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It means that it behaves like stock market, nothing more, nothing less.
by krzyk 4y ago
It means that it behaves like stock market, nothing more, nothing less.
- dragontamer 4y agoThe Stock Market, S&P 500, is down 20% year-to-date (6-months). BTC is down 33% *in a month*. Its not even remotely comparable. YTD, its below 60%. -------- I got some buddies in Celsius right now. Has there ever been a circumstance in "the stock market" where you've been unable to access your funds for a week, with _NO_ contact from the CEO or an explanation of what the hell is going on? EDIT: Whatever happened to "inflation hedge" and "store of value" promises from the community by the way? No one in the stock market promised those things. But as inflation ticked up to 9%, BTC completely collapsed.
- evv555 4y ago>The Stock Market, S&P 500, is down 20% year-to-date (6-months). A more apples to apples comparison would be comparing crypto market to tech stocks. In which case yes there are valid comparisons.
- dragontamer 4y agoIts not very surprising that Cryptocoins would be correlated to GBTC (literally a pile of bitcoin trading as a stock), Coinbase (literally the exchange that does better when more volume happens), and TSLA (who bought a pile of BTC sometime last year). Tech companies were playing with blockchain this past year, and are now getting burned. You've got cause-and-effect backwards here.
- evv555 4y agoPeople were making equivalent accusations of vaporware when the dot com bubble burst but 20 years later and many winners have emerged from that era in addition to new ones.
- dragontamer 4y agoI lost all my paper money at that time trading Ask Jeeves. The Dot-com bubble was my "test run", when I was learning stocks, paper-trading, and getting into finance. I very much was alive during that time. If you didn't live during that time, then you wouldn't know anything of that era. Yahoo was the #1 search engine. No one cared much about Google. Amazon was a book store. Ebay was far bigger than Amazon for general purpose goods. Webvan was your hope at making the internet mainstream. Etc. etc. The biggest "internet" company was either AOL or Netscape IMO. Neither of them really the winner over the next 20 years. --------- If you lived in that era, you would know just how unlikely it was that you'd have picked Amazon or Google out of the ashes. Chances are, you would have been caught up with Enron and Worldcom's schemes, just like everyone else was.
- kareemsabri 4y agoThey're also correlated with other high-growth tech stocks like SNOW, TWLO, NET, DDOG, and other companies that don't have exposure to crypto. It's not necessary to engage in denial in order to trash crypto.
- heartbreak 4y agoCelsius hiring Akin Gump wasn’t explanation enough?
- dragontamer 4y agoYou can rest assured that I appropriately warned him. I personally took the Luna/UST situation to talk to him about fake APYs, risks, and why anyone offering more than the risk-free rate (~3% US Bonds) is making some kind of risk (just as the laws of physics prove that perpetual motion doesn't exist, the laws of finance prove that risk-free rates _above_ the risk free rate are non-existent). In any case, Celsius has managed to convince a lot of people that their 10% or 20% APY stablecoins and "staking platform" was risk free. Sometimes, these people need to have their own money burned, before they believe in the potential of risk. ---------- I don't know anything about internet celebrity figures. But I do know a thing or two about risk-free rates and reasonable return rates.
- brokenodometer 4y agoAkin Gump is a large law firm.
- dragontamer 4y agoOh. The timeline is messed up then. Celsius locked everyone's accounts on Monday, _BEFORE_ hiring those bankruptcy law firms. By the time you heard the news of the bankruptcy lawyers, it was already too late. Your funds were locked.
- datalopers 4y agoIt’s extremely comparable. Take a time-series of VTI (all US stock index) against BTC or ETH. It’s very highly correlated since November. Crypto prices have what is called “high beta”. Very similar daily trends just a few orders of magnitude larger.
- bandrami 4y agoThe beta is infinite since crypto has no book value
- deleted 4y ago[deleted]
- krzyk 4y agoI didn't mean literally that it will move by the same amount of %. Stock markets down -> crypto down. Stock market up -> crypto up. The swings in crypto are just bigger, just like swings are bigger in stock market than in bonds.
