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Mexican billionaire Salinas says his banking business may embrace Bitcoin
- onion2k 5y agoSalinas last year said he had about 10% of his liquid portfolio invested in bitcoin. Billionaire buys BTC. Billionaire pumps the price of BTC. Billionaire profits. There's at least one other billionaire who plays this game.
- celticninja 5y agoAs a billionaire I am not sure he really needs to pump bitcoin to make a return. If you watch the interview with him he makes his case for holding bitcoin and it is a reasonable one. He says when he started his career the Mexican peso was 20:1 to the US dollar, now it is 20,000:1. Many in developed countries don't understand the challenges of a devaluing currency with unlimited supply or the difficulty of being unbanked.
- isatty 5y agoBillionaires, just like everyone else, love making money.
- cqt100 5y agoMost people want to do honest work. If they didn't, everyone would be a parasite and the system would collapse.
- holoduke 5y agoThe reality is that 95% of the world population is doing shitty work and they would love becoming a parasite to escape their current live.
- krferriter 5y agoBillionaires buying up all the real estate to ride the price wave is not "honest work"
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- WJW 5y agoI'm pretty sure a billionaire does not need to worry about being unbanked even in Mexico. There are many other types of assets he could hold that would bring as much inflation protection as bitcoins with a fraction of the volatility. Now obviously in his particular case he's done pretty well with his hodlings because the price went up so much, but that is not guaranteed to happen again in the future and may in fact reverse. As long as it stays so incredibly volatile, holding bitcoin should be regarded as speculation first and an inflation hedge second.
- janandonly 5y agoName one asset (class) that does as well as Bitcoin. Gold? No, it's only back at its 2012 peak now. Bonds? I'm laughing.... or crying... Stocks ... Could be, but very risky... because if QE stops tomorrow the stock market will correct -60% or more...
- hellbannedguy 5y agoCartel drug money. (Until Mexico gets a slight handle on systemic corruption in every aspect of that country; I have a hard time believing anything they claim about anything.)
- bellyfullofbac 5y agoHah, love the delusion. Any mention of interest rate hikes and Bitcoin takes a dive too, because as far as I understand it, there's many borrowing cheap money (i.e. with low interest rate) to "invest" hoping to profit off the ponzi scheme.
- celticninja 5y agoDo you have any sources for that?
- zarzavat 5y agoExactly how long does something have to hold its value for it to not be a "ponzi scheme?" Because I've been reading snide remarks about Ponzi schemes and tulip bubbles on HN since bitcoin was in the single figures.
- mrtksn 5y agoThe norm in this type of countries is to keep USD, EUR and property. Bitcoin is the way to get rich, at least the mental model is based on that. The inflation in these countries is not because of the way their economy is structured but because lack of structure and integrity. Things are not good in these countries, people don't seek to preserve the current wealth(and fail because of their currency) but they seek to get out of poverty and those who are not in poverty seek to explode their wealth so that the can buy a mansion and a Ferrari. The richer ones seek ways to hide their wealth out of the reach of the politics because in this type of countries the political situation is usually unstable and those who get very rich are cronies. When the crown falls the cronies need to have an exit strategy(sometimes they can adopt but sometimes the new crown comes with its own people) and that usually is buying property or companies overseas. Now they have the BTC option. Therefore, in such countries people don't really keep local currency long term already(when they do, they will do it to get interest rates that at least match the inflation). The inflation rate is relevant only when doing business deals, financing projects or purchases and adjusting employee salaries. No one is losing their wealth to inflation.
- xiphias2 5y ago,, The norm in this type of countries is to keep USD, EUR and property'' It was while people had at least some hope to buy a property. But nowdays the yearly increase in a property price is more than the median yearly salary of a person in the poorer countries (this may soon be true for western countries as well). In Eastern Europe people immigrate to west for higher salaries so that they can buy an apartment in their home country, but if they don't use a loan to buy it, they are losing a lot of time to be able to buy a good place that they planned to. Still, as you wrote, in Europe people are still thinking very conservatively.
- JumpCrisscross 5y ago> the yearly increase in a property price is more than the median yearly salary of a person in the poorer countries This is not a limiting factor for billionaires looking to protect their wealth from expropriation, the use case the parent post contemplates.
