I guess it depends what you mean by late adopters. Novogratz, in my example, bought ether in early 2016. Bitcoin had already been around for 6 years and gone from 0 to $1k and back to $500 by then. Maybe everyone buying now is likewise still an early adopter?
But this is also true of any venture capital investment. They’re all built on the idea that they can build potential value and sell it to other people later on. Uber doesn’t make any profits yet, but no one’s calling its $100B valuation a tulip mania. (They might say Uber’s not worth that, but they’re not saying it’s worth nothing.)
The value in bitcoin is perhaps harder to understand and harder to evaluate because it’s quite different from a typical startup stock. But it’s a mistake to dismiss it outright.
You are correct. Maybe people buying now are early adapters. One never knows at what point the scheme will collapse.
I do not, however, view this as anything like venture capital. There is no “venture” here except the hope that people will continue to trade something for the sake of trading it. There is nothing of underlying value to sell should the “venture” fail.
The venture is the ability to quickly, easily, securely, and pseudonymously transfer value to someone else anywhere in the world. I think you underestimate that potential.
SoftBank has $10B in new money that says it’s worth closer to $50B sadly, but don’t worry, they’re investing a tiny amount at almost $70B so you can pretend it’s still a hot stock.
You may be correct. But it seems to me that this “value” only exists for people who own bitcoins. Therefore they should not be worth anything more than the value one places on this abliity to do business thusly. And it seems as though it is rampant speculators only that are buying them and not people in need of the service
A huge spike in ownership is in Japan. Japanese bank have negative interest rate so anything that doesn’t go slowly toward zero is a better bet for a country that is saving heavy.
The chinese ban turned out to be non-event. I’m surprised too, not in that recovery but the speed of it.
To me, the conversation around the value of BTC is a bit like asking whether or not BTC is more like Google or Pets.com during the late 90s. You can go back and forth as long as you want and still not come to an agreement. BTC can hit $10k or drop back down to $1k and there will still be a raging debate about it. If you let that one currency alone deter you from understanding more about how blockchain is changing the way we do things, you’ll end up missing the forest for the trees.
I don’t see it that way. Investing in bitcoin is not the same as investing in company that sells blockchaon technology or anything else. It is akin to investing in currency that may or may not go bust because people stop wanting to own it.
It’s fairly similar to investing in a theoretical company that gets a fee from every bitcoin transaction. The more transactions, the more people need bitcoin, the higher the price of bitcoin (see: equation of exchange). Yes, the ownership structure is very different from a real company, but you can model it this way to provide one reasonable valuation.
IMO it is foolish to compare investing in a stock to speculating on bitcoin.
When you own invest of a company you own a tangible asset. It is a business that produces profits (hopefully - lots of people speculate on companies that lose money). You are entitled to a portion of that business’ future earnings. You have ownership rights to that companies net assets (after deducting liabilities). You are also entitled to voting rights to make decisions on how the business should operate.
When you own bitcoin you literally own nothing. You have 0’s and 1’s on a hard drive. Someone who has a thousand bitcoin has no more or less control over the bitcoin network than someone with zero bitcoin. There are no earnings or cash flows that guarantee future value. There is no intrinsic value as someone with 1000 bitcoins has the exact same amount of nothing as someone with zero bitcoins. The value is strictly derived from the expectation that someone will pay more for it in the future (which will be disappointing when people figure out they’re going to lose money rather than get rich).
Everything you said is not true about the non-voting shares sold of snapchat. They make no money and shareholders have no voting rights. And I’m not sure, but they probably have no real assets after deducting liabilities. At best, they own some software and trademarks, which are about as “nothing” as the 1’s and 0’s that you think are nothing in a hard drive. I don’t think bitcoin is meaningful different from such shares, and has a better value proposition than snapchat.
Yes that’s why people should not buy snapchat stock just like they shouldn’t buy bitcoin. I expect the shareholders of snapchat to get wiped out just like I expect the holders of bitcoin to be wiped out.
