6 ms·

I'd say the biggest reasons recently are: 1) The approval of various ETFs (so demand is heightened). It's much easier to invest in it than in was in the past.

I'd say the biggest reasons recently are: 1) The approval of various ETFs (so demand is heightened). It's much easier to invest in it than in was in the past. 2) Traders expecting the supply to tighten (see bitcoin halving which is due very soon) and the demand there also heightening due to supply constraint expectation. 3) A lot of the uncertainty in terms of exchanges is gone. Coinbase looks like it can stand up to scrutiny and this furthermore boosts demand. When you have huge demand vs. constrained supply, bubbles form. Of course, are all of the factors I mentioned enough to keep the bubble going for a very long time? Well, that I can't answer. No one knows how long this will last. I can tell you though that this to me looks like it is the next Tulip bubble. I see almost no reason to use bitcoin as a store of wealth. As a decentralized currency it has tremendous value, but treating it as gold I have reservations on since a lot of corrupt gangs and regimes are currently using it as a method of payment and laundering (including North Korea), as well as it being a huge drain on the world's energy supply due to mining energy needs...I don't really see what value it brings to the world at all, so treating it as 'virtual gold' (the way the world has been treating it) makes 0 sense to me, but in general, the world in the short-term sometimes makes very little sense. Over the long term, things tend to clear up. Hopefully that helps.

haebom 3y ago
In fact, it seems that places like North Korea, where there are economic restrictions, are using crypto markets as a way of funding. As you said, they say that it will replace digital gold, or the dollar, but that sounds a bit tasteless to me. On the other hand, when I keep seeing news about El Salvador getting out of a national financial crisis with bitcoin, or Sam Altman issuing a worldcoin, or what Optimism did with artificial intelligence, I wonder if it's really worthless. Some say that various tokens will be in the spotlight at Ndivia's upcoming event, but what I'm most interested in is whether this crypto market really helps with AI distributed processing. In fact, when creating an LLM, the biggest concern is how to handle quantised data.
- MakeThemMoney 3y ago
  > I keep seeing news about El Salvador getting out of a national financial crisis with bitcoin First time I see this. Could you share some links?
  - haebom 3y ago
    Like this : https://www.bitcoinsensus.com/el-salvador-bitcoin-profit/ https://www.bitcoinsensus.com/el-salvador-bitcoin-profit/
    - MakeThemMoney 3y ago
      > El Salvador’s Bitcoin Stack Now in Profit by Over $50M That's less than 8 dollars per capita. Hardly enough to solve a financial crisis.
      - el-salvador 3y ago
        El Salvador is not currently on a widespread financial crisis... I mean by Latin American Standards of course. But some things are of concern. First the country's access to international financing is still limited. Right now International bondholders are being paid, but two major local debts have been renegotiated. Last year the national banking association "voluntarily renegotiated" its short term with the government from 1 to 7 years. For context, the banks liquidity requirement has been lowered since 2020 and banks can buy more government issued bonds. Also last year the ruling party changed the Retirement Fund law. And there have been changes to the individual and collective retirement savings accounts. One of the changes on the collective accounts was that the old financial instruments that were interest paying were changed for new ones that include a four year 0% interest rate paid back to the account owners. Information regarding this has been limited to a couple of paragraphs by foreign credit risk rating agencies and a tweet by the Retirement Savings management companies. There is no publicly available prospectus for that new government debt, and the Retirement Fund statistics and reports haven't been updated for months. Like if you go to check for a recent report on the regulatory government agency you get literally 404 errors.
    - 3y ago
latchkey 3y ago
ETH is outperforming BTC. ETH Merged from PoW to PoS in Sept 2022, and decimated the entire GPU mining industry, cutting obscene power usage down to just running some servers. Sure, there is a small amount of shitcoin PoW mining still, but overall it was a massive change across the board. Combine that with the transactional burn introduced into EIP-1559, supply is going down because the network isn't having to pay as much for security. Then, we have EigenLayer, which is taking staked ETH and restaking it to provide an additional layer of security to layer 2 networks. Now, you're just locking up even more ETH. 3m ($12b) are locked into that one alone. Vicious cycle. ETH is about to have a network upgrade, the first since the Merge, that helps lay the groundwork for scaling. These factors are all contributing to the growth as new money rolls back into DeFi. https://ultrasound.money/ https://ultrasound.money/ https://decrypt.co/119687/4-6-billion-ethereum-flames-since-eip-1559 https://decrypt.co/119687/4-6-billion-ethereum-flames-since-...
RestlessMind 3y ago
> but treating it as gold I have reservations on since a lot of corrupt gangs and regimes are currently using it as a method of payment and laundering (including North Korea), as well as it being a huge drain on the world's energy supply due to mining energy needs. You do realize that being a great store of value is orthogonal to criminals using it or its energy consumption, right? Criminals also use USD bills, far more than they use bitcoin. Are you going to claim that USD is not a great store of value for poor countries then?
lowkey 3y ago
Adding some detail to your points 1 and 2, the ETFs are currently buying up over 12,000 coins per day and growing. The miners are producing 900 coins per day which will fall to 450 coins per day in 40 days due to the halving. Demand is outpacing supply by 12 to 1 at the current pace and all signs point to further tightening as demand continues to grow and supply remains programmatically fixed and soon to fall by half. The world has never before experienced an asset with perfectly inelastic supply and exponentially growing demand. It is the perfect storm.
- ur-whale 3y ago
  > The world has never before experienced an asset with perfectly inelastic supply and exponentially growing demand. Fully agree, and a point that most folks who shout "no intrinsic value" on the rooftops, completely fail to understand. Furthermore, no economic theories exists to this day (that I know of) that can get a handle on this kind of asset class and predict its future behavior and impact on society.

