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It's been almost a month arguing with my wife not to invest in Bitcoin. I'm just fed up with positive (microstrategy, tesla and other banks) news and negative n

by v1k65 6y ago

It's been almost a month arguing with my wife not to invest in Bitcoin. I'm just fed up with positive (microstrategy, tesla and other banks) news and negative news (mostly on here). I believe institutional investors do their research before investing in Bitcoin. Why do they still invest if Tether & Bitfinex are fraud?

rawtxapp 6y ago
They make up an increasingly small % of the crypto exchange volumes. And it's not clear that it's a 100% fraud, they probably have some backing even if it's not at 100%. I'd say research Bitcoin itself instead of looking at news to decide whether you should hold some or not. It may go to 1M$, it may go to 0, but at least you'll understand what you were buying.
paulryanrogers 6y ago
Could it be the greater fool theory? If they believe future buyers exist despite bad fundamentals then it could be a gamble. An attempt to ride the wave and get out before it collapses.
- gruez 6y ago
  Is gold the ultimate greater fool? Sure, it might have "intrinsic value" (eg. industrial use), but the current and historical price far exceeds that of comparable substances. Only about 7.5% of gold mined goes to industrial use, with the rest going to jewelry (48.5%), investment (29.2%), and central banks (14.8%). https://www.statista.com/statistics/299609/gold-demand-by-industry-sector-share/ https://www.statista.com/statistics/299609/gold-demand-by-in...
  - nly 6y ago
    If your numbers are accurate >=55% of the demand for Gold is completely organic and because of the desire of human beings to wear it. The rest is largely as a hedge against other assets under the belief that the demand for Gold will endure a crisis. This sounds healthy. Contrast this to Bitcoin where it has already been established in other comment threads that the vast majority of Bitcoin trading volume on dozens of exchanges might be fake ( see Bitwise/SEC presentation) and that a huge amount of volume is via the BTC/USDT pair and USDT may be fraudulent. Sounds pretty unhealthy.
    - bboygravity 6y ago
      > Contrast this to Bitcoin where it has already been established in other comment threads that the vast majority of Bitcoin trading volume on dozens of exchanges might be fake ( see Bitwise/SEC presentation) and that a huge amount of volume is via the BTC/USDT pair and USDT may be fraudulent. Sounds pretty unhealthy. You do realize that most gold and silver traded on the COMEX is also "fake" in the sense that they're trading in amounts of underlying gold and silver that could never ever be delivered at the COMEX prices? JP Morgan even got a tiny "still worth it" fine for blatant metals price manipulation: https://www.nasdaq.com/articles/jpmorgan-to-pay-%24920-mln-fine-for-manipulating-precious-metals-treasury-market-2020-09-29 https://www.nasdaq.com/articles/jpmorgan-to-pay-%24920-mln-f... Note that the fine for JP Morgan was so tiny compared to profits made that there's 0 incentive for them !and others! to stop this behavior. Sounds pretty unhealthy. All in all, I don't really see how "fake volume" on some exchanges would make Bitcoin any less valuable as an alternative to holding USD or other fiat?
      - mamon 6y ago
        > You do realize that most gold and silver traded on the COMEX is also "fake" in the sense that they're trading in amounts of underlying gold and silver that could never ever be delivered at the COMEX prices? Which means that gold is UNDERVALUED - there's a lot more demand for it than can be fulfilled with physical metal, hence the "paper gold" in form of contracts. If the COMEX scam comes to an end we can see gold price skyrocketing to 20-30k USD per ounce.
    - eurusdac 6y ago
