Paul Tudor: Compelling case for bitcoin ?

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indexlover
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Paul Tudor: Compelling case for bitcoin ?

Post by indexlover » Mon May 11, 2020 12:35 pm

Have you seen this article by Paul Tudor ?

https://www.docdroid.net/2nTB6aY/may-20 ... utlook-pdf

"The most compelling argument for owning Bitcoin is the coming digitization of currency everywhere, accelerated by COVID-19. Bull markets are built on an ever-expanding universe of buyers.Central to the price of Bitcoin is how many more (or less) owners of Bitcoin will there be beyond the 60 million who currently own it? The probable introduction ofFacebook’s Libra (whose value will be pegged to the US dollar and will not be a store of value in that sense) as well as China’s DCEP, also tied to the yuan, will make virtual digital wallets a commonplace tool for the world. It will make the understanding, utility, and ease of ownership of Bitcoin a much more commonplace option than it is today.

Owning Bitcoin is a great way to defend oneself against the GMI (Great Monetary Inflation) , given the current fact set. As Satoshi Nakamoto, the anonymous creator of Bitcoin, stated in anonline forum around the time he launched Bitcoin, “the root problem with conventional currency is all the trust that’s required to make it work. The central bank must be trusted not to debase the currency, but the history of fiat currencies is full of breaches of that trust.” I am not an advocate of Bitcoin ownership in isolation, but do recognize its potential in a period when we have the most unorthodox economic policies in modern history. So, we need to adapt our investmentstrategy. We have updated theTudor BVI offering memoranda to disclose that we may trade Bitcoin futures for Tudor BVI. We have set the initial maximum exposure guideline for purchasing Bitcoin futures to a low single digit exposure percentage of Tudor BVI’s net assets, which seems prudent.We will review this exposure guideline regularly."

Thoughts ?
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Re: Paul Tudor: Compelling case for bitcoin ?

Post by buhlaxtus » Mon May 11, 2020 12:43 pm

My thought is that it's complete gibberish. Do you think you could translate that into plain english?

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Re: Paul Tudor: Compelling case for bitcoin ?

Post by Ferdinand2014 » Mon May 11, 2020 12:48 pm

I see no compelling reason for bitcoin. I personally would never invest my money in any cryptocurrency.
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Re: Paul Tudor: Compelling case for bitcoin ?

Post by randomguy » Mon May 11, 2020 1:02 pm

buhlaxtus wrote:
Mon May 11, 2020 12:43 pm
My thought is that it's complete gibberish. Do you think you could translate that into plain english?
It is pretty much a bunch of random statements/opinions and then a jump to a conclusion. Take the comments about Libre. Yes it might make digital currencies more accepted. It might also mean that nobody uses bitcoin. Will digital currency help against GMI(whatever that is)? Who knows. And so on.

Nobody knows what the future is for digital currency and if the current currencies will ever be worth anything. For all we know bitcoin will be the friendster of digitial currencies. Or it could be the facebook. Or digital currencies could be a dead end (i.e. have Segways revolutionized urban transport?)

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Re: Paul Tudor: Compelling case for bitcoin ?

Post by DesertMan » Mon May 11, 2020 1:06 pm

All the good stuff he attributed to bitcoin is equally applicable to physical gold. Gold has the added advantage of never going obsolete.

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Re: Paul Tudor: Compelling case for bitcoin ?

Post by nisiprius » Mon May 11, 2020 1:12 pm

The compelling case against bitcoin is it is no good for the things Satoshi Nakamoto said it would be good for.

He called it "a cash system" in Bitcoin: a Peer-to-Peer Electronic Cash System,. He said that the case for it is that
Commerce on the Internet has come to rely almost exclusively on financial institutions serving as trusted third parties to process electronic payments. While the system works well enough for most transactions, it still suffers from the inherent weaknesses of the trust based model. Completely non-reversible transactions are not really possible, since financial institutions cannot avoid mediating disputes. The cost of mediation increases transaction costs, limiting the minimum practical transaction size and cutting off the possibility for small casual transactions...
So it's raison d'etre is a cash system that supports "small casual transactions" at a cost far lower than the cost of credit card processing.