haebom 3y ago

In fact, it seems that places like North Korea, where there are economic restrictions, are using crypto markets as a way of funding. As you said, they say that it will replace digital gold, or the dollar, but that sounds a bit tasteless to me. On the other hand, when I keep seeing news about El Salvador getting out of a national financial crisis with bitcoin, or Sam Altman issuing a worldcoin, or what Optimism did with artificial intelligence, I wonder if it's really worthless. Some say that various tokens will be in the spotlight at Ndivia's upcoming event, but what I'm most interested in is whether this crypto market really helps with AI distributed processing. In fact, when creating an LLM, the biggest concern is how to handle quantised data.

MakeThemMoney 3y ago
> I keep seeing news about El Salvador getting out of a national financial crisis with bitcoin First time I see this. Could you share some links?
- haebom 3y ago
  Like this : https://www.bitcoinsensus.com/el-salvador-bitcoin-profit/ https://www.bitcoinsensus.com/el-salvador-bitcoin-profit/
  - MakeThemMoney 3y ago
    > El Salvador’s Bitcoin Stack Now in Profit by Over $50M That's less than 8 dollars per capita. Hardly enough to solve a financial crisis.
    - el-salvador 3y ago
      El Salvador is not currently on a widespread financial crisis... I mean by Latin American Standards of course. But some things are of concern. First the country's access to international financing is still limited. Right now International bondholders are being paid, but two major local debts have been renegotiated. Last year the national banking association "voluntarily renegotiated" its short term with the government from 1 to 7 years. For context, the banks liquidity requirement has been lowered since 2020 and banks can buy more government issued bonds. Also last year the ruling party changed the Retirement Fund law. And there have been changes to the individual and collective retirement savings accounts. One of the changes on the collective accounts was that the old financial instruments that were interest paying were changed for new ones that include a four year 0% interest rate paid back to the account owners. Information regarding this has been limited to a couple of paragraphs by foreign credit risk rating agencies and a tweet by the Retirement Savings management companies. There is no publicly available prospectus for that new government debt, and the Retirement Fund statistics and reports haven't been updated for months. Like if you go to check for a recent report on the regulatory government agency you get literally 404 errors.
  - 3y ago

latchkey 3y ago

ETH is outperforming BTC. ETH Merged from PoW to PoS in Sept 2022, and decimated the entire GPU mining industry, cutting obscene power usage down to just running some servers. Sure, there is a small amount of shitcoin PoW mining still, but overall it was a massive change across the board. Combine that with the transactional burn introduced into EIP-1559, supply is going down because the network isn't having to pay as much for security. Then, we have EigenLayer, which is taking staked ETH and restaking it to provide an additional layer of security to layer 2 networks. Now, you're just locking up even more ETH. 3m ($12b) are locked into that one alone. Vicious cycle. ETH is about to have a network upgrade, the first since the Merge, that helps lay the groundwork for scaling. These factors are all contributing to the growth as new money rolls back into DeFi. https://ultrasound.money/ https://ultrasound.money/ https://decrypt.co/119687/4-6-billion-ethereum-flames-since-eip-1559 https://decrypt.co/119687/4-6-billion-ethereum-flames-since-...

RestlessMind 3y ago

> but treating it as gold I have reservations on since a lot of corrupt gangs and regimes are currently using it as a method of payment and laundering (including North Korea), as well as it being a huge drain on the world's energy supply due to mining energy needs. You do realize that being a great store of value is orthogonal to criminals using it or its energy consumption, right? Criminals also use USD bills, far more than they use bitcoin. Are you going to claim that USD is not a great store of value for poor countries then?

lowkey 3y ago

Adding some detail to your points 1 and 2, the ETFs are currently buying up over 12,000 coins per day and growing. The miners are producing 900 coins per day which will fall to 450 coins per day in 40 days due to the halving. Demand is outpacing supply by 12 to 1 at the current pace and all signs point to further tightening as demand continues to grow and supply remains programmatically fixed and soon to fall by half. The world has never before experienced an asset with perfectly inelastic supply and exponentially growing demand. It is the perfect storm.

ur-whale 3y ago
> The world has never before experienced an asset with perfectly inelastic supply and exponentially growing demand. Fully agree, and a point that most folks who shout "no intrinsic value" on the rooftops, completely fail to understand. Furthermore, no economic theories exists to this day (that I know of) that can get a handle on this kind of asset class and predict its future behavior and impact on society.