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I own no crypto and I think it's a ridiculous piece of hype, but I think all that reporting (and, on twitter, all that schadenfreude) about bitcoin (etc) going

I own no crypto and I think it's a ridiculous piece of hype, but I think all that reporting (and, on twitter, all that schadenfreude) about bitcoin (etc) going down is nonsense. If you look at a 5 year chart of the BTC value, it's still super insane high and it's been going down hard once before (summer 2021). If I were a crypto fan I'd just tweet HODL like every previous time.

Liron 5y ago
Yeah if you’re just looking at the graph trend, you might only start panicking if BTC drops below the previous 2017 cycle’s peak of $19k.
- Fnoord 5y ago
  Only for people who invested (I mean, speculated) before 2017. Those who started to speculate when BTC was 50k stepped right into the big pile of poo, and they have the choice to take their losses for current price, or to keep their assets ('HODL'). Either way, it remains speculation.
  - Suchos 5y ago
    I jumped in right at 60k fully knowing it will either go to 500k or to zero. I will wait this out whatever happens.
    - Fnoord 5y ago
      Depending on how much you went into, aside from HODL, that's called YOLO. In general, people spread their assets. So for example, you could speculate some on the stock market, some in cryptocurrencies, etc. If you put all your savings in, and it goes to zero, I feel sorry for your children. Cause there goes their scholarship.
      - Suchos 5y ago
        Childless and European here :). But I put like 3 months of salary there. Really nothing that could financially ruin me. I went YOLO on housing though... That shit is expensive.
      - xtracto 5y ago
        > In general, people spread their assets. So for example, you could speculate some on the stock market, some in cryptocurrencies, etc. I find this funny, my tech stocks portfolio has gone down 10% since the beginning of the year. I do monthly investing, so that's a loss compared to my average price over time. In contrast, I bought ETH at around $20 USD, and it being at $2000 is still quite a good outcome for me.
        Fnoord 5y ago
        You can't know what happens when the cryptocurrency ETH was at $20. You still don't know what happens. In contrast, with companies, we can take some things for granted, as they have to be open about it to e.g. SEC. With regards to the $20, I knew about Bitcoin when it was a couple of USD (during the Occupy Wallstreet movement, IIRC). I liked the idea, back then. But I didn't end up buying any because to me money is a tool, not a speculative asset. And, as tool, Bitcoin was not very useful then (it still isn't, IMO). Yes, I could've bought it back then. I almost did. But we don't know what the future holds, and for every person with my story there's only a few who did buy it in large enough quantities and exfiltrated their profits at a margin of 10000% like yours. The amount of people who lost money from Bitcoin speculation is also applicable, but you don't hear about the losers. As long as you HODL, all those who HODL win (at least on paper), but as soon as large amounts get exfiltrated, the supply goes up, and value goes down. So it is very important for those who hold the asset to share the HODL mindset (as cultish as it might be).
- LightG 5y ago
  Well, looking at the graph trend, there's an argument that it should be trading at $15 when you take out speculative bubbles. Who knows.
Fnoord 5y ago
If you own cryptocurrency, and its all gone down, you're invested and can do two things. You can keep hold of your assets, or you can sell. If you sell, you can decide to share such or not, but since you are no longer invested, there's no incentive to share such (and if you're part of a pump and dump scheme, you don't want people to lose trust so your incentive is to say HODL while doing otherwise). So it makes sense we see a lot of HODL posts; these are people who are invested and don't want an implosion. There's also no way to verify whether the people who claim HODL actually do as they say. Thinking about it, seems awfully close to game theory like prisoner's dilemma.
- podgaj 5y ago
  Bitcoin is probably the first Ponzi scheme where everyone in it knows it is a Ponzi scheme. So I agree with your take here.
  - sschueller 5y ago
    Please explain to me how Bitcoin is a Ponzi scheme while USD after 1971 (going away from the gold standard) is not. More so explain to me how the USD is less of a Ponzi scheme when it is the super wealthy banks/institutions that are getting zero interest loans allowing them to make even more money while at the same time devaluating the currency.
