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>> Bitcoin is up something like 800% for the year. It might be up another 800% in six months! Or it might go down to $10000! That was the case in 2017. Not an

>> Bitcoin is up something like 800% for the year. It might be up another 800% in six months! Or it might go down to $10000! That was the case in 2017. Not anymore, things have changed. the fundamentals of bitcoin are based on what people believe it will be worth and this has changed drastically in mid-2020. Mid 2020 is the year WallStreet "got" bitcoin. this fundamentally changed it's future path. You have all these hedge fund managers and institutions that are willing to pour trillions of dollars into this asset to gain some exposure. And now that, that's begun it's setting off a chain reaction. You've got to remember, the impetus for all this. It's not that bitcoin is some ideal form of investment. The driver for bitcoin and equity growth is the destruction of an existing asset class: fixed income. That 100 trillion worldwide wealth of fixed income has to go somewhere (not that all of it has to get sold). either it will go into bitcoin or equities or gold. it could go to cash but then it'll get wiped out.

endisneigh 6y ago
Do you personally own any crypto?
biztos 6y ago
> destruction of an existing asset class: fixed income I find it very intriguing that this could be the driver, but what do you base that on?
- thorwasdfasdf 6y ago
  Take a look at what's been happening in US Treasuries. Yields have been dropping for the last 40 years. Investors have still been happy with their returns because they make up for low yields with increasing prices on those bonds (bond prices and yields are inversely relational). But, now that US treasury prices have reached their peak (yields can not possibly go lower), it's game over for US treasuries. this is playing out in other bond markets as well too. So, everyone is dumping bonds: see article "Why would anyone hold bonds?", it was shared on hacker news a few weeks ago. Listen to just about any financial professional speak about bonds: they wouldn't "touch it with a 10' pole", is what you hear more often than not. Especially in the inflationary environment we're in now. Governments everywhere across the globe are up to their eyeballs in debt. the only way out is inflation - they've all realized this. you can't raise taxes, you cant decrease spending. you can only inflate your way out of the debt. so, basically 100T worth of bonds, a very significant percentage of global assets, is being sold off. And it can't go into cash. So where's it going? Well, equities for the most part, hence the relentless rise of equity markets. but also, other places too like bitcoin because people need some diversification, which used to be served by bonds. In the past, investors recommended 60/40 equity bonds mix. in the future, maybe it's 60/40 equity/commodities/crypto.

endisneigh 6y ago

Do you personally own any crypto?

biztos 6y ago

> destruction of an existing asset class: fixed income I find it very intriguing that this could be the driver, but what do you base that on?

thorwasdfasdf 6y ago
Take a look at what's been happening in US Treasuries. Yields have been dropping for the last 40 years. Investors have still been happy with their returns because they make up for low yields with increasing prices on those bonds (bond prices and yields are inversely relational). But, now that US treasury prices have reached their peak (yields can not possibly go lower), it's game over for US treasuries. this is playing out in other bond markets as well too. So, everyone is dumping bonds: see article "Why would anyone hold bonds?", it was shared on hacker news a few weeks ago. Listen to just about any financial professional speak about bonds: they wouldn't "touch it with a 10' pole", is what you hear more often than not. Especially in the inflationary environment we're in now. Governments everywhere across the globe are up to their eyeballs in debt. the only way out is inflation - they've all realized this. you can't raise taxes, you cant decrease spending. you can only inflate your way out of the debt. so, basically 100T worth of bonds, a very significant percentage of global assets, is being sold off. And it can't go into cash. So where's it going? Well, equities for the most part, hence the relentless rise of equity markets. but also, other places too like bitcoin because people need some diversification, which used to be served by bonds. In the past, investors recommended 60/40 equity bonds mix. in the future, maybe it's 60/40 equity/commodities/crypto.