Cryptocurrencies (Bitcoin, Ethereum, Litecoin, etc.)

[Parliament 14022]

Cryptocurrency is naturally deflationary.  Money supply goes up -> money flows into Bitcoin/Dogecoin/etc -> prices go up -> more money goes in -> someone panics (and likely posts a TikTok vid) -> prices crash and all that actual money that started it disappears.  Like literally taking a pile of cash US Dollars and burning it.

Rince -> repeat

[Maestro della Moneta 17]

 

[Maestro della Moneta 17]

Microstrategy earnings today. Big announcement. 

 

 

Over next 3 years. 

Their “BTC yield” forecast raised. 

 

Shit’s gonna get wild. 

[MAUFRAIS 6561]

Want candy corn

[Nice Guy Eddie 13318]

17 hours ago, Maestro della Moneta said:

 

The ship has sailed in that more institutions and govts are looking into bitcoin and perhaps other crypto. When funds (pension, ETFs, state/national sovereign) decide to buy bitcoin, the price almost has nowhere to go but skyrocket since there is an extremely limited supply.

There are uninformed critics that point to the question that how do you know there isn't more bitcoin or that more can't be created by hackers. That's out of ignorance in that the code regulates the growth and the blockchain can be read by anyone to see the exact amounts today. There are some nerdy finance and math types who debated and mitigated every concern years ago. There are more controls in the bitcoin blockchain than other financial systems.

 

 

[Captainant 26927]

1 hour ago, Nice Guy Eddie said:

The ship has sailed in that more institutions and govts are looking into bitcoin and perhaps other crypto. When funds (pension, ETFs, state/national sovereign) decide to buy bitcoin, the price almost has nowhere to go but skyrocket since there is an extremely limited supply.

There are uninformed critics that point to the question that how do you know there isn't more bitcoin or that more can't be created by hackers. That's out of ignorance in that the code regulates the growth and the blockchain can be read by anyone to see the exact amounts today. There are some nerdy finance and math types who debated and mitigated every concern years ago. There are more controls in the bitcoin blockchain than other financial systems.

There's still the fundamental problem that the only reason to buy Bitcoin is the hope of selling it to someone else for more in the future. It is generally impractical for use as a currency, and does not play well with market expectations for a payment system. 

If you abstract it away to just being a value in an account, then sure NGU all day baybay. But why would the value go up? What utility is driving the cost increase aside from FOMO?

[Nice Guy Eddie 13318]

16 minutes ago, Captainant said:

There's still the fundamental problem that the only reason to buy Bitcoin is the hope of selling it to someone else for more in the future. It is generally impractical for use as a currency, and does not play well with market expectations for a payment system. 

If you abstract it away to just being a value in an account, then sure NGU all day baybay. But why would the value go up? What utility is driving the cost increase aside from FOMO?

I agree there is a Greater Fool Theory in play with Bitcoin until it becomes a self realized prophecy as more people and wealth buys into it. What is the value of fiat currency other than you have faith that the country behind it. You hold onto whatever currency based on the hope that the country and its citizens agree that it has value. If Americans agreed today that the $2 bill was actually phony money, it would not be exchangeable for two $1 bills. 

Personally I don't even consider bitcoin to be a currency. It's called that because of the incorrectly applied term, cryptocurrency. 

Value is defined by what people want it to be defined. You or I can't tell others how to define it. 

[Maestro della Moneta 17]

20 hours ago, Captainant said:

There's still the fundamental problem that the only reason to buy Bitcoin is the hope of selling it to someone else for more in the future. It is generally impractical for use as a currency, and does not play well with market expectations for a payment system. 

If you abstract it away to just being a value in an account, then sure NGU all day baybay. But why would the value go up? What utility is driving the cost increase aside from FOMO?

Pretty simple. It's a long term store of value, like gold. As monetary units are debased, it will go up given the 21 million coin cap.

How useful is gold as a currency? Is it used in any payment systems? 

 

Also, going back to Microstrategy. What they are doing and attempting to ramp up is really fascinating. A very compelling long term opportunity for people with money trapped in 401k or other accounts. Michael Saylor explains in great detail in the most recent earnings call starting at 28:00.

Explore MicroStrategy's Investor Relations: Stay Informed on Financial Performance and Corporate Governance

Tl;DR

The financial products that can be provided to market based on their bitcoin holdings are actually accretive to shareholders. If you look at it as earnings, the amount of value they're creating is substantial.

Let's say they hit the middle of their "BTC yield" target for 2025 at 8%. Based on holding 252,000 BTC currently that would be about 20,000 BTC accretive to shareholders. At today's prices that's $1.4B annually.

But they will also be adding BTC intermittently via selling equity that adds to their base stack. These numbers will get big. 

