Bitcoin and Fear Discussion. Fact from Misinformation

Bitcoin and Fear Discussion. Fact from Misinformation

Real Estate Broker · Los Angeles, CA · Member since 2017 · 658 posts · 293 votes

I don’t expect to change anyone’s mind about Crypto, specifically Bitcoin, nor do I expect this post to be popular or liked by 95% of BP users

I really like the money podcast and I’m listening back and am starting to see that @Mindy Jensen's hate for bitcoin comes from a total lack of understanding, which like in all things, leads to fear. To a lesser degree @Scott Trench as well but only because so far, he’s had less to say. But from what he’s said, doesn’t seem to understand it and doesn’t seem interested. Scott mentioned he thinks something else will come along – sounds logical, and I have friends who know little about BTC that have said the same thing. No one knows. But if you look at the fundamentals, growing support, dominance and market cap, and understand it, you end up with a better platform to base your decisions from. One example, a better Amazon hasn’t come around yet. A better internet either. There are thousands of crypto, which Mindy calls all of them Bitcoin, and at some point, I think we will see a lot of them disappear. Scott also says it has “no intrinsic value”, another phrase I see repeated often. I have friends who have said the same thing but can't define the word "intrinsic".  I’d like to ask Scott what the word intrinsic means to him, without looking it up! Because you could say the same about printed fiat currency. Money Show 86 with David Stein was telling. 

But don’t we think it’s important to understand what crypto is, what makes it useful, and the differences between all of the offerings? Just like any other asset class? They are not all the same.

David Steins advice that one should be able to explain something before investing is solid fundamental advice. On the other hand, wouldn’t everyone agree that one should be able to explain what something is before they hate and recommend against it? Not understanding and not investing is one thing, it’s a good reason not to invest in fact, but actively hating something that isn’t understood seems dangerous, especially when giving financial advice.

For instance, Mindy recalled something that might have happened in Greece that caused the price of BTC to sink to $6k – details are fuzzy, such as what exactly happened, when, what the price was before and after, and how it affected BTC

In this episode (86) there were a couple of points that had fuzzy or non-existent details and facts – don’t we think those are important when deciding for or against something?

Doesn’t it seem like giving financial advice out of fear, emotion, or/and lack of understanding, is dangerous?

One thing Mindy said did make sense, it is volatile. If the volatility is beyond your threshold, even when you believe in something, you might avoid it. But undersatand it first! 

When I started investing in BTC, it was early 2015 when it had fallen from previous highs of over $1,000. I bought at $246.

I held since and have seen gains in the 1000%. Not even my real estate purchased at the bottom of the last crash, has performed that well

Even given the volatility, since 2009, we've not seen anything perform like BTC. Look at Apple stock January 2015, which traded at around $110. It's at $227 today. Do the math from the same period against BTC. 

I invested no more than I could afford to part with, I understand it, I believe in it, adoption is growing, and I could write another two pages

I think if anyone has rational questions, not emotional hate, post up and we can discuss things. 

What's past is proglogue. People hated the automobile, MP3's, electric elevators, and were afraid of flight. Anything can happen, but if you're curious, I'm here to have a discussion 

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Investor · Nipomo, CA · Member since 2014 · 366 posts · 401 votes
7y

@Scott Trench Before getting into it I will mention that I've been a holder of various currencies since 2015, but do not consider myself an expert. I will do my best to explain as I see things, but welcome others with more knowledge to expand and/or point out inaccuracies. 

"Bitcoin is similar to hundreds of other cryptocurrencies. Each crypto has it's nuances, it's slight differences. But, at the end of the day, there seems to me to be no particular reason to me that Bitcoin will be the one universally adopted in the end. Perhaps it has odds over, say, KodakCoin. But, why Bitcoin vs. Litecoin? Vs. Ethereum? Vs. XRP"

I think this highlights why more research should be done before making strong opinions one way or the other. As you put it, Bitcoin's value is in its ability to replace other currencies (such as gold or fiat) as a store of value. With that being the case, why would people choose Bitcoin over the others? 

Gold is the best comparison, as BTC is often called digital gold. It may not be tangible in the sense that you can hold physical BTC, but the code that surround BTC is irrefutable. I think both of these currencies are complimentary. One is physical, the other digital. As long as you hold your private keys, you will always be in control of your BTC. Just like if you lock you gold in a safe, you will always be in control of your gold. Give it to a 3rd party to store, and that is where BTC and Gold both become vulnerable. 

