Crypto

[Menger 88]

4 hours ago, azda said:

Actually, in some places you can pay your taxes with bitcoin 🤓

Yes - but those taxes are denominated in fiat currency.  Only if bitcoin becomes a fiat currency (so that the taxes are denominated in bitcoin, and not a $€£¥ equivalent) would bitcoin have an equivalent “intrinsic” value that could save it from testing zero.  Alternatively, if some dentist devises a way to use bitcoin to fill teeth, it will also have a safety net. 

[Menger 88]

4 hours ago, azda said:

Doubtful it will see zero with hedge funds now entered into the area. In fact one CEO hedge fund manager got booted for not entering inTO THE BTC ETF, but now it will never go to zero as there’s trillions, not billions available.

I don’t think the hedge funds are acting differently from anyone else: they are speculating. They are not seeking to substitute bitcoin as a form of “money”. As speculators, Hedge fund can go short as quickly as they can go long.  It is precisely this “speculative” essence of bitcoin which means it can test the moon, or zero - and will test the latter before it becomes “money” (which it never will). 

[Peckris 2 2,145]

National currencies are as notional as crypto, except in two critical respects:

1. they reflect the 'real' economy, i.e. the GDP of a nation

2. they are underwritten by the national bank(s)

you cannot say either in relation to Bitcoin

[Menger 88]

7 hours ago, Peckris 2 said:

National currencies are as notional as crypto, except in two critical respects:

1. they reflect the 'real' economy, i.e. the GDP of a nation

2. they are underwritten by the national bank(s)

you cannot say either in relation to Bitcoin

National currencies are fiat currencies and so exclusively mandated by law for the settlement of tax and legal liabilities in the jurisdiction.  This is a tether to reality - a real demand for the given supply.  That real demand (like the real demand for gold, to fill teeth or make jewelry) prevents price action being arbitrary and purely speculative. Fiat currency can be inflated to zero - but for a given supply it has a demand separate from any purely speculative demand.  Prices of fiat currencies can go up and down (denominated in gold or other fiat currencies) but not to the moon or (absent aforementioned inflation) zero. This gives them relative stability, so they can be used for savings. As such, they can be generally accepted as a means of payment - “money”. 

Edited March 23, 2024 by Menger

[ozjohn 671]

On 3/24/2024 at 7:26 AM, Menger said:

National currencies are fiat currencies and so exclusively mandated by law for the settlement of tax and legal liabilities in the jurisdiction.  This is a tether to reality - a real demand for the given supply.  That real demand (like the real demand for gold, to fill teeth or make jewelry) prevents price action being arbitrary and purely speculative. Fiat currency can be inflated to zero - but for a given supply it has a demand separate from any purely speculative demand.  Prices of fiat currencies can go up and down (denominated in gold or other fiat currencies) but not to the moon or (absent aforementioned inflation) zero. This gives them relative stability, so they can be used for savings. As such, they can be generally accepted as a means of payment - “money”. 

IMO crypto is a scam and a vehicle for money laundering. National currencies are not perfect by any means but as mentioned earlier do relate back to the real economy, Whereas crypto has no intrinsic value whatsoever. Where the money goes to after the purchase of crypto is anyone's guess but one thing you can be sure of is it is not held in reserve in case of a run on the particular crypto. Crypto has all the hallmarks of a Ponzi scheme and would collapse tomorrow is there were a serious run on it.

[Menger 88]

4 hours ago, ozjohn said:

IMO crypto is a scam and a vehicle for money laundering. National currencies are not perfect by any means but as mentioned earlier do relate back to the real economy, Whereas crypto has no intrinsic value whatsoever. Where the money goes to after the purchase of crypto is anyone's guess but one thing you can be sure of is it is not held in reserve in case of a run on the particular crypto. Crypto has all the hallmarks of a Ponzi scheme and would collapse tomorrow is there were a serious run on it.

Two quibbles: The money does not “go” anywhere after purchase of crypto, other than into the pockets of the person who sold the crypto (and from there into the hands of anyone he subsequently purchases goods and services, including more crypto, from).   Crypto does have “intrinsic” value in that it can be used as speculation or as a (very short term) means of exchange. But it cannot be used for savings due to its volatility and so cannot be “money” itself.  So it will test zero before it becomes money (which it won’t). 

