Bitcoin 2019

finglis
By finglis on Sat, Mar 23, 2019 - 9:02am

So now that Bitcoin (Notice thaer is no plural as in the first post on the subject in 2018) has dropped in price to $ 3972 (US) and is on the brink of possibly going lower to perhaps the previous low or maybe even down to $2500 (US) is anyone still interested? If you have been involved since 2017 then maybe the 2018 bear market was just too much to stomache?  

 

As the other crypto currencies morph into Stable coins, Exchange offerings and the ICO phase declines from the hype of last year, Bitcoin just marches stuburnly on to become the peoples money.  Those thinking of Bitcoin as an investment (in fiat terms) clearly don't fully understand what unconfiscatable hard money means to the ordinary people who were at the bottom of the cultural pyramid.  People are waking up to the Myths! 

All human behaviour in modern times is controlled by a "hierarchy" of 5 MYTHS!  Myth 1. RELIGION ( belief in someone's version of right and wrong, good and bad - with "Fear Narrative" Do the right thing and you will be rewarded in some mythical place and you will be punished if you stop believing) - Then, as people questioned this "Blind Faith" system, it was immediately backed up with the second myth in the hierarchy; Myth 2. LAW - As faith failed to control people, force was used to get people to comply. Myth 3. MONEY  for food and to pay those enforcing the law (false trust) and spreading religious nonsense.  Myth 4. "THE NATION STATE" wrap people in a flag and tell them the "others" (Wrapped in other flags with different religion, laws and who (usually) "want your stuff" and change the way you live (Liberty threat)  are "coming to get you". so you need to fight for your "rights" (which we also invented).  This required the 5th Myth - OWNERSHIP; How can a human own a piece of a 4.5 billion year old planet that no one has any "right" to above any other?  If I take something from you by force is it mine? Historical conquests and even as far back to when we were forager hunters 200 000 years ago (which we were for 93% of our existence remember!) does not mean we "own" the land and can pass it on for generations because someone won a battle for some king or leader?  How stupid!  Says who?  MYTHS! all of it. 
(Quite brilliant, BUT,  it's only as real as we choose to make it, we invented it, we can end it.

12 Comments

New_Life's picture
New_Life
Status: Gold Member (Offline)
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Posts: 432
definitely still interested in BTC

Not sure how relevant your 2nd paragraph is, or what you were trying to say exactly.

BTC fundamentals aside, for me its a speculative instrument that could again turn into a run away bubble for the masses to jump on.

Granted, South American populations have benefitted from its utility to transmit across borders.  IIRC there's only 4 MM BTC wallets been used even after 10 years since its inception, BTC needs far wider adoption to become widely used in society in the future.  

If the manipulation continues and interest rekindles as previously then I'm already watching the signs of accumulation and then rising Price Action months before the next halving approaches.

Interesting you mention $2.5k, I still see that as a possibility with a wick, particulary interested for intra day action to achieve it if we hang around the Weekly 200MA

davefairtex's picture
davefairtex
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Posts: 5934
someone is long

I'm guessing he's long.  :)

Time2help's picture
Time2help
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Someone is long
davefairtex wrote:

I'm guessing he's long.  :)

finanindecia's picture
finanindecia
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Posts: 21
someone is long?

What do you mean by that? Thanks.

New_Life's picture
New_Life
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Posts: 432
Being Long

long basically means that a person holds the asset either outright or by staking a derivative instrument using leveraged funds (borrowed money) to speculate the price is (at some point) going higher.

the opposite is "short"

Google is able to help

https://www.investopedia.com/terms/l/long.asp

New_Life's picture
New_Life
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Posts: 432
Thin air above 4.6k

If we continue to somehow push up here (seriously doubt) against higher timeframe hidden bearish divergence & consistently lower weekly vo!ume, up through resistance levels to 4.4k it's a huge gap in historic price action between 4.6 and 5.7k, we should rip through it before hitting the wall of months of price history at 6k.

I favour we save doing that until later this year unless the whales want to create an almighty bull trap, but I think we are already in one, I'd like to see PA drift back down to the Weekly 200MA at around 3.5k and get some sideways action.  Better still we go down to under 3k either with a wick or grinded down by Wyckoff method.

Not wanting to sound too bullish, but if the halving has the same effect as previous cycles I'm growing more confident this bear market AND accumulation ends before Xmas, possibly September...

New_Life's picture
New_Life
Status: Gold Member (Offline)
Joined: Apr 18 2011
Posts: 432
New_Life's picture
New_Life
Status: Gold Member (Offline)
Joined: Apr 18 2011
Posts: 432
Good BTC article

I quite like this article on Stock to Flow, references gold and it has nice confluence with the NVT Signal ratio too.  