That’s fine, I’m not here to try to convince you of something that you’re not prepared to explore on your own. You mentioned a few posts up that you don’t understand it and I didn’t understand it at first and still don’t have a full technical comprehension of it. I didn’t learn more about it debating back and forth with individuals on a forum. I started reading articles, listening to podcasts, watching videos and documentaries. Like I mentioned, I don’t know if BTC is going to be the eventual “winner” of the cryptocurrency space but if you keep thinking about it like “bitcoin is not a business”, you’ll never understand why more and more people are valuing it and accepting it.
You took my Google vs Pets.com analogy and pulled a comparison to investing in companies. That’s not the point I was trying to make. The point is that you’re witnessing the early stages of a truly transformative technology and Bitcoin is one of the early iterations of that. I really don’t know if it will be the dominant crypto 5-10 years from now. There are a ton of others out there that are doing some VERY interesting things. Again, I don’t see it replacing traditional forms of fiat currency for a very long time but rather as a store of value like gold (and other precious metals), gemstones, fine wine (or other collectibles), etc. These are all things that people can want to stop owning as well but it doesn’t make them any less valid as a store of value. To me, it’s not a stock, not a business, not even really a form of currency (yet). But just because it’s not any of those things does not mean that it will “fail”.
Being in a financial services career I have multiple conversations on a weekly basis on the topic and I’ve ultimately heard everything has been repeated on this forum and others. Prognostications of why people feel like it’s going to fail, mostly by people who compare it to traditional forms of investing. How governments are going to want to shut it down. Tulips. Money laundering/criminal activity. These are all risks and will definitely cause volatility. I believe that cryptocurrency (if not BTC) will work through all these issues and grow to be even more valuable because of it. And even if some day BTC hits $100k some years down the road, we will be back here still talking about all these issues.
That’s fair. I happen to agree about snapchat actually.
I just want to clarify the differences. I don’t think snapchat is a great investment, but it’s not a ponzi scheme (or whatever else people like to call bitcoin). I don’t think people should look at bitcoin in a significantly different light than these types of pre-earnings stocks.
One bit coin should be worth exactly what one is willing to pay for the ability to engage in a commercial transaction using the bitcoin platform.
It is NOTHING like a Snapchat Non Voting Share, the owner of which has a board of directors with fiduciary duties to maximize shareholder value. And the owner of which will receive compensation upon the acquisition of Snapchat or its liquidation (assuming assets exceed liabilities).
A bitcoin owner merely owns the means of engaging in the pseudo anonymous commercial transaction with others who are willing to do the same based upon a medium of exchange that is highly speculative.
As long as there is a black market there will be demand for crypto currencies. I know the average fragiledealer is a upstanding member of society, but there is high demand for untraceable currency from a more seedy crowd.
I agree that bitcoin is worthless except as a means of barter with another party who’s willing to assume the risk of loss from false gains. Crypto is a Ponzi scheme of sorts, but the big difference is that the party can be everlasting if everyone involved plays fairly. The bag is held by the most exposed (real investment vs real return), and the irrationality of people when it comes to Money also applies to Crypto.
The neat thing about Money is that the whole world, even North Korea, depends on it and is balanced upon it - crypto will never, ever be in that position. I can think of many societies that will be strangers to bitcoin throughout the foreseeable future - Bedouins, Shaka-Zulus, Nepalese, etc.
I’m naive on this market, so maybe this is dumb question but :
So is anyone actually regulating the bitcoin markets?
Is there anyone keeping people from manipulating the market?
Is there any reason to think that criminal enterprise(s) or deep pocket investors or banks or … well just about anyone wouldn’t be manipulating the market?
I mean how do we know that the bitcoin buy / ask values aren’t just total fiction? Or at minimum why shouldn’t we think that a couple groups wouldn’t collude to drive up prices artificially? Or that an individual would try to corner the market to manipulate the price.