    - dtech 5y ago
      Bitcoin and other cryptocurrencies have ~zero inherent value, due to their non-speculation use-cases like payment being very limited or still early development (smart contracts). Unless you count BTC in black market I guess. USD has inherent value, it's the only currency where you can pay taxes in, and if you want to do business with government or government employees - who are ever only paid in USD - you must accept USD.
      - sschueller 5y ago
        But it's not a Ponzi scheme. It's a currency with small adoption like that of a third world nation.
gigaflop 5y ago
Most of the 'financial' reporting on crypto is nonsense, and imo, is just grasping at straws, or some kind of puff piece. To some confident people, this is just a flash sale.
- elif 5y ago
  i almost get the sense that it is written by grifters trying to make the waves in both directions bigger for their own gain.
jensensbutton 5y ago
I tend to think crypto currencies, much more than conventional financial assets, is sensitive to the public narrative/hype due to it being a pure speculation play. A lot of people bought in over the past two years due to the hype and I suspect if the media narrative turns a lot of folks will pull out.
- fault1 5y ago
  I think many cryptocurrencies are on the edge of pump and dump schemes, amplified by social media. A friend of mine made a decent amount just tracking the tweets of Elon Musk and other coin influencers a few years ago.
  - rjmunro 5y ago
    "many cryptocurrencies"? Which ones would you say are not?
mavhc 5y ago
Bitcoin has 3 mechanisms built in to make it almost always increase in value, halving of the rewards, finite total+lost bitcoins, and increasing complexity when more people are mining. In the end all you're doing is buying electricity and converting it to bitcoin, anything above that cost is based on future costs when the rewards halve. All this means you should never sell your bitcoins, which means it's a terrible currency
- podgaj 5y ago
  "to make it almost always increase in value" To any investor this should be the biggest red flag that you are in a Ponzi/pump and dump scheme. "You can't lose!" And rather than you are "buying electricity" I would say you are buying used electricity, which is useless.
  - matheusmoreira 5y ago
    It's a deflationary currency. The opposite of "USD always decreases in value because of inflation". Not a red flag at all. Even the idea that it's deflationary is debatable since exchanges now offer loans, a service which effectively creates new bitcoins out of nowhere.
    - immibis 5y ago
      Deflationary currencies cannot be deflationary forever. Think for 5 seconds: if that was true, then the person who sold the pizza for bitcoin will eventually have enough value to buy everything on the planet. So will the person whose CPU was mining to keep the pizza warm. Can there be two planets of value on the planet?
      - matheusmoreira 5y ago
        The value on the planet is not increasing as a result of bitcoin. Available bitcoins with which to buy valuable things are decreasing. There is a finite amount and people constantly lose bitcoins which takes them out of circulation.
throwthere 5y ago
I'll tell you why I disagree taking the same 5 year chart-- the nature of the rapid rise means new money always going in. That is to say, very large amounts of new money are being lost.
Yizahi 5y ago
It's because completely unregulated pseudo-money with all proper infrastructure around it is amazingly attractive thing for all kinds of financial criminals, precisely because there is no regulation and no consequences. As long as it stay like that this industry will constantly grow long term. That doesn't make any less shady and bad for humans. It's like wildcat banks but now instead of a hundred clients they have hundred million clients.
elif 5y ago
It's also worth noting that BTC is virtually even (down 1.6%) to where it was 6 months ago.
wruza 5y ago
HODL equals to BUY. Would you? I bought^ some of these recent days dips and sold on bounce, but now it’s just too scary. If you look at NASDAQ, it is much more appealing. ^ No, I’m not a desperate idiot, I’m just testing my feelings in trading in general on $1k, to stay calm and not act crazy in a real investment situation
- Demiurge 5y ago
  No, it doesn't. HODL equals "hold". "Buy" means make an active decision to buy, hold means make a passive not to make a decision.
  - UncleMeat 5y ago
    Money is fungible. There is no rational difference between "continue to hold X BTC that I already own" and "buy X BTC today when I currently own 0 BTC."
    - Demiurge 5y ago
