A decade in the making, the bitcoin ETFs are a game-changer for bitcoin, offering exposure to the world’s largest cryptocurrency without directly holding it. They provide a major boost for a crypto industry beset by scandals.
Another bubble in the making. All for the money who cares about others.
But despite a popular myth or narrative encouraged by some Bitcoin is not and has never been a bubble… it has on average grown in value over its lifetime since 2014. Sure the growth is uneven and there are peaks and drop but it has steadily on average increased in value if you were to draw a line from start to now.… certainly not a bubble… but potentially a viable long term investment if that sort of thing interests you and you have a risk appetite for it because of its short term year to year volatility.
I work in the finance industry and was reading a bit of research yesterday (I presume I cant say name of person who wrote it) and short story was bitcoin will be 1.5M (yes really) by 2030, so 45k is a drop in the ocean to pay now …
Having held bitcoin on and off since the mid 2010s… I would be wary of such statements… it might happen… but given the size and increased regulation I would expect price changes less extreme in the future… I don’t work in the finance history… I just am reasonably familiar with the tech, and follow with sometimes amusement the popular narrative on crypto currency.
Sounds like a Ponzi scheme - unless there is an actual commodity or asset who’s growth underpins it…
Bitcoin is an asset - it uses a discrete unique transaction record(s) asset(s) that are permanently stored in the Bitcoin block chain (or distributed ledger) that is viewable and auditable by anyone. The rate of growth of Bitcoin tokens is controlled and limited by design of the specific blockchain implementation so has inbuilt scarcity over time. The value of the token is only what people perceive that value of that asset to be and are willing to pay for it as with any asset.
There does often appear confusion about what blockchain and Bitcoin actually is. The Bitcoin blockchain is immutable.
In the world of software, assets can be computer stored records/files, blockchain tokens, licences etc as well as physical bits of tin or gold…
you mean like gold backing the US dollar?
Yes, I think that stopped in the 1930s so Fiat currency is just a bit of paper backed by a promise.
My point exactly.
1976 though - Nixon.
Bitcoin has confused quite a few people because they are wondering how it maintains a high value without an underlying market.
But it does not need any backing asset because it is an asset by itself, and it has outperformed all the traditional assets, including precious gold, silver, platinum.
I think the bigger story here is the apparent validation of cryptocurrency technology by Wall St. There is already talk of “tokenizing” financial securities from people in high places which could have a pretty big (presumably positive) effect on the clearing process (t+2 to t+0) and, in turn, our returns.
“We have the technology to tokenize today,” he added. “If you had a tokenized security … the moment you buy or sell an instrument, it’s known it’s on a general ledger that is all created together. … This eliminates all corruption, having a tokenized system.“
Yes, it is a “new” financial world. If you were in a sleep for more than 50 years, and wake up today, you would not have any clue how the financial world works today with all kinds of exotic financial instruments/derivatives.
Indeed, though I understand the ancient Greeks developed financial derivatives in terms of trading olives… so it is certainly not new.
Anyone wishing to invest in Bitcoin should read this paper/book:
Informative and interesting.
“… eliminates all corruption”. Wow such a dumb statement. Has he even perused around the internet for a second to see if corruption has been solved by the web3 bros?
A quick Look here doesn’t strike me as an endorsement for cryptos:
Btw, I’m not anti-crypto, in fact, CBDCs could be part of an offer to underbanked and unbanked. But unfettered blockchain crypto nonsense is just an invitation to fraud and scamming those least in place to defend themselves.
Let’s not even get into the energy requirements. And yes I know about proof of stake, that only Eth has successfully migrated to, in doing so losing its decentralised structure favouring the major holders of their particular brand of magic beans.
This is true.
And built on confidence, like all assets.
Interesting that Vanguard has decided not to issue a Bitcoin ETF, which runs counter to their investing philosophy, while Fidelity has. And the late, great Charlie Munger’s view is one I’d not take lightly “This is a very, very bad thing. The country did not need a currency that was good for kidnappers”
I don’t understand Bitcoin well enough, though fund manager friends consider it no different to most assets. Besides, beyond a certain level I don’t have much spare money to speculate. Maybe Bitcoin will beat £1.5m by the end of the decade (was it Ark @biddler66?). Alluring to think what could be and how one could benefit. Or SBF is a warning - how can so many billions evaporate so quickly?
Will be interesting to watch.
He is talking in the context of using a distributed ledger for financial instrument transactions (stocks etc) where, under the current system, bad actors can use the current net-settlement clearing process to manipulate the market (abusive naked short selling for example).
P.s. Moon soon ooga booga
No Sean, it doesn’t confuse anyone. It maintains a ‘high value’ because the demand for it exceeds the supply of it. It is an asset, yes, but you can’t value it on a fundamental level (dividend growth model, DCF, book values, etc.) because it doesn’t have any of the traditional characteristics of a debt or equity instrument.
At best it’s a commodity that should trade (value) on open market exchanges. Not unlike gold. You can’t eat it, put it in your car, or make a shirt out of it - but people are willing to pay for it because you can exchange it for something of value - maybe a pizza, maybe a Tesla, maybe a group of hostages.
It has a market. But because the market is not transparent, unlike corn for example, it has fits of value swings that no one can explain. Myself included. I have no clue how bitcoin works or how to go about valuing it.
Well to me, that is the really interesting part, a lot of the rest is just blah… an immutable distributed global ledger using cryptographic encryption amongst other things… one of the underlying technologies is blockchain which is a fascinating use case of an electronic auditable distributed ledger trust system… which is used increasingly in the modern world in distributed ledger/tracking systems.