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> -Crypto has a major correction; bitcoin finishes the year well under $100k. Eh, I was expecting the opposite, with people flocking it to bitcoin (or some oth

by Yoric 2y ago

> -Crypto has a major correction; bitcoin finishes the year well under $100k. Eh, I was expecting the opposite, with people flocking it to bitcoin (or some other crypto) as a backup strategy in case of political/ecological instability. What makes you think that there will be a major correction?

nobrains 2y ago
See this: https://news.ycombinator.com/item?id=42493130 https://news.ycombinator.com/item?id=42493130 Reposting: This is easy. Bitcoin reaches it's high between Jun and Oct. This is based on historical 4 year trends. Then falls. Falls around 70%. Again, this is based on historical trends. And yes, while past performance is not indicative of future performance, the bitcoin cycle has been following this, and when everyone expects this, it ends up happening by the virtue of everyone's expectation.
- Yoric 2y ago
  Fair enough, but this doesn't sound like a major correction, does it?
  - pjc50 2y ago
    70% is the end of the world for traditional stocks, not a "correction"!
    - rapsey 2y ago
      70% is not the end of the world for a single company stock. Plenty have done similar and come out on top (Apple, Meta, Carvana, Netflix, etc.). BTC market cap is lower than nVidia, Apple or MS. But that is not important, what it should really be compared to is gold and compared to that it is an upstart at current price levels. BTC has no utility other than being digital gold. Other crypto currencies have no utility either.
lizzas 2y ago
You need a constant supply of new bag holders, but miners need to be paid.
rapsey 2y ago
Crypto moves with financial liquidity. If the stock market falls, so does crypto. Gold is for investment diversity not crypto.
- Yoric 2y ago
  Why not? Because crypto is somehow easier to buy/liquidate than gold?
  - rapsey 2y ago
    Gold will always retain value. Stocks and crypto can fall to 0. It is the only asset that has retained high value for thousands of years. When the future in uncertain (like start of a war/pandemic), gold is a safe heaven. Stocks and crypto get obliterated in panics.
    - onra87 2y ago
      Isn't the future uncertain since the creation of Bitcoin? I'd like to be obliterated like I've been with BTC going through multiple global crisis :)
      - rapsey 2y ago
        BTC is not a threat to gold. No central bank is replacing gold in it's vault with BTC. > I'd like to be obliterated like I've been with BTC going through multiple global crisis :) Crashes don't happen in a vacuum. The reason people sell at the bottom is because they believe in the crisis not the recovery.
    - throw0101d 2y ago
      > Gold will always retain value. After >40 years, gold has only just gotten back to its 1980s inflation-adjusted price: * https://www.macrotrends.net/1333/historical-gold-prices-100-year-chart https://www.macrotrends.net/1333/historical-gold-prices-100-... Papers have been written on how it does not hedge inflation: * https://www.nber.org/papers/w18706 https://www.nber.org/papers/w18706 * https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3667789 https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3667789 See also Roy Jastram's The Golden Constant: The English and American Experience 1560 to 1976: > Andre Sharon, head of the international research department at Drexel Burnham, Inc., notes, “the value of gold essentially derives from its capacity to preserve real capital and purchasing power.”† I select this particular quotation because of the prestige of the organization and the position of the spokesman, but statements in this vein can be found in great numbers. They can be traced back for generations and in many countries. How can this proposition so contrary to statistical fact become so widely believed and quoted? Possibly because gold has preserved capital in cataclysmic cases it is easy to infer that it can be trusted to do the same in less severe circumstances. To extrapolate from gold’s protection in singular catastrophes to its use as a strategy against cyclical infation is an example of faulty inductive reasoning. * http://csinvesting.org/wp-content/uploads/2016/02/RoyJastram-TheGoldenConstant.pdf http://csinvesting.org/wp-content/uploads/2016/02/RoyJastram... So if the barbarians are (close to literally) coming across the fields, gold can be useful to hide or take with you as you head for the hills, but for most economic situations it is not useful. > Stocks and crypto can fall to 0. In which case, you better be a farmer with lots of ammo so you can feed yourself and protect what's yours. Of course the Mad Max chaos is a popular trope, but historical events show that people tend to be altruistic and pull together during disasters: * https://en.wikipedia.org/wiki/A_Paradise_Built_in_Hell https://en.wikipedia.org/wiki/A_Paradise_Built_in_Hell
onra87 2y ago
I even think that with the polarization of the world and the new global crisis coming, people might realise the ever growing need of decentralization, and we might see the real birth of web3 technologies. (Not speaking about meme coins =))

