RetireJapan

mighty58 wrote: ↑Wed Jun 02, 2021 1:34 pm

RMA wrote: ↑Tue Jun 01, 2021 2:08 am 3. Try to understand bitcoin 4 years cycle. It's actually very predictable.

No no no no Sorry, but looking at past performance is NEVER predictive.

100% agree with you on this. However there is something very unique with bitcoin's 4 year cycle which has never been seen before. I am not suggesting to blindly follow this cycle and I am just advicing to try to understand it.

In my understanding, there are 2 types of assets - those which generate something (productive assets) like stocks, bonds, agricultural land, real estate etc. and those which do not generate anything (non-productive assets) like gold, bitcoin.

Non-productive assets simply derive their value from demand and supply. Now in case of gold if demand increases, price increases, miners become profitable, they dig up more gold, sell at high prices, supply resumes and equilibrium is maintained.

However in case of bitcoin, there will always be a limited supply (capped at 21 million) and it is getting halved every 4 years. Since it is a new asset, demand is increasing but let's assume it is constant. So what happens after every 4 years, supply gets cut in half, miners are making half of what they were making before, they refuse to sell, price go up, now miners start selling at high prices as they have to cover the costs, early investors start taking profits and price settles somewhere but it never goes below the lows of previous cycle.

Supply is decreasing every 4 years and demand is ever increasing so there is a cycle which is taking bitcoin to the new highs every 4 years. This can change if demand decreases more than the decrease in the supply which may or may not happen.

Supply of bitcoin is guaranteed to decrease but we don't know whether the demand of bitcoin will decrease or not. Even if it decreases then it should decrease more than the decrease in supply for the prices to crash. So going by risk/reward concept, the odds are highly in favor of investing in bitcoin (at least as for now).

This is just my understanding and I am not encouraging anyone to invest in bitcoin based on this.

Now the altcoin market cycle is a totally different concept but it is very closely related to bitcoin as of now.

RMA wrote: ↑Thu Jun 03, 2021 1:50 am... In my understanding, there are 2 types of assets - those which generate something (productive assets) like stocks, bonds, agricultural land, real estate etc. and those which do not generate anything (non-productive assets) like gold, bitcoin, and _________.
...

> bank accounts here

captainspoke wrote: ↑Thu Jun 03, 2021 2:06 am

RMA wrote: ↑Thu Jun 03, 2021 1:50 am... In my understanding, there are 2 types of assets - those which generate something (productive assets) like stocks, bonds, agricultural land, real estate etc. and those which do not generate anything (non-productive assets) like gold, bitcoin, and _________.
...

> bank accounts here

True, at least gold and bitcoin are scarce and have limited supply. Can't say the same for cash sitting in our bank accounts. As Ray Dalio says, "CASH IS TRASH"
Edit: Of course I meant "excess cash" and not emergency funds before you guys start attacking me

OkLah! wrote: ↑Thu Jun 03, 2021 2:57 am I often hear that crypto have no practical use and are just speculative investments.

So when EIB issues digital bonds based on ETH or Ethiopian government is using ADA technology to track students performance, what does it mean? These are just gimmicks? Of the beginning of something new?

Don't confuse between bitcoin and crypto. Bitcoin has currently no practical use but it has evolved as a store of value because it is scarce. Compare bitcoin with gold. See this https://youtu.be/JJfPXQKSXpU

Now people will argue that gold has intrinsic value but only 10% of gold is used for industrial purpose and the majority goes into jewelry and bullions as a store of value. This is my general understanding about gold and I may be wrong.

Bitcoin is currently a store of value which in itself is a very big deal however in future it may also have a practical use which we don't know yet.

Now Ethereum and many other cryptos already have many practical uses and it will only grow from here. Calling they have no practical use is like saying in 1970's that internet has no practical use.

Edit: Having said that current prices of these altcoins are all speculative and their real price discovery is yet to be achieved.

RMA wrote: ↑Thu Jun 03, 2021 3:57 am

OkLah! wrote: ↑Thu Jun 03, 2021 2:57 am I often hear that crypto have no practical use and are just speculative investments.

So when EIB issues digital bonds based on ETH or Ethiopian government is using ADA technology to track students performance, what does it mean? These are just gimmicks? Of the beginning of something new?

Don't confuse between bitcoin and crypto. Bitcoin has currently no practical use but it has evolved as a store of value because it is scarce. Compare bitcoin with gold. See this https://youtu.be/JJfPXQKSXpU

Now people will argue that gold has intrinsic value but only 10% of gold is used for industrial purpose and the majority goes into jewelry and bullions as a store of value. This is my general understanding about gold and I may be wrong.