While selling equity in almost any other case is dilutive and knocks down the share price, it's telling that they announced the largest ever ATM equity offering and the stock is up. As he mentions, when they raise capital they deploy it and can get returns in 5 days, not 5 years.

 

[Captainant 26927]

1 hour ago, Maestro della Moneta said:

How useful is gold as a currency? Is it used in any payment systems? 

Gold has actual utility as a commodity. It's a core component of electronics and chips, in addition to being physically tangible and not requiring gigawatts of power to complete a transaction with it, nor half an hour or more to confirm the transaction 

 

1 hour ago, Maestro della Moneta said:

The financial products that can be provided to market based on their bitcoin holdings are actually accretive to shareholders. If you look at it as earnings, the amount of value they're creating is substantial.

But it's just an abstraction of an abstraction of a digital value. There's nothing THERE!

I recognize that there's technical utility in block chains and a distributed architecture, but none of that has to do with why Bitcoin is bought and sold. It's all FOMO and hoping to sell for more than you bought it, with literally zero other generally used utility or function. 

 

But I gotta say GRUhorn, it is a nice way to fund oligarchs and dictators around the world. I can see why your bosses tell you to stan for it

Edited Friday at 03:34 PM by Captainant
Typos, autocorrect

[Maestro della Moneta 17]

It's ok. I'm aware that you don't get it. 

It does give me a small amount of satisfaction knowing that the lamest posters on here will be among the last to get it, and it will benefit them the least.

 

The game theory will play out over time. The earliest corporate adopter is the best performing stock on the planet the last 4 years. The earliest sovereign adopter has seen a resurgence.  I'm sure multiple sovereigns already are privately. 

Next, you'll see outperformance by the pensions and other funds that have invested in the etfs. These things will all eventually be followed by others. And on it goes. It's a self-fulfilling prophecy. 

And you'll still be claiming there's nothing THERE!

[Captainant 26927]

5 hours ago, Maestro della Moneta said:

The game theory will play out over time. The earliest corporate adopter is the best performing stock on the planet the last 4 years. The earliest sovereign adopter has seen a resurgence.  I'm sure multiple sovereigns already are privately. 

Which stock would that be? You seem to be claiming that their adoption of BTC is responsible for the growth, so please show your work

[Maestro della Moneta 17]

32 minutes ago, Captainant said:

Which stock would that be? You seem to be claiming that their adoption of BTC is responsible for the growth, so please show your work

Sigh

 

 

 

 

 

Edited Friday at 11:05 PM by Maestro della Moneta

[Captainant 26927]

3 hours ago, Maestro della Moneta said:

Sigh

 

 

 

 

 

Real solid fundamentals underlying it's growth and not FOMO amirite 

[Maestro della Moneta 17]

17 hours ago, Captainant said:

Real solid fundamentals underlying it's growth and not FOMO amirite 

 

 

As far as net income numbers, that’s due to old FASB accounting standards around digital assets. Theyve been updated and that will effect Q1 2025. 

 

https://dart.deloitte.com/USDART/home/publications/deloitte/heads-up/2023/fasb-issues-asu-crypto-assets#

 

The current valuation is based more on the assets they hold and what they're doing with them. 

The biggest effect of the new standards will be Bitcoin appreciation marked as net income. I believe positive net income is the only thing holding back MSTR from S&P 500 inclusion, later Nasdaq 100 inclusion. Then you will all become passive Bitcoin hodlers via SPY and QQQ.

 

Congrats Captain!

 

[Captainant 26927]

1 minute ago, Maestro della Moneta said:

The biggest effect of the new standards will be Bitcoin appreciation marked as net income. I believe positive net income is the only thing holding back MSTR from S&P 500 inclusion, later Nasdaq 100 inclusion. Then you will all become passive Bitcoin hodlers via SPY and QQQ.

So you want to claim unrealized gains as profit? Seems unwise and Enron-like

[Maestro della Moneta 17]

1 hour ago, Captainant said:

So you want to claim unrealized gains as profit? Seems unwise and Enron-like

I don't want to do anything. It’s accounting standards. 

[B00M 6033]

On 11/2/2024 at 3:37 PM, Maestro della Moneta said:

The biggest effect of the new standards will be Bitcoin appreciation marked as net income. 

Will it be taxed like income? 

[bernorange 8341]

Quote

The Treasury Borrowing Advisory Committee has published a new presentation calling for central bank digital currencies (CBDCs) to replace stablecoins. Pointing to a history of so-called “wildcat banking,” the committee argued that just as the government monopolized the issuance of paper currency by establishing the Federal Reserve, the government should monopolize digital currency by establishing a CBDC: ...

https://www.cato.org/blog/treasury-advisory-committee-calls-cbdcs-replace-stablecoins