There have been earlier attempts to discuss cryptocurrencies on this forum as well. These discussions tend to die out pretty quickly. The topic has been discussed and written about extensively in various places.
I would recommend somehow focusing the discussion around a certain topic or issue so that something useful could come out of it. General discussion is sort of doomed, as so much has already been explained in detail about this.
You referred to corona and Bitcoin halving – that would be, in my opinion, a good and timely topic, deepening the subject and gathering news from around the world here. If corona is involved, it would also be worth following the correlation with gold and SP500 development. These have previously correlated from time to time (in one direction or the other).
What kind of product are Bitcoin, etc., when their value behaves so unsystematically? People in the field try to generate excitement and predict a price increase around the upcoming halving. As a bull, I consider such a product an entertainment delicacy, around which a game of hot potato is played. So… could someone still analytically tell me (us) what the real trick is here, why it would have justified value appreciation potential in the long term?
There is a limited supply of Bitcoins, and currently, 92% of them are in circulation. By 2040, this figure will be 99.9%. Some Bitcoins are behind lost credentials or otherwise lost. After the halving, new Bitcoins will be generated at half the rate, and if demand increases or even stays at the level of recent years, the value of Bitcoin will rise.
First, some information about Bitcoin and its value. This is also covered in the video. Supply and demand are an essential part of this, which will change with the halving. This is discussed in the video. https://www.investopedia.com/ask/answers/100314/why-do-bitcoins-have-value.asp
Here’s the correlation with the S&P 500. Especially during drops, the courses start to resemble each other, and the corona adds a good element to this. So, connections can be found between Bitcoin and the courses.
I don’t think Bitcoin has much use as a daily medium of exchange for people (Visa is indeed much more agile), but rather as a “reserve currency” like gold. There are also justifications for its increase in value, for example, the number of new Bitcoin accounts (that hold Bitcoin) has been steadily rising after a small drop in late 2017, meaning Bitcoin continues to attract new buyers. Another reason is that loyal Bitcoin hodlers, who refuse to sell even if the market drops significantly, already own a substantial portion (was it something like 50% of all Bitcoins, not certain, needs to be checked) of all Bitcoins. And the share of Bitcoins owned by these hodlers is also growing rapidly.
And indeed, Bitcoin has served as a safe haven in countries where high inflation erodes purchasing power.
The difference, however, is that physical gold will still be physical gold even hundreds of years from now. It’s hard to believe anyone would even remember Bitcoin in 2300.
That’s exactly right. Other cryptocurrencies have been developed as means of payment, and there are many different types for various purposes.
The same applies to service architecture, where a coin primarily functions as a means of payment for using a service (Ethereum is the most extensive implementation and its development work is still ongoing).
But since the topic of this thread is Bitcoin, let’s not delve into everything related to cryptocurrencies, as it is a really broad area.
I’ve personally been in the crypto market since 2017, not longer than that. But I’ve had time to see and experience a thing or two. Also as a trader. I have very strong reservations about this halving in the short term.
I’m more in favor of a “sell the news” event. Within a year, there might be a rise, but that’s entirely dependent on whether the number of investors/buyers significantly increases from the current level. Alts will then get a boost with BTC, if we get into an uptrend. Trading volume has grown really significantly in the last couple of months (Binance).
Stock investors, generally speaking, seem to hate Bitcoin (including me just half a year ago). However, this has been the case ever since Bitcoin’s price was €1, €10, €100, and €1000, and it hasn’t changed since. That’s why it’s hard to worry about these anti-Bitcoin arguments that have accompanied it from the beginning. The price does jump strongly, but the pump lasts better if you don’t follow your small position at all…
BTC approaching 10k, big pump underway (Binance)
Colleague’s comment:
"Miners want the price as high as possible to sell coin into to cover costs. But the halving also reduces supply by half. So that’s why there usually is a pump and dump followed by a slow recovery to new ATHs. The problem with the current state of BTC is:
Lack of real adoption
COVID-19.
Makes me think this is a sell the news event."
This page has a good chart of Bitcoin’s history, which I mentioned earlier. The movements have followed each other quite smoothly after halving events, as shown in that graph. Even now, the value has changed significantly upwards in a few days (due to the approaching halving, of course). In four days, we’ll see if the price movement is similar to the previous halvings or not.
I don’t know if “hatred” is the right term; based on Finnish Bitcoin discussions, a lack of understanding and knowledge is considerably more common. This then culminates, as the annoyance of those “left behind” grows, into vague remarks about criminals’ money and other clever things.
The human mind just tends to be such that one cannot or dares not question one’s own reason, and one clings to beliefs until the very end.
The use of Bitcoin in human trafficking, for example, is very limited compared to how much human trafficking is done with, say, US dollars. Paying in cash can be done completely anonymously and secretly even with the current currency. Hackers also engage in similar phishing schemes with current money. So, Bitcoin’s reputation as a criminal currency is not entirely accurate.
And I agree that BTC is not suitable as a general means of payment, but rather as a gold-like asset that is not subject to inflation, but is speculative. So, it’s an alternative to cash in a portfolio. And if inflation starts to accelerate in the near future, I would see interest in Bitcoin growing, because in this situation, companies would hardly be able to beat inflation. On the other hand, if there were a deflationary crisis, where would money flow from the stock markets? Somewhere, but certainly not into interest rates, I guess.
My message wasn’t really directed at you, and this wasn’t the first time someone pulled out the crime card. FIAT currencies are also used in crimes, and they’re actually better for that purpose than cryptocurrencies if a criminal wants to operate anonymously.
It’s possible that Bitcoin will be used as a means of payment in the future, or it might not be; it doesn’t really affect my life much, even though I’ve “invested” a few bottle-collecting euros into it.
I think I recognize myself as the kind of hypocritical weakling you described. I can honestly confess that I’m primarily interested in returns when it comes to investing. My main goal is to buy an instrument and sell it for more in the future, and currently, Bitcoin seems like something I want to be involved with. Hopefully, we weaklings can also fit in among the purists here to earn a few pennies for retirement and a roof renovation for the cottage. So, I speculate on the price of Bitcoin, and depending on the situation, I’ll convert it back to FIAT currency. If I happen to use it as money, I think the essential thing in this alternative, too, is its value, not so much in dollars but how many more times of that commodity I can get with it. I engage in the same speculation with shares of companies that don’t pay dividends.
In the bigger picture, I see it as a good thing that the system is being questioned from the outside in the form of “threats” like Bitcoin.
I myself invested a small slice of crypto alongside stocks, having been in the field as an investor for 5 years now.
That 100k going up is very possible, but it would mean a 1.83 trillion market cap just for BTC.
However, if we assume that the stock markets collapse at the end of the year (e.g., a second wave of Corona) and there are profits in crypto, many might jump on board, which would cause that 100k price increase, not to mention the altcoin rally alongside it.
