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,,The crypto slump has been brutal’’ I’ve been holding Bitcoin since 2013, and this 50-60% retracement from the all time high was nothing compared to what I (a

,,The crypto slump has been brutal’’ I’ve been holding Bitcoin since 2013, and this 50-60% retracement from the all time high was nothing compared to what I (and other people) were living through. I advise people to look at past volatility of Bitcoin before making an investment decision.

oleganza 4y ago
Also bitcoin != crypto, those are not even subset/superset for the most part. Bitcoin solves one single problem of "digital cash" with the most robust and boring mechanism (known to mankind so far). While the "cryptos" aim at satisfying demand for all sorts of p2p apps and moneymaking schemes that can be funded with the digital cash to avoid getting regulated out of existence.
- pavlov 4y ago
  It’s practically impossible to use Bitcoin as digital cash because it’s so slow and expensive. That was the original problem it purported to solve, but it failed miserably at that.
  - barnabee 4y ago
    So far. If you spend any time in the research community you’ll realise that those problems are very likely to get solved. Lightning alone probably gets us there. Its volatility and UX, as well as how negatively it is perceived currently (by some people) look like bigger blockers to me.
    - rvz 4y ago
      > Lightning alone probably gets us there. Which that is not Bitcoin and neither is it on-chain. The parent comment is correct on Bitcoin's failure as a peer-to-peer electronic cash system and all it is instead, is a store of value. This is how you know it has failed in its intended purpose.
    - redox99 4y ago
      What advancements have happened regarding lightning? Last I heard about lightning was around 2017, and 5 years later it doesn't really seem to have gained much adoption.
      - saalweachter 4y ago
        Fun fact: the Lightning whitepaper is now older than the Bitcoin whitepaper was when the former was published.
    - technobach 4y ago
      The US adult population is ~250 million. With Bitcoin's ~300k transactions/day, it would take over 2 years for each of them to simply open a LN channel, if we dedicate the entire network just to onboarding. Lightning will definitely not solve it. edit: tps -> transactions/day
    - tsimionescu 4y ago
      Ligthning is an alternative to Bitcoin, not a fix for it. It has a different security model (much much much weaker), it uses entirely different technology, it is essentially centralized. The fact that it uses Bitcoin on the back end is mostly a detail of Lightning.
      - adastra22 4y ago
        There is literally not a single thing true in this comment. I would advise you seriously revaluate where you are getting your (mis)information from. Lightning is a way of using bitcoin. A way of cooperatively creating bitcoin transactions with multiple parties, in such a way that you can minimize the number of on-chain transactions required. It is bitcoin. It has the same security model as bitcoin. It uses the same technology. It is not in any way centralized (it's a p2p network of payment channel connections, with each operator running their own server).
        imtringued 4y ago
        Lightning is a decentralised PayPal equivalent. Nothing more nothing less.
        tsimionescu 4y ago
        If you and I have a lightning node and a channel between us, and I send 1 BTC to you, this transaction is NOT secured by the bitcoin network, nor any similar technology. It's basically just a regular ledger that my node and yours keep track of (there's a little more cryptography in place, but not much more). Even worse, if you saw my transaction, then sent me 1BTC worth of goods, then your node becomes offline and I forcefully close the channel with the original balance, I still have my 1BTC and there is no proof anywhere except your node that the transaction ever happened. So no security, unless both nodes are online. Finally, unless you open direct channels with everyone you want to transact with, you will rely on a 3rd party node that does have such a channel. In practice, this likely means you will use one of a few major nodes that you trust to stay online and not refuse transactions, so the payments are in effect highly centralized.
  - alangibson 4y ago
    Every time one makes the point that Bitcoin has no real utility, someone says 'Lightning network'. Does anyone know if it's getting any adoption?
    - sexangel 4y ago
      not entirely sure, but there appears to be investment from old-school banking, so that could be its on ramp into the classical financial sector. oh yeah, & this: https://www.youtube.com/watch?v=0BZoKH-hX_o https://www.youtube.com/watch?v=0BZoKH-hX_o but yeah, bitcoin has no utility. you'd just have to wait until The Merge inevitably occurs, or use any of the few PoS cryptocurrencies that are generally better & more capable than bitcoin in every capacity, like Avalanche, Cardano, Fantom, Solana, etc.
