It’s possible to think that Bitcoin is as with gold, given that the politicians ccasnnot mess with it it is therefore a safe asset, a haven in choppy waters.
The rhetoric and price rally helped to fuel Bitcoin’s status among crypto enthusiasts as a “digital gold” – a safe haven during times of uncertainty.
It’s also possibly to think of it as a pure speculation and is thus something that will deflate in hard or uncertain times.
The price of Bitcoin dropped sharply over the weekend to around $77,000 (£56,000) as investors fled the notoriously volatile asset.
We’re coming up on hte 13th anniversary of my declaration that that’s the end of Bitcoin then so I’d not take my view all that seriously. But the above is still the choice of pathways.
Whatever it is, it’s not goods or services. One can at least make teeth, jewellery and electrical contacts out of gold. Once can also wrap a steak in it.
At the current price people with Bitcoin will say they are collectively sitting on assets worth approximately $1.55 trillion USD. The total revenue miners have received including both the value of the coins they mined and tips/fees is apparently believed to be $200-$400 million. The rest of the “value” is the speculative return.
As BiS will point out they are “worth” exactly the price people are willing to buy and sell them.
Originally I thought Bitcoin would die out and become valueless, but it occurred to me that if years back I had bought a few Bitcoin as a punt I would need to be in a desperate financial position to ever sell them at a loss. Consequently I now have a gut feeling that if the current price dropped to that base mining cost the aggregate of holders would be more and more reluctant to sell so it sets a long term floor to the price.
yes… Then again, the same goes for Pokémon cards.. And their actual base/floor value, their “collector’s value” , and their actual value.
Something, something, Sunk Cost Fallacy…… Proft!! ( except there isn’t any unless you find the next idiot in the Ponzi Tree…)
“Consequently I now have a gut feeling that if the current price dropped to that base mining cost the aggregate of holders would be more and more reluctant to sell so it sets a long term floor to the price.”
But that’s like saying that that HS2 is worth £100bn because that’s how much we’re pissing away on it.
If you get down to the real value of Bitcoin, as in, Bitcoin as a useful thing, it’s useful for drug dealing. But even then, only as a transfer mechanism. You convert £ to BTC, send it to your dealer, and he converts BTC to £. You don’t need to hold a whole lot of BTC for long though. Could be minutes for that transaction.
On the last article I misread the firm as ‘Van Hoogstraten consulting’
I once had him sit in front of me across the table on a train. He had a terrifying presence that perfectly matched his knuckles which appeared to have been badly damaged hours earlier.
Sometime around 2015 a very bright young woman who worked for me was buying BitCoin and encouraged me to do so. I didn’t because I just didn’t see the point of it or what the fuss was about. Later on, a sharp young kid who worked in his parents’ restaurant while going to school was suggesting that I buy it, which made me think of Joseph Kennedy and selling all his shares once his shoeshine boy started giving him stock tips.
If that young woman hung on to her Bitcoin for several years she did very well. I still don’t really get it – yeah the somewhat frictionless means of buying and selling, but I keep thinking it’s more like currency speculation. Too old I guess.
That would be a silly thought, given that the US (!) government stole all the substantial gold holdings of its citizens and forced them to accept government fiat at an exchange rate set by the government. That can be fairly classed as messing.
RE: That last post with no comments I’d Want This Investigated Too:
Gamecock could make 4 sentences from this mess. And you could then understand it.
And he’d leave out superfluous adjectives and appeals to pity. Urgent? Highly vulnerable? BS.
“Following an inquiry in 2018, detectives seized 61,000 Bitcoin from Qian, also known as Yadi Zhang.” So she pleaded guilty four months ago. There were over 100,000 mainly chinese victims entitled to compensation, at original price of investment aiui. Starmer just back from China. The theory I’ve just made up while sat on the bog is that a cabinet insider knows there’s a deal to identify those victims and sell those BTC soon.
@tim has laid out the two pathes very well. Bitcoin shares gold’s attributes of guaranteed scarcity and not being counterfeitable and therefore many cryptonerds believe it should be a good inflation hedge ‘digital gold’. However it actually has a low correlation with gold or other assets.
It seems to go up when the money supply increases. What happened is that if governments are printing money and interest rates are low people buy bitcoin because it is scarce and the opportunity cost is low.
I believe BTC is a sensible asset at 5pc of a 10year portfolio.
Is the advantage of both Bitcoin & Gold not that Goverments cant make more of them.
Govts certainly cannot do a money printer go brrr with them.
Gold – govts can mine- (though not for less than the private sector and not quickly)
Bitcoin – ultimately a finite number of.( Is that why Bessent has added some to US govt reserves?)