Edited April 16, 2024 by Menger

[ozjohn 671]

3 hours ago, Menger said:

Two quibbles: The money does not “go” anywhere after purchase of crypto, other than into the pockets of the person who sold the crypto (and from there into the hands of anyone he subsequently purchases goods and services, including more crypto, from).   Crypto does have “intrinsic” value in that it can be used as speculation or as a (very short term) means of exchange. But it cannot be used for savings due to its volatility and so cannot be “money” itself.  So it will test zero before it becomes money (which it won’t). 

Sorry we will have to agree to disagree Crypto is nothing but a giant Ponzi scheme. At least with tulip bulbs you can plant them in the garden. I think I will stick with physical gold.

[Menger 88]

2 hours ago, ozjohn said:

Sorry we will have to agree to disagree Crypto is nothing but a giant Ponzi scheme. At least with tulip bulbs you can plant them in the garden. I think I will stick with physical gold.

Agreed. Not a scam nor a ponzi: a speculative instrument that will test zero before it becomes money.  Like a tulip. 

[ozjohn 671]

In Australia and assuming you cash in your crypto  at a profit you will be subject to capital gains tax at your marginal  tax rate. If the asset is held for more than a year the capital gains tax is 50% of your marginal tax rate. If you make a capital  loss on crypto then you can offset that against other income. This is true for most investments, shares, real estate, etc. I don't know what the tax implications are in the UK or US but there are probably some.

[azda 979]

On 4/17/2024 at 12:04 AM, ozjohn said:

In Australia and assuming you cash in your crypto  at a profit you will be subject to capital gains tax at your marginal  tax rate. If the asset is held for more than a year the capital gains tax is 50% of your marginal tax rate. If you make a capital  loss on crypto then you can offset that against other income. This is true for most investments, shares, real estate, etc. I don't know what the tax implications are in the UK or US but there are probably some.

0% if held for 365 days in Germany, nearly $100k per bitcoin, gotta love the doubters above, big boys playing now, we should correct soon though. The btc ETF has been spectacular, but sooner or later comes the supply shock and the rocket.......Love my Tulips, the biggest player in the world playing and its a Tulip, the'y been buying like it's gonna run out, major hedge funds own nearly 1 million btc, that's gotta be some Tulip

Edited November 13, 2024 by azda

[Master Jmd 89]

On 3/16/2024 at 10:42 AM, Master Jmd said:

...

2023
Price bounces back a little to between $25,000 and $30,000 until the end of the year where it starts climbing up to $42,500.
"It's a bubble, it's going to burst" comments start slowly appearing again.

2024
Price continues to sharply rise up to a new all time high of $73,000 in March.
<- You are here.

My historically-informed prediction is that Bitcoin will continue to climb for a few months before correcting itself down to around the $50,000 mark. The bubble commenters will be out again with their "Haha, told you so" comments despite this figure being more than double what it was before the price rises started in 2023, and the cycle will continue.

My prediction here was a little off. It's spent most of the time since hitting the $73,000 figure at an average of $65,000, dipping a couple of times as low as $53,850 before rapidly bouncing back. There wasn't really a big percentage slump like we've seen with most of the other peaks. It's seen another fast rise off the back of Trump winning the US election to a new all time high of just over $93,000 achieved earlier today.

I presume a lot of people will have $100k as their auto-sell figure and that will be a large wall for it to overcome. It'll be interesting to see how it performs over the next few months and what impact any new US economic policies may have.

[Menger 88]

1 hour ago, azda said:

Love my Tulips, the biggest player in the world playing and its a Tulip, the'y been buying like it's gonna run out, major hedge funds own nearly 1 million btc, that's gotta be some Tulip

Most investors in the Tulip Mania of 1637 were the (“expert”) merchants; Isaac Newton was a famous loser in the South Sea Bubble (1720) but the establishment was generally invested.  I have yet to meet someone who bought crypto other than as a speculation of higher prices. Speculative instruments are a poor store of value - so won’t become “money”. But a form of “money” was the original rationale for crypto (before speculation took over).  A tulip planted in sand … 

I still say it will “test zero” before it becomes “money”.