Crypto mania !

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Random Musings
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Re: Crypto mania !

Post by Random Musings »

The mania will continue until the leverage trend reverses course. Then, I expect trouble with crypto's.

RM
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Re: Crypto mania !

Post by watchnerd »

HanSolo wrote: Sun May 09, 2021 8:00 pm (Did I just invent the concept?)
I've seen some that claim to be working towards that.
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Re: Crypto mania !

Post by watchnerd »

Random Musings wrote: Sun May 09, 2021 8:14 pm The mania will continue until the leverage trend reverses course. Then, I expect trouble with crypto's.

RM
That could certainly happen if fiat money interest rates go up.

I don't know what the rates are to borrow in crypto using other crypto as collateral.

But, since "money" is fungible, if there is a carry trade going on, it might unwind.
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Re: Crypto mania !

Post by chinchin »

Decentralized exchanges already exist e.g. Uniswap.
not financial advice
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Re: Crypto mania !

Post by watchnerd »

chinchin wrote: Sun May 09, 2021 8:23 pm Decentralized exchanges already exist e.g. Uniswap.
UNI is my 3rd largest allocation in crypto.
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Re: Crypto mania !

Post by SlowMovingInvestor »

txhill wrote: Sun May 09, 2021 7:41 pm Just one example: with DeFi you can (and do) have protocols that do not require someone sitting at a desk assessing the credit risk of a borrower. Instead, you have a program that assesses whether the borrower is sufficiently capitalized; if so, they get to borrow, if not, their collateral gets liquidated. It's programmatic--no middleman (unless you consider computer programs to be middlemen). Costs associated with hiring a bunch of people to do a job that in certain instances can be better done by a program?
There is nothing DeFi specific about this. If you have collateral that can be quickly priced and liquidated, then it can be margined automatically and is today. Retail brokers will send you messages, sometimes even try and call if you've fallen below margin requirements, but that's only because they (sometimes) want to give you a chance to avoid getting your positions liquidated. I think Ibroker (which caters to more knowledgeable semi-professional traders) will liquidate automatically if you violate Reg T because they expect their semi-pro traders to be prepared for liquidation (which can really upset infrequent traders).

txhill wrote: Sun May 09, 2021 7:41 pm Reduced to the costs associated with someone programming a smart contract that can scale basically infinitely.
Credit risk comes in when you're borrowing without adequate, easily priced and liquidated collateral. But many forms of credit issuance (say for credit cards) is done by programs, probably with access to far more data on an applicant than smart contracts. But people complain about credit card denials all the time ! Probably not a lot on bogleheads, because people here tend to have excellent credit, but on credit card forums :happy

The fact that you can call a person to (sometimes) override a credit card denial is a feature, not a bug in the system. Just as the fact that brokers will try and contact you before liquidation is a feature, not a bug, a feature that DeFi largely doesn't and can't easily have ! I like the fact that I can call Chase and possibly get them to issue a credit card to me that their program might not have given out because of their 5/24 rule.

[And there's a whole subfield of AI that deals with ethics and AI biases -- it's not like programs don't have biases and problems as much as humans do.]
Last edited by SlowMovingInvestor on Sun May 09, 2021 8:52 pm, edited 1 time in total.
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Re: Crypto mania !

Post by SlowMovingInvestor »

watchnerd wrote: Sun May 09, 2021 8:17 pm
I don't know what the rates are to borrow in crypto using other crypto as collateral.
https://defirate.com/loans/
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Re: Crypto mania !

Post by watchnerd »

SlowMovingInvestor wrote: Sun May 09, 2021 8:46 pm
watchnerd wrote: Sun May 09, 2021 8:17 pm
I don't know what the rates are to borrow in crypto using other crypto as collateral.
https://defirate.com/loans/
Thanks.

The spreads are fascinating.
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Re: Crypto mania !

Post by ballons »

txhill wrote: Sun May 09, 2021 7:41 pm
ballons wrote: Sun May 09, 2021 7:23 pm
watchnerd wrote: Sun May 09, 2021 7:17 pm
ballons wrote: Sun May 09, 2021 7:12 pm
txhill wrote: Sun May 09, 2021 4:46 pm Maybe crypto doesn't have as big an impact as the internet, but it is part of the same movement from analog stores of value and financial systems to digital ones. The benefits are obvious: cut out the middleman, reduce costs, and minimize reliance on untrustworthy governments/banks....
Please explain how you cut out the worthless crypto middleman.
Why do I want to cut out the crypto middleman if part of the crypto revenue stream comes from those fees?

Stellar, for example, is not a free means to transfer remittances from USA to another country. It charges fees.

It's just cheaper than Western Union by a lot.
"The benefits are obvious: cut out the middleman"

My question is pertaining to a claimed benefit of crypto. If this claim is false, it is not a benefit.
Just one example: with DeFi you can (and do) have protocols that do not require someone sitting at a desk assessing the credit risk of a borrower. Instead, you have a program that assesses whether the borrower is sufficiently capitalized; if so, they get to borrow, if not, their collateral gets liquidated. It's programmatic--no middleman (unless you consider computer programs to be middlemen). Costs associated with hiring a bunch of people to do a job that in certain instances can be better done by a program? Reduced to the costs associated with someone programming a smart contract that can scale basically infinitely.
Anyone or anything that takes their cut between two parties. This claim seems demonstrably false. You could say a potential reduction in the middleman's cut; however, I would argue that isn't a benefit due to the unknown reduction that may not even materialize.
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Re: Crypto mania !

Post by txhill »

ballons wrote: Sun May 09, 2021 9:21 pm Anyone or anything that takes their cut between two parties. This claim seems demonstrably false. You could say a potential reduction in the middleman's cut; however, I would argue that isn't a benefit due to the unknown reduction that may not even materialize.
Ok if you say so.
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Re: Crypto mania !

Post by ballons »

SlowMovingInvestor wrote: Sun May 09, 2021 8:46 pm
watchnerd wrote: Sun May 09, 2021 8:17 pm
I don't know what the rates are to borrow in crypto using other crypto as collateral.
https://defirate.com/loans/
Collateralized Dogcoin Obligations in a completely unregulated cypto market. What could possibly go wrong?

I see the site pushes you for unregulated insurance too and the founder appears to be a moron:
https://cryptoslate.com/defi-founders-h ... 8m-in-nxm/
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Re: Crypto mania !