The compelling case against bitcoin is that it is no good as a "cash system," it is no good for "small casual transactions," and it is no cheaper than trust-based credit card systems that allow bill disputes and chargebacks.
Last edited by nisiprius on Mon May 11, 2020 1:14 pm, edited 1 time in total.
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Re: Paul Tudor: Compelling case for bitcoin ?

Post by jhsu802701 » Mon May 11, 2020 1:14 pm

Is it just me, or does it seem that anything sold as an alternative to "fiat currency" turns out to be extremely risky and speculative? I don't know about Paul Tudor, but I have to pay all of my expenses in US dollars. The landlord, that bank that issues my credit card, gas stations, grocery stores, utility providers, etc. all insist on being paid in US dollars.

What's really ironic is that those selling these "fiat currency" alternatives accept payment in the very same fiat currency they deride.

Warren Buffett and Charlie Munger have warned that cryptocurrencies are bubbles. History has not been kind to those who disregarded their warnings.

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Re: Paul Tudor: Compelling case for bitcoin ?

Post by TropikThunder » Mon May 11, 2020 1:20 pm

I ignore most Bitcoin threads but sometimes I can’t help myself: the requirements for something to be an (A) investment or (B) a currency are polar opposites. An investment is worthless if its value doesn’t increase. A currency is unusable unless it’s value is stable.

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Re: Paul Tudor: Compelling case for bitcoin ?

Post by nisiprius » Mon May 11, 2020 1:23 pm

jhsu802701 wrote:
Mon May 11, 2020 1:14 pm
...What's really ironic is that those selling these "fiat currency" alternatives accept payment in the very same fiat currency they deride...
Indeed. Last time I was in the local supermarket, the Coinstar machine had a sign on it saying "Buy bitcoin here." So you can buy it.

But can you sell bitcoin there? Can you exchange it for dollars, even with a fee or markup, which you can then use to buy groceries?

Even granted that the machine isn't set up to dispense paper money, when you put in coins it prints out a slip that a cashier will accept as payment for groceries, and, I think, exchange it for cash. So it could just as well accept your bitcoin and print a similar slip. But it does not.

Coinstar wants your fiat money coins. But they don't want your bitcoin after they've sold it to you.
Last edited by nisiprius on Mon May 11, 2020 1:49 pm, edited 1 time in total.
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Re: Paul Tudor: Compelling case for bitcoin ?

Post by langlands » Mon May 11, 2020 1:26 pm

As someone who owns a little bit of both bitcoin and gold, the responses in this thread are very reassuring. It seems that most mainstream investors are pricing the possibility of hyper-inflation or some sort of collapse of the monetary system at essentially 0.

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Re: Paul Tudor: Compelling case for bitcoin ?

Post by abuss368 » Mon May 11, 2020 1:28 pm

No chance! In my opinion I look at that as speculation and not investing. I would rather buy more shares of Total Stock Index!
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Re: Paul Tudor: Compelling case for bitcoin ?

Post by adamthesmythe » Mon May 11, 2020 1:36 pm

> The most compelling argument for owning Bitcoin is the coming digitization of currency everywhere

So that's the "most compelling" argument??

But digitization =/ blockchain =/ bitcoin

so I'm not persuaded.

Not gonna read the whole document...but the extract sounds like a few paragraphs indicating- and attempting to justify- that the fund now intends to buy* bitcoin futures.

* was going to write "invest in" here...then I decided it was the wrong phrase.
Last edited by adamthesmythe on Mon May 11, 2020 1:39 pm, edited 1 time in total.

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Re: Paul Tudor: Compelling case for bitcoin ?

