Some may find this interesting. It helped me understand a few things.
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Short answer yes. Some regulation might be introduced but not sure where you see the motivation to ban, stymie or regulate into parity however.
Crypto is speculative absolutely. Itâs still a very new industry by all accounts. While the outsize returns drives a lot of it itâs also the development, innovation and technology. There will be winners and losers and whatâs good now doesnât mean it will stay true. Bitcoin started out as digital peer to peer cash and thatâs kinda failed with slow and expensive transactions. More as a store of value now. The returns cannot be understated though and investors chasing yield take notice whichever crypto that is.
As for traders pushing it higher thatâs not pertinent only to crypto. 20% circa returns is on a USD backed stable coin pegged to the dollar. Returns you donât see on your savings account or term deposit at your bank for instance. While the risks can be offset by and large. Your bank would welcome the chance to operate in Defi.
Whatâs your definition on all assets are set to fold? Everything will just crash? You really think central banks and governments wonât step in? Where do you see the S&P 500 going? Returning to? Or perhaps just more of the same. RBNZ increased interest rates by 0.25% this week and is usually a good barometer for other central banks in the future.
A lot of traders use leverage and margin calls is not uncommon but the same can be said for all financial derivatives. Thereâs a lot more volatility generally but the ripple effect into other asset classes not so sure.
As for limit on demand? Prolonged sell off? Cryptoâs have dropped 70% plus on a good few occasions and that includes the majors like Bitcoin and Ethereum for example. Itâs often only then pushed higher.
At what point would you recognise crypto as a worthwhile investment? How high do prices need to go? When there is more regulation? After mass adoption? When the biggest returns seen were in yesteryear?
Crypto is a bit of a maze though and there are risks in everything. There are scams, pump and dumps, valid concerns but thereâs also opportunity. Crypto needs to improve certainly. However the best time historically to invest is when assets are the most centralised.
Since 2009 weâve lived in a world where governments have vastly increased the supply of money without increasing demand. Theyâve done this primarily by giving that increased money supply to a comparatively few actors, primarily financial institutions. This has kept overall inflation low by moderating increases in demand. The pandemic changed this as governments spewed out large increases in fiscal budgets, at least some of which were more democratically delivered. This has increased demand beyond the capacity of supply. Now we are seeing (potentially) the first persistent inflation since the 1970s. Will it actually be that bad? Hard to say. If it is, central banks will have to raise interest rates, which will cause other assets to fall. It might not actually happen, but if we do enter a world where inflation is persistent, the value of all assets will decrease, assuming they are denominated in a currency which is losing its value through inflation. How might that affect crypto? If it pushes more people to invest in crypto, it could actually increase its value, which is why recent market moves in cryptocurrencies are so interesting. Keeping in mind Iâve generally been wrong about how long central banks and governments could keep the balloon aloft, I generally believe the persistent creation of new money has to cause inflation at some point and destroy at least some of the value in assets added since the 2008 financial crisis. Donât forget that cryptocurrencies are also money creation and are a part of this bubble.
At what point would you recognise crypto as a worthwhile investment? How high do prices need to go? When there is more regulation? After mass adoption? When the biggest returns seen were in yesteryear?
Itâs difficult for me to invest in something I donât understand, though this discussion has got me thinking about crypto more. Thanks to @Noo_Noo for posting that interesting video. I do believe I should make more of an attempt to understand this market but fear I lack the time. Crypto is definitely part of the financial landscape with ramifications for the future. Another limiter for me is the extent of adoption and use. Comparatively few people are actually using crypto for transactions. I see its run up as similar to the runup in meme stocks. All this value creation is being driven by central banks who have told markets they wonât let any class of assets fail (as evidence by the Fed backstopping junk debt in March 2020). Will the Fed and other central banks backstop cryptocurrencies if a general market selloff causes significant value destruction in that sector?
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One can also view the creation of cryptocurrencies in the context of the larger struggle of technology versus traditional government. We see governments challenging the increased power of emerging technology companies like Google, Facebook, Apple etc. These technology companies could become a de facto government in the future. Itâs not so far fetched. Elon Musk might be more likely to send people to the moon than dysfunctional governments. Will governments, however, who must fund themselves through tax revenues, allow an entire universe of new currencies to exist outside their ability to collect taxes? To say nothing of the purposes to which actors of all stripes can put crypto. One example given here.
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This is very concerning.