Post by ballons »

txhill wrote: Sun May 09, 2021 9:23 pm
ballons wrote: Sun May 09, 2021 9:21 pm Anyone or anything that takes their cut between two parties. This claim seems demonstrably false. You could say a potential reduction in the middleman's cut; however, I would argue that isn't a benefit due to the unknown reduction that may not even materialize.
Ok if you say so.
You're free to expound on how a cheaper middleman is not a middleman.
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Re: Crypto mania !

Post by txhill »

ballons wrote: Sun May 09, 2021 9:41 pm
txhill wrote: Sun May 09, 2021 9:23 pm
ballons wrote: Sun May 09, 2021 9:21 pm Anyone or anything that takes their cut between two parties. This claim seems demonstrably false. You could say a potential reduction in the middleman's cut; however, I would argue that isn't a benefit due to the unknown reduction that may not even materialize.
Ok if you say so.
You're free to expound on how a cheaper middleman is not a middleman.
I don't even know what you're arguing. You're saying that a liquidity protocol that is deployed to a network--and after it is deployed is not subject to alteration by people and is not dependent on people's input--is a middleman. I don't know what to say to that. When you do a math problem for homework, is the piece of paper you wrote on now a middleman between you and the teacher? I just don't think we can have an intelligent conversation about this, so maybe let's just agree to disagree.
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Re: Crypto mania !

Post by HomerJ »

txhill wrote: Sun May 09, 2021 7:41 pm
ballons wrote: Sun May 09, 2021 7:23 pm
watchnerd wrote: Sun May 09, 2021 7:17 pm
ballons wrote: Sun May 09, 2021 7:12 pm
txhill wrote: Sun May 09, 2021 4:46 pm Maybe crypto doesn't have as big an impact as the internet, but it is part of the same movement from analog stores of value and financial systems to digital ones. The benefits are obvious: cut out the middleman, reduce costs, and minimize reliance on untrustworthy governments/banks....
Please explain how you cut out the worthless crypto middleman.
Why do I want to cut out the crypto middleman if part of the crypto revenue stream comes from those fees?

Stellar, for example, is not a free means to transfer remittances from USA to another country. It charges fees.

It's just cheaper than Western Union by a lot.
"The benefits are obvious: cut out the middleman"

My question is pertaining to a claimed benefit of crypto. If this claim is false, it is not a benefit.
Just one example: with DeFi you can (and do) have protocols that do not require someone sitting at a desk assessing the credit risk of a borrower. Instead, you have a program that assesses whether the borrower is sufficiently capitalized; if so, they get to borrow, if not, their collateral gets liquidated. It's programmatic--no middleman (unless you consider computer programs to be middlemen). Costs associated with hiring a bunch of people to do a job that in certain instances can be better done by a program? Reduced to the costs associated with someone programming a smart contract that can scale basically infinitely.
LOL... Normal banks wouldn't need anyone at a desk approving loans either if the people who wanted to borrow money would put down 2x the loan amount as collateral.

You guys keep talking about DeFi taking over the role of banks, but it's nowhere near that yet. Normal people don't put down $50,000 in collateral to borrow $25,000 to buy a car. DeFi, currently, is almost all about speculation and trading. It's all about leverage and derivatives and options. All the BAD parts of investing.

We told people to avoid that stuff even before crypto. The fact that DeFi makes it easier for normal people to burn themselves on exotic investments is NOT a selling point.
Last edited by HomerJ on Sun May 09, 2021 10:19 pm, edited 1 time in total.
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Re: Crypto mania !

Post by watchnerd »

ballons wrote: Sun May 09, 2021 9:37 pm
SlowMovingInvestor wrote: Sun May 09, 2021 8:46 pm
watchnerd wrote: Sun May 09, 2021 8:17 pm
I don't know what the rates are to borrow in crypto using other crypto as collateral.
https://defirate.com/loans/
Collateralized Dogcoin Obligations in a completely unregulated cypto market. What could possibly go wrong?

I see the site pushes you for unregulated insurance too and the founder appears to be a moron:
https://cryptoslate.com/defi-founders-h ... 8m-in-nxm/
This is going to have been an exciting period in financial history to have lived through.

To be able to publicly see the weak spots that may bring the house down, eventually, is fascinating to think about how long it will take to unravel.

My guess is not quite this year.

By the time Powell has to raise rates, definitely, yes.
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Re: Crypto mania !

Post by ohboy! »

txhill wrote: Sun May 09, 2021 9:44 pm
ballons wrote: Sun May 09, 2021 9:41 pm
txhill wrote: Sun May 09, 2021 9:23 pm
ballons wrote: Sun May 09, 2021 9:21 pm Anyone or anything that takes their cut between two parties. This claim seems demonstrably false. You could say a potential reduction in the middleman's cut; however, I would argue that isn't a benefit due to the unknown reduction that may not even materialize.
Ok if you say so.
You're free to expound on how a cheaper middleman is not a middleman.
I don't even know what you're arguing. You're saying that a liquidity protocol that is deployed to a network--and after it is deployed is not subject to alteration by people and is not dependent on people's input--is a middleman. I don't know what to say to that. When you do a math problem for homework, is the piece of paper you wrote on now a middleman between you and the teacher? I just don't think we can have an intelligent conversation about this, so maybe let's just agree to disagree.
The paper as a middleman, lol
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Re: Crypto mania !

Post by langlands »

Prahasaurus or others, any opinions on Shiba Inu? The token claims to be the "Doge killer." It's hard for me to tell if there's anything legit in there or not and whether the development team is serious. It certainly has a giant hype train behind it and the reddit subforum has the typical GME/Doge vibe.
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Re: Crypto mania !

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langlands wrote: Mon May 10, 2021 12:05 am Prahasaurus or others, any opinions on Shiba Inu? The token claims to be the "Doge killer." It's hard for me to tell if there's anything legit in there or not and whether the development team is serious. It certainly has a giant hype train behind it and the reddit subforum has the typical GME/Doge vibe.
Seriously?

It's literally a dog copy of a joke meme based on a dog.

It's a meme joke on top of a meme joke.

Although it's pretty cheap. You could buy oodles of them.

Then the meta joke would be on us all.
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Re: Crypto mania !