Bitcoin is currently a store of value which in itself is a very big deal however in future it may also have a practical use which we don't know yet.

Now Ethereum and many other cryptos already have many practical uses and it will only grow from here. Calling they have no practical use is like saying in 1970's that internet has no practical use.

The gold mining analogy has some merit, but there are real differences.

Gold as jewelry (18k-24k) may be a store of value in developing countries, but in other countries is it just ornamental. No one wears bitcoin or gets a smile (or more) from their SO when they are gifted one.

Bitcoin may becoming more "scarce" as the speed of production decreases, but plenty of other coins can provide the same role as a store of value. If everyone decided Bitcoin sucked and another coin seemed better, or governments banned it, there would be plenty available for the believers to scoop up, but still no guarantee of rising prices.

TJKansai wrote: ↑Thu Jun 03, 2021 4:13 am
Bitcoin may becoming more "scarce" as the speed of production decreases, but plenty of other coins can provide the same role as a store of value. If everyone decided Bitcoin sucked and another coin seemed better, or governments banned it, there would be plenty available for the believers to scoop up, but still no guarantee of rising prices.

Good points and I would try to comment on them from my point of view.

1. Bitcoin getting replaced by some other coin as a store of value - We should not forget the decentralization property of bitcoin. Most of the other projects have some names or companies behind it. I for one will not be comfortable holding my store of value with someone else controlling it. Some other decentralized coin may enter the sphere but why would the devs put so much time and efforts in creating one when we already have a working, stable, non-corruptible coin in the form of bitcoin? Even if they come up with some alternative for whatever reasons, why would people put trust in the new coin with little past history over bitcoin which already has a history of more than 10 years?

2. Governments banning bitcoin - Governments cannot ban bitcoin. They can only make it harder for people to acquire it or trade it. As long as there is internet and electricity, bitcoin will exist. India, China and Turkey among others tried to ban bitcoin but I know someone in all these 3 countries who always owned bitcoin.

I am not saying that the above are impossible, I am just stating that the odds are highly in favor of bitcoin. Also I am not trying to convince anyone to own bitcoin, I am just sharing my views on this topic.

RMA wrote: ↑Thu Jun 03, 2021 1:50 am However in case of bitcoin, there will always be a limited supply (capped at 21 million) and it is getting halved every 4 years. Since it is a new asset, demand is increasing but let's assume it is constant. So what happens after every 4 years, supply gets cut in half, miners are making half of what they were making before, they refuse to sell, price go up, now miners start selling at high prices as they have to cover the costs, early investors start taking profits and price settles somewhere but it never goes below the lows of previous cycle.

Let’s clarify first that the “halvening” does NOT mean that the supply of Bitcoin is suddenly cut in half, as you suggest above. It merely means the pace of mining NEW Bitcoins is cut in half. So all existing coins remain in circulation and total theoretical supply remains unchanged at 21m. So the halvening just represents a tightening of new supply coming on to the market.

But you’re right about the laws of supply and demand. If demand remains constant, or decreases at a pace slower than the decrease in new supply, then the price should go up. The problem though, when it comes to Bitcoin, is the nature of that demand … specifically the fact that much of it is driven by speculative hype. So to assume that demand will continue increasing just because “it is a new asset” is where I disagree with you. The future demand level for Bitcoin is fundamentally unknowable, and the speculative nature of it makes it even more unpredictable than other asset classes. The cycle you describe above is one theory of what might happen in the future, but for me, it's making way too many assumptions about the future behaviour of other people for me to be comfortable with. Also, a separate point, but because the halvening is not exactly a secret, I wonder how that gets (pre)priced in … I don’t know. I doubt it's as easy as buying before the halvening and then selling afterwards, but if it, then you seem to have identified a guaranteed way to make money. I remain respectfully skeptical.

OkLah! wrote: ↑Thu Jun 03, 2021 2:57 am I often hear that crypto have no practical use and are just speculative investments.
So when EIB issues digital bonds based on ETH or Ethiopian government is using ADA technology to track students performance, what does it mean? These are just gimmicks? Of the beginning of something new?

The potential use-cases for cryptocurrencies and blockchain tech must be decoupled from the asset price. One is not, and should not, be linked with the other. I’m quite optimistic about future use-case potential surrounding increased efficiency, security, and cutting out the fee-taking middle men, but the asset price speculation that goes on with the coins/tokens is, frankly, ridiculous.

mighty58 wrote: ↑Thu Jun 03, 2021 6:00 am

RMA wrote: ↑Thu Jun 03, 2021 1:50 am However in case of bitcoin, there will always be a limited supply (capped at 21 million) and it is getting halved every 4 years. Since it is a new asset, demand is increasing but let's assume it is constant. So what happens after every 4 years, supply gets cut in half, miners are making half of what they were making before, they refuse to sell, price go up, now miners start selling at high prices as they have to cover the costs, early investors start taking profits and price settles somewhere but it never goes below the lows of previous cycle.