      There is a logical difference between making a decision that some time is a right time to make a decision and making a decision that you don't have enough confidence in either decision.
      - smaryjerry 5y ago
        Holding is not lack of confidence in a decision. Holding is exactly the same confidence as a buy. It’s always interest to see analysts recommendations go between sell, hold, and buy to me because like the one who initially posted, I believe a hold is the same as a buy. The effect on your return between a hold and a buy is the exact same for those dollars. It would be illogical to say you would hold a stock at a price but would not buy a stock at the same price. Every time you are not selling it should be based on the same factors as if you were buying. Indecision just results in an uninformed decision, it doesn’t make your past decision right.
hn_throwaway_99 5y ago
The thing about Bitcoin specifically, though, is that there are only really 2 possible outcomes: 1. The world decides it's "tulips" at some point, and the value goes to 0. 2. The world decides it will be a major part of the financial system, and it goes to 500k or 1 million. Basically, anything in between is just a probability calculation of whether it will end up at one end or the other. The problem with this, though, is that the way proof of work works means that it is impossible that it will ever go to a million. The amount of electricity needed to protect the network is directly tied to the price of BTC. This is not just some small, inconvenient detail. It is inherent to how proof of work functions. So if it takes the electrical output of, say, Argentina to run Bitcoin now, it will take the output of China to run it when it's up around a million, and that obviously is untenable. Other cryptocurrencies have seen the writing on the wall and are moving to proof of stake (not without other issues). But the politics of Bitcoin mining, and the few large mining groups, makes it hard for me to see how this happens.
- 3np 5y ago
  What makes you assume that only 0 and >500k USD are possible outcomes? Why not 5k or 50k? Why can it not sustain as a niche asset in your book? > anything in between is just a probability calculation of whether it will end up at one end or the other. There is some strong assumption you’re leaving out here.
- asimpletune 5y ago
  I could be wrong about this, but I don't know if the energy requirements have anything to do with the price (I.e. demand) for the coin, does it? I was under the impression that the problems that you have to solve get predictably more difficult, and they're more of a function of time than price. But yes, with your point overall I agree, like in 10 years or something it doesn't seem workable without major changes. Wasn't that what lightening or side chains were supposed to do? Any way, also, I don't own any crypto and I'm definitely not defending it. Feel free to correct me too if I'm mistaken, anyone.
  - 0x0 5y ago
    I guess if the price of BTC goes up, then it makes it more "worth it" to throw more energy at mounting a double-spend attack, and therefore the energy needed to protect the network against such an attack also goes up?
hervature 5y ago
The problem is that, due to exponential growth, the majority of bitcoin holders entered in the last year. So, in a very meaningful way, the chart is always effectively only a year old in the collective's mind.
- smaryjerry 5y ago
  This is a great point. People might say bitcoin went up 5000% over x amount of time but what percentage of the people saw those returns and what percent of people got beat up over the spikes in 2021. Now that the market is essentially saturated, meaning everyone one who could buy bitcoin now has the ability to buy bitcoin… the growth left can’t necessarily come from new market entrants… and while there will always be stories of people hitting it rich, when 50% of people or more have only experienced a loss, a speculative asset can easily get negative sentiment, and permanently if enough people lose.
DennisP 5y ago
Every few months the financial press rediscovers crypto's insane volatility and pretends it's something new. A year ago, the Bitcoin price was $32K. By April it was $62K. It dropped to $31K in July. It got to $68K or so in November. Now it's $33K. Maybe this is the start of the next crypto winter but so far it's nothing unusual. I would say that it's hard to credit the idea that Bitcoin is "the new gold" or any sort of safe haven asset. Just like the rest of crypto, it crashes when stocks crash, but harder. It's more like a high-flying tech stock.
NicoJuicy 5y ago
I own no crypto anymore. But it should be taken into account that it took a pandemic to get it back up and there was a multi-year decline before COVID.