Post by Marseille07 »

watchnerd wrote: Mon May 10, 2021 12:07 am
langlands wrote: Mon May 10, 2021 12:05 am Prahasaurus or others, any opinions on Shiba Inu? The token claims to be the "Doge killer." It's hard for me to tell if there's anything legit in there or not and whether the development team is serious. It certainly has a giant hype train behind it and the reddit subforum has the typical GME/Doge vibe.
Seriously?

It's literally a dog copy of a joke meme based on a dog.

It's a meme joke on top of a meme joke.

Although it's pretty cheap. You could buy oodles of them.

Then the meta joke would be on us all.
Why is it an issue? Doge proved that a joke coin can work as a store of value just fine. Shiba Inu should be no different.
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Re: Crypto mania !

Post by langlands »

watchnerd wrote: Mon May 10, 2021 12:07 am
langlands wrote: Mon May 10, 2021 12:05 am Prahasaurus or others, any opinions on Shiba Inu? The token claims to be the "Doge killer." It's hard for me to tell if there's anything legit in there or not and whether the development team is serious. It certainly has a giant hype train behind it and the reddit subforum has the typical GME/Doge vibe.
Seriously?

It's literally a dog copy of a joke meme based on a dog.

It's a meme joke on top of a meme joke.

Although it's pretty cheap. You could buy oodles of them.

Then the meta joke would be on us all.
Yes, on the narrative level. I'm looking for a more technical perspective. Doge is basically a copy of litecoin, which is in the bitcoin family. Shiba Inu from what I understand is an ERC-20 token on Uniswap (itself a smart contract on Ethereum). I only have a tenuous grasp still of what this means so forgive the butchering of the lingo. In any case, the point is that Dogecoin is a dead coin (no development) while Shiba Inu claims to be developing all sorts of crazy dapps. Apparently, there is a highly anticipated ShibaSwap coming out. I just want to know how much of all of this is hot air.
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Re: Crypto mania !

Post by watchnerd »

Marseille07 wrote: Mon May 10, 2021 12:09 am

Why is it an issue? Doge proved that a joke coin can work as a store of value just fine. Shiba Inu should be no different.
Personal shame.
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Re: Crypto mania !

Post by decapod10 »

langlands wrote: Mon May 10, 2021 12:17 am
watchnerd wrote: Mon May 10, 2021 12:07 am
langlands wrote: Mon May 10, 2021 12:05 am Prahasaurus or others, any opinions on Shiba Inu? The token claims to be the "Doge killer." It's hard for me to tell if there's anything legit in there or not and whether the development team is serious. It certainly has a giant hype train behind it and the reddit subforum has the typical GME/Doge vibe.
Seriously?

It's literally a dog copy of a joke meme based on a dog.

It's a meme joke on top of a meme joke.

Although it's pretty cheap. You could buy oodles of them.

Then the meta joke would be on us all.
Yes, on the narrative level. I'm looking for a more technical perspective. Doge is basically a copy of litecoin, which is in the bitcoin family. Shiba Inu from what I understand is an ERC-20 token on Uniswap (itself a smart contract on Ethereum). I only have a tenuous grasp still of what this means so forgive the butchering of the lingo. In any case, the point is that Dogecoin is a dead coin (no development) while Shiba Inu claims to be developing all sorts of crazy dapps. Apparently, there is a highly anticipated ShibaSwap coming out. I just want to know how much of all of this is hot air.
Uniswap would be considered a "dApp" or decentralized application. It runs on Ethereum. A "smart contract" is a piece of code on the block chain. Contracts have addresses similar to wallet addresses. Uniswap surely has contracts however as a whole it's a dApp.

An ERC-20 token is an Ethereum token, so it would be more accurate to say it is "on Ethereum" rather than "on Uniswap". An ERC-20 token can be traded on Uniswap, but it could also be traded on Sushiswap or any other DEX if it is supported.

I don't know that much about Shiba Inu Specifically, but as an ERC-20 token it wouldn't really make sense to be a DOGE killer except on meme potential. ERC-20 tokens run on Ethereum, so you would also pay the high gas rates that Ethereum has. Since DOGE is meant to be a currency, an ERC-20 that is strictly a currency doesn't at first glance make a lot of sense since you could just use Ether if you wanted a currency built on Ethereum.

It looks like the Shiba team has a couple other coins, and you'll be able to swap between them somehow with Shibaswap. I didn't really read that much in detail since it just looks like a meme.
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Re: Crypto mania !

Post by Orangutan »

Dogecoin - much wow! Shiba Inu. ShibaSwap. Memes on top of memes of dogs of memes of memes. Elections are accidentally won through the meme. Elon Musk is on SNL memeing while Tesla buys bitcoin while SpaceX launches a Tesla into space.

Have we all lost our minds? :oops:

Technology and social media has changed everything and how society itself functions and interacts with each other. Life just feels like one big meme now. Or is it just me? I’m pretty young, but can’t imagine any of this 15 years ago.
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Re: Crypto mania !

Post by Prahasaurus »

langlands wrote: Mon May 10, 2021 12:05 am Prahasaurus or others, any opinions on Shiba Inu? The token claims to be the "Doge killer." It's hard for me to tell if there's anything legit in there or not and whether the development team is serious. It certainly has a giant hype train behind it and the reddit subforum has the typical GME/Doge vibe.
As God is my witness, I've been in crypto for 8 years, I've even mined DOGE at one time! I never, ever, thought I'd see the phrase "Doge killer" written within a serious question on crypto. It's truly a crazy time to be alive.
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Re: Crypto mania !

Post by Orangutan »

Prahasaurus wrote: Mon May 10, 2021 1:41 am
langlands wrote: Mon May 10, 2021 12:05 am Prahasaurus or others, any opinions on Shiba Inu? The token claims to be the "Doge killer." It's hard for me to tell if there's anything legit in there or not and whether the development team is serious. It certainly has a giant hype train behind it and the reddit subforum has the typical GME/Doge vibe.
As God is my witness, I've been in crypto for 8 years, I've even mined DOGE at one time! I never, ever, thought I'd see the phrase "Doge killer" written within a serious question on crypto. It's truly a crazy time to be alive.
Good god we’re now looking for the Doge Killer coin. Outside of BTC and ETH, which will also take a beating in the short term, how can anyone seriously say we’re not in a massive crypto bubble? There is just too much cash floating around. Doge killer is peak insanity.
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Re: Crypto mania !

Post by HanSolo »

Orangutan wrote: Mon May 10, 2021 1:27 am Dogecoin - much wow! Shiba Inu. ShibaSwap. Memes on top of memes of dogs of memes of memes. Elections are accidentally won through the meme. Elon Musk is on SNL memeing while Tesla buys bitcoin while SpaceX launches a Tesla into space.

Have we all lost our minds?
While some people think there are too many cryptos, others might opine that maybe there aren't enough. I think I'll sit out crypto until everyone is getting their own personal cryptocurrency. Why would I eat someone else's dog food?

For now, some of us (quite possibly a silent majority) just sit on low-cost index funds and enjoy watching the circus go by.

Much index. So cheaper. Very chill.
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Re: Crypto mania !

Post by watchnerd »

Prahasaurus wrote: Mon May 10, 2021 1:41 am
langlands wrote: Mon May 10, 2021 12:05 am Prahasaurus or others, any opinions on Shiba Inu? The token claims to be the "Doge killer." It's hard for me to tell if there's anything legit in there or not and whether the development team is serious. It certainly has a giant hype train behind it and the reddit subforum has the typical GME/Doge vibe.
As God is my witness, I've been in crypto for 8 years, I've even mined DOGE at one time! I never, ever, thought I'd see the phrase "Doge killer" written within a serious question on crypto. It's truly a crazy time to be alive.
The groundlings need their piece of the pie, too.
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Re: Crypto mania !

Post by Prahasaurus »

Orangutan wrote: Mon May 10, 2021 1:48 am
Prahasaurus wrote: Mon May 10, 2021 1:41 am
langlands wrote: Mon May 10, 2021 12:05 am Prahasaurus or others, any opinions on Shiba Inu? The token claims to be the "Doge killer." It's hard for me to tell if there's anything legit in there or not and whether the development team is serious. It certainly has a giant hype train behind it and the reddit subforum has the typical GME/Doge vibe.
As God is my witness, I've been in crypto for 8 years, I've even mined DOGE at one time! I never, ever, thought I'd see the phrase "Doge killer" written within a serious question on crypto. It's truly a crazy time to be alive.
Good god we’re now looking for the Doge Killer coin. Outside of BTC and ETH, which will also take a beating in the short term, how can anyone seriously say we’re not in a massive crypto bubble? There is just too much cash floating around. Doge killer is peak insanity.
ETH is not in a bubble. It has tremendous utility. Market leading DeFi apps should also continue to do very well. Projects like Aave. They have a growing user base and real revenue.

However, just about anything outside of Ethereum and DeFi is in a bubble, yes. XRP is a scam and yet it's worth billions. Ethereum Classic has no future and its pumping. Litecoin? What's the point? And please don't tell me "Litecoin is silver to Bitcoin's gold," that is just idiotic.

Avoid generalizations. Search out the cream. There are many Pets.com projects, but there is also a few Amazons. And when in doubt, buy more ETH...
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Re: Crypto mania !

Post by langlands »

decapod10 wrote: Mon May 10, 2021 1:07 am
langlands wrote: Mon May 10, 2021 12:17 am Yes, on the narrative level. I'm looking for a more technical perspective. Doge is basically a copy of litecoin, which is in the bitcoin family. Shiba Inu from what I understand is an ERC-20 token on Uniswap (itself a smart contract on Ethereum). I only have a tenuous grasp still of what this means so forgive the butchering of the lingo. In any case, the point is that Dogecoin is a dead coin (no development) while Shiba Inu claims to be developing all sorts of crazy dapps. Apparently, there is a highly anticipated ShibaSwap coming out. I just want to know how much of all of this is hot air.
Uniswap would be considered a "dApp" or decentralized application. It runs on Ethereum. A "smart contract" is a piece of code on the block chain. Contracts have addresses similar to wallet addresses. Uniswap surely has contracts however as a whole it's a dApp.

An ERC-20 token is an Ethereum token, so it would be more accurate to say it is "on Ethereum" rather than "on Uniswap". An ERC-20 token can be traded on Uniswap, but it could also be traded on Sushiswap or any other DEX if it is supported.

I don't know that much about Shiba Inu Specifically, but as an ERC-20 token it wouldn't really make sense to be a DOGE killer except on meme potential. ERC-20 tokens run on Ethereum, so you would also pay the high gas rates that Ethereum has. Since DOGE is meant to be a currency, an ERC-20 that is strictly a currency doesn't at first glance make a lot of sense since you could just use Ether if you wanted a currency built on Ethereum.

It looks like the Shiba team has a couple other coins, and you'll be able to swap between them somehow with Shibaswap. I didn't really read that much in detail since it just looks like a meme.
Thanks for clarifying, makes sense. No doubt it's a meme, but just because something is a meme doesn't mean it can't also have substance. Just from my googling though, the fact that it's so hard to find details about the substance (compared to the meming) is highly suspect.
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Re: Crypto mania !

Post by langlands »

Prahasaurus wrote: Mon May 10, 2021 2:02 am
Orangutan wrote: Mon May 10, 2021 1:48 am
Prahasaurus wrote: Mon May 10, 2021 1:41 am
langlands wrote: Mon May 10, 2021 12:05 am Prahasaurus or others, any opinions on Shiba Inu? The token claims to be the "Doge killer." It's hard for me to tell if there's anything legit in there or not and whether the development team is serious. It certainly has a giant hype train behind it and the reddit subforum has the typical GME/Doge vibe.
As God is my witness, I've been in crypto for 8 years, I've even mined DOGE at one time! I never, ever, thought I'd see the phrase "Doge killer" written within a serious question on crypto. It's truly a crazy time to be alive.
Good god we’re now looking for the Doge Killer coin. Outside of BTC and ETH, which will also take a beating in the short term, how can anyone seriously say we’re not in a massive crypto bubble? There is just too much cash floating around. Doge killer is peak insanity.
ETH is not in a bubble. It has tremendous utility. Market leading DeFi apps should also continue to do very well. Projects like Aave. They have a growing user base and real revenue.

However, just about anything outside of Ethereum and DeFi is in a bubble, yes. XRP is a scam and yet it's worth billions. Ethereum Classic has no future and its pumping. Litecoin? What's the point? And please don't tell me "Litecoin is silver to Bitcoin's gold," that is just idiotic.

Avoid generalizations. Search out the cream. There are many Pets.com projects, but there is also a few Amazons. And when in doubt, buy more ETH...
I don't understand why "Litecoin is silver to Bitcoin's gold" is idiotic. Even BCH doesn't look like it's going to die. There are some quasi-philosophical issues in crypto regarding how thinly value can be spread between various cryptos and it's no longer clear to me that BTC/ETH maximalism is necessarily the only equilibrium. To me, what's currently playing out with NFT's is playing out at a meta-level with cryptos.
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Re: Crypto mania !

Post by Prahasaurus »

langlands wrote: Mon May 10, 2021 2:15 am
Prahasaurus wrote: Mon May 10, 2021 2:02 am
Orangutan wrote: Mon May 10, 2021 1:48 am
Prahasaurus wrote: Mon May 10, 2021 1:41 am
langlands wrote: Mon May 10, 2021 12:05 am Prahasaurus or others, any opinions on Shiba Inu? The token claims to be the "Doge killer." It's hard for me to tell if there's anything legit in there or not and whether the development team is serious. It certainly has a giant hype train behind it and the reddit subforum has the typical GME/Doge vibe.
As God is my witness, I've been in crypto for 8 years, I've even mined DOGE at one time! I never, ever, thought I'd see the phrase "Doge killer" written within a serious question on crypto. It's truly a crazy time to be alive.
Good god we’re now looking for the Doge Killer coin. Outside of BTC and ETH, which will also take a beating in the short term, how can anyone seriously say we’re not in a massive crypto bubble? There is just too much cash floating around. Doge killer is peak insanity.
ETH is not in a bubble. It has tremendous utility. Market leading DeFi apps should also continue to do very well. Projects like Aave. They have a growing user base and real revenue.

However, just about anything outside of Ethereum and DeFi is in a bubble, yes. XRP is a scam and yet it's worth billions. Ethereum Classic has no future and its pumping. Litecoin? What's the point? And please don't tell me "Litecoin is silver to Bitcoin's gold," that is just idiotic.

Avoid generalizations. Search out the cream. There are many Pets.com projects, but there is also a few Amazons. And when in doubt, buy more ETH...
I don't understand why "Litecoin is silver to Bitcoin's gold" is idiotic. Even BCH doesn't look like it's going to die. There are some quasi-philosophical issues in crypto regarding how thinly value can be spread between various cryptos and it's no longer clear to me that BTC/ETH maximalism is necessarily the only equilibrium. To me, what's currently playing out with NFT's is playing out at a meta-level with cryptos.
Ok, I'll edit as follows: I believe Litecoin being positioned as silver to Bitcoin's gold is idiotic. And I think BCH will eventually die, yes. I think Bitcoin should remain as a storage of wealth, but I don't see the need for 20 variants of Bitcoin (Litecoin, Ethereum Classic, Dogecoin, whatever). Of course, I could be completely wrong!

As to this:
To me, what's currently playing out with NFT's is playing out at a meta-level with cryptos.
Can you elaborate? I'm not sure I follow. Thanks!
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Hustlinghustling
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Re: Crypto mania !

Post by Hustlinghustling »

HomerJ wrote: Sun May 09, 2021 10:15 pm
LOL... Normal banks wouldn't need anyone at a desk approving loans either if the people who wanted to borrow money would put down 2x the loan amount as collateral.
Which is it? That crypto lending is a risky, leveraged bubble with easy loans put into more crypto about to burst any moment now? Or an over-collateralized arrangement that's so excessive in its caution that banks wouldn't even have to worry about credit?

And you always conveniently forget with the leverage talk to consider how much of these borrowed positions are in fact putting on the trade whose strategy is betting against the crypto market, not enriching it: SHORTSELLING a specific crypto currency
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Re: Crypto mania !

Post by watchnerd »

Orangutan wrote: Mon May 10, 2021 1:27 am Dogecoin - much wow! Shiba Inu. ShibaSwap. Memes on top of memes of dogs of memes of memes. Elections are accidentally won through the meme. Elon Musk is on SNL memeing while Tesla buys bitcoin while SpaceX launches a Tesla into space.

Have we all lost our minds? :oops:
Don't worry, there will be a big hangover once the party stops.
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Re: Crypto mania !

Post by Wannaretireearly »

watchnerd wrote: Mon May 10, 2021 2:00 am
Prahasaurus wrote: Mon May 10, 2021 1:41 am
langlands wrote: Mon May 10, 2021 12:05 am Prahasaurus or others, any opinions on Shiba Inu? The token claims to be the "Doge killer." It's hard for me to tell if there's anything legit in there or not and whether the development team is serious. It certainly has a giant hype train behind it and the reddit subforum has the typical GME/Doge vibe.
As God is my witness, I've been in crypto for 8 years, I've even mined DOGE at one time! I never, ever, thought I'd see the phrase "Doge killer" written within a serious question on crypto. It's truly a crazy time to be alive.
The groundlings need their piece of the pie, too.
Watchnerd, thanks for sharing what your investing in via your signature and crypto details in this thread.
I'm curious, roughly what is 2% of your risk portfolio? Is this around $20k of pure play money just to get your feet wet?
Also, how is your EM strategy going ;) - still part of your portfolio?
Overall, i admire how you've setup your portfolio. I def need to understand your fixed income strategy better using TIPS etc.

:sharebeer
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Re: Crypto mania !

Post by watchnerd »

Wannaretireearly wrote: Mon May 10, 2021 7:12 am
I'm curious, roughly what is 2% of your risk portfolio? Is this around $20k of pure play money just to get your feet wet?
Also, how is your EM strategy going ;) - still part of your portfolio?
Overall, i admire how you've setup your portfolio. I def need to understand your fixed income strategy better using TIPS etc.

:sharebeer
Thanks.

The crypto allocation is a low six figure amount.

To put it in context, we save about 1.5x of our crypto allocation to retirement every year.

So it's pretty low risk for us in the big picture.

I have no idea how EM/FM are looking, I haven't really checked. ;)
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Re: Crypto mania !

Post by nisiprius »

Image

The loss of about $38 billion in Dogecoin's "market cap" due to a punchline delivered by Elon Musk on SNL shows the fragility of the crypto ecosystem. I don't think you can just call this "volatility." This is certifiable mania.

Note that press reports are inaccurate! Reuters says Dogecoin tumbles after Elon Musk calls it a 'hustle' on 'SNL' show. But that's not so!

The sketch, Weekend Update: Financial Expert Lloyd Ostertag on Cryptocurrency, is pretty funny, well worth two minutes of time. As you can tell just from the title, it isn't really "Elon Musk" who said it.
  • It's in a comedy sketch on a comedy show.
  • It is said by a fictional character named Lloyd Ostertag who is being played by Elon Musk--thinly disguised by wearing glasses.
  • Ostertag: "It's a cryptocurrency you can trade for actual money."
    Host: "So it's a hustle?"
    Ostertag: "Yeah, it's a hustle."
    Did you get that? He "supports" his statement that it's a hustle by giving a reason for thinking it isn't!
  • It is the punch line to a two-minute sketch and thus the actual words and tone are guided as much by a writer's instincts for "a funny thing to say," as by Musk's real opinion, whatever it may be.
It is as if JetBlue's stock had fallen -40% because of something Gordon Gekko said in the movie "Wall Street."

This is certifiable mania.

Sure, it is happening in Dogecoin and not the more respectable BTC or ETH. But it shows that mania on a large scale is happening within the cryptocurrency space. People are putting real, valuable fiat dollars into something that is 100.000% pure speculation. I have yet to hear claims that people are buying things at Nordstrom's with Dogecoin, or that Dogecoin is digital copper, or that anyone has registered a Dogecoin ETF with the SEC.

Note that $30 billion move in Dogecoin represents about 1.9% of the total claimed "market cap" for all cryptocurrency. In contrast, at its peak Gamestop had a market cap of about $25 billion in a global market cap of almost $100 trillion, or 0.025% of the global market cap for all stocks. As a percentage of its own global market, the Dogecoin move was roughly a thousand times as big.

So it would be a false equivalence to observe that there is mania in the stock market, too. Sure there is, but a loss of 1.9% of the total value of the global total of all cryptocurrency...
...due to a dive in the value of a joke currency...
...as the result of a punch line to a joke on a comedy show...
is no joke.
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Re: Crypto mania !

Post by Freefun »

A pretty good overview that provides what I think is a balanced viewpoint.

https://seths.blog/2021/05/why-the-blockchain-matters/
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Re: Crypto mania !

Post by txhill »

Prahasaurus wrote: Sun May 09, 2021 1:58 pm There is an excellent podcast called Bankless. Please look it up on your application of choice for podcasts. I can't recommend it highly enough. Please listen to episode 62 from April 26th. It's with Joel Monegro of Placeholder Venture Capital, and he discusses governance tokens and how value accrues to token holders. They talk about Uniswap in particular.

Warning: it's a long (90 minute?) podcast, touching on many subjects around governance. They get into DAO's and how they could transform governance structure well beyond traditional crypto projects. Super interesting.
The April 26 episode is a fantastic philosophical discussion. I really liked the discussion about why old valuation models fall apart in lots of situations and why there is so much value in governance itself. Thanks for pointing this out.
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Re: Crypto mania !

Post by sureshoe »

Complete non sequitur:

I continue to wonder how many people are making "huge profits" in crypto. I have no doubt there are some people who put in $5000 at $100 and now are sitting on $2.5M they wisely cashed out. But, I do wonder how many people have been jumping in and out of various types of crypto. This is what creates all the FOMO. We only hear about the winners, none of the losers. Just like on GameStop. Somebody bought that thing at $200+, right? Not just stupid mutual fund managers who don't understand how markets work.

It makes me think the NCAA bracket my 6 year old got 2nd place in this year. The guy that "won" had 12 brackets on ESPN. So he scored $90 on this one for a $10 bracket in our youth basketball league... but did he really make a profit?

Or, I think about WebVan, Floorz, even Yahoo... dunno.

Anyhoo... every time I think about tossing a couple thousand bucks at crytpo, that's what goes through my head. I could try to find "the next Bitcoin", but how many $5k do I have to throw out to hit a winner? If I put $20k in an "established" currency, can I really think with confidence it's going to outperform? Anyhoo... more just rambling.
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Re: Crypto mania !

Post by watchnerd »

Freefun wrote: Mon May 10, 2021 8:01 am A pretty good overview that provides what I think is a balanced viewpoint.

https://seths.blog/2021/05/why-the-blockchain-matters/
I had reached a similar conclusion to the author, perhaps because I worked in VC-backed open source startups for so long.

Tokens provide a potential mechanism to invest capital in and monetize revenue streams for open source software development.
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Re: Crypto mania !

Post by Wannaretireearly »

watchnerd wrote: Mon May 10, 2021 7:18 am
Wannaretireearly wrote: Mon May 10, 2021 7:12 am
I'm curious, roughly what is 2% of your risk portfolio? Is this around $20k of pure play money just to get your feet wet?
Also, how is your EM strategy going ;) - still part of your portfolio?
Overall, i admire how you've setup your portfolio. I def need to understand your fixed income strategy better using TIPS etc.

:sharebeer
Thanks.

The crypto allocation is a low six figure amount.

To put it in context, we save about 1.5x of our crypto allocation to retirement every year.

So it's pretty low risk for us in the big picture.

I have no idea how EM/FM are looking, I haven't really checked. ;)
Awesome. Thanks watchnerd!
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Re: Crypto mania !

Post by banook »

sureshoe wrote: Mon May 10, 2021 9:06 am Complete non sequitur:

I continue to wonder how many people are making "huge profits" in crypto. I have no doubt there are some people who put in $5000 at $100 and now are sitting on $2.5M they wisely cashed out. But, I do wonder how many people have been jumping in and out of various types of crypto. This is what creates all the FOMO. We only hear about the winners, none of the losers. Just like on GameStop. Somebody bought that thing at $200+, right? Not just stupid mutual fund managers who don't understand how markets work.

It makes me think the NCAA bracket my 6 year old got 2nd place in this year. The guy that "won" had 12 brackets on ESPN. So he scored $90 on this one for a $10 bracket in our youth basketball league... but did he really make a profit?

Or, I think about WebVan, Floorz, even Yahoo... dunno.

Anyhoo... every time I think about tossing a couple thousand bucks at crytpo, that's what goes through my head. I could try to find "the next Bitcoin", but how many $5k do I have to throw out to hit a winner? If I put $20k in an "established" currency, can I really think with confidence it's going to outperform? Anyhoo... more just rambling.
I will bite on this non sequitur. I lost in 2017 (I was a loser in BTC), but it was money I was prepared to lose and continued to hold because I find the tech interesting. Similar to now - I only hold what I am fully prepared to lose, and in that preparation I learn. In that loss, I might also learn. I appreciate the caution of more experienced investors and I have also enjoyed the perspectives and links of those trying to spread good information about the crypto space and ask good questions. I did not even think that BH forum would allow for such a discussion, so it's good to get these diverse thoughts in one space.

If you are curious - I think others have provided nice information on their AA for crypto. Or if you want to throw none of your "real" fiat money at it, just use Brave browser attention tokens and convert/trade those over for BTC or ETH. Note: I am not endorsing Brave or BAT - it's a browser that pays a crypto token (I think it's worth $1.45 USD right now) for your attention and is tradable on the easiest UI crypto exchange - coinbase, and so might be a route for those who are crypto curious but very risk averse. Learn the technology by using it.
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Re: Crypto mania !

Post by decapod10 »

sureshoe wrote: Mon May 10, 2021 9:06 am Complete non sequitur:

I continue to wonder how many people are making "huge profits" in crypto. I have no doubt there are some people who put in $5000 at $100 and now are sitting on $2.5M they wisely cashed out. But, I do wonder how many people have been jumping in and out of various types of crypto. This is what creates all the FOMO. We only hear about the winners, none of the losers. Just like on GameStop. Somebody bought that thing at $200+, right? Not just stupid mutual fund managers who don't understand how markets work.

It makes me think the NCAA bracket my 6 year old got 2nd place in this year. The guy that "won" had 12 brackets on ESPN. So he scored $90 on this one for a $10 bracket in our youth basketball league... but did he really make a profit?

Or, I think about WebVan, Floorz, even Yahoo... dunno.

Anyhoo... every time I think about tossing a couple thousand bucks at crytpo, that's what goes through my head. I could try to find "the next Bitcoin", but how many $5k do I have to throw out to hit a winner? If I put $20k in an "established" currency, can I really think with confidence it's going to outperform? Anyhoo... more just rambling.
I'm not saying you made a bad decision avoiding crypto, but to your question virtually every crypto within the top 50 (like probably anything you have heard about even in passing) has probably at least doubled since the beginning of the year (even BTC) so anyone jumping around between crypto has still made money yes. If you go back and look at posts on BH from January and look up every crypto that was even mentioned, probably none of them have gone down from January 1 until now. I can think of very few losers except people trying to short.

People who are in the crypto space for the past 6 months who claim to have made a lot of money are probably not lying, except maybe about how much they made.

Of course that can't last forever, at some point some or all will have to start coming down.

Edit: to be clear, I'm not advocating people buy into crypto unless you really believe in the specific ones you are buying, and FOMO isn't a good reason. It's very risky.
Last edited by decapod10 on Mon May 10, 2021 10:09 am, edited 2 times in total.
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Re: Crypto mania !

Post by Valuethinker »

JohnDindex wrote: Sat May 08, 2021 1:49 pm I happen to have 3 friends who are financial advisors. All 3 of them have told me a similar story in the last 30 days. They have existing clients and new prospects that are crypto millionaires. Too much to write but crazy stories, people in their 30’s worth 4-6 million dollars. The advisors are obviously pushing them to sell enough and invest normally but it’s just insane. Some of them are wanting to double down, pull money from traditional investments, and even use leverage.

One of them said to me: “ I think when this thing pops, it might trigger a collapse in markets etc”

I own no crypto and I have no desire.

What do the bogleheads think? Could a crypto bubble burst cause a financial panic ?
It is leverage that causes the meltdown. Borrowing more money to invest more, with the collateral of what you already have.

Which then, when the value of the collateral falls, leads to margin calls & forced liquidations. Which leads to lower prices, more margin calls, more forced liquidations.

Even in the Tech Media Telecoms aka "dot com" bubble, although the dot coms were primarily equity financed, the Media & Telecoms stocks had borrowed hundreds of billions of dollars, to dig holes in the ground and fill them with fibre optics that were often never lit. And companies had signed leases for huge amounts of office space that they then defaulted on, another form of leverage.

So, if people have found a way to leverage their crypto investments, there could be broader systemic effects of a bubble collapse.

If not, it's like your average mining bubble when it blows, only the investors who don't get out ahead of the pack get hurt. The last investors, usually the woman on the street, the little guy or gal, get hosed. The smart money is off on the next new new thing.
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Re: Crypto mania !

Post by BolderBoy »

chinchin wrote: Sat May 08, 2021 10:08 pm
BolderBoy wrote: Sat May 08, 2021 9:56 pm
Mike Scott wrote: Sat May 08, 2021 7:58 pmAll of us with S&P 500 or total stock market funds already own a piece of the crypto mania.
Do we? And is it a significant amount?
SQ, MSTR, and Tesla have over $8B in Bitcoin.

https://bitcointreasuries.org/
Does this mean I now own something I don't understand?

How should we view this? Are the companies we own that are holding BTC doing so to use it as a medium of exchange, such as the fiat currency we have in our checking accounts? If they are holding BTC merely as an investment, such as one publicly held company owning shares in another publicly held company, should it matter to those of us who don't choose to buy BTC?

I guess I'm asking, "Should we care if our publicly traded company chooses to hold a small amount of BTC?" Should the underlying tracking index care?
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Re: Crypto mania !

Post by alluringreality »

BolderBoy wrote: Mon May 10, 2021 9:56 am
chinchin wrote: Sat May 08, 2021 10:08 pm
BolderBoy wrote: Sat May 08, 2021 9:56 pm
Mike Scott wrote: Sat May 08, 2021 7:58 pmAll of us with S&P 500 or total stock market funds already own a piece of the crypto mania.
Do we? And is it a significant amount?
SQ, MSTR, and Tesla have over $8B in Bitcoin.

https://bitcointreasuries.org/
Does this mean I now own something I don't understand?
At this point it does not appear as a significant amount in relation to index stock investing. Microstrategy appears to be the current largest corporate holder of bitcoin for the funds I own, and for example the following source suggests MSTR amounts to approximately 0.01% of VTI. While ideally I'd prefer to avoid Michael Saylor's business on principle, from a practical perspective the miniscule portion of the market probably does not make much difference.
https://www.etfchannel.com/symbol/mstr/
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Re: Crypto mania !

Post by Orangutan »

nisiprius wrote: Mon May 10, 2021 7:32 am Image

The loss of about $38 billion in Dogecoin's "market cap" due to a punchline delivered by Elon Musk on SNL shows the fragility of the crypto ecosystem. I don't think you can just call this "volatility." This is certifiable mania.

Note that press reports are inaccurate! Reuters says Dogecoin tumbles after Elon Musk calls it a 'hustle' on 'SNL' show. But that's not so!

The sketch, Weekend Update: Financial Expert Lloyd Ostertag on Cryptocurrency, is pretty funny, well worth two minutes of time. As you can tell just from the title, it isn't really "Elon Musk" who said it.
  • It's in a comedy sketch on a comedy show.
  • It is said by a fictional character named Lloyd Ostertag who is being played by Elon Musk--thinly disguised by wearing glasses.
  • Ostertag: "It's a cryptocurrency you can trade for actual money."
    Host: "So it's a hustle?"
    Ostertag: "Yeah, it's a hustle."
    Did you get that? He "supports" his statement that it's a hustle by giving a reason for thinking it isn't!
  • It is the punch line to a two-minute sketch and thus the actual words and tone are guided as much by a writer's instincts for "a funny thing to say," as by Musk's real opinion, whatever it may be.
It is as if JetBlue's stock had fallen -40% because of something Gordon Gekko said in the movie "Wall Street."

This is certifiable mania.

Sure, it is happening in Dogecoin and not the more respectable BTC or ETH. But it shows that mania on a large scale is happening within the cryptocurrency space. People are putting real, valuable fiat dollars into something that is 100.000% pure speculation. I have yet to hear claims that people are buying things at Nordstrom's with Dogecoin, or that Dogecoin is digital copper, or that anyone has registered a Dogecoin ETF with the SEC.

Note that $30 billion move in Dogecoin represents about 1.9% of the total claimed "market cap" for all cryptocurrency. In contrast, at its peak Gamestop had a market cap of about $25 billion in a global market cap of almost $100 trillion, or 0.025% of the global market cap for all stocks. As a percentage of its own global market, the Dogecoin move was roughly a thousand times as big.

So it would be a false equivalence to observe that there is mania in the stock market, too. Sure there is, but a loss of 1.9% of the total value of the global total of all cryptocurrency...
...due to a dive in the value of a joke currency...
...as the result of a punch line to a joke on a comedy show...
is no joke.
So when does the party stop? It very much feels like peak hysteria right now. And what does the post-crash landscape look like?
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Re: Crypto mania !

Post by nisiprius »

chinchin wrote: Sat May 08, 2021 10:08 pm
BolderBoy wrote: Sat May 08, 2021 9:56 pm
Mike Scott wrote: Sat May 08, 2021 7:58 pmAll of us with S&P 500 or total stock market funds already own a piece of the crypto mania.
Do we? And is it a significant amount?
SQ, MSTR, and Tesla have over $8B in Bitcoin...
(As already noted above by AlluringReality), $8B is not a significant percentage of $50 trillion stock market. It's 0.016%. If you own $100,000 of total stock than arguably you sorta-kinda-pseudo-"own" crypto valued at $16. Fine. It's a fair "gotcha" for anyone making an absolute statement that they would never own a penny in cryptocurrency, but that's all it is. You could probably make an entertaining list of other surprising things you didn't know you "own" $16 worth of.
sureshoe wrote: Mon May 10, 2021 9:06 amI continue to wonder how many people are making "huge profits" in crypto.
The problem is: how to keep score? What is the end state? When is it "over?"

During periods of mania many people make and lose fortunes.

A former colleague of mine had a story of "how I turned $2,500 into $2,500 in the commodities market." He made and lost $1 million.

Apparently people with the right temperament and willingness to take risk can temporarily make "huge profits," but the exact same qualities that lead to huge profits make it likely that they will experience huge losses. Someone who has multiplied their money by ten a few times is not going to suddenly stop and miss out on the opportunity to multiply it by ten again. The mentality is "Stocks only go up. Only losers take profits."

And then that has to be weighted by storytelling bias. One person who makes $10 million in crypto is a good story, ten thousand people losing $1,000 each in crypto is not.

I always find it odd that a man who ultimately lost all his money and shot himself is considered to be a "legendary investor," but the story of how Jesse Livermore first shorted the stock market in 1929 is a much better and more memorable story.
Last edited by nisiprius on Mon May 10, 2021 11:35 am, edited 2 times in total.
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Re: Crypto mania !

Post by HomerJ »

Hustlinghustling wrote: Mon May 10, 2021 3:35 am
HomerJ wrote: Sun May 09, 2021 10:15 pm
LOL... Normal banks wouldn't need anyone at a desk approving loans either if the people who wanted to borrow money would put down 2x the loan amount as collateral.
Which is it? That crypto lending is a risky, leveraged bubble with easy loans put into more crypto about to burst any moment now? Or an over-collateralized arrangement that's so excessive in its caution that banks wouldn't even have to worry about credit?

And you always conveniently forget with the leverage talk to consider how much of these borrowed positions are in fact putting on the trade whose strategy is betting against the crypto market, not enriching it: SHORTSELLING a specific crypto currency
Okay, how much of the borrowed money is shorting? I don't conveniently forget. I don't know. What are the numbers and where are you getting them?
A Goldman Sachs associate provided a variety of detailed explanations, but then offered a caveat, “If I’m being dead-### honest, though, nobody knows what’s really going on.”
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HomerJ
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Re: Crypto mania !

Post by HomerJ »

nisiprius wrote: Mon May 10, 2021 11:19 amApparently people with the right temperament and willingness to take risk can temporarily make "huge profits," but the exact same qualities that lead to huge profits make it likely that they will experience huge losses. Someone who has multiplied their money by ten a few times is not going to suddenly stop and miss out on the opportunity to multiply it by ten again. The mentality is "Stocks only go up. Only losers take profits."
Good point.

Most of us here, even if we did invest in something that went up 1000x, would never get those profits, because we would have cashed out (at least some, and maybe all) at 3x, 10x, 20x, 50x, etc.

But someone dedicated enough to not sell ANYTHING all the way up to 500x isn't likely to sell at 800x or 1000x either...

I'd be interested to hear from the guy who had made $500,000, and is now down to $400,000 (or less?). Still dedicated? Still certain it will bounce back and go higher? Is there any point where he might sell? If he drops to $200,000? $100,000?
A Goldman Sachs associate provided a variety of detailed explanations, but then offered a caveat, “If I’m being dead-### honest, though, nobody knows what’s really going on.”
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