- CPLX 4y agoThe stock market is a place to buy shares of operating companies. You can go to the stock market and buy shares and then actually get the thing. If you buy enough shares of Ford, for example, you can walk into the factory and drive off with any car you see, because you would literally own that car. If you buy enough shares of McDonalds you could rename it to McDowell’s if you wanted. That’s pretty different to what would happen if you bought every Bitcoin in existence.
- metalliqaz 4y agoMore importantly for real investors, the stocks on the stock market are shares of a company that generates profit (or at least revenue and growth, with expectation of future profit). The value comes from that. The only "value" in Bitcoin is that it can be used to transfer money between two parties, but that function can be easily replicated, as it often is with shitcoins.
- PragmaticPulp 4y agoThis is one of the lies that people use to legitimize crypto while de-legitimizing stocks. But it’s not true. With crypto you’re buying an entry in a ledger and the hope that other people will want to buy that entry from you later. With stocks you’re buying actual shares of an actual company with actual assets, and you now have an ownership claim on those. Crypto is like taking the stock market and removing the only thing that actually gives stocks value, then selling the stock anyway.
- jacquesm 4y agoYou mean like the derivatives market?
- potatoyogurt 4y agoDerivatives have underlyings. An option is the right to purchase or sell a stock (or something else); a future is the right/obligation to accept delivery of something at a future time. While the payout curve is more complicated than straightforward ownership, they derive their value from their relation to some underlying assets.
- TedDoesntTalk 4y agoI thought the underlying of a crypto coin ledger entry is the heat generated from the electricity consumed to calculate the hash of a meaningless number?
- tsimionescu 4y agoThat's not an asset that anyone wants (or can have in any meaningful sense).
- jacquesm 4y agoI see them as side bets on the stock market.
- potatototoo99 4y ago
- ljw1001 4y agoIt’s one of the most useless ways to waste energy on a large scale ever invented.
- lamontcg 4y agoThe stock market is buttressed by businesses which have real cash flows. These days it is "quaint" to consider stock dividends, but in ye olde days they were supposed to be owning part of a capital machine to turn commodities inputs into widgets, selling those widgets at a profit and giving back dividends to the stock owners. If the stock was producing dividends at $1/share then the price would have a floor at around $10/share assuming those dividends held steady. There's no floor under crypto because the incoming cash flow from people trying to get rich entirely funds the outgoing cash flow for people who are rich or who are running for the exits. Once the pool of actual money in the system goes to zero then you have more people running for the exits than are throwing cash into the system and the price discovery rapidly goes to zero. There is some theoretical floor because if people are throwing thousands per day into the system while people are trying to extract millions per day, then if you cut the price down by 1,000 the flows are theoretically balanced. This is the proverbial "well if bitcoin goes to $50 then I'll buy a BTC every week so there must be a price floor". But at that point the exchanges have all gone bankrupt and your $50/week won't keep the lights on, so the owners of the exchanges have fled to sandy beaches with the remaining millions, or gotten arrested, or been assassinated. This is also why you shouldn't try shorting the market. The exchange where you place those bets on may disappear. Of course you could short Microstrategy on the actual stock market, but I suspect those options are going to be extraordinarily expensive at this point because everyone is thinking that (and BTC is not likely to go to zero tomorrow, its likely to keep shuffling on like a zombie for months[*]). [*] I suppose I should more accurately assert that nobody knows when it'll go to zero and the problem is timing it accurately because shorting always has a time-cost, and I certainly don't know how to do that. But it does seem to be running pretty hard into a brick wall at the moment. My statement is less of a prediction and more of a rationale of why I'm not running out to short Microstrategy right now.
- bandrami 4y agoNo, stocks have a book value. In the worst case shareholders can liquidate the company, sell off the tables and chairs, and split the money. There's no book value for crypto.