Yeah, Iâm still struggling with it, just the language used as well as the whole idea of it.
Itâs one of those things where Iâm uncertain about it but I cant see how you can simply turn the tap off. It seems to be embedded into the digital world now, and that world is getting extremely busy.
Bitcoin mining is just wrong but thatâs how that blockchain is set up and it is still the âgo toâ crypto currency that drives the value of other coins / tokens.
I tried a little bit of day trading on it and found it extremely difficult and have now basically got a small amount invested in a couple of coins that Iâm HODLing. Worth noting, for the longer term âpuntsâ you can stake your coins. Interest rates are generally very good and remove any impact inflation has on the value of the coin. You can basically earn a guaranteed 7% interest (say) on your holding for a period of about 60 days or so on top of any gains or losses that occur in the value of the coin itself. There are choices on whether you enter into a locked agreement (fixed time period with no access to it but higher return) or a flexible one.
One last note. Apparently crypto tends to work in cycles. We are currently in a Bull cycle where the value generally increases. It is due to switch to a Bear cycle where there will be a downward trend. That is due any time now.
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Amazed at how many suppliers there seem to be!
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The two that failed are not that significant (I think 40+ still left, not that many customers), but CNG pulling out is regulatory failure. Being required to supply gas with no prospect of payment is just not that interesting, particularly when you think that you might have another 15 client companies on the brink of failure. Those CNG customers are unlikely to be able to secure another supplier of gas.
Couldnât they think of a better name?
Nobodyâs opening a document titled CumEx Files 2.0 at work.
This shit is getting really weird. Now there are two other EV companies, Rivian and Lucid, which are worth as much large auto companies like GM and Ford. Neither has meaningful revenue either. Seriously, does anyone think EVâs wonât quickly become a commodity? Itâs four wheels and a battery.
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I donât know much about these companies, but it does appear odd that so many of them benefit from such positive valuations. Do these companies offer anything more than cars? At least one can argue Teslaâs price is down to the expected cashflow from dominating not just the car industry, but solar, robotics, Batteries, space travel and AI etc (not sure thatâs likely either but at least it is an understandable narrative).
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Teslaâs primary advantage is it has invested in a network of fast charging stations available only to its cars and the brand loyalty of having gotten to market first. These newcomers donât have that advantage. Rivian specializes in pickups and SUVs, but Ford is about to launch its EV F-150 pickup which will power your house for several days in a blackout. Lucidâs sedan was just named Car of the Year by Motor Trend, but it costs $169K. Tesla will likely have staying power, but these new entrants are burning so much cash. Hard to believe there is room for them in a market where Toyota, Ford, GM, VW and others will spend lots of money on EVs.
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Oh, yeah. It must be real!
If you listen to the chief engineer of the new F150 she was talking about the challenges of doing things so novel in legacy companies. The fact she was given room to make what sheâs made suggests it isnât an impossible situation, but it does speak to why these EV focused new companies might be better positioned to make the better paradigm busting product. The question is will investment funds be available for long enough to prop them up through this period of massive losses (half a billion in the last quarter for Lucid)?
On the other hand, Tesla is not exactly a paradigm-busting product. Electric vehicles are an incremental change, but there really arenât huge barriers to entry and an enormous amount of the product is substantially similar to other vehicles. For Rivian in particular, the valuation seems absurd until they actually start shipping units to people other than themselves.
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Watching Europa today on some Slavic language channel. At half-time Matt Damon comes on to pitch Crypto.com, English with Slavic subtitles. âFortune favors the brave,â he says.
Hey, I got a Robinhood account (weird platform to be honest). I bought a hundred bucks of Bitcoin and Ether. Both went down abruptly and immediately. Iâm brave!
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Thatâs unfortunate.i know the feeling.
Ada would be the one Iâd watch. Itâs been slowly sinking of late due to a string of bas news but as Blockchain the technology continues to grow and has the potential to deliver more than Ether.
Trick is to wait for the turn and enter get in when it looks solid.
Also look at staking. You can get inflation busting interest rates plus any benefit should the price go up.
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Just dabbling. Robinhood will let you buy 50 cents worth of Bitcoin, if you are so inclined. No idea how they do it. I imagine they took my $100 and bought sweets with it.
They effectively sell details of trades before they happen. Itâs one of the reasons they canât get a licence to operate in the UK, because that sort of thing isnât allowed here.
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