Post by arcticpineapplecorp. » Mon May 11, 2020 1:39 pm

maybe ask someone else who was so ga ga over bitcoin (until he wasn't)...John McAfee who predicted bitcoin would be worth $1 million by the end of this year:

https://thenextweb.com/hardfork/2019/10 ... rediction/

course even though he still believed that in 2019, now he renegs on his bet:

https://www.forbes.com/sites/billybambr ... 55ac049e58
https://thenextweb.com/hardfork/2020/01 ... to-hit-1m/
https://news.bitcoin.com/mcafee-catches ... tcoin-bet/

these guys obviously just crave attention. even bad attention is better than no attention at all.
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Re: Paul Tudor: Compelling case for bitcoin ?

Post by gwe67 » Mon May 11, 2020 1:39 pm

I think if OP really believes any of this, then he/she should change usernames.
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Re: Paul Tudor: Compelling case for bitcoin ?

Post by nisiprius » Mon May 11, 2020 1:41 pm

langlands wrote:
Mon May 11, 2020 1:26 pm
As someone who owns a little bit of both bitcoin and gold, the responses in this thread are very reassuring. It seems that most mainstream investors are pricing the possibility of hyper-inflation or some sort of collapse of the monetary system at essentially 0.
Not necessarily. I think the possibility is real enough, I just don't think there's any cheap reliable protection against it. And I am not willing to buy something just because someone says it will do that.

For example, I have bought neither Miracle Mineral Solution nor colloidal silver to protect myself against COVID-19, even though I believe that the probability that I will catch and then die of COVID-19 is not "essentially zero."
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Re: Paul Tudor: Compelling case for bitcoin ?

Post by langlands » Mon May 11, 2020 1:48 pm

nisiprius wrote:
Mon May 11, 2020 1:41 pm
langlands wrote:
Mon May 11, 2020 1:26 pm
As someone who owns a little bit of both bitcoin and gold, the responses in this thread are very reassuring. It seems that most mainstream investors are pricing the possibility of hyper-inflation or some sort of collapse of the monetary system at essentially 0.
Not necessarily. I think the possibility is real enough, I just don't think there's any cheap reliable protection against it. And I am not willing to buy something just because someone says it will do that.

For example, I have bought neither Miracle Mineral Solution nor colloidal silver to protect myself against COVID-19, even though I believe that the probability that I will catch and then die of COVID-19 is not "essentially zero."
Yes, you're right that it makes no sense to buy bitcoin or gold if you don't think it will actually protect against hyperinflation. But I don't think "colloidal silver" as a remedy against COVID-19 is a fair comparison. It's pretty clear (at least to me) that if the monetary system collapses, bitcoin and gold will start spiking because they are the closest substitutes we have for a store of value (and gold at least has a long history of living up to such a claim). And this perception is what will give it value.

I think I actually agree with you that bitcoin as it is currently designed is essentially worthless as a currency. I'm essentially a bitcoin maximalist (in the mildest sense). It is digital gold and it's worth something because a lot of people think it's worth something. And its value grows as alternatives to it weaken. I view it as diversification to gold. Before we only had gold. Now we have physical gold and digital gold, so why not own a little of both.

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Re: Paul Tudor: Compelling case for bitcoin ?

Post by StormShadow » Mon May 11, 2020 1:59 pm

indexlover wrote:
Mon May 11, 2020 12:35 pm
Thoughts ?
Yeah...

Currency speculation is extremely risky and not really an investment.

Cryptocurrency speculation is stupid.

Those are my thoughts.

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Re: Paul Tudor: Compelling case for bitcoin ?

Post by neurosphere » Mon May 11, 2020 2:03 pm

The technology behind bitcoin is intriguing and such currencies may indeed oneday be in widespread use.

But why is bitcoin, in particular a good investment? Does it have an unexpiring patent on blockchain currencies? Why won't we all be using some other "it coin". I like "chitcoin" (and I'm certain someone has used that term before me without even needing to look it up). But aren't there hundreds of competing such "currencies"? Do their prices move in lockstep, and if not, why not?