      - MrMan 4y ago
        Algorand
    - xiphias2 4y ago
      At this point it can be used for payments practically everywhere where Bitcoin accepted, but it’s not yet practical for payments over $100 as far as I know, so I still only use the base Bitcoin layer for paying for my travels. There are new algorithms in late research phase though for much larger payments (like $5000) that are expected to go into production this year. I’m waiting for that before switching to using lightning network. For people in the US though they can just go into a Walmart or McDonald’s and use it right now.
      - beefield 4y ago
        > For people in the US though they can just go into a Walmart or McDonald’s and use it right now. Am I right to assume that "use" here is in the same sense[1] that you can "use" "dollars" to pay your Big Mac in Paris with your US credit card? I.e. French McDonald's does not set the price in dollars but euros and does not need to touch dollars with a ten foot pole during the whole process and receives euros in their account? [1] Which hardly makes any sense to me, to be honest.
  - londons_explore 4y ago
    A bitcoin transaction to be processed sometime in the next 24 hours costs $0.15 right now. That competes pretty well with many bank transfer methods, especially international, which still take many days and cost sometimes $20+.
    - pavlov 4y ago
      Cash settles immediately. "Sometime in the next 24 hours" is not digital cash. Not to mention that Bitcoin is so volatile that the transaction's value in real-world currency may be 10% higher or lower within that 24-hour window, and of course you still need to pay someone to convert it into money if you're not planning on being a crypto holder.
    - derriz 4y ago
      That's not really a fair comparison. Bitcoin cannot has very limited use for actual commerce - actually paying for stuff. So you also need to consider the inconvenience, complexity and cost of trading the received BTC for local currency. I haven't paid anything for international transfers within the SEPA area for years. Depending on the source/destination bank, the transfer can be completed within an hour or so. Sometimes the solution is simply better banking infrastructure. The banking/payments system in the US is a mess but it doesn't have to be so.
    - happymellon 4y ago
      It really doesn't. Bank transfers do not cost me and happen instantaneous, not 24 hours. I can also transfer to the US, and they receive it in 24 hours. It still doesn't cost me.
- yakak 4y ago
  bitcoin != crypto Right, e-banking is crypto. The field of Speculative Blockchain solutions is a tiny part of crypto. But your examples sound like they either are or anchor to speculative Blockchains so Bitcoin is the leading implementation of infrastructure for your examples.
BrissyCoder 4y ago
People have such short memories... Was 2018 really that long ago... Even back then there was a tonne of MSM coverage.
- lostcohort 4y ago
  When was long term memory ever a thing for people. People have completely forgotten about invading an entire country finding no WMDs and the recent Afghanistan debacle.
  - pibechorro 4y ago
    You must be against democracy and freedom. Dont you see weapon sales and money laundering is a good thing? So what if a few million people die..
  - lupire 4y ago
    The guy who did that just remembered and Freudian slip told everyone in a speech.
danuker 4y ago
Indeed, Bitcoin spends quite a lot of time at say 40% dropdown. And an 80% crash is typical.
ZeroGravitas 4y ago
Do you have a strategy of selling on the peaks (possibly even buying on the lows with some of the proceeds) to eventually exit while ahead or are you just holding because you have a strong belief that it can only rise in future and it's not worth following the day to day drama (as many do with stocks)? Either way, you personally benefit from belief in Bitcoin and crypto being generally positive, which has implications for your objectivity even if well meaning.
- xiphias2 4y ago
  If there would be a huge peak, like $200k, I would sell, but generally I don’t believe I can compete with the hedge funds trading Bitcoin, so it’s the second. The only exception was the Bitcoin Cash hard fork, that I strongly opposed as it was being pushed by companies so aggressively even though there was no rough consensus reached, while segregated witness fork contained several critical bug fixes for Bitcoin. I sold all my Bitcoin Cash instantly for about 0.13 BCH/BTC exchange rate.
  - arethuza 4y ago
    Out of interest, do you set explicit targets like "if it gets to X I will sell"? Just wondering as I'd have thought a "peak" is only evident in retrospect?
    - chii 4y ago