Liron 5y ago

Yeah if you’re just looking at the graph trend, you might only start panicking if BTC drops below the previous 2017 cycle’s peak of $19k.

Fnoord 5y ago
Only for people who invested (I mean, speculated) before 2017. Those who started to speculate when BTC was 50k stepped right into the big pile of poo, and they have the choice to take their losses for current price, or to keep their assets ('HODL'). Either way, it remains speculation.
- Suchos 5y ago
  I jumped in right at 60k fully knowing it will either go to 500k or to zero. I will wait this out whatever happens.
  - Fnoord 5y ago
    Depending on how much you went into, aside from HODL, that's called YOLO. In general, people spread their assets. So for example, you could speculate some on the stock market, some in cryptocurrencies, etc. If you put all your savings in, and it goes to zero, I feel sorry for your children. Cause there goes their scholarship.
    - Suchos 5y ago
      Childless and European here :). But I put like 3 months of salary there. Really nothing that could financially ruin me. I went YOLO on housing though... That shit is expensive.
    - xtracto 5y ago
      > In general, people spread their assets. So for example, you could speculate some on the stock market, some in cryptocurrencies, etc. I find this funny, my tech stocks portfolio has gone down 10% since the beginning of the year. I do monthly investing, so that's a loss compared to my average price over time. In contrast, I bought ETH at around $20 USD, and it being at $2000 is still quite a good outcome for me.
      - Fnoord 5y ago
        You can't know what happens when the cryptocurrency ETH was at $20. You still don't know what happens. In contrast, with companies, we can take some things for granted, as they have to be open about it to e.g. SEC. With regards to the $20, I knew about Bitcoin when it was a couple of USD (during the Occupy Wallstreet movement, IIRC). I liked the idea, back then. But I didn't end up buying any because to me money is a tool, not a speculative asset. And, as tool, Bitcoin was not very useful then (it still isn't, IMO). Yes, I could've bought it back then. I almost did. But we don't know what the future holds, and for every person with my story there's only a few who did buy it in large enough quantities and exfiltrated their profits at a margin of 10000% like yours. The amount of people who lost money from Bitcoin speculation is also applicable, but you don't hear about the losers. As long as you HODL, all those who HODL win (at least on paper), but as soon as large amounts get exfiltrated, the supply goes up, and value goes down. So it is very important for those who hold the asset to share the HODL mindset (as cultish as it might be).
LightG 5y ago
Well, looking at the graph trend, there's an argument that it should be trading at $15 when you take out speculative bubbles. Who knows.

Fnoord 5y ago

If you own cryptocurrency, and its all gone down, you're invested and can do two things. You can keep hold of your assets, or you can sell. If you sell, you can decide to share such or not, but since you are no longer invested, there's no incentive to share such (and if you're part of a pump and dump scheme, you don't want people to lose trust so your incentive is to say HODL while doing otherwise). So it makes sense we see a lot of HODL posts; these are people who are invested and don't want an implosion. There's also no way to verify whether the people who claim HODL actually do as they say. Thinking about it, seems awfully close to game theory like prisoner's dilemma.

podgaj 5y ago
Bitcoin is probably the first Ponzi scheme where everyone in it knows it is a Ponzi scheme. So I agree with your take here.
- sschueller 5y ago
  Please explain to me how Bitcoin is a Ponzi scheme while USD after 1971 (going away from the gold standard) is not. More so explain to me how the USD is less of a Ponzi scheme when it is the super wealthy banks/institutions that are getting zero interest loans allowing them to make even more money while at the same time devaluating the currency.
  - dtech 5y ago
    Bitcoin and other cryptocurrencies have ~zero inherent value, due to their non-speculation use-cases like payment being very limited or still early development (smart contracts). Unless you count BTC in black market I guess. USD has inherent value, it's the only currency where you can pay taxes in, and if you want to do business with government or government employees - who are ever only paid in USD - you must accept USD.
    - sschueller 5y ago
      But it's not a Ponzi scheme. It's a currency with small adoption like that of a third world nation.