Fiat government currency has shown that it is not a good store of value. The system is centralized to a max and is subject to inflation. BTC will never be inflated. It has a fixed supply that cannot be changed. Fiat currency is constantly being printed, causing it to lose value over time. 

Ethereum is a different concept from Bitcoin. The goal of Ether and the Ethereum blockchain isn't really to be a store of value. It is attempting to be a platform for development of Digital Autonomous Corporations (DAOs) as well as as Smart Contracts. This is a different use case entirely than Bitcoin, so I do not really see the two as competitors. 

Similarly, XRP was not created to be a store of value. It is currently being used by banks and financial institutions to help with cross border payments and to manage liquidity costs. If I remember correctly, the creators have mentioned that crypto investors should not be seculating with XRP, as the price of the token is intended to stay low. In addition, Ripple appears to fairly centralized compared to other cryptocurrencies. 

LTC on the other hand has a lot of similarities with BTC, making it the most obvious competitor. The main reason Charlie Lee created LTC was to improve the scalability of BTC. There are some differences, such as processing speed, but the functionality is largely the same. 

So why would someone choose BTC over LTC? 

There is an important point that many BTC maximalists will pount to. There is no creator/owner that can be easily pointed to. BTC is a protocal created by an anonymous entity and is now entirely run by the people who make up the ecosystem. LTC, and all other currencies, have a central founder. Even if the coins themselves are entirely decentralized, they still have founders/leaders who can heavily influence the community. 

I highly encourage you to listen to actual experts, as again, this explanation was just my best attempt. The two podcasts I'd recommend were done by The Investor's Podcast. This podcast is normally focused on stocks, but they did two back to back on Bitcoin. 

The two I recommend are #259 with Dr Saifedean Ammous and #260 with Plan B. The main takeaway I received by listening to these two episodes was the concept of stock to flow, and why this is important when deciding upon a store of value. 

See this reply in the discussion

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  • Real Estate Broker · Los Angeles, CA · Member since 2017 · 658 posts · 293 votes
    5y

    UK firm Ruffer dumped gold in favor of Bitcoin in the amount of $675 Million. 

    Also, Bitcoin broke all time highs across all exchanges and is closing in on $21K.

  • Real Estate Broker · Los Angeles, CA · Member since 2017 · 658 posts · 293 votes
    5y
  • Real Estate Broker · Los Angeles, CA · Member since 2017 · 658 posts · 293 votes
    5y

    Bitcoins market cap left Berkshire Hathaway in the dust and has crossed $600B. Tesla is next. 

    We will see a pull back at some point, but with Grayscale alone, now with $20B under management, who just bought 3x the amount of mined supply in December, I just don't know if we will see the retracements of the past. 

    So far we are ahead in this cycle, 2021 will be interesting. 

    I expect to see more companies on the S&P add it to their balance sheets, more insurance companies invest, RIA's, hedge funds, and at some point, more pensions. I also expect to see more regulation this year, which will clear the path for more adoption. Regulation will also likely weed out a lot of the junk in the space. And eventually, we will see an ETF, which will clear the path for everyone with an IRA, 401K - although this can be done already.

  • Sherman Oaks, CA · Member since 2013 · 3k+ posts · 2k+ votes
    5y
    Originally posted by @Eric Carr:

    Bitcoins market cap left Berkshire Hathaway in the dust and has crossed $600B. Tesla is next. 

    We will see a pull back at some point, but with Grayscale alone, now with $20B under management, who just bought 3x the amount of mined supply in December, I just don't know if we will see the retracements of the past. 

    So far we are ahead in this cycle, 2021 will be interesting. 

    I expect to see more companies on the S&P add it to their balance sheets, more insurance companies invest, RIA's, hedge funds, and at some point, more pensions. I also expect to see more regulation this year, which will clear the path for more adoption. Regulation will also likely weed out a lot of the junk in the space. And eventually, we will see an ETF, which will clear the path for everyone with an IRA, 401K - although this can be done already.

    I think I read somewhere 5% is now quietly owned by corporate treasuries and this is separate from the fund types. As mentioned Grayscale just upped mins from 25k to 1 mil and kind of a more radical indicator that something bigger might be coming. Many funds will be obligated to own 1% or more is one possible outcome soon. Turns out rat poison might be a good business model, always buyers somewhere. 