      The way i've been looking at it is thru the lens of allocation ratios. You never have one asset with a high allocation (compared to another). You also have to decide ahead of time (when you start investing) what an appropriate allocation ratio is between the different assets (e.g., you might have 10% bonds, 80% stocks and 10% crypto). Then, one or twice a year, you an reallocate assets as they drift away from the ratio. Doing it too often is detrimental, so my guess is once a year is "enough", and may be keep an eye on any fluctuations and if it grows bigger than some threshold, you do a second rebalance. Let's say in 2021, crypto had a huge bull run, and went from just being 10% of your allocation to something close to 20%. It makes a lot of sense then, to sell the 10%, and rebalance back into the other assets you hold.
bottled_poe 4y ago
So, past trends are the basis of this advice? Not trying to be snarky, just genuinely interested in why we would expect it to climb again.
- vmception 4y ago
  Past performance is indicative of future results except for the purposes of liability punting, which is a super convenient capability of apocryphal disclaimers
- seertaak 4y ago
  Here's what Goldman told me in their newsletter: The meltdown in cryptocurrencies is raising alarm about the future of digital assets — or is it? Fears over soaring prices and slowing economic growth have sent investors fleeing from risk assets, notably cryptocurrencies. In the latest Exchanges at Goldman Sachs, Mathew McDermott, global head of digital assets at Goldman Sachs, explains the drivers, evolution and the outlook for crypto assets and the broader digital assets ecosystem. Recent volatility underscores that crypto assets are still an emerging asset class with a large number of retail participants, McDermott explains to Exchanges host Allison Nathan of Goldman Sachs Research. “The move so far has been correlated to the broader macro market moves,” notes McDermott, who points out that nearly every asset class with discounted cash flows has been hard hit by inflationary pressures. Blockchain, crypto and digital currencies are gaining broader acceptance among investors, companies and institutions. “Maturity across both the market participants and the infrastructure has given not only confidence to many different institutional sectors, but also has enabled many more traditional traders to really look forward in how they trade this marketplace because of this maturity in the product suite,” McDermott says. Venture capital investments in digital assets are surging. While valuations are pretty high, there continues to be “high levels of interest because people continue to see exponential growth opportunities and are keen to deploy that capital,” says McDermott. “I think valuations have got a little out of kilter, so perhaps we'll see some more sensible valuations in terms of investment opportunities, too.”
- markburns 4y ago
  The thinking behind it is based on the halving of rewards and the stock to flow model. https://bitblogger.org/demystifying-bitcoins-remarkably-accurate-price-prediction-model-stock-to-flow/ https://bitblogger.org/demystifying-bitcoins-remarkably-accu... If you follow that reason then it's rational that there are crashes after peaks (cashing out), and it's still rational that it will keep rising to a point that it reaches its true value (whatever that is). The peaks and troughs will flatten out as that happens. Could well all be wrong. But so far that seems to be the pattern.
CPLX 4y ago
Or you could look at the absolutely factual statement that since Bitcoin isn’t a productive asset (in fact it’s the opposite it’s expensive to create) then every single dollar that will ever be taken out of Bitcoin is a dollar that some other person put in. This is not true of normal investments. For example the dollars you get from selling McDonald’s stock 30 years after purchasing it come from people buying hamburgers. The fact that there’s no such mechanism with Bitcoin demonstrates that it’s not actually an investment at all. So when you get your profits out who will have given them to you, and what’s their story?
- scotty79 4y ago
  > ... it come from people buying hamburgers So from money someone else put into this whole hamburger thing and won't get it back? > For example the dollars you get from selling McDonald’s stock 30 years after purchasing it come from people buying hamburgers. Some dollars not all, and most likely bot even the most. So the Bitcoin doesn't have this merchandise based mechanism for sucking the money out of the rest of the economy, so what? Only a part of the cash of the investors comes from it anyways. The rest comes from other investors who gambled wrong. Same as with Bitcoin. Your argument is just a version of intrinsic value argument tgat crypto bros dismiss with a wide smile.
  - CPLX 4y ago
    > So from money someone else put into this whole hamburger thing and won't get it back? They got a hamburger and ate it. People need food.
    - scotty79 4y ago
      They could eat something else. From the point of view of McDonalds investor there's no guarantee money will be flowing in because of sale of hamburgers.
  - nradov 4y ago
    McDonald's stock (MCD) pays a 2.39% dividend yield based on people buying hamburgers. That's hard cash paid out every year. Bitcoin doesn't pay any dividends.