      People often choose gold jewelry because of its value as a metal. Either because they want to be able to cash it in one day (a traditional form of family savings for some communities) or because an expensive gift is preferred to a cheap one, even if the cheap one had all the same physical properties.
    - gruez 6y ago
      >If your numbers are accurate >=55% of the demand for Gold is completely organic and because of the desire of human beings to wear it. It's not as simple as that. If people wanted gold jewelry for the appearance the pieces would be gold plated.
mlthoughts2018 6y ago
I am long on Bitcoin and also believe Tether is a fraud. I expect Bitcoin will significantly drop, but I realize I could be wrong. If it does drop, that is nothing but a large buying opportunity to me. If it doesn’t drop, I’ll be happy to just buy smaller amounts on a steady basis.
kamaal 6y ago
>>I believe institutional investors do their research before investing in Bitcoin. Why do they still invest if Tether & Bitfinex are fraud? Because institutional investors are not people borrowing $50K from loan sharks risking their life and limb to invest in one instrument hoping they'll get lucky. When you have hundreds of billions to manage, your options are to invest everywhere, even in scammy places. Bay Area billionaires invest money in lots of start ups, every once in a while you get your Google's, Facebook's, Air BnB's and they make up for what they lost else where. You can use this strategy too. Invest $10 or $50 in lottery'ish places every time you come along one. If you find something pays off, spend a little more there. Take you money out when you have decent returns without getting too greedy.
morpheos137 6y ago
Ever hear about Softbank and WeWork?
x3sphere 6y ago
Most aren't putting more than 5% in. Tesla is one of the larger buys I think they put in around 7%. Still, if it goes to 0, it won't matter much at those percentages. Conversely, if it ends up going up more, it'll probably go up a lot more since it's still a small asset class relatively. $1.5T market cap is nothing compared to the stock market and still a lot less than Gold. And with interest rates so low and all other asset prices ballooning, cryptocurrencies probably looked cheap to a bunch of fund managers. Up until a few months ago, BTC was still sitting below its all time highs. So I think that's the mindset people are taking. Even with big money behind it, it doesn't mean BTC is now a safe thing to buy, but the upside is still so massive that it's worth taking a chance on despite the risks.
ac29 6y ago
A few of the thousands of publicly traded US companies have bought some bitcoin, the others have not. If you assume institutional investors do their homework, why are the 99.99% of companies who didn't buy bitcoin wrong?
- bboygravity 6y ago
  > If you assume institutional investors do their homework We're talking about predicting the future here. "Doing your homework" may not be the relevant factor in predicting the future compared to "luck" or "power to manipulate" (insider trading, SEC in the pocket, priority at exchanges, CNBC market manipulation, etc).
deleted 6y ago
[deleted]
gge 6y ago
Wow, Elon got scammed to buy Bitcoin? What does the ex-CEO and former largest single shareholder of PayPal know about digital money? What does the world's richest man know about money? Apparently not much. Definitely not more than you, since you know that Bitcoin is a scam.
- peteretep 6y ago
  It is far from clear that Elon’s investment in Bitcoin is because he genuinely thinks it will go up in value; the man is clearly a finance troll and has enough money to do stuff like this for the lulz
  - gge 6y ago
    Cope
peteretep 6y ago
Same reason institutions invest in startups; want some high risk high reward assets.
yks 6y ago
