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Eyebrows raised. What this is showing is that both tech stocks and crypto were being propped up by the same investors/behavior (speculation) and are highly corr

Eyebrows raised. What this is showing is that both tech stocks and crypto were being propped up by the same investors/behavior (speculation) and are highly correlated. I thought this was a good test regarding crypto being a “store or value” since inflation devalues fiat currency, one hypothesis was crypto would rise with market turmoil and high inflation as “digital gold”. I guess that hypothesis was incorrect.

twox2 4y ago
IMO, this hypothesis hasn't been adequately tested. By all accounts inflation is bad, but not THAT bad. However, I'm sure Bitcoin and most Cryptocurrency is looking pretty stable with respect to Venezuela's 2,00,00% inflation. Bitcoin as a hedge against economic turmoil requires real economic turmoil.
- lumost 4y ago
  A Venezuelan could also own dollar/euro denominated assets or commodities. BTC would need to be better and more stable than those for someone to view it as an effective hedge. If US or EU inflation hit 2000% there would be global consequences. There is no reserve asset currently large enough to redenominate US denominated assets, aid payments would collapse, and currencies pegged to the dollar would collapse. Betting on BTC for such a world is reasonable, as there would be a reasonable chance your gold reserves would be become inaccessible, seized, or both. However ammunition might be a more effective financial hedge in this situation.
  - FabHK 4y ago
    > A Venezuelan could also own dollar/euro denominated assets or commodities. If they're allowed to. Which underscores that the true innovation of Bitcoin is to circumvent rules and regulations.
    - vkou 4y ago
      Why would they be allowed to own BTC but not USD? How are they going to buy groceries with their BTC? Pay rent? Taxes? Go to the local black market and exchange it for local currency? You can do that just fine with USD, too. Does doing black-market deals in BTC somehow make you immune to arrest, prosecution, and execution?
      - twox2 4y ago
        With BTC they can get their money out of Venezuela by memorizing several words. With USD, they can't.

twox2 4y ago

IMO, this hypothesis hasn't been adequately tested. By all accounts inflation is bad, but not THAT bad. However, I'm sure Bitcoin and most Cryptocurrency is looking pretty stable with respect to Venezuela's 2,00,00% inflation. Bitcoin as a hedge against economic turmoil requires real economic turmoil.

lumost 4y ago
A Venezuelan could also own dollar/euro denominated assets or commodities. BTC would need to be better and more stable than those for someone to view it as an effective hedge. If US or EU inflation hit 2000% there would be global consequences. There is no reserve asset currently large enough to redenominate US denominated assets, aid payments would collapse, and currencies pegged to the dollar would collapse. Betting on BTC for such a world is reasonable, as there would be a reasonable chance your gold reserves would be become inaccessible, seized, or both. However ammunition might be a more effective financial hedge in this situation.
- FabHK 4y ago
  > A Venezuelan could also own dollar/euro denominated assets or commodities. If they're allowed to. Which underscores that the true innovation of Bitcoin is to circumvent rules and regulations.
  - vkou 4y ago
    Why would they be allowed to own BTC but not USD? How are they going to buy groceries with their BTC? Pay rent? Taxes? Go to the local black market and exchange it for local currency? You can do that just fine with USD, too. Does doing black-market deals in BTC somehow make you immune to arrest, prosecution, and execution?
    - twox2 4y ago
      With BTC they can get their money out of Venezuela by memorizing several words. With USD, they can't.