oleganza 4y ago

Also bitcoin != crypto, those are not even subset/superset for the most part. Bitcoin solves one single problem of "digital cash" with the most robust and boring mechanism (known to mankind so far). While the "cryptos" aim at satisfying demand for all sorts of p2p apps and moneymaking schemes that can be funded with the digital cash to avoid getting regulated out of existence.

pavlov 4y ago
It’s practically impossible to use Bitcoin as digital cash because it’s so slow and expensive. That was the original problem it purported to solve, but it failed miserably at that.
- barnabee 4y ago
  So far. If you spend any time in the research community you’ll realise that those problems are very likely to get solved. Lightning alone probably gets us there. Its volatility and UX, as well as how negatively it is perceived currently (by some people) look like bigger blockers to me.
  - rvz 4y ago
    > Lightning alone probably gets us there. Which that is not Bitcoin and neither is it on-chain. The parent comment is correct on Bitcoin's failure as a peer-to-peer electronic cash system and all it is instead, is a store of value. This is how you know it has failed in its intended purpose.
  - redox99 4y ago
    What advancements have happened regarding lightning? Last I heard about lightning was around 2017, and 5 years later it doesn't really seem to have gained much adoption.
    - saalweachter 4y ago
      Fun fact: the Lightning whitepaper is now older than the Bitcoin whitepaper was when the former was published.
  - technobach 4y ago
    The US adult population is ~250 million. With Bitcoin's ~300k transactions/day, it would take over 2 years for each of them to simply open a LN channel, if we dedicate the entire network just to onboarding. Lightning will definitely not solve it. edit: tps -> transactions/day
  - tsimionescu 4y ago
    Ligthning is an alternative to Bitcoin, not a fix for it. It has a different security model (much much much weaker), it uses entirely different technology, it is essentially centralized. The fact that it uses Bitcoin on the back end is mostly a detail of Lightning.
    - adastra22 4y ago
      There is literally not a single thing true in this comment. I would advise you seriously revaluate where you are getting your (mis)information from. Lightning is a way of using bitcoin. A way of cooperatively creating bitcoin transactions with multiple parties, in such a way that you can minimize the number of on-chain transactions required. It is bitcoin. It has the same security model as bitcoin. It uses the same technology. It is not in any way centralized (it's a p2p network of payment channel connections, with each operator running their own server).
      - imtringued 4y ago
        Lightning is a decentralised PayPal equivalent. Nothing more nothing less.
      - tsimionescu 4y ago
        If you and I have a lightning node and a channel between us, and I send 1 BTC to you, this transaction is NOT secured by the bitcoin network, nor any similar technology. It's basically just a regular ledger that my node and yours keep track of (there's a little more cryptography in place, but not much more). Even worse, if you saw my transaction, then sent me 1BTC worth of goods, then your node becomes offline and I forcefully close the channel with the original balance, I still have my 1BTC and there is no proof anywhere except your node that the transaction ever happened. So no security, unless both nodes are online. Finally, unless you open direct channels with everyone you want to transact with, you will rely on a 3rd party node that does have such a channel. In practice, this likely means you will use one of a few major nodes that you trust to stay online and not refuse transactions, so the payments are in effect highly centralized.
- alangibson 4y ago
  Every time one makes the point that Bitcoin has no real utility, someone says 'Lightning network'. Does anyone know if it's getting any adoption?
  - sexangel 4y ago
    not entirely sure, but there appears to be investment from old-school banking, so that could be its on ramp into the classical financial sector. oh yeah, & this: https://www.youtube.com/watch?v=0BZoKH-hX_o https://www.youtube.com/watch?v=0BZoKH-hX_o but yeah, bitcoin has no utility. you'd just have to wait until The Merge inevitably occurs, or use any of the few PoS cryptocurrencies that are generally better & more capable than bitcoin in every capacity, like Avalanche, Cardano, Fantom, Solana, etc.
    - MrMan 4y ago
      Algorand
  - xiphias2 4y ago
    At this point it can be used for payments practically everywhere where Bitcoin accepted, but it’s not yet practical for payments over $100 as far as I know, so I still only use the base Bitcoin layer for paying for my travels. There are new algorithms in late research phase though for much larger payments (like $5000) that are expected to go into production this year. I’m waiting for that before switching to using lightning network. For people in the US though they can just go into a Walmart or McDonald’s and use it right now.
    - beefield 4y ago
      > For people in the US though they can just go into a Walmart or McDonald’s and use it right now. Am I right to assume that "use" here is in the same sense[1] that you can "use" "dollars" to pay your Big Mac in Paris with your US credit card? I.e. French McDonald's does not set the price in dollars but euros and does not need to touch dollars with a ten foot pole during the whole process and receives euros in their account? [1] Which hardly makes any sense to me, to be honest.
- londons_explore 4y ago
  A bitcoin transaction to be processed sometime in the next 24 hours costs $0.15 right now. That competes pretty well with many bank transfer methods, especially international, which still take many days and cost sometimes $20+.
  - pavlov 4y ago
    Cash settles immediately. "Sometime in the next 24 hours" is not digital cash. Not to mention that Bitcoin is so volatile that the transaction's value in real-world currency may be 10% higher or lower within that 24-hour window, and of course you still need to pay someone to convert it into money if you're not planning on being a crypto holder.
  - derriz 4y ago
    That's not really a fair comparison. Bitcoin cannot has very limited use for actual commerce - actually paying for stuff. So you also need to consider the inconvenience, complexity and cost of trading the received BTC for local currency. I haven't paid anything for international transfers within the SEPA area for years. Depending on the source/destination bank, the transfer can be completed within an hour or so. Sometimes the solution is simply better banking infrastructure. The banking/payments system in the US is a mess but it doesn't have to be so.
  - happymellon 4y ago
    It really doesn't. Bank transfers do not cost me and happen instantaneous, not 24 hours. I can also transfer to the US, and they receive it in 24 hours. It still doesn't cost me.
yakak 4y ago
bitcoin != crypto Right, e-banking is crypto. The field of Speculative Blockchain solutions is a tiny part of crypto. But your examples sound like they either are or anchor to speculative Blockchains so Bitcoin is the leading implementation of infrastructure for your examples.

