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The crypto market is crashing for the same reason real financial markets are crashing. The problems with Celsius are an irrelevant blip.

suzzer99 4y ago
Except the real financial markets have a bottom where contrarian investors will step in and stop the free fall. What tangible value is there for a contrarian investor in crypto?
- junofan 4y ago
  Under proof-of-stake, if I control some fraction of the network, perhaps statistically I’ll occasionally be able to profit from doing things the network designers didn’t think of. So I’d want to buy during a sell-off to maximize my profits.
  - CTDOCodebases 4y ago
    Is there something like MEV with PoS?
- viraptor 4y ago
  Same as before - hope the price is low enough and starts rising for the same reasons it was rising years ago.
  - arka2147483647 4y ago
    Real markets, or the companies within, make something that people need. They have equipment, customers, etc. Maybe they are important enough that the state has to bail them out. Maybe they get restructured or merged. Anyways, there is some kind of floor to which they can fall, and which will catch them. What kind of "floor" is there for crypto? By definition it is not tied to anything non digital? Right?
    - Auracle 4y ago
      If you’re buying growth stocks that pay no dividends there isn’t much of a difference, and there’s no coincidence that those are also the stocks that have crashed as hard as crypto.
    - dave_sullivan 4y ago
      A company can go out of business and cease to function. What would cause the Bitcoin network to cease to function? There will always be a market price and it will fluctuate. But the end of Bitcoin? Would be like the end of BitTorrent, not gonna happen.
      - ogogmad 4y ago
        [EDIT: Made my argument clearer.] Not a finance expert, but I disagree with what you're saying: There's a feedback loop between: 1. The price of BTC, which depends on people's willingness to mine it (without which, BTC doesn't have security). 2. The willingness to mine BTC, which depends on the price. Why would you mine BTC if you're not sure whether you'll be able to sell it for more than you mined it for? A decline in 1 can trigger a decline in 2, which can trigger a decline in 1, which can trigger a decline in 2. BTC can have an end. Oh, and BTC is not like BitTorrent.
        hackernudes 4y ago
        It totally is like BitTorrent. As long as some people are willing to run the software (mining + full nodes) it will work. The "feedback loop" you describe would reach equilibrium due to difficulty adjustment (blocks could be really slow for some time). Granted it would then become cheaper to 51% attack. Maybe one could consider Bitcoin "dead" at that point but it would still be working.
    - viraptor 4y ago
      The floor is belief in usability for transfers, for speculation, for avoiding local inflation, etc. You don't need real-world-value for that.
- dave_sullivan 4y ago
  "Historical upside potential". If it crashes 90% and then goes back to 30% of its peak a couple years later, pundits will declare bitcoin collapsed, but the people that bought around the bottom will make out like bandits. I dont see many failure modes for crypto itself. The exchanges and all the speculative bullshit built around it are a big problem, but the network itself will survive and there is a price where people will start betting on upside again. I say this as someone that bought my first bitcoin at $5 and sold my last one for $4500. I left a lot on the table.
  - Tiktaalik 4y ago
    For a regular equity the thing that causes it to "go back to 30%" would be investors recognizing that the company is a good company with real cash flows and real products and the stock now undervalued, and so they come in to buy shares. There's no similar mechanism with crypto. There's no annual dividend that is now on sale. More likely to simply go to $0 as everyone heads to the exits.
  - qayxc 4y ago
    > I say this as someone that bought my first bitcoin at $5 and sold my last one for $4500. I left a lot on the table. It's called gambling and you should consider yourself lucky. Very, very lucky. You basically whine about 90000% ROI when it could've been 900000%. Let that sink in for a moment. Consider this: many small-scale investors entered the market right at, or very near recent peaks. What would someone say who bought in a year ago for like $50k, not $5? They'd be down over 50% at the moment and there's simply no guarantee the market will recover to the $60k+ levels seen in October and November last year. Add on top of that people who invested by means of putting their life savings (again, not as uncommon as you might think) into shady operations like Celsius due to their dubious claims of %10 annual returns. They're completely screwed if things go sideways and Celsius closes its doors.
    - dave_sullivan 4y ago
      > What would someone say who bought in a year ago for like $50k, not $5? They'd be down over 50% at the moment and there's simply no guarantee the market will recover to the $60k+ levels seen in October and November last year. Same thing I'd say to someone that bought Netflix stock around the same time. Gamblers beware.
CTDOCodebases 4y ago
The problem or benefit of crypto land though is there are no bailouts so the insolvencies will be contagious.
- cersa8 4y ago
  I see it as a benefit. No bailouts means a proper cleansing of bad parties. It empowers good projects, vs rewarding bad behavior.
  - saint_abroad 4y ago
    So the only hangover from bad parties is that the party ends? The biggest, baddest parties will always draw the popular crowd, and the same DJs will know better when to quietly slip out the back door with bags full. How does a well-regulated party compete against that without calling for more regulation?
    - CTDOCodebases 4y ago
      By operating in an open and honest manner and standing the test of time. In the end though they will probably still call for more regulation because once they have stood the test of time they will want to cement their position.
UncleMeat 4y ago
I was told that btc was a store of value. If it is strongly correlated with the broad market… what does it achieve?
- MrMan 4y ago
  high beta ! and no laws

suzzer99 4y ago

Except the real financial markets have a bottom where contrarian investors will step in and stop the free fall. What tangible value is there for a contrarian investor in crypto?

