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BTC has been the #1 asset over the last 10 years. In many individual years it has out performed every other asset. It has this year by a large amount. At some

BTC has been the #1 asset over the last 10 years. In many individual years it has out performed every other asset. It has this year by a large amount. At some point the dissenters will have to admit they were wrong. The reality is, BTC is here to stay and is a valuable hedge that is independent of any corporation, government, or central bank.

UncleMeat 6y ago
What does it mean to be wrong? Should I have mined 1000 coins in my CPU a decade ago? Duh. Does that mean that BTC is a useful financial hedge against inflation? Why would it? BTC went up by a factor of a gazillion during a decade when USD inflation was not out of the ordinary. Clearly something other than "inflation hedge" is driving the price.
- nemo44x 6y ago
  What it means is pundits have spared no opportunity to ridicule anyone who has invested their money in BTC, pontificated that BTC has no value, that it is a fad, that it is a bubble, etc. For 10 years. At some point don't they have to capitulate from that provenly wrong position and at least admit there's something there? What is driving the price is price discovery. More people are becoming comfortable with it as an asset as the FUD described above has continued to be debunked. As more people become comfortable that drives demand which increases the value. As a hedge against inflation it works for a number of reasons. People generally price it in dollars, like stocks or real estate. As the dollar inflates one would assume the value of BTC would increase as investors have more dollars to invest into it, driving demand. But the "something other" is more and more people agreeing it has value and therefore creating more demand for it and therefore creating higher prices. This is how any asset works.
  - andresp 6y ago
    I think people don't really agree it has that much value. People want to get rich quickly. They always have done that and continue to do so. Casinos and lotteries are older than bitcoin. The idea that BTC goes above 50k USD because millions of people believe its intrinsic value is worth that much is a story that BTC investors tell themselves before going to sleep. Reality is much greedier than that, and they know it, but the narrative won't change while the fairy tale continues to be profitable.
mumblemumble 6y ago
This statement, minus the political content, sounds very, very, very similar to what I was hearing about tech stocks a bit over 20 years ago, and houses about 15 years ago. Maybe that means something, maybe it doesn't. If I had some way of knowing, I'd have a lot more money than I am now. It's worth remembering, though, that prices are just that: prices. Nothing more, nothing less.
- nemo44x 6y ago
  Yeah me too - I remember when AMZN was $2. I remember when AAPL was 28 cents (before splits, etc). I remember when the Internet had a host of pundits proclaiming it was a dying fad in 2001. And most anyone who bought a house at the peak of the bubble is doing quite well if they still have it today.
  - mumblemumble 6y ago
    Are you familiar with the concept of survivorship bias? It's an important concept to remember when talking about the long term outcomes from adverse market events. "If they still have it today," for example, is a useful qualifier, because it subtly renders the statement almost tautological. "Sure, it was a bloodbath, but all the people who survived seem to be doing OK."
    - nemo44x 6y ago
      Yeah, don't go on margin is the lesson there. People that lost their hat on the housing crises borrowed too much (went too far on margin, which is what a home loan is). Anyone who just kept investing during any market crash in history is sitting well. So yeah, it's up to you.
  - Apocryphon 6y ago
    Those stocks were issued by businesses that were providing goods and services for people and being paid in return.
  - jcranmer 6y ago
    The counterpoint is Japan: its economy peaked around 1990, and still hasn't recovered to that level, 30 years later.

UncleMeat 6y ago

What does it mean to be wrong? Should I have mined 1000 coins in my CPU a decade ago? Duh. Does that mean that BTC is a useful financial hedge against inflation? Why would it? BTC went up by a factor of a gazillion during a decade when USD inflation was not out of the ordinary. Clearly something other than "inflation hedge" is driving the price.

nemo44x 6y ago
What it means is pundits have spared no opportunity to ridicule anyone who has invested their money in BTC, pontificated that BTC has no value, that it is a fad, that it is a bubble, etc. For 10 years. At some point don't they have to capitulate from that provenly wrong position and at least admit there's something there? What is driving the price is price discovery. More people are becoming comfortable with it as an asset as the FUD described above has continued to be debunked. As more people become comfortable that drives demand which increases the value. As a hedge against inflation it works for a number of reasons. People generally price it in dollars, like stocks or real estate. As the dollar inflates one would assume the value of BTC would increase as investors have more dollars to invest into it, driving demand. But the "something other" is more and more people agreeing it has value and therefore creating more demand for it and therefore creating higher prices. This is how any asset works.
- andresp 6y ago
  I think people don't really agree it has that much value. People want to get rich quickly. They always have done that and continue to do so. Casinos and lotteries are older than bitcoin. The idea that BTC goes above 50k USD because millions of people believe its intrinsic value is worth that much is a story that BTC investors tell themselves before going to sleep. Reality is much greedier than that, and they know it, but the narrative won't change while the fairy tale continues to be profitable.

mumblemumble 6y ago

This statement, minus the political content, sounds very, very, very similar to what I was hearing about tech stocks a bit over 20 years ago, and houses about 15 years ago. Maybe that means something, maybe it doesn't. If I had some way of knowing, I'd have a lot more money than I am now. It's worth remembering, though, that prices are just that: prices. Nothing more, nothing less.

nemo44x 6y ago
Yeah me too - I remember when AMZN was $2. I remember when AAPL was 28 cents (before splits, etc). I remember when the Internet had a host of pundits proclaiming it was a dying fad in 2001. And most anyone who bought a house at the peak of the bubble is doing quite well if they still have it today.
- mumblemumble 6y ago
  Are you familiar with the concept of survivorship bias? It's an important concept to remember when talking about the long term outcomes from adverse market events. "If they still have it today," for example, is a useful qualifier, because it subtly renders the statement almost tautological. "Sure, it was a bloodbath, but all the people who survived seem to be doing OK."
  - nemo44x 6y ago
    Yeah, don't go on margin is the lesson there. People that lost their hat on the housing crises borrowed too much (went too far on margin, which is what a home loan is). Anyone who just kept investing during any market crash in history is sitting well. So yeah, it's up to you.
- Apocryphon 6y ago
  Those stocks were issued by businesses that were providing goods and services for people and being paid in return.
- jcranmer 6y ago
  The counterpoint is Japan: its economy peaked around 1990, and still hasn't recovered to that level, 30 years later.