  • Real Estate Broker · Los Angeles, CA · Member since 2017 · 658 posts · 293 votes
    5y

    @Matt R.

    "It's not a rally, not a bubble, it is a wild fire in cyberspace" 

    It is just getting started. 

  • Real Estate Broker · Los Angeles, CA · Member since 2017 · 658 posts · 293 votes
    5y

    BTC $40K+ and volume is rising.

    Market Cap now $743B

    I have been expecting a pullback since $18K. We saw a 20% dip at $34K - to $27.7k, which was quickly bought up.

    I see the next major resistance at $56K - $1T market cap.

  • Real Estate Broker · Los Angeles, CA · Member since 2017 · 658 posts · 293 votes
    5y

    Market cap is $769 Billion, while Bitcoin set a new ATH of about $42K

    Eats Facebook. 

  • Real Estate Broker · Los Angeles, CA · Member since 2017 · 658 posts · 293 votes
    5y

    $801B market cap, and Elon Musk just put $1.5B of his company's money into BTC.

    Let's see what happens 

  • Member since 2020 · 20 posts · 4 votes
    5y

    Lots of interest in BTC now that Musk has made the news

  • Real Estate Broker · Los Angeles, CA · Member since 2017 · 658 posts · 293 votes
    5y
    Originally posted by @Account Closed:

    Lots of interest in BTC now that Musk has made the news

    Him getting in is a huge deal. I think if Oracle and Apple get in, we will be two huge steps closer. As I have always said, anything can happen, but it has been my belief that it was just a matter of time. Let's hope it continues. 

  • Real Estate Broker · Los Angeles, CA · Member since 2017 · 658 posts · 293 votes
    5y

    Adoption continues to grow. State Street and other large funds are adding it to their fund offerings / adding it to their balance sheets. Major banks, like Chase and Wells, are offering it to their clients. Custody is next. Jim Cramer recommends putting 5% into BTC. Budweiser buys and NFT and buys the Beer.eth domain name. El Salvador getting ready to make BTC legal tender. Miami launches Miami coin, will pay interest / rewards in BTC, Kiyosaki says BTC has the greatest upside, Bitcoin of America listed as one of the fastest growing companies, Citi files to trade bitcoin futures - citing increasing demand, Europes largest derivatives platform will launch a Bitcoin futures fund. And more companies are accepting BTC for payment. 

  • Real Estate Broker · Los Angeles, CA · Member since 2017 · 658 posts · 293 votes
    5y

    And I just received my Bitcoin Visa rewards card 

  • Real Estate Broker · Los Angeles, CA · Member since 2017 · 658 posts · 293 votes
    5y

    @Scott Trench

    Here's a good reason: 

    Palihapitiya said on Twitter that he had bought an empty plot of land near Lake Tahoe in 2014 using bitcoin.

    He said bought the land for $1.6 million using 2,739 bitcoin - which would be worth more than $120 million as of Wednesday.



    Chamath Palihapitiya says he spent $1.6 million of bitcoin on some land in 2014. Those coins would be worth more than $120 million today. | Currency News | Financial and Business News | Markets Insider (businessinsider.com)

  • Real Estate Broker · Los Angeles, CA · Member since 2017 · 658 posts · 293 votes
    5y

    MO. Governor wants to give citizens $1k in BTC - must hold it for 5 years. 

  • Real Estate Broker · Los Angeles, CA · Member since 2017 · 658 posts · 293 votes
    5y

    Franklin and Templeton, $1.5T asset manager is hiring crypto analysts 

  • Real Estate Broker · Los Angeles, CA · Member since 2017 · 658 posts · 293 votes
    5y

    Latin America may be adopting. El Salvador has, Cuba drops a blatant hint. Others express interest. I can see why. 

    States, local governments, in the US, will follow. Already happening. 



    All the Countries Where Bitcoin Adoption Is Being Considered - The Street Crypto: Bitcoin and cryptocurrency news, advice, analysis and more

  • Real Estate Broker · Los Angeles, CA · Member since 2017 · 658 posts · 293 votes
    5y

    Pro sports players are taking pay, and or signing bonuses and promotional pay, in BTC. 

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