Let’s clarify first that the “halvening” does NOT mean that the supply of Bitcoin is suddenly cut in half, as you suggest above. It merely means the pace of mining NEW Bitcoins is cut in half. So all existing coins remain in circulation and total theoretical supply remains unchanged at 21m. So the halvening just represents a tightening of new supply coming on to the market.

But you’re right about the laws of supply and demand. If demand remains constant, or decreases at a pace slower than the decrease in new supply, then the price should go up. The problem though, when it comes to Bitcoin, is the nature of that demand … specifically the fact that much of it is driven by speculative hype. So to assume that demand will continue increasing just because “it is a new asset” is where I disagree with you. The future demand level for Bitcoin is fundamentally unknowable, and the speculative nature of it makes it even more unpredictable than other asset classes. The cycle you describe above is one theory of what might happen in the future, but for me, it's making way too many assumptions about the future behaviour of other people for me to be comfortable with. Also, a separate point, but because the halvening is not exactly a secret, I wonder how that gets (pre)priced in … I don’t know. I doubt it's as easy as buying before the halvening and then selling afterwards, but if it, then you seem to have identified a guaranteed way to make money. I remain respectfully skeptical.

OkLah! wrote: ↑Thu Jun 03, 2021 2:57 am I often hear that crypto have no practical use and are just speculative investments.
So when EIB issues digital bonds based on ETH or Ethiopian government is using ADA technology to track students performance, what does it mean? These are just gimmicks? Of the beginning of something new?

The potential use-cases for cryptocurrencies and blockchain tech must be decoupled from the asset price. One is not, and should not, be linked with the other. I’m quite optimistic about future use-case potential surrounding increased efficiency, security, and cutting out the fee-taking middle men, but the asset price speculation that goes on with the coins/tokens is, frankly, ridiculous.

Oh yaa, thank you for clarifying. In my mind I meant future supply only but I was not clear when writing the post.

And I believe the demand to be constant or growing because with every bull cycle, more and more people start asking about cryto and enter the market; some of them stay and some of them leave incuring huge losses but very few old timers who held for long time leave the scene. On reddit, twitter and other forums, bitcoin and cryptocurrencies topics are thriving and growing exponentially. Also the current quantitative easing all over the world brought a new interest in bitcoin and gave it a huge boost in demand.

At the end of the day I agree these are all assumptions and nothing is guaranteed. I wish if life was that easy!

Hello. I'm new to cryptocurrencies, but thought I'd dip my toe in.

I signed up for CoinCheck (recommended by a student) and just yesterday went to Family Mart to buy my first BitCoin. I paid 10,000 yen (plus 770yen fee at the conbini), and then used the CoinCheck app to buy 10,000yen of BitCoin which weirdly only gave me 9,700yen (due to transaction fees?).

Anyway, I had also signed up for a Binance account, and read that you can lock your crypto savings in there to earn interest.
https://www.binance.com/en/lending#lend ... ndDeposits

So I'm thinking I'll wait for CoinCheck's 7-day no-transfer period to end, and then move my BitCoin to Binance and stick it in Locked Savings for (currently) 7% annual interest.

If it goes smoothly, I'll put more money in it, and maybe diversify with a bit of Ethereum.

On a side note, I have a gaming PC with an RTX2700 graphics card, so I joined NiceHash (crypto mining) and earn about 25 yen of BitCoin each evening while I watch AppleTV+. I hope it doesn't blow up my electricity bill!

Taylorsew wrote: ↑Mon May 31, 2021 9:57 am A lot of people here probably have been in the crypto game for a while now and have a lot more than $1k invested, however, a lot of people also don't. If you had to start your portfolio from scratch with $1k which coins would you invest in now?. Bitcoin is down nowadays so I would advise you to do some searches in the crypto market and also do some chat with the professional trader to know more about cryptocurrency as a newbie with 3 months of experience. I also have been trading through crypto bot and the results are pretty much good. Here you can checkhttps://tradingbot-solutions.com/

I started with less than 1% of my portfolio, just before the recent crash, lol. I do NOT plan to rebalance or buy more.

40% Bitcoin - 40% Ether - 20% XRP.

Bitcoin for the market cap, Ether for the utility, XRP for the environmental factors. I was trying to be a pragmatic as possible, but it is still a speculative investment.