gigaflop 5y ago

Most of the 'financial' reporting on crypto is nonsense, and imo, is just grasping at straws, or some kind of puff piece. To some confident people, this is just a flash sale.

elif 5y ago
i almost get the sense that it is written by grifters trying to make the waves in both directions bigger for their own gain.

jensensbutton 5y ago

I tend to think crypto currencies, much more than conventional financial assets, is sensitive to the public narrative/hype due to it being a pure speculation play. A lot of people bought in over the past two years due to the hype and I suspect if the media narrative turns a lot of folks will pull out.

fault1 5y ago
I think many cryptocurrencies are on the edge of pump and dump schemes, amplified by social media. A friend of mine made a decent amount just tracking the tweets of Elon Musk and other coin influencers a few years ago.
- rjmunro 5y ago
  "many cryptocurrencies"? Which ones would you say are not?

mavhc 5y ago

Bitcoin has 3 mechanisms built in to make it almost always increase in value, halving of the rewards, finite total+lost bitcoins, and increasing complexity when more people are mining. In the end all you're doing is buying electricity and converting it to bitcoin, anything above that cost is based on future costs when the rewards halve. All this means you should never sell your bitcoins, which means it's a terrible currency

podgaj 5y ago
"to make it almost always increase in value" To any investor this should be the biggest red flag that you are in a Ponzi/pump and dump scheme. "You can't lose!" And rather than you are "buying electricity" I would say you are buying used electricity, which is useless.
- matheusmoreira 5y ago
  It's a deflationary currency. The opposite of "USD always decreases in value because of inflation". Not a red flag at all. Even the idea that it's deflationary is debatable since exchanges now offer loans, a service which effectively creates new bitcoins out of nowhere.
  - immibis 5y ago
    Deflationary currencies cannot be deflationary forever. Think for 5 seconds: if that was true, then the person who sold the pizza for bitcoin will eventually have enough value to buy everything on the planet. So will the person whose CPU was mining to keep the pizza warm. Can there be two planets of value on the planet?
    - matheusmoreira 5y ago
      The value on the planet is not increasing as a result of bitcoin. Available bitcoins with which to buy valuable things are decreasing. There is a finite amount and people constantly lose bitcoins which takes them out of circulation.

throwthere 5y ago

I'll tell you why I disagree taking the same 5 year chart-- the nature of the rapid rise means new money always going in. That is to say, very large amounts of new money are being lost.

Yizahi 5y ago

It's because completely unregulated pseudo-money with all proper infrastructure around it is amazingly attractive thing for all kinds of financial criminals, precisely because there is no regulation and no consequences. As long as it stay like that this industry will constantly grow long term. That doesn't make any less shady and bad for humans. It's like wildcat banks but now instead of a hundred clients they have hundred million clients.

elif 5y ago

It's also worth noting that BTC is virtually even (down 1.6%) to where it was 6 months ago.

wruza 5y ago

HODL equals to BUY. Would you? I bought^ some of these recent days dips and sold on bounce, but now it’s just too scary. If you look at NASDAQ, it is much more appealing. ^ No, I’m not a desperate idiot, I’m just testing my feelings in trading in general on $1k, to stay calm and not act crazy in a real investment situation

