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As opposed to other futures, which are totally certain.

deleted 9y ago
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mdip 9y ago
Heh, I get the sarcasm implied here, but I think the bigger issue is that a lot of "futures" are based on things that have reasons[0] for the price moving the way that it does. Oil futures, while unpredictable at times, have an element of research that can be done to make an informed "bet". Crop futures are affected by weather predictions and almost all futures are affected by overall economic outlooks for the sector they occupy. But cryptocurrency? I have yet to find someone who can give me a "good"[1] reason for prices of BTC to even bet at USD$100, let alone USD$8,000. The probability that in two months the price is $0.01 or the price is $19,000 are equal without a reasonable, data-backed explanation about why the price, today, is $8,000. [0] As in reasons that exist outside of the bubble of "other people are buying it and they're paying that much". Hell, 80-90% of people who work in technology/programming/software development couldn't properly explain how the blockchain actually works -- and I don't mean "they mostly get it but make some technical errors/couldn't write a working example", I mean they are "deer-in-the-headlights lost" with regard to explaining how any of it works. And it's been my (anecdotal) experience that those who can wouldn't dream of putting money into it. [1] Good, as in something other than the early "Well, there's that drug market that takes it and it's popular" or "Algorithms are trading it without human intervention and the price just keeps going up" or "Look at that! (pointing upward at the right-hand side of the price graph)". There's simply no explanation that I've heard that dares market a benefit to owning Bitcoin beyond the fact that it can be turned back into cash and the amount of cash that it can be turned into is inexplicably more than the amount of cash it could be turned into last week.
- tbtowzhtow 9y ago
  Benefits of ownership and other such fundamentals are decoupled from an open market, which creates an ever changing inside market (bid and ask) and beyond (buy and sell walls in cryptocurrency parlance) based on buying and selling pressure. Not to state the obvious, but the “value” at a given time is actually directly based on the ever changing decisions of willing market participants. Sentiment drives such demand which has increased of late. You may be right fundamentally but the market can easily make a short seller insolvent before “rationally” discovering true pricing based on your thesis.
- charlesdm 9y ago
  Why is gold $1,288 per ounce today? Purely because it acts as a store of value. But gold is only valued at its current valuation, because people say gold is gold and that has a certain value. You could have picked any other rare metal, or say, diamonds. Gold has limited real world uses. The same could (not saying it will, but could) apply to Bitcoin. It seems to be growing into digital gold / a digital store of value. The price of gold globally is $7.8tn. Bitcoin is worth $150bn(ish). If there is a 50/50 chance that Bitcoin does become digital gold, then at current valuations it will be cheap. Is it not worth investing $1 today, to potentially make $10-20-30 IF it does succeed? Those are decent odds with great upside. This is not investment advice, just my personal opinion.
  - kgwgk 9y ago
    Where does the 50/50 come from? Do other cryptocurrencies also have 50/50 chance of becoming digital gold?

deleted 9y ago

[deleted]

mdip 9y ago

Heh, I get the sarcasm implied here, but I think the bigger issue is that a lot of "futures" are based on things that have reasons[0] for the price moving the way that it does. Oil futures, while unpredictable at times, have an element of research that can be done to make an informed "bet". Crop futures are affected by weather predictions and almost all futures are affected by overall economic outlooks for the sector they occupy. But cryptocurrency? I have yet to find someone who can give me a "good"[1] reason for prices of BTC to even bet at USD$100, let alone USD$8,000. The probability that in two months the price is $0.01 or the price is $19,000 are equal without a reasonable, data-backed explanation about why the price, today, is $8,000. [0] As in reasons that exist outside of the bubble of "other people are buying it and they're paying that much". Hell, 80-90% of people who work in technology/programming/software development couldn't properly explain how the blockchain actually works -- and I don't mean "they mostly get it but make some technical errors/couldn't write a working example", I mean they are "deer-in-the-headlights lost" with regard to explaining how any of it works. And it's been my (anecdotal) experience that those who can wouldn't dream of putting money into it. [1] Good, as in something other than the early "Well, there's that drug market that takes it and it's popular" or "Algorithms are trading it without human intervention and the price just keeps going up" or "Look at that! (pointing upward at the right-hand side of the price graph)". There's simply no explanation that I've heard that dares market a benefit to owning Bitcoin beyond the fact that it can be turned back into cash and the amount of cash that it can be turned into is inexplicably more than the amount of cash it could be turned into last week.

tbtowzhtow 9y ago
Benefits of ownership and other such fundamentals are decoupled from an open market, which creates an ever changing inside market (bid and ask) and beyond (buy and sell walls in cryptocurrency parlance) based on buying and selling pressure. Not to state the obvious, but the “value” at a given time is actually directly based on the ever changing decisions of willing market participants. Sentiment drives such demand which has increased of late. You may be right fundamentally but the market can easily make a short seller insolvent before “rationally” discovering true pricing based on your thesis.
charlesdm 9y ago
Why is gold $1,288 per ounce today? Purely because it acts as a store of value. But gold is only valued at its current valuation, because people say gold is gold and that has a certain value. You could have picked any other rare metal, or say, diamonds. Gold has limited real world uses. The same could (not saying it will, but could) apply to Bitcoin. It seems to be growing into digital gold / a digital store of value. The price of gold globally is $7.8tn. Bitcoin is worth $150bn(ish). If there is a 50/50 chance that Bitcoin does become digital gold, then at current valuations it will be cheap. Is it not worth investing $1 today, to potentially make $10-20-30 IF it does succeed? Those are decent odds with great upside. This is not investment advice, just my personal opinion.
- kgwgk 9y ago
  Where does the 50/50 come from? Do other cryptocurrencies also have 50/50 chance of becoming digital gold?