Bitcoin Bubble - Crash

Bitcoin Bubble - Crash

Real Estate Agent · Jacksonville, FL · Member since 2015 · 1k+ posts · 1k+ votes

I know this will bring out the haters and the, "you don't understand bitcoin".  With that said here goes:

Bitcoin hit $23,000 this week.  What does that even mean?  You and I agree that today one Bitcoin is the value a used Honda Accord?  In December of 2019 it was under $4,000.  That is an amazing growth.  Imagine buying a house for 40 and selling it for 230 next year!  Sign me up.  

The premise is that the value of bitcoin is a currency, exchange it to get something in return.  As a currency it is inflationary, you get less for your currency over time.  This sounds great, but prices will rise at the same pace.  If you get paid once a month by the end of the month you will effectively make less than than the month before.  Given the option you will get paid in a stable currency.

For an examples Google: Weimar Republic, Venezuela.  While the causes of the Hyper inflation are different the effect is the same.

 No government or corporation is benefiting from bitcoin.  Regardless of your political bend it is an undeniable fact that governments want to tax and regulate and companies want to monetize.  In fact the early signs of the governments crack down are showing up in the tax code.  I can easily report currency swap trades, but if I trade bitcoin, then I must file a separate schedule for them.  

Facebook tried to start its own digital currency and was shut down.  Why would it allow Bitcoin to continue?

The Digi-dollar or the Digi-Yuan will render the Bitcoin useless as a currency. There is widespread agreement that a completely digital currency is necessary. The first government to issue one will have a significant competitive advantage in remaining or becoming the reserve currency. The pay off would be 2 people in third world with phones could transact in dollars with out any knowledge of the US or speaking English. While there are a lot of critics of the dollar and fiat currency, the US still owns assets. What is the Grand Canyon worth in a liquidation? Bitcoin on the other hand owns nothing and is accountable to no one. My bank gets hacked and I get my money back from them or the FDIC. What about Bitcoin, While block chain is a great idea, it is not fool proof. It will someday be hacked. To geek out a bit, I believe the block chain data is secure by its distributed nature, however access to it from the Client, (purse) will be compromised. If I have your pasword, (cats name, younges child, etc), I can access your account.

The press has been covering the fact that Wall Street is getting into Bitcoin.  These are the same people who brought us the Credit Default Swap and we all know how that turned out.

Bitcoin is speculation.  There will be people who make big money speculating and there will be a lot of losers in the game.  It is not investing and as long as people do not think they are going to retire holding bitcoin they should be fine and potentially could make a few bucks.  I, on the other hand am not a speculator.   

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New to Real Estate · Chicago · Member since 2020 · 6 posts · 9 votes
5y

You know what's also speculation? Fiat currencies. The US dollar loses purchasing power each year because the Federal Reserve prints money out of thin air. Not to mention, with quantitative easing & the fed lowering interest rates, they're trillions of negative-yielding bonds worldwide as a result. Why would institutions keep their clients money in negative yield assets, when they could dip their toes in bitcoin? Only a 1% allocation from Wall Street would cause a mania unlike you've ever seen before. 

The market cap of bitcoin is roughly $400 billion, the market cap of gold is $10 trillion, more or less. Bitcoin is gold 2.0 and could easily do 5x in the next decade, conservatively. You can't manipulate bitcoin either because it's decentralized and they're difficulty adjustments built-in (hard to explain here but there's crazy game theory built into the algorithm. I would recommend reading into that if you're curious. 

You cant bring a million dollars worth of gold with you on an airline to another country, yet you can do bring a million dollars in bitcoin on a USB drive. Bitcoin is a store of value and safe-haven asset that cannot be manipulated. Real estate, gold bitcoin are all great investments in my opinion. My personal strategy is to dollar cost average into it every week with small amounts, which helps reduce the volatility risk. I'm up 173% this year 

I'd be more than happy to address any concerns you have about bitcoin or share any resources!

Matt

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

    $1.5T mutual fund asset manager is hiring to build a digital asset team. 
    CoinDesk: Bitcoin, Ethereum, Crypto News and Price Data

    In addition to Amazon and Walmart hiring crypto teams 

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

    $1.5T mutual fund asset manager, Franklin Templeton, is hiring to build a digital asset team. 