Demiurge 5y ago
No, it doesn't. HODL equals "hold". "Buy" means make an active decision to buy, hold means make a passive not to make a decision.
- UncleMeat 5y ago
  Money is fungible. There is no rational difference between "continue to hold X BTC that I already own" and "buy X BTC today when I currently own 0 BTC."
  - Demiurge 5y ago
    There is a logical difference between making a decision that some time is a right time to make a decision and making a decision that you don't have enough confidence in either decision.
    - smaryjerry 5y ago
      Holding is not lack of confidence in a decision. Holding is exactly the same confidence as a buy. It’s always interest to see analysts recommendations go between sell, hold, and buy to me because like the one who initially posted, I believe a hold is the same as a buy. The effect on your return between a hold and a buy is the exact same for those dollars. It would be illogical to say you would hold a stock at a price but would not buy a stock at the same price. Every time you are not selling it should be based on the same factors as if you were buying. Indecision just results in an uninformed decision, it doesn’t make your past decision right.

hn_throwaway_99 5y ago

The thing about Bitcoin specifically, though, is that there are only really 2 possible outcomes: 1. The world decides it's "tulips" at some point, and the value goes to 0. 2. The world decides it will be a major part of the financial system, and it goes to 500k or 1 million. Basically, anything in between is just a probability calculation of whether it will end up at one end or the other. The problem with this, though, is that the way proof of work works means that it is impossible that it will ever go to a million. The amount of electricity needed to protect the network is directly tied to the price of BTC. This is not just some small, inconvenient detail. It is inherent to how proof of work functions. So if it takes the electrical output of, say, Argentina to run Bitcoin now, it will take the output of China to run it when it's up around a million, and that obviously is untenable. Other cryptocurrencies have seen the writing on the wall and are moving to proof of stake (not without other issues). But the politics of Bitcoin mining, and the few large mining groups, makes it hard for me to see how this happens.

3np 5y ago
What makes you assume that only 0 and >500k USD are possible outcomes? Why not 5k or 50k? Why can it not sustain as a niche asset in your book? > anything in between is just a probability calculation of whether it will end up at one end or the other. There is some strong assumption you’re leaving out here.
asimpletune 5y ago
I could be wrong about this, but I don't know if the energy requirements have anything to do with the price (I.e. demand) for the coin, does it? I was under the impression that the problems that you have to solve get predictably more difficult, and they're more of a function of time than price. But yes, with your point overall I agree, like in 10 years or something it doesn't seem workable without major changes. Wasn't that what lightening or side chains were supposed to do? Any way, also, I don't own any crypto and I'm definitely not defending it. Feel free to correct me too if I'm mistaken, anyone.
- 0x0 5y ago
  I guess if the price of BTC goes up, then it makes it more "worth it" to throw more energy at mounting a double-spend attack, and therefore the energy needed to protect the network against such an attack also goes up?

hervature 5y ago

The problem is that, due to exponential growth, the majority of bitcoin holders entered in the last year. So, in a very meaningful way, the chart is always effectively only a year old in the collective's mind.

smaryjerry 5y ago
This is a great point. People might say bitcoin went up 5000% over x amount of time but what percentage of the people saw those returns and what percent of people got beat up over the spikes in 2021. Now that the market is essentially saturated, meaning everyone one who could buy bitcoin now has the ability to buy bitcoin… the growth left can’t necessarily come from new market entrants… and while there will always be stories of people hitting it rich, when 50% of people or more have only experienced a loss, a speculative asset can easily get negative sentiment, and permanently if enough people lose.

DennisP 5y ago

Every few months the financial press rediscovers crypto's insane volatility and pretends it's something new. A year ago, the Bitcoin price was $32K. By April it was $62K. It dropped to $31K in July. It got to $68K or so in November. Now it's $33K. Maybe this is the start of the next crypto winter but so far it's nothing unusual. I would say that it's hard to credit the idea that Bitcoin is "the new gold" or any sort of safe haven asset. Just like the rest of crypto, it crashes when stocks crash, but harder. It's more like a high-flying tech stock.

NicoJuicy 5y ago

I own no crypto anymore. But it should be taken into account that it took a pandemic to get it back up and there was a multi-year decline before COVID.