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Institutional and retail investors are just starting to pile on and there will be potentially massive gains to be had in the near to mid term before the bottom

Institutional and retail investors are just starting to pile on and there will be potentially massive gains to be had in the near to mid term before the bottom falls out. Long term? Probably not smart. Safe to get in now? Debatable, pretty high risk. But if you have a bunch of coins laying around and you're willing to gamble a bit longer...

qeternity 6y ago
GBTC was trading at 15% discount to spot today... The institutional thesis is massively overblown. And retail isn’t piling in like in 2017.
- perl4ever 6y ago
  There was an article I read on how arbitrage vs BTC was possible, despite it not being an ETF. I forget the details, it may have taken like 6 months to do the exchange for regulatory reasons. So professionals were making money while it was >BTC, until they overdid it and the premium went away. It seems reasonable to be patient because there's just a lot of lag in the system as it's currently set up. If you've ever paid attention to closed-end funds, you might have noticed how they can trade substantially over or under asset value for quite a while, but not forever.
  - qeternity 6y ago
    There’s no arbitrage in the strict sense but basically it’s just a straight convergence trade without a delivery mechanism. Just need funding, which is abundant today.
    - perl4ever 6y ago
      There's no arbitrage in what sense? The article I read that called it arbitrage described it like this: "[Hedge funds] borrow Bitcoin, deposit the coins with GBTC in exchange for shares that are more valuable than the coins they bought, and they pocket that profit by selling the marked-up shares after a six-month lockup period expires." Unlike an ETF though, the shares can't be destroyed. And suddenly the premium went away, so probably some of the people who were counting on it to remain have quit now.
rowland66 6y ago
Wow, that is pretty basic economic fallacy. Whether you hold coins today or not should not impact an investment decision. If the BTC you bought 10 years ago for $100 is worth $100,000 today, and a couple of weeks from now the price collapses and is worth $100 again, you have still lost $100,000. Just the same as if you paid $100,000 for your BTC today. Only difference would be tax liability.
- qeternity 6y ago
  Yeah this is trading 101 for anyone who has cut their teeth somewhere decent. I had that drilled into my head. There is no such thing as house money.
  - concreteblock 6y ago
    Curious, who drilled it into your head? Were you/are you a quant? I see the 'house money' fallacy all the time (most commonly in the context of 'take out your initial investment').
- perl4ever 6y ago
  It sounds like you believe the marginal utility of currency or wealth is constant and anything else is contrary to "basic economics". Can you explain further, because it sounds weird to me?
  - ALittleLight 6y ago
    I think the idea is you have some amount of "worth" today, denominated in whatever you like. Maybe you have 100k USD in BTC or in cash. If you let your bitcoin ride, that's equivalent, modulo taxes, to buying bitcoin. Or, selling your bitcoin today is equivalent to choosing not to buy. The idea is that you shouldn't think "I already have some bitcoins, may as well let them ride" but instead think "Would it be better to have bitcoins or dollars?" And then, whatever your answer and current assets are, reposition yourself so you're consistent with your beliefs. If you have a bitcoin that you bought for 10 dollars and you hold on to it even though you believe the price will likely fall because you think you'll still be able to sell above 10 dollars, that's a fallacy in the sense that you'd probably make the most money basing your decisions only on what you think is likely to happen and not what the original cost of your assets was.

qeternity 6y ago

GBTC was trading at 15% discount to spot today... The institutional thesis is massively overblown. And retail isn’t piling in like in 2017.

perl4ever 6y ago
There was an article I read on how arbitrage vs BTC was possible, despite it not being an ETF. I forget the details, it may have taken like 6 months to do the exchange for regulatory reasons. So professionals were making money while it was >BTC, until they overdid it and the premium went away. It seems reasonable to be patient because there's just a lot of lag in the system as it's currently set up. If you've ever paid attention to closed-end funds, you might have noticed how they can trade substantially over or under asset value for quite a while, but not forever.
- qeternity 6y ago
  There’s no arbitrage in the strict sense but basically it’s just a straight convergence trade without a delivery mechanism. Just need funding, which is abundant today.
  - perl4ever 6y ago
    There's no arbitrage in what sense? The article I read that called it arbitrage described it like this: "[Hedge funds] borrow Bitcoin, deposit the coins with GBTC in exchange for shares that are more valuable than the coins they bought, and they pocket that profit by selling the marked-up shares after a six-month lockup period expires." Unlike an ETF though, the shares can't be destroyed. And suddenly the premium went away, so probably some of the people who were counting on it to remain have quit now.

rowland66 6y ago

Wow, that is pretty basic economic fallacy. Whether you hold coins today or not should not impact an investment decision. If the BTC you bought 10 years ago for $100 is worth $100,000 today, and a couple of weeks from now the price collapses and is worth $100 again, you have still lost $100,000. Just the same as if you paid $100,000 for your BTC today. Only difference would be tax liability.

qeternity 6y ago
Yeah this is trading 101 for anyone who has cut their teeth somewhere decent. I had that drilled into my head. There is no such thing as house money.
- concreteblock 6y ago
  Curious, who drilled it into your head? Were you/are you a quant? I see the 'house money' fallacy all the time (most commonly in the context of 'take out your initial investment').
perl4ever 6y ago
It sounds like you believe the marginal utility of currency or wealth is constant and anything else is contrary to "basic economics". Can you explain further, because it sounds weird to me?
- ALittleLight 6y ago
  I think the idea is you have some amount of "worth" today, denominated in whatever you like. Maybe you have 100k USD in BTC or in cash. If you let your bitcoin ride, that's equivalent, modulo taxes, to buying bitcoin. Or, selling your bitcoin today is equivalent to choosing not to buy. The idea is that you shouldn't think "I already have some bitcoins, may as well let them ride" but instead think "Would it be better to have bitcoins or dollars?" And then, whatever your answer and current assets are, reposition yourself so you're consistent with your beliefs. If you have a bitcoin that you bought for 10 dollars and you hold on to it even though you believe the price will likely fall because you think you'll still be able to sell above 10 dollars, that's a fallacy in the sense that you'd probably make the most money basing your decisions only on what you think is likely to happen and not what the original cost of your assets was.