Elon in particular can manipulate Bitcoin price so out of them all he's actually one of the most rational. As for the rest, I would not necessarily consider institutional investors an infallible authority, they are prone to groupthink and have a pressure to diversify. Overall, we've been riding a long bull wave juiced up by the spineless Fed, and as the saying goes, everyone is a genius in the bull market.
- bboygravity 6y ago
  You're worried about Elon manipulating the Bitcoin price when Tesla eventually owns < 0.1% of all Bitcoins (assuming he buys at 48000 USD and assuming no other large parties like Apple buy in)? I find this kind of unsubstantiated doomsday thinking rather interesting: BTC overall is an insignificant market[1] compared to the stock market or the global illegal drug trade just to name two random examples. I strongly feel the markets and exchanges that trade BTC are infinitely more "fair" and "free" than the stock markets and forex markets will ever be. I also believe this is the main reason (besides loss of trust in USD fiat) why Bitcoin is so "expensive" and will keep going up in price. Think about it: even if all crypto exchanges in the world would collapse in 5 minutes, you'd still be able to trade Bitcoin in 10 minutes. The same can't be said for digital fiat dollars or stocks that are held without physical certificate (AKA all stocks). If the ongoing GameStop saga has taught me anything, it's that the stock markets are completely rigged in favor of "big money" institutions. They control everything from mass media (CNBC being the most blatant example) to the very rules that clearing houses, brokers and lawmakers create and follow. And they can change these rules to their liking within seconds, on the fly, without warning.[2][3] The systemic risk because of conflicts of interest/corruption right now is massive and I would not be surprised in the slightest if in a few months the stockmarket crashes worse than 2007/8 because of this. I estimate this risk is both more real, more critical in time and a whole lot of orders of magnitude worse than the negative impact BTC or USDT can possibly have on global society in the very worse case. This is not just whataboutism: I'm not just saying there are worse problems to focus on than Bitcoin. I'm saying Bitcoin might be the only (temporary) way out of global financial system crashes for (retail) investors. Just like gold has been for thousands of years. In my opinion Bitcoin is not the problem, it's a bandaid for the common man in case of real problems. I think this is why Elon Tweeted: "in retrospect it will be inevitable" while referring to Bitcon. I don't think Tesla is buying Bitcoin as an investment, rather they're buying insurance against the upcoming loss of buying power of USD. [1]https://www.visualcapitalist.com/all-of-the-worlds-money-and-markets-in-one-visualization-2020/ https://www.visualcapitalist.com/all-of-the-worlds-money-and... [2]https://finance.yahoo.com/news/bad-words-lead-gamestop-shares-060034480.html https://finance.yahoo.com/news/bad-words-lead-gamestop-share... [3]https://www.bloomberg.com/news/articles/2021-02-17/sec-data-show-359-million-of-gamestop-shares-failed-to-deliver https://www.bloomberg.com/news/articles/2021-02-17/sec-data-...
csomar 6y ago
GBTC market cap is $37bn. USDC has a market cap of $7bn+. CME future contracts are also in the billions. No one knows for sure how many bitcoins are changing hands privately (offline liquidity). Tether is just one of the venues of trading with bitcoin.
eurusdac 6y ago
Why are you arguing against your wife doing this? Even if you are technically correct about the value of bitcoin, it might still be a good idea, if it's money you can afford to lose. You both might learn something. It might be fun. It might be a good story. Your wife might appreciate your trust, and trust you to take some other risk that you believe in. Life is not a competition to make the most rational and well thought out economic decisions.