I have no idea whatever who the author is nor did I click on the pdf, but someone is likely selling something related to bitcoin?

If I intend to buy a particular car in the next few weeks, I know how many dollars in my account are needed to do so. If I have bitcoin, I have no idea how much it might cost me at that time. If my bitcoin has gone down, I've "lost" money when I sell to buy the car in that the car got more expensive. Or perhaps my bitcoin went up. Do I pay capital gains when I sell to buy the car? Wait, the dealer takes bitcoin? Does that transfer of bitcoin to the dealer count as a barter? There are existing rules/laws for this, and any of those laws may change too.

If bitcoin is then supposed to merely be a long-term inflation hedge instead of a growth investment, why is it any better than TIPS (or TIPS analog of another country), or other investments touted for inflation protections (e.g. gold)?

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Re: Paul Tudor: Compelling case for bitcoin ?

Post by Jack FFR1846 » Mon May 11, 2020 2:04 pm

StormShadow wrote:
Mon May 11, 2020 1:59 pm
indexlover wrote:
Mon May 11, 2020 12:35 pm
Thoughts ?
Yeah...

Currency speculation is extremely risky and not really an investment.

Cryptocurrency speculation is stupid.

Those are my thoughts.
I don't know how you can say that.

Since those exact words were in my head and I didn't tell you.
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Re: Paul Tudor: Compelling case for bitcoin ?

Post by Dottie57 » Mon May 11, 2020 2:06 pm

Ferdinand2014 wrote:
Mon May 11, 2020 12:48 pm
I see no compelling reason for bitcoin. I personally would never invest my money in any cryptocurrency.
+1000. For both points.

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Re: Paul Tudor: Compelling case for bitcoin ?

Post by Dottie57 » Mon May 11, 2020 2:06 pm

Jack FFR1846 wrote:
Mon May 11, 2020 2:04 pm
StormShadow wrote:
Mon May 11, 2020 1:59 pm
indexlover wrote:
Mon May 11, 2020 12:35 pm
Thoughts ?
Yeah...

Currency speculation is extremely risky and not really an investment.

Cryptocurrency speculation is stupid.

Those are my thoughts.
I don't know how you can say that.

Since those exact words were in my head and I didn't tell you.
:sharebeer

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Re: Paul Tudor: Compelling case for bitcoin ?

Post by firebirdparts » Mon May 11, 2020 2:16 pm

indexlover wrote:
Mon May 11, 2020 12:35 pm
Thoughts ?
Just replace "bitcoin" with "beany babies" and it doesn't change a thing.
A fool and your money are soon partners

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Re: Paul Tudor: Compelling case for bitcoin ?

Post by firebirdparts » Mon May 11, 2020 2:18 pm

langlands wrote:
Mon May 11, 2020 1:26 pm
As someone who owns a little bit of both bitcoin and gold, the responses in this thread are very reassuring. It seems that most mainstream investors are pricing the possibility of hyper-inflation or some sort of collapse of the monetary system at essentially 0.
Definitely. Now obviously we're not talking about Argentine 100% domestic investors here, nor Venezuelan, but yes.
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Re: Paul Tudor: Compelling case for bitcoin ?

Post by Forester » Mon May 11, 2020 2:26 pm

Paul Tudor Jones is a trader and Bitcoin I would guess, is only one or two percent of his total positions.

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Re: Paul Tudor: Compelling case for bitcoin ?

Post by nisiprius » Mon May 11, 2020 2:29 pm

Is the correct full name bitcoin, with a lower-case b, or Bitcoin, with an uppercase B?
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Re: Paul Tudor: Compelling case for bitcoin ?

Post by Leesbro63 » Mon May 11, 2020 2:54 pm

Forester wrote:
Mon May 11, 2020 2:26 pm
Paul Tudor Jones is a trader and Bitcoin I would guess, is only one or two percent of his total positions.
Paul Tudor Jones was on CNBC this morning and said EXACTLY that...that Bitcoin was between one and two percent of his positions and that it is a great SPECULATION but not a great investment. Or something along those lines.