junofan 4y ago
Under proof-of-stake, if I control some fraction of the network, perhaps statistically I’ll occasionally be able to profit from doing things the network designers didn’t think of. So I’d want to buy during a sell-off to maximize my profits.
- CTDOCodebases 4y ago
  Is there something like MEV with PoS?
viraptor 4y ago
Same as before - hope the price is low enough and starts rising for the same reasons it was rising years ago.
- arka2147483647 4y ago
  Real markets, or the companies within, make something that people need. They have equipment, customers, etc. Maybe they are important enough that the state has to bail them out. Maybe they get restructured or merged. Anyways, there is some kind of floor to which they can fall, and which will catch them. What kind of "floor" is there for crypto? By definition it is not tied to anything non digital? Right?
  - Auracle 4y ago
    If you’re buying growth stocks that pay no dividends there isn’t much of a difference, and there’s no coincidence that those are also the stocks that have crashed as hard as crypto.
  - dave_sullivan 4y ago
    A company can go out of business and cease to function. What would cause the Bitcoin network to cease to function? There will always be a market price and it will fluctuate. But the end of Bitcoin? Would be like the end of BitTorrent, not gonna happen.
    - ogogmad 4y ago
      [EDIT: Made my argument clearer.] Not a finance expert, but I disagree with what you're saying: There's a feedback loop between: 1. The price of BTC, which depends on people's willingness to mine it (without which, BTC doesn't have security). 2. The willingness to mine BTC, which depends on the price. Why would you mine BTC if you're not sure whether you'll be able to sell it for more than you mined it for? A decline in 1 can trigger a decline in 2, which can trigger a decline in 1, which can trigger a decline in 2. BTC can have an end. Oh, and BTC is not like BitTorrent.
      - hackernudes 4y ago
        It totally is like BitTorrent. As long as some people are willing to run the software (mining + full nodes) it will work. The "feedback loop" you describe would reach equilibrium due to difficulty adjustment (blocks could be really slow for some time). Granted it would then become cheaper to 51% attack. Maybe one could consider Bitcoin "dead" at that point but it would still be working.
  - viraptor 4y ago
    The floor is belief in usability for transfers, for speculation, for avoiding local inflation, etc. You don't need real-world-value for that.
dave_sullivan 4y ago
"Historical upside potential". If it crashes 90% and then goes back to 30% of its peak a couple years later, pundits will declare bitcoin collapsed, but the people that bought around the bottom will make out like bandits. I dont see many failure modes for crypto itself. The exchanges and all the speculative bullshit built around it are a big problem, but the network itself will survive and there is a price where people will start betting on upside again. I say this as someone that bought my first bitcoin at $5 and sold my last one for $4500. I left a lot on the table.
- Tiktaalik 4y ago
  For a regular equity the thing that causes it to "go back to 30%" would be investors recognizing that the company is a good company with real cash flows and real products and the stock now undervalued, and so they come in to buy shares. There's no similar mechanism with crypto. There's no annual dividend that is now on sale. More likely to simply go to $0 as everyone heads to the exits.
- qayxc 4y ago
  > I say this as someone that bought my first bitcoin at $5 and sold my last one for $4500. I left a lot on the table. It's called gambling and you should consider yourself lucky. Very, very lucky. You basically whine about 90000% ROI when it could've been 900000%. Let that sink in for a moment. Consider this: many small-scale investors entered the market right at, or very near recent peaks. What would someone say who bought in a year ago for like $50k, not $5? They'd be down over 50% at the moment and there's simply no guarantee the market will recover to the $60k+ levels seen in October and November last year. Add on top of that people who invested by means of putting their life savings (again, not as uncommon as you might think) into shady operations like Celsius due to their dubious claims of %10 annual returns. They're completely screwed if things go sideways and Celsius closes its doors.
  - dave_sullivan 4y ago
    > What would someone say who bought in a year ago for like $50k, not $5? They'd be down over 50% at the moment and there's simply no guarantee the market will recover to the $60k+ levels seen in October and November last year. Same thing I'd say to someone that bought Netflix stock around the same time. Gamblers beware.

CTDOCodebases 4y ago

The problem or benefit of crypto land though is there are no bailouts so the insolvencies will be contagious.

cersa8 4y ago
I see it as a benefit. No bailouts means a proper cleansing of bad parties. It empowers good projects, vs rewarding bad behavior.
- saint_abroad 4y ago
  So the only hangover from bad parties is that the party ends? The biggest, baddest parties will always draw the popular crowd, and the same DJs will know better when to quietly slip out the back door with bags full. How does a well-regulated party compete against that without calling for more regulation?
  - CTDOCodebases 4y ago
    By operating in an open and honest manner and standing the test of time. In the end though they will probably still call for more regulation because once they have stood the test of time they will want to cement their position.

UncleMeat 4y ago

I was told that btc was a store of value. If it is strongly correlated with the broad market… what does it achieve?

MrMan 4y ago
high beta ! and no laws