- DasIch 5y ago> Many in developed countries don't understand the challenges of a devaluing currency with unlimited supply or the difficulty of being unbanked. I have to admit, being in a developed country, that I genuinely don't understand why someone would switch away from a local currency that is failing at the task of being a currency to a cryptocurrency like bitcoin that is also failing at being a currency.
- celticninja 5y agoPurchasing power of bitcoin over the last decade has increased, the purchasing power of the Mexican peso has consistently fallen. https://www.macrotrends.net/2559/us-dollar-mexican-peso-exchange-rate-historical-chart https://www.macrotrends.net/2559/us-dollar-mexican-peso-exch... The Venezuelan Bolivar is even worse. https://tradingeconomics.com/venezuela/currency https://tradingeconomics.com/venezuela/currency If you saw this happening to a close neighbour then you would also be worried about your own currency. Not saying that bitcoin is the salve they need, just that perhaps given that context you can understand why it appears like an attractive alternative to the local currency. Also USD and EUR may be better options but I dont think having accounts denominated in these currencies is easily available to many people in Venezuela or Mexico. I have only (last 3 years or so) been able to hold EUR or USD denominated accounts (relatively easily) and I am in the UK. I'm sure it was possible to do for longer than that but it required hoops to be jumped through that are not always the easiest.
- DasIch 5y agoI agree that the Mexican peso and the Venezuelan Bolivar are not doing well, certainly you wouldn't want to use them as currency, if you can avoid it. I can also totally see people using bitcoin as a speculative investment. That's also not an argument in favour of bitcoin as a currency. > Also USD and EUR may be better options but I dont think having accounts denominated in these currencies is easily available to many people in Venezuela or Mexico. So bitcoin is used not because it's a good currency but because it's better than the available alternatives. I guess that makes sense.
- dragonwriter 5y ago
- rxhernandez 5y agoHow is it 20,000:1? Google's conversion calculator has it around 20:1 right now.
- murukesh_s 5y agoif you see a 40 year period, inflation is 200k%? (wow) https://www.inflationtool.com/mexican-peso/1980-to-present-value https://www.inflationtool.com/mexican-peso/1980-to-present-v...
- kungito 5y agoFrom what I have heard was happening in my home country as well during hyperinflation, usually you don't have access to the foreign currencies, only the politically connected people to. Then they dump the forex into the black currency market at ridiculously inflated prices
- notahacker 5y agoIt's a lot easier for a poor person to find someone that will give them a dollar for their pesos than some satoshis...
- dragonwriter 5y agoIts 20,000:1 based on the old peso, because in 1993 the peso did what was in effect a 1,000:1 reverse split where 1,000 old pesos (1,000 MXP) were exchanged for 1 new peso (1 MXN).
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- canadianfella 5y agoYou are a billionaire?
- arcticbull 5y ago> As a billionaire I am not sure he really needs to pump bitcoin to make a return. What makes you think that billionaires are somehow altruistic actors no longer looking for an ROI? Especially an easy one? [edit] Or that they're immune to speculative manias?
- SuoDuanDao 5y agoAnecdotal, but I recently wrote a book that had a quote from a prominent, successful person at the opening of each chapter. Part of my process was reaching out to the originators of these quotes and asking permission to include them. The result was fascinating. With exactly one exception (from a university professor) all the people I was able to contact were incredibly gracious and encouraging. Based on that experience I now believe that to have significant success really does require a reflexive attitude of generosity and gratitude. I don't think successful people are paragons by any means, but when I compare how they responded to how the average person would respond to a stranger asking a favour, I have to say - I'd definitely trust a random billionaire over a random member of my own social class.
- karpierz 5y agoI don't know that it's really indicative of grace if you phone someone and ask "hey, I'm including quotes from prominent, successful people in a book, do you mind if I add you to it?" and they say yes. You haven't really asked them for a favour, really you're doing them a favour by improving their reputation.
- SuoDuanDao 5y agoyes, but 'best of luck with the project', or 'sorry I don't have time to read an advance copy' goes beyond what's expected with that kind of power differential. I do think most average people would have felt much more entitled to someone admiring their thoughts.
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- arkitaip 5y agoBillionaires routinely conspire with politicians and law makers to prevent workers from earning a few dollars more per hour, but somehow they would would be too ethical to pump and dump Bitcoin?