by v1k65 6y ago

rawtxapp 6y ago

They make up an increasingly small % of the crypto exchange volumes. And it's not clear that it's a 100% fraud, they probably have some backing even if it's not at 100%. I'd say research Bitcoin itself instead of looking at news to decide whether you should hold some or not. It may go to 1M$, it may go to 0, but at least you'll understand what you were buying.

paulryanrogers 6y ago

Could it be the greater fool theory? If they believe future buyers exist despite bad fundamentals then it could be a gamble. An attempt to ride the wave and get out before it collapses.

gruez 6y ago
Is gold the ultimate greater fool? Sure, it might have "intrinsic value" (eg. industrial use), but the current and historical price far exceeds that of comparable substances. Only about 7.5% of gold mined goes to industrial use, with the rest going to jewelry (48.5%), investment (29.2%), and central banks (14.8%). https://www.statista.com/statistics/299609/gold-demand-by-industry-sector-share/ https://www.statista.com/statistics/299609/gold-demand-by-in...
- nly 6y ago
  If your numbers are accurate >=55% of the demand for Gold is completely organic and because of the desire of human beings to wear it. The rest is largely as a hedge against other assets under the belief that the demand for Gold will endure a crisis. This sounds healthy. Contrast this to Bitcoin where it has already been established in other comment threads that the vast majority of Bitcoin trading volume on dozens of exchanges might be fake ( see Bitwise/SEC presentation) and that a huge amount of volume is via the BTC/USDT pair and USDT may be fraudulent. Sounds pretty unhealthy.
  - bboygravity 6y ago
    > Contrast this to Bitcoin where it has already been established in other comment threads that the vast majority of Bitcoin trading volume on dozens of exchanges might be fake ( see Bitwise/SEC presentation) and that a huge amount of volume is via the BTC/USDT pair and USDT may be fraudulent. Sounds pretty unhealthy. You do realize that most gold and silver traded on the COMEX is also "fake" in the sense that they're trading in amounts of underlying gold and silver that could never ever be delivered at the COMEX prices? JP Morgan even got a tiny "still worth it" fine for blatant metals price manipulation: https://www.nasdaq.com/articles/jpmorgan-to-pay-%24920-mln-fine-for-manipulating-precious-metals-treasury-market-2020-09-29 https://www.nasdaq.com/articles/jpmorgan-to-pay-%24920-mln-f... Note that the fine for JP Morgan was so tiny compared to profits made that there's 0 incentive for them !and others! to stop this behavior. Sounds pretty unhealthy. All in all, I don't really see how "fake volume" on some exchanges would make Bitcoin any less valuable as an alternative to holding USD or other fiat?
    - mamon 6y ago
      > You do realize that most gold and silver traded on the COMEX is also "fake" in the sense that they're trading in amounts of underlying gold and silver that could never ever be delivered at the COMEX prices? Which means that gold is UNDERVALUED - there's a lot more demand for it than can be fulfilled with physical metal, hence the "paper gold" in form of contracts. If the COMEX scam comes to an end we can see gold price skyrocketing to 20-30k USD per ounce.
  - eurusdac 6y ago
    People often choose gold jewelry because of its value as a metal. Either because they want to be able to cash it in one day (a traditional form of family savings for some communities) or because an expensive gift is preferred to a cheap one, even if the cheap one had all the same physical properties.
  - gruez 6y ago
    >If your numbers are accurate >=55% of the demand for Gold is completely organic and because of the desire of human beings to wear it. It's not as simple as that. If people wanted gold jewelry for the appearance the pieces would be gold plated.

mlthoughts2018 6y ago

I am long on Bitcoin and also believe Tether is a fraud. I expect Bitcoin will significantly drop, but I realize I could be wrong. If it does drop, that is nothing but a large buying opportunity to me. If it doesn’t drop, I’ll be happy to just buy smaller amounts on a steady basis.

kamaal 6y ago

>>I believe institutional investors do their research before investing in Bitcoin. Why do they still invest if Tether & Bitfinex are fraud? Because institutional investors are not people borrowing $50K from loan sharks risking their life and limb to invest in one instrument hoping they'll get lucky. When you have hundreds of billions to manage, your options are to invest everywhere, even in scammy places. Bay Area billionaires invest money in lots of start ups, every once in a while you get your Google's, Facebook's, Air BnB's and they make up for what they lost else where. You can use this strategy too. Invest $10 or $50 in lottery'ish places every time you come along one. If you find something pays off, spend a little more there. Take you money out when you have decent returns without getting too greedy.

morpheos137 6y ago

Ever hear about Softbank and WeWork?

x3sphere 6y ago

Most aren't putting more than 5% in. Tesla is one of the larger buys I think they put in around 7%. Still, if it goes to 0, it won't matter much at those percentages. Conversely, if it ends up going up more, it'll probably go up a lot more since it's still a small asset class relatively. $1.5T market cap is nothing compared to the stock market and still a lot less than Gold. And with interest rates so low and all other asset prices ballooning, cryptocurrencies probably looked cheap to a bunch of fund managers. Up until a few months ago, BTC was still sitting below its all time highs. So I think that's the mindset people are taking. Even with big money behind it, it doesn't mean BTC is now a safe thing to buy, but the upside is still so massive that it's worth taking a chance on despite the risks.

ac29 6y ago

A few of the thousands of publicly traded US companies have bought some bitcoin, the others have not. If you assume institutional investors do their homework, why are the 99.99% of companies who didn't buy bitcoin wrong?

bboygravity 6y ago
> If you assume institutional investors do their homework We're talking about predicting the future here. "Doing your homework" may not be the relevant factor in predicting the future compared to "luck" or "power to manipulate" (insider trading, SEC in the pocket, priority at exchanges, CNBC market manipulation, etc).