BrissyCoder 4y ago

People have such short memories... Was 2018 really that long ago... Even back then there was a tonne of MSM coverage.

lostcohort 4y ago
When was long term memory ever a thing for people. People have completely forgotten about invading an entire country finding no WMDs and the recent Afghanistan debacle.
- pibechorro 4y ago
  You must be against democracy and freedom. Dont you see weapon sales and money laundering is a good thing? So what if a few million people die..
- lupire 4y ago
  The guy who did that just remembered and Freudian slip told everyone in a speech.

danuker 4y ago

Indeed, Bitcoin spends quite a lot of time at say 40% dropdown. And an 80% crash is typical.

ZeroGravitas 4y ago

Do you have a strategy of selling on the peaks (possibly even buying on the lows with some of the proceeds) to eventually exit while ahead or are you just holding because you have a strong belief that it can only rise in future and it's not worth following the day to day drama (as many do with stocks)? Either way, you personally benefit from belief in Bitcoin and crypto being generally positive, which has implications for your objectivity even if well meaning.

xiphias2 4y ago
If there would be a huge peak, like $200k, I would sell, but generally I don’t believe I can compete with the hedge funds trading Bitcoin, so it’s the second. The only exception was the Bitcoin Cash hard fork, that I strongly opposed as it was being pushed by companies so aggressively even though there was no rough consensus reached, while segregated witness fork contained several critical bug fixes for Bitcoin. I sold all my Bitcoin Cash instantly for about 0.13 BCH/BTC exchange rate.
- arethuza 4y ago
  Out of interest, do you set explicit targets like "if it gets to X I will sell"? Just wondering as I'd have thought a "peak" is only evident in retrospect?
  - chii 4y ago
    The way i've been looking at it is thru the lens of allocation ratios. You never have one asset with a high allocation (compared to another). You also have to decide ahead of time (when you start investing) what an appropriate allocation ratio is between the different assets (e.g., you might have 10% bonds, 80% stocks and 10% crypto). Then, one or twice a year, you an reallocate assets as they drift away from the ratio. Doing it too often is detrimental, so my guess is once a year is "enough", and may be keep an eye on any fluctuations and if it grows bigger than some threshold, you do a second rebalance. Let's say in 2021, crypto had a huge bull run, and went from just being 10% of your allocation to something close to 20%. It makes a lot of sense then, to sell the 10%, and rebalance back into the other assets you hold.