- economusty 5y agoHe can still leverage the bitcoin, he may be holding and not selling but that doesn't mean he isn't borrowing against the bitcoin and using the borrowed cash to make growth investments.
- fedreserved 5y agoHad to google that one. It seems your off. It's still 20_1 now. 20 pesos for every US Dollar
- pibechorro 5y agoDont worry, they will soon. All developed countries have been bailing out banks etc by printint trillions. It will catch up to them. Good on him. Good on Mexico. Preserving the wealth of the middle class and giving access to the poor and unbanked is tye way forward for a more egalitarian society.
- null_object 5y ago> Good on Mexico. Preserving the wealth of the middle class and giving access to the poor and unbanked is tye way forward for a more egalitarian society. Genuine question - how is this going to help the "poor and unbanked" to get access to an economy that's somehow insulated from what you say is the inflation surrounding them? And in what concrete way is it leading to a more "egalitarian society"? As far as I can see, this only gives an opportunity to the already wealthy (and especially the super-wealthy) to increase their wealth at the cost of newcomers to the system. But I'm genuinely curious about the part that I'm missing, where the poorest in society are reaping the benefits of their Bitcoin holdings?
- joshsyn 5y agoOh this so much. So many people are envious and think being a billionaire is a zero sum game.
- throw0101a 5y ago> As a billionaire I am not sure he really needs to pump bitcoin to make a return. It's not about making a return, or about having 'enough'. It's about keeping score, and the person with the highest number "wins".
- nly 5y agoAll that matters to Mexicans is their local purchasing power though. Inflation in Mexico hasn't been that insane for the last 10 years. You have to look at wage growth and investment returns to really make a judgement
- el_nahual 5y ago10% is far too much of his net worth for a pump-and-dump. A much more reasonable use case for holding ~1B worth of BTC for a man like RSP (Ricardo Salinas Pliego) is as insurance against having assets frozen or nationalized. A man like him is sufficiently diversified in asset holdings that he doesn't really care about the fluctuations of any one (property, businesses, fx), but he very much cares about the government deciding to freeze his accounts. It's an enormous irony (if a predictable one) that the biggest buyers of a "control your money!" story are not your wacky libertarians living in the forest, but the ultra, ultra rich, especially those who obtained their fortunes in marginal ways.
- jalcazar 5y agoIt should read "Salinas Pliego" as "Salinas" is understood to be "Salinas de Gortari"
- xtracto 5y agoIs Salinas de Gortari a billionaire? I think few millennials actually know who the previous president is.
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- TheGigaChad 5y agoNoCoiners, I offer coping lessons. Reach out to me if interested.
- holoduke 5y agoSeems like bitcoin is a the driver for influencers to earn a little money. Without those influencers bitcoin wouldn't be followed by the 99.9% wannabee influencers and worth nothing.
- TheGigaChad 5y agoHahaha, get some copium and enjoy being poor.
- errantmind 5y agoInfluencers don't really shill Bitcoin, ironically because it isn't volatile enough. They shill what are known as 'shitcoins' for PnDs
- villgax 5y agoI just hope BTC becomes the global alternative to the USD being set as a reference for value
- arcticbull 5y agoThat would make the global financial system dramatically less stable.
- New_California 5y agoOn the contrary, the Bitcoin based global financial system would be robust, reliable, dependable, non-inflationary, neutral, and apolitical. Note after hyperbitcoinization the volatility would be much lower than it is today, simply because it would take so much more to affect the price.
- arcticbull 5y ago"Non-inflationary" in supply terms only, of course, but that's just half the picture. You can easily have inflation in an economy with a fixed monetary supply if velocity increases disproportionately. [1] Worse, without a central monetary authority to adjust the supply boom and bust cycles are greatly exaggerated just as they used to be with the gold standard. There's no mechanism to address a deflationary spiral or runaway inflation (again that can happen with fixed supply). That makes it less reliable and less dependable. There's no such thing as neutral and apolitical money, certainly not at the point of use. This is broadly speaking wishful thinking and voodoo economics. Currencies need to be fungible, predictable, cheap to transact and hold their value as long as required to invest or spend on basic needs. Bitcoin is absolutely none of these things, making it crap money. Worse, it's the grey goo of energy usage. [1] https://www.stlouisfed.org/on-the-economy/2014/september/what-does-money-velocity-tell-us-about-low-inflation-in-the-us https://www.stlouisfed.org/on-the-economy/2014/september/wha...
