others get nothing.

So yes, there’s a lot of electricity being used across the world for this purpose.

Since it uses a lot of electricity, the big miners go to where electricity is the cheapest. Some say that they go to places with a lot of renewable energy so that it’s cheap. Some say it’s big coal mines in China.

They also say that overall it uses less energy than the traditional banking system because how much energy did it take to build all the banks, power all the banks, the people working in the banks, upkeep/renovate banks, servers, etc.

So who knows 🤷♂️ who to believe.

it’s easy to know what to believe. Bitcoin uses an insane amount of energy (currently greater then the country of Sweden). Some of this is renewable and some is not. But this is mostly immaterial, since if it was not used the renewable energy would just be used for other purposes.

Saying that the current financial system uses energy as well is also irrelevant. Of course it does. Bitcoin does not replicate the functions of the financial system. Even if we all switched from dollars to Bitcoin, we would still need banks, financial institutions, etc that would still consume energy.

Im unsure about cryptos future in general. But I’m very Bearish on BTC in particular in the >5 year term.