bottled_poe 4y ago

So, past trends are the basis of this advice? Not trying to be snarky, just genuinely interested in why we would expect it to climb again.

vmception 4y ago
Past performance is indicative of future results except for the purposes of liability punting, which is a super convenient capability of apocryphal disclaimers
seertaak 4y ago
Here's what Goldman told me in their newsletter: The meltdown in cryptocurrencies is raising alarm about the future of digital assets — or is it? Fears over soaring prices and slowing economic growth have sent investors fleeing from risk assets, notably cryptocurrencies. In the latest Exchanges at Goldman Sachs, Mathew McDermott, global head of digital assets at Goldman Sachs, explains the drivers, evolution and the outlook for crypto assets and the broader digital assets ecosystem. Recent volatility underscores that crypto assets are still an emerging asset class with a large number of retail participants, McDermott explains to Exchanges host Allison Nathan of Goldman Sachs Research. “The move so far has been correlated to the broader macro market moves,” notes McDermott, who points out that nearly every asset class with discounted cash flows has been hard hit by inflationary pressures. Blockchain, crypto and digital currencies are gaining broader acceptance among investors, companies and institutions. “Maturity across both the market participants and the infrastructure has given not only confidence to many different institutional sectors, but also has enabled many more traditional traders to really look forward in how they trade this marketplace because of this maturity in the product suite,” McDermott says. Venture capital investments in digital assets are surging. While valuations are pretty high, there continues to be “high levels of interest because people continue to see exponential growth opportunities and are keen to deploy that capital,” says McDermott. “I think valuations have got a little out of kilter, so perhaps we'll see some more sensible valuations in terms of investment opportunities, too.”
markburns 4y ago
The thinking behind it is based on the halving of rewards and the stock to flow model. https://bitblogger.org/demystifying-bitcoins-remarkably-accurate-price-prediction-model-stock-to-flow/ https://bitblogger.org/demystifying-bitcoins-remarkably-accu... If you follow that reason then it's rational that there are crashes after peaks (cashing out), and it's still rational that it will keep rising to a point that it reaches its true value (whatever that is). The peaks and troughs will flatten out as that happens. Could well all be wrong. But so far that seems to be the pattern.

CPLX 4y ago

Or you could look at the absolutely factual statement that since Bitcoin isn’t a productive asset (in fact it’s the opposite it’s expensive to create) then every single dollar that will ever be taken out of Bitcoin is a dollar that some other person put in. This is not true of normal investments. For example the dollars you get from selling McDonald’s stock 30 years after purchasing it come from people buying hamburgers. The fact that there’s no such mechanism with Bitcoin demonstrates that it’s not actually an investment at all. So when you get your profits out who will have given them to you, and what’s their story?

scotty79 4y ago
> ... it come from people buying hamburgers So from money someone else put into this whole hamburger thing and won't get it back? > For example the dollars you get from selling McDonald’s stock 30 years after purchasing it come from people buying hamburgers. Some dollars not all, and most likely bot even the most. So the Bitcoin doesn't have this merchandise based mechanism for sucking the money out of the rest of the economy, so what? Only a part of the cash of the investors comes from it anyways. The rest comes from other investors who gambled wrong. Same as with Bitcoin. Your argument is just a version of intrinsic value argument tgat crypto bros dismiss with a wide smile.
- CPLX 4y ago
  > So from money someone else put into this whole hamburger thing and won't get it back? They got a hamburger and ate it. People need food.
  - scotty79 4y ago
    They could eat something else. From the point of view of McDonalds investor there's no guarantee money will be flowing in because of sale of hamburgers.
- nradov 4y ago
  McDonald's stock (MCD) pays a 2.39% dividend yield based on people buying hamburgers. That's hard cash paid out every year. Bitcoin doesn't pay any dividends.