- New_California 5y agoKeynesian vs Austrian once again - lets agree to disagree.
- neilwilson 5y agoBanks create and take financial assets and discount them into their own liabilities, which can be in any denomination they feel capable of supporting. Since there is paper gold, it would be amazing if paper bitcoins didn't show up at some point.
- magsnus 5y agoBitcoin needs to go away. All cryptography has a shelf life so it is not a good store of wealth and it is terrible as a transaction medium. 1 Bitcoin transaction: 1200 kWh 100k VISA transactions: 148 kWh Avg US houshold per month: 877 kWh
- fabianfabian 5y agoThere is a difference between currencies, payment systems and settlements, Bitcoin can do all. Also, you forgot to list the dollar.
- jcranmer 5y agoThe VISA transaction is effectively how most people will transact with dollars. If you're seriously unsure about how much more energy Bitcoin uses than cash, when I last did the math, Bitcoin mining consumed more energy than the entire US Mint by a few orders of magnitude. It's not even close.
- plebianRube 5y agoMind posting your math so we can check your claim?
- errantmind 5y agoAs usual when this tired argument is made, you aren't considering the Lightning Network, which enables cheap and energy efficient send/receive for Bitcoin. Even if this didn't exist, Bitcoin isn't going anywhere. Its value could be dramatically reduced by banning fiat on-ramps, but it will still be around. Cryptocurrency is a genie out of a bottle, you aren't going to put it back in and pretend it never happened.
- nerdponx 5y agoHasn't Lightning been in the works for 4+ years? Is it actually progressing towards usability? I remember hearing about it during the 2017 speculation frenzy and block size controversies, when people raised the exact same concerns about Bitcoin transactions being slow, expensive, and carbon-intensive.
- swiley 5y agoI honestly wouldn't be shocked if South America embraced bitcoin while North America banned it.
- Cenk 5y agoMexico is in North America
- gruez 5y agoMaybe "latin america" instead? In terms of "north america" mexico is definitely the odd one out.
- BrissyCoder 5y agoSure, but no one blinked and eye until you pointed it out. Everyone knows that North America really means Anglo America.
- animal_spirits 5y agoYou are not correct on this matter.
- BrissyCoder 5y ago90% of the time when people say South America they're referring to the poor Spanish speaking countries. Let me ask you this... do you include Greenland in your definition of North America.
- DantesKite 5y agoThey certainly have a larger incentive to figure it out.
- corpMaverick 5y agoNot good. Salinas is one of the worst oligarchs in Mexico. A text book narcissist.
- adelHBN 5y agoHe is smart. Unlike Musk, he is buying Bitcoin when it's down.
- luffapi 5y agoMusk receives billions of dollars in government handouts. Tesla and Space X could not exist without the government pouring our tax dollars on them. I don’t think it’s too far of a leap to suggest Musk’s role in destabilizing BTC came at the request of his patrons in the government. Or he’s just incredibly stupid. Maybe a bit if both.
- SantalBlush 5y agoThat does seem like too far of a leap, unless you have some strong evidence to support it. Did the government ask him to tweet about Gamestop, too?
- luffapi 5y agoSo you think he’s just incredibly stupid? I would believe that but he does have billions of dollars of incentives to do the bidding of the US gov. I could also see him tweeting GameStop as an anti crypto move. He basically has done nothing but inject fraud and FUD into the “internet investing” space that Bitcoin is a huge part of. How many people sold BTC to buy GME or otherwise shifted money there away from crypto?
- jjcon 5y ago*Looks like someone may have bought into the hype at just the wrong time*
- luffapi 5y agoWell Musk both created the hype and bought into it at the wrong time, definitely worth taking a look at his motives for making such an aggressively destructive move. If you’re suggesting I bought in at the wrong time, I didn’t. I would never listen to Elon Musk.
- outside1234 5y ago"Billionaire banker sees potential to do more money laundering"
- Hyolobrika 5y agoThis is bad for Bitcoin. Embrace. Extend. Extinguish. Not your keys, not your coins.