by Yoric 2y ago

nobrains 2y ago

See this: https://news.ycombinator.com/item?id=42493130 https://news.ycombinator.com/item?id=42493130 Reposting: This is easy. Bitcoin reaches it's high between Jun and Oct. This is based on historical 4 year trends. Then falls. Falls around 70%. Again, this is based on historical trends. And yes, while past performance is not indicative of future performance, the bitcoin cycle has been following this, and when everyone expects this, it ends up happening by the virtue of everyone's expectation.

Yoric 2y ago
Fair enough, but this doesn't sound like a major correction, does it?
- pjc50 2y ago
  70% is the end of the world for traditional stocks, not a "correction"!
  - rapsey 2y ago
    70% is not the end of the world for a single company stock. Plenty have done similar and come out on top (Apple, Meta, Carvana, Netflix, etc.). BTC market cap is lower than nVidia, Apple or MS. But that is not important, what it should really be compared to is gold and compared to that it is an upstart at current price levels. BTC has no utility other than being digital gold. Other crypto currencies have no utility either.

lizzas 2y ago

You need a constant supply of new bag holders, but miners need to be paid.

rapsey 2y ago

Crypto moves with financial liquidity. If the stock market falls, so does crypto. Gold is for investment diversity not crypto.

Yoric 2y ago
Why not? Because crypto is somehow easier to buy/liquidate than gold?
- rapsey 2y ago
  Gold will always retain value. Stocks and crypto can fall to 0. It is the only asset that has retained high value for thousands of years. When the future in uncertain (like start of a war/pandemic), gold is a safe heaven. Stocks and crypto get obliterated in panics.
  - onra87 2y ago
    Isn't the future uncertain since the creation of Bitcoin? I'd like to be obliterated like I've been with BTC going through multiple global crisis :)
    - rapsey 2y ago
      BTC is not a threat to gold. No central bank is replacing gold in it's vault with BTC. > I'd like to be obliterated like I've been with BTC going through multiple global crisis :) Crashes don't happen in a vacuum. The reason people sell at the bottom is because they believe in the crisis not the recovery.
  - throw0101d 2y ago
    > Gold will always retain value. After >40 years, gold has only just gotten back to its 1980s inflation-adjusted price: * https://www.macrotrends.net/1333/historical-gold-prices-100-year-chart https://www.macrotrends.net/1333/historical-gold-prices-100-... Papers have been written on how it does not hedge inflation: * https://www.nber.org/papers/w18706 https://www.nber.org/papers/w18706 * https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3667789 https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3667789 See also Roy Jastram's The Golden Constant: The English and American Experience 1560 to 1976: > Andre Sharon, head of the international research department at Drexel Burnham, Inc., notes, “the value of gold essentially derives from its capacity to preserve real capital and purchasing power.”† I select this particular quotation because of the prestige of the organization and the position of the spokesman, but statements in this vein can be found in great numbers. They can be traced back for generations and in many countries. How can this proposition so contrary to statistical fact become so widely believed and quoted? Possibly because gold has preserved capital in cataclysmic cases it is easy to infer that it can be trusted to do the same in less severe circumstances. To extrapolate from gold’s protection in singular catastrophes to its use as a strategy against cyclical infation is an example of faulty inductive reasoning. * http://csinvesting.org/wp-content/uploads/2016/02/RoyJastram-TheGoldenConstant.pdf http://csinvesting.org/wp-content/uploads/2016/02/RoyJastram... So if the barbarians are (close to literally) coming across the fields, gold can be useful to hide or take with you as you head for the hills, but for most economic situations it is not useful. > Stocks and crypto can fall to 0. In which case, you better be a farmer with lots of ammo so you can feed yourself and protect what's yours. Of course the Mad Max chaos is a popular trope, but historical events show that people tend to be altruistic and pull together during disasters: * https://en.wikipedia.org/wiki/A_Paradise_Built_in_Hell https://en.wikipedia.org/wiki/A_Paradise_Built_in_Hell

onra87 2y ago

I even think that with the polarization of the world and the new global crisis coming, people might realise the ever growing need of decentralization, and we might see the real birth of web3 technologies. (Not speaking about meme coins =))