deleted 6y ago

[deleted]

gge 6y ago

Wow, Elon got scammed to buy Bitcoin? What does the ex-CEO and former largest single shareholder of PayPal know about digital money? What does the world's richest man know about money? Apparently not much. Definitely not more than you, since you know that Bitcoin is a scam.

peteretep 6y ago
It is far from clear that Elon’s investment in Bitcoin is because he genuinely thinks it will go up in value; the man is clearly a finance troll and has enough money to do stuff like this for the lulz
- gge 6y ago
  Cope

peteretep 6y ago

Same reason institutions invest in startups; want some high risk high reward assets.

yks 6y ago

Elon in particular can manipulate Bitcoin price so out of them all he's actually one of the most rational. As for the rest, I would not necessarily consider institutional investors an infallible authority, they are prone to groupthink and have a pressure to diversify. Overall, we've been riding a long bull wave juiced up by the spineless Fed, and as the saying goes, everyone is a genius in the bull market.

bboygravity 6y ago
You're worried about Elon manipulating the Bitcoin price when Tesla eventually owns < 0.1% of all Bitcoins (assuming he buys at 48000 USD and assuming no other large parties like Apple buy in)? I find this kind of unsubstantiated doomsday thinking rather interesting: BTC overall is an insignificant market[1] compared to the stock market or the global illegal drug trade just to name two random examples. I strongly feel the markets and exchanges that trade BTC are infinitely more "fair" and "free" than the stock markets and forex markets will ever be. I also believe this is the main reason (besides loss of trust in USD fiat) why Bitcoin is so "expensive" and will keep going up in price. Think about it: even if all crypto exchanges in the world would collapse in 5 minutes, you'd still be able to trade Bitcoin in 10 minutes. The same can't be said for digital fiat dollars or stocks that are held without physical certificate (AKA all stocks). If the ongoing GameStop saga has taught me anything, it's that the stock markets are completely rigged in favor of "big money" institutions. They control everything from mass media (CNBC being the most blatant example) to the very rules that clearing houses, brokers and lawmakers create and follow. And they can change these rules to their liking within seconds, on the fly, without warning.[2][3] The systemic risk because of conflicts of interest/corruption right now is massive and I would not be surprised in the slightest if in a few months the stockmarket crashes worse than 2007/8 because of this. I estimate this risk is both more real, more critical in time and a whole lot of orders of magnitude worse than the negative impact BTC or USDT can possibly have on global society in the very worse case. This is not just whataboutism: I'm not just saying there are worse problems to focus on than Bitcoin. I'm saying Bitcoin might be the only (temporary) way out of global financial system crashes for (retail) investors. Just like gold has been for thousands of years. In my opinion Bitcoin is not the problem, it's a bandaid for the common man in case of real problems. I think this is why Elon Tweeted: "in retrospect it will be inevitable" while referring to Bitcon. I don't think Tesla is buying Bitcoin as an investment, rather they're buying insurance against the upcoming loss of buying power of USD. [1]https://www.visualcapitalist.com/all-of-the-worlds-money-and-markets-in-one-visualization-2020/ https://www.visualcapitalist.com/all-of-the-worlds-money-and... [2]https://finance.yahoo.com/news/bad-words-lead-gamestop-shares-060034480.html https://finance.yahoo.com/news/bad-words-lead-gamestop-share... [3]https://www.bloomberg.com/news/articles/2021-02-17/sec-data-show-359-million-of-gamestop-shares-failed-to-deliver https://www.bloomberg.com/news/articles/2021-02-17/sec-data-...

csomar 6y ago

GBTC market cap is $37bn. USDC has a market cap of $7bn+. CME future contracts are also in the billions. No one knows for sure how many bitcoins are changing hands privately (offline liquidity). Tether is just one of the venues of trading with bitcoin.

eurusdac 6y ago

Why are you arguing against your wife doing this? Even if you are technically correct about the value of bitcoin, it might still be a good idea, if it's money you can afford to lose. You both might learn something. It might be fun. It might be a good story. Your wife might appreciate your trust, and trust you to take some other risk that you believe in. Life is not a competition to make the most rational and well thought out economic decisions.