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Re: Paul Tudor: Compelling case for bitcoin ?

Post by Enganerd » Mon May 11, 2020 3:04 pm

I have otherwise rational and successful friends that are "bitcoin maximalist". I find myself oscillating between thinking they are just too far into a sound money echo chamber and that btc may turn out having a large impact on global economics. They sent me this document. Personally, the quotes below represent the most compelling case for holding a small % of your AA in btc. Full disclosure: I own some btc but less than 2% of my AA.

They "polled" their research group to score and compare global stocks and bonds, fiat cash, gold, and btc based on 4 metrics. The metrics are:
1.Purchasing Power–How does this asset retain its value over time?
2.Trustworthiness–How is it perceived through time and universally as a store of value?
3.Liquidity–How quickly can the asset be monetized into a transactional currency?
4.Portability–Can you geographically move this asset if you had to for an unforeseen reason?
Table 2. Global assets outstanding (USD bn)
1. Global fincancial assets (stocks and credit) (266,917)
2. Cash (proxy for global M1) (39,806)
3. Total value of above ground gold (9,918)
4. Total market capitalization of Bitcoin (186)
Table 3. Grading assets by their ability to store value (Subjective score)
1. Financial Assets (71)
2. Fiat cash (54)
3. Gold (62)
4. Bitcoin (43)
So that was the flavor behind some of the discussions that were had when scoring the suitability of each asset as a store of value. What was surprising to me was not that Bitcoin came in last,but that it scored as high as it did. Bitcoin had an overall score nearly 60% of that of financial assets but has a market cap that is 1/1200th of that. It scores 66% of gold as a store of value,but has a market cap that is 1/60th of gold’s outstanding value. Something appears wrong here and my guess is it is the price of Bitcoin.
Last edited by Enganerd on Mon May 11, 2020 3:17 pm, edited 1 time in total.

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Re: Paul Tudor: Compelling case for bitcoin ?

Post by fredflinstone » Mon May 11, 2020 3:14 pm

Cardless digital transactions are increasingly common through apps such as Apple Pay and Google Pay. From Korea to Kenya, people increasingly pay for stuff using a phone -- no credit card needed (as far as I know) and definitely no cash needed. I gather people are still transacting in a digital version of their local currency, but it is not such a large jump to imagine that someday people will transact in Bitcoin (or some other digital currency). Actually it's a really small jump.

Bitcoin has several advantages over fiat currencies. First and forecost, it is much less likely to be degraded because (if I recall correctly) the supply is fixed. Second, in theory it can be used all over the world. No need to pay a bank 5% transaction fee to convert dollars to yen. Just use Bitcoin in both countries.

Someone over at Gyroscope Investing recommended a modified version of the Permanent Portfolio. Rather than 25/25/25/25 stocks/bonds/gold/cash, they suggested 24/24/24/24/4 stocks/bonds/gold/cash/bitcoin. Seems reasonable to me.

I don't currently own Bitcoin but I am seriously considering it. The reason I've held off so far is because I try to keep things a little bit simple and, in particular, I worry about Wilma's ability to access our investments if I die before her. I also worry about security a little and transaction costs -- still ridiculously high for Bitcoin.
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Re: Paul Tudor: Compelling case for bitcoin ?

Post by fredflinstone » Mon May 11, 2020 3:22 pm

nisiprius wrote:
Mon May 11, 2020 1:12 pm
The compelling case against bitcoin is it is no good for the things Satoshi Nakamoto said it would be good for.