    In addition to Amazon and Walmart hiring crypto teams 

  • 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
    4y
    Quote from @Account Closed:

    Bitcoin is very unstable. Because of the events happening in the world, it has fallen in price by almost 50 percent, but I think that it will be able to grow again in the short term. I have long been engaged in forex live trading, and the bitcoin exchange rate constantly surprises me. I heard that one country's ruler made bitcoin the official currency and bought a lot of bitcoins with public money. The rate has fallen, and the government has lost a lot of money. It surprises me that people didn't go to rallies of such exp

      When you understand how bitcoin is mined and the network is maintained, you realize it's the most stable thing on this planet. The El salvadorian president, not ruler, made it legal tender. Along with the other branches of the government. And they haven't lost money, they are buying more. They have established a bitcoin mining operation using one of their volcanoes, free energy. They've also formed a bitcoin bond, which other countries are buying into. El Salvador also built a 4 million dollar veterinarian hospital/college, using bitcoin.  There are States in the US that have bills to legalize it as money, others want to buy it and put it on their States balance sheet, others want to attract miners, other States including California and Colorado want to make it possible for citizens to pay government fees using bitcoin.  The world's largest banks, corporations, and hedge funds, are putting it on their balance sheets, establishing funds, and building custody products.  Both Russia and Ukraine have made it legal property, and Brazil is working on its own bill to do the same.  Mexico is considering making it legal tender, just as El Salvador has. Several countries have spot traded bitcoin etfs. Canada's largest spot bitcoin ETF, just grew 12% over the past 2 weeks.  The US currently has a handful of futures traded bitcoin ETF's, there are mounting efforts to push the SEC to approve a spot product in the US.  It's up 400% over the last 3 years. And it doesn't have the government/fed anti plunge protection team buying it up like the stock market has. 

    The price is volatile. That's the price you pay for performance. There are no wash sale rules when it comes to crypto. It also trades 24 hours a day. There are also exchanges that will do 20 to 1 or 100 to 1 leverage. As the rules start to change and countries, states, and institutions continue to adopt, the volatility will lessen. 

  • harlingen, TX · Member since 2016 · 1 post · 0 votes
    4y

    Bitcoin is both a giffen good and Veblen good, the price function only signals the rapid monetization it's going through. Saylor compares it to Manhattan real estate.

  • Real Estate Agent · Jacksonville, FL · Member since 2015 · 1k+ posts · 1k+ votes
    4y

    The thing about Bitcoin I don't understand is the level of fervor people exhibit.  They are so sure they are right there can be no discussion.  Their mind is made up, there can be no further review.  If it moves 5x in either direction, that just proves their premise.  I am open to all possibilities and opportunities, but I measure risk carefully in everything I invest in.  Bitcoin is still speculation and is not a good  currency due to its volatility.  No one can see the future, there is no certainty and further, how do you know we are going to be better off in this brave new world?  

    Should monetary and fiscal policy even exist?  In the post bitcoin world it is a free for all.  I trust the wisdom of crowds even less than our government.  

    While I have no great love for our government or its systems and abuse, I can not begin to imagine how my standard of living or happiness will improve because of Bitcoin. Perhaps If you are a successful bitcoin trader, then sure. give it another year before deciding if you are a successfully trading bitcoin.  We, the US and by extension its citizens have an unfair advantage on the world stage as the leading economy and military power.  We collectively do not want to level the playing field, we will be worse off.    

    Digital current and block chain are a fact and will become a greater part of our daily lives, but like it or not it will be owned and run by governments and central banks.  China has outlawed Bitcoin in-favor of their own digital current, if the US and the EU follow suit, Bitcoin will face real challenges and be relegated to criminal activity.  

  • Real Estate Broker · Los Angeles, CA · Member since 2017 · 658 posts · 293 votes
    4y
    Quote from @Lesley Resnick:

    The thing about Bitcoin I don't understand is the level of fervor people exhibit.  They are so sure they are right there can be no discussion.  Their mind is made up, there can be no further review.  If it moves 5x in either direction, that just proves their premise.  I am open to all possibilities and opportunities, but I measure risk carefully in everything I invest in.  Bitcoin is still speculation and is not a good  currency due to its volatility.  No one can see the future, there is no certainty and further, how do you know we are going to be better off in this brave new world?  

    Should monetary and fiscal policy even exist?  In the post bitcoin world it is a free for all.  I trust the wisdom of crowds even less than our government.  

    While I have no great love for our government or its systems and abuse, I can not begin to imagine how my standard of living or happiness will improve because of Bitcoin. Perhaps If you are a successful bitcoin trader, then sure. give it another year before deciding if you are a successfully trading bitcoin.  We, the US and by extension its citizens have an unfair advantage on the world stage as the leading economy and military power.  We collectively do not want to level the playing field, we will be worse off.    

    Digital current and block chain are a fact and will become a greater part of our daily lives, but like it or not it will be owned and run by governments and central banks.  China has outlawed Bitcoin in-favor of their own digital current, if the US and the EU follow suit, Bitcoin will face real challenges and be relegated to criminal activity.  

    Studying it for a month.  You also sound sure that block chain is here to stay. No one knows what's going to happen, but the world needs sound money. China also banned Google, Twitter, Facebook, free speech. And now, the Chinese government can see everything chinese people are spending on. Do you want that?

    Bitcoin is the worst thing to use for crime. We've talked about that 
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