Quotes the creator " As a thought experiment, imagine there was a base metal as scarce as gold but with the following properties: boring grey in colour, not a good conductor of electricity, not particularly strong [..], not useful for any practical or ornamental purpose .. and one special, magical property: can be transported over a communications channel" — Nakamoto [2]"

https://medium.com/@100trillionUSD/modeling-bitcoins-value-with-scarcity...

DaveF - if your reading, would appreciate your neutral thoughts.

 

davefairtex's picture
davefairtex
Status: Diamond Member (Offline)
Joined: Sep 3 2008
Posts: 5934
stocks/flows

I like the stocks/flows model.  It provides a nice theoretical underpinning to a relationship I've observed with a lot of commodities.

If scarcity were the only variable in bitcoin's value calcuation, then it would probably make a rough amount of sense.  But notice the S/F dependency for the molecule-items.   A gold bar doesn't depend on a gold mine, or a jeweler to be valuable.  If the "gold ecosystem" were to vanish, gold will still have value.  Gold has independence from the mechanism of creation, and also in the mechanism of validation.

Contrast with bitcoin.  It has a hidden dependency on an operational bitcoin network, which itself has a dependency on an operational, fully connected internet that is "mostly free", along with a dependency on a reliable electrical grid.  Without the network/internet/relative-freedom/electrical grid you cannot effect a transfer or validate possession.  Your "digital gold" is useless if you cannot transfer and/or prove ownership.

Lastly, there is the stock/flow situation of "all valuable coins".  While the S/F for bitcoin is hard-coded, others can make ethereum-coin, and the new-new-coin which happens to be even better.  If bitcoin itself is superceded by another coin which has more functionality, then the limited amount of capital that wants to be in coins will flow away from bitcoin, regardless of bitcoin's stock/flow sitution.

So there's a big fat caveat in owning bitcoin.  If just one of those assumptions became problematic - say the "internet" was partitioned between the US and China due to a conflict - then bitcoin would be partitioned too, and the double-spend problem would start to get ugly.

Likewise, if certain powerful nation states (or supra-national organizations) saw bitcoin as a threat, that would make the internet "less free", and executing bitcoin transactions might become very risky - to freedom, for instance, and would make bitcoin users vulnerable to nation-state monitoring/hacking attempts.

If another coin comes along and looks better, bitcoin's share of the aggregate coin S/F space gets worse.

Not saying the world will end in fire, but - bitcoin isn't gold.  Bitcoin stands at the apex of a large amount of complicated technology, which itself depends on everything continuing to work more or less exactly how it currently works.  And those assumptions are built into the S/F price calculation.

And that's not true with gold.

New_Life's picture
New_Life
Status: Gold Member (Offline)
Joined: Apr 18 2011
Posts: 432
great summary

Yep, BitCoin is very much connected to the grid, including manipulation by the very financial institutions it claims to break free from.

Comparing to Gold, how many people have personal local custody of their entire physical holdings of PM's?  Many keep their PM's stored in a vault by a Bullion dealer they trust, reliant on security/electricity and I dare say an internet account to access buy/sell it.

I also like that an ounce of .999 Gold in your hand is the product of historical spent work/energy

A bitcoin is still reliant on the ecosystem around it that manufactured it.

I agree and think to blindly own any asset without understanding how its value will fluctuate depending on external factors is naive.

davefairtex's picture
davefairtex
Status: Diamond Member (Offline)
Joined: Sep 3 2008
Posts: 5934
gold & bitcoin

Comparing to Gold, how many people have personal local custody of their entire physical holdings of PM's?  Many keep their PM's stored in a vault by a Bullion dealer they trust, reliant on security/electricity and I dare say an internet account to access buy/sell it.

Yeah, I don't buy that.  While people may (at the moment) have their gold stored elsewhere, the value of that gold-stored-elsewhere isn't dependent on a functioning internet.  People have been storing gold outside their homes long before the Internet existed.  You can write a letter, make a phone call, drive physically to the vault and present your ID, and you can still get your gold bars.  Gold bars stored in someone else's vault won't lose value or become unsellable if the internet were to suddenly vanish.

However, for bitcoin to hold its value, the digital bitcoin network needs to be "reasonably" operational.

Here's the core point: the value of each bitcoin derives from the value of the bitcoin network as a whole.  The better the network works, the more valuable each coin is.  The worse the network works, the less valuable each coin is.  That's just not true for gold.

Will this matter?  In some set of future circumstances, it will be critical.  If everything stays largely the same as it is right now - it won't matter at all.

New_Life's picture
New_Life
Status: Gold Member (Offline)
Joined: Apr 18 2011
Posts: 432
404 error: No internet

It's an interesting thought experiment how long modern just in time supply chain would last without the internet...

Even more so with power blackouts.

Continuing this train of thought, you may find this interesting..
https://www.chepicap.com/en/news/8533/brian-armstrong-talks-about-issues...

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