He called it "a cash system" in Bitcoin: a Peer-to-Peer Electronic Cash System,. He said that the case for it is that
Commerce on the Internet has come to rely almost exclusively on financial institutions serving as trusted third parties to process electronic payments. While the system works well enough for most transactions, it still suffers from the inherent weaknesses of the trust based model. Completely non-reversible transactions are not really possible, since financial institutions cannot avoid mediating disputes. The cost of mediation increases transaction costs, limiting the minimum practical transaction size and cutting off the possibility for small casual transactions...
So it's raison d'etre is a cash system that supports "small casual transactions" at a cost far lower than the cost of credit card processing.

The compelling case against bitcoin is that it is no good as a "cash system," it is no good for "small casual transactions," and it is no cheaper than trust-based credit card systems that allow bill disputes and chargebacks.
It seems to me Bitcoin can be used for small transactions just as easily as large ones. If there is a demand for the protections offered by credit cards, then credit card issuers will offer Bitcoin-denominated credit cards.
Stocks 28 / Gold 23 / Long-term US treasuries 19 / Cash 22 / TIPS 8

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Re: Paul Tudor: Compelling case for bitcoin ?

Post by David Jay » Mon May 11, 2020 3:26 pm

nisiprius wrote:
Mon May 11, 2020 1:12 pm
The compelling case against bitcoin is it is no good for the things Satoshi Nakamoto said it would be good for.
But it is really good at other things, like speculation, asset loss (when you lose your keys or the exchange folds) and natural resource consumption. :wink:
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Re: Paul Tudor: Compelling case for bitcoin ?

Post by telemark » Mon May 11, 2020 3:33 pm

I've always preferred using physical currency, actual bills and coins, but since Covid-19 I've switched almost completely to using digitized currency in the form of credit cards. No blockchain needed or even possible where I usually shop.

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Re: Paul Tudor: Compelling case for bitcoin ?

Post by randomguy » Mon May 11, 2020 4:13 pm

fredflinstone wrote:
Mon May 11, 2020 3:22 pm

It seems to me Bitcoin can be used for small transactions just as easily as large ones. If there is a demand for the protections offered by credit cards, then credit card issuers will offer Bitcoin-denominated credit cards.
It seems to me that waiting 5-10 mins for every transaction will get annoying in a hurry.

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Re: Paul Tudor: Compelling case for bitcoin ?

Post by Iridium » Mon May 11, 2020 4:17 pm

indexlover wrote:
Mon May 11, 2020 12:35 pm
Owning Bitcoin is a great way to defend oneself against the GMI (Great Monetary Inflation) , given the current fact set.
Bitcoin lost 30% of its value in one day last month. To the degree that inflation is defined as the loss of purchasing power, I would say that BTC has demonstrated regular bouts of hyperinflation, so seeing it as an inflation shelter is odd. The culture surrounding Bitcoin even implicitly acknowledges this by coining the phrase HODL - "Hold on for dear life". I don't want to hold onto my spending money for dear life, I want to spend it, and I don't want to have to worry that the pizza I want will cost a double digit percentage more between when I place the order and when I go to pick it up and pay for it.

I also question the premise of needing to protect one's spending money from inflation anyway. How much cash do people carry around? Even if inflation hit 10% / year, the cost of the actual cash I tend to have in hand would be less than a cup of coffee per month. Of course, I have a lot more cash in the bank, but high inflation environments correlate with high interest rates, so, other than taxes, inflation isn't a huge concern. Rather, it is a negative real riskless return that would cost me, but if BTC had widespread adoption, it is not at all clear to me that the same economic factors that push real interest rates negative wouldn't also drive down the value of BTC.

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Re: Paul Tudor: Compelling case for bitcoin ?

Post by Humility101 » Mon May 11, 2020 4:25 pm

He mentioned it in an interview as 2% of his portfolio for speculation so treat it as such. It is a hedge and not an investment.

You can take 2% of your portfolio to the casino as well and make a fortune or lose. Perhaps the only difference with bitcoin is that it will last longer than your chips in the casino, and your bitcoin can buy a few other things but your casino chips cannot.

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Re: Paul Tudor: Compelling case for bitcoin ?

Post by March2009 » Mon May 11, 2020 4:51 pm

Sovereign currencies have value because they are required to pay taxes. What is the value of cryptocurrency beyond a hope someone will trade it later? It's not a loaded question; really want to understand.
In bear markets, stocks return to their rightful owners. - J.P. Morgan

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Re: Paul Tudor: Compelling case for bitcoin ?

Post by oldfort » Mon May 11, 2020 4:53 pm

langlands wrote:
Mon May 11, 2020 1:26 pm
As someone who owns a little bit of both bitcoin and gold, the responses in this thread are very reassuring. It seems that most mainstream investors are pricing the possibility of hyper-inflation or some sort of collapse of the monetary system at essentially 0.
In the event of hyper-inflation or collapse of the monetary system, I see no reason for crypto-currency to have any value above zero. It has no inherent value. Gold is better in that regard. Gold has some industrial uses. Gold is a great conductor and useful for electronics. Gold has been used in jewelry for thousands of years.

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Re: Paul Tudor: Compelling case for bitcoin ?

Post by oldfort » Mon May 11, 2020 4:59 pm

langlands wrote:
Mon May 11, 2020 1:48 pm
Yes, you're right that it makes no sense to buy bitcoin or gold if you don't think it will actually protect against hyperinflation. But I don't think "colloidal silver" as a remedy against COVID-19 is a fair comparison. It's pretty clear (at least to me) that if the monetary system collapses, bitcoin and gold will start spiking because they are the closest substitutes we have for a store of value (and gold at least has a long history of living up to such a claim). And this perception is what will give it value.
The only people with the perception bitcoin is a store of value are a small number of anarcho-libertarian computer geeks. Most people view Bitcoin as financial snake oil and a ponzi scheme, where the initial investors try to get rich and cash out before the bubble inevitably bursts.

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Re: Paul Tudor: Compelling case for bitcoin ?

Post by DesertMan » Mon May 11, 2020 5:10 pm

Iridium wrote:
Mon May 11, 2020 4:17 pm
indexlover wrote:
Mon May 11, 2020 12:35 pm
Owning Bitcoin is a great way to defend oneself against the GMI (Great Monetary Inflation) , given the current fact set.
Bitcoin lost 30% of its value in one day last month. To the degree that inflation is defined as the loss of purchasing power, I would say that BTC has demonstrated regular bouts of hyperinflation, so seeing it as an inflation shelter is odd. The culture surrounding Bitcoin even implicitly acknowledges
Hyperinflation is something that Bitcoin has in common with Zimbabwe dollars. Another commonality is that both currencies are used by criminals.

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Re: Paul Tudor: Compelling case for bitcoin ?

Post by SimpleGift » Mon May 11, 2020 5:18 pm

telemark wrote:
Mon May 11, 2020 3:33 pm
I've always preferred using physical currency, actual bills and coins, but since Covid-19 I've switched almost completely to using digitized currency in the form of credit cards. No blockchain needed or even possible where I usually shop.
One of the policy recommendations at least being discussed by monetary economists is doing away with physical currency completely and transitioning exclusively toward digital currency (credit and debit cards). The gradual trend around the world today is toward cashless societies, with leading-edge countries like Sweden where only 2% of transactions are now in cash.

My concern is that once a society becomes completely cashless, there's no limit to how far into negative territory that interest rates can driven by central banks. The existence of paper money today limits how far rates can become negative (i.e., at the cost of storing physical cash). Economists who are advocating for cashless societies talk about negative interest rates in the -4% to -6% range, as a form of monetary stimulus. Practically, there'd be no limit to the extent of negative rates.

Not sure that I'd want to live in a completely cashless world, with negative interest rates that extreme.

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Re: Paul Tudor: Compelling case for bitcoin ?

Post by indexlover » Mon May 11, 2020 5:37 pm

gwe67 wrote:
Mon May 11, 2020 1:39 pm
I think if OP really believes any of this, then he/she should change usernames.
LOL. I am a 3 fund index guy. The pdf is a very interesting read for sure but I don't agree with his conclusions just like Nisiprius.
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Re: Paul Tudor: Compelling case for bitcoin ?

Post by softwaregeek » Mon May 11, 2020 5:55 pm

I am an exec at a crypto company.

Let me first state, I don't believe crypto is a suitable investment for individual investors. You definitely should not be putting your retirement in it.

However, over the long term it has gone up. And I should add that it has been a better investment in current times than other asset classes, for example Oil or Carnival Cruise stock, or tech stocks in 2001. And there are certain mathematical formulas which cause it to trend up over time given increases in demand. Keeping a small amount of BTC isn't the worst thing to do, when used as a tiny part of a well-diversified portfolio, but probably doesn't bring that much benefit for US based investors either. I definitely don't recommend keeping enough in bitcoin to move the needle.

Crypto does have a massive number of uses for which it is well suited. For example, we prefer to take payment in crypto because the merchant costs are much, much lower. Credit card costs ~3%. We pay zero using Coinbase Commerce or 1% using our fancy invoicing system that does the conversion for us and delivers dollars to our bank. This is especially true when you take into account international FX fees. Let's say you're an Indian software engineer in the US that wants to send $250k back to India at the end of your H1B. Sure, you could lose $1000+ in the hidden exchange rate conversion and wire, or you could send it in bitcoin and save yourself some real cash.

In addition, note that many of the features we ascribe to "money" may hold if you are in a well run currency like dollars or euros or yen but are not necessarily universal. For example, convertability across borders, lack of extreme volatility, etc. If you are in a Latin American country with a currency prone to both devaluation and exchange controls, keeping your money in Crypto may be highly appealing. Which is probably why we see massive acceptance of crypto across the developing world.

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Re: Paul Tudor: Compelling case for bitcoin ?

Post by nisiprius » Mon May 11, 2020 6:04 pm

fredflinstone wrote:
Mon May 11, 2020 3:22 pm
...It seems to me Bitcoin can be used for small transactions just as easily as large ones...
Just a bystander in the world of bitcoin. It certainly always seemed to me that Bitcoin should be capable of being used for small transactions. It was people within the world of bitcoin who first made me aware that it wasn't.

I don't know what to say when I read things like
In 2010, an explicit block size limit of 1 MB was introduced into Bitcoin by Satoshi Nakamoto. He added it hidden in two commits in secret.
The designer of the protocol intentionally and secretly added a feature that guaranteed that it could not fulfill its stated purpose if it ever achieved large-scale adoption. The world of cryptocurrency is just seriously weird.
Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness; Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.

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Re: Paul Tudor: Compelling case for bitcoin ?

Post by oldfort » Mon May 11, 2020 6:16 pm

softwaregeek wrote:
Mon May 11, 2020 5:55 pm
Crypto does have a massive number of uses for which it is well suited. For example, we prefer to take payment in crypto because the merchant costs are much, much lower. Credit card costs ~3%. We pay zero using Coinbase Commerce or 1% using our fancy invoicing system that does the conversion for us and delivers dollars to our bank.
Credit cards have two main advantages for consumers. They can get cash-back and rewards. If the credit card information is stolen or misused, it's trivial to get the charges reversed. Who makes me whole if my bitcoin wallet gets stolen?

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Re: Paul Tudor: Compelling case for bitcoin ?

Post by softwaregeek » Mon May 11, 2020 6:28 pm

oldfort wrote:
Mon May 11, 2020 6:16 pm
softwaregeek wrote:
Mon May 11, 2020 5:55 pm
Crypto does have a massive number of uses for which it is well suited. For example, we prefer to take payment in crypto because the merchant costs are much, much lower. Credit card costs ~3%. We pay zero using Coinbase Commerce or 1% using our fancy invoicing system that does the conversion for us and delivers dollars to our bank.
Credit cards have two main advantages for consumers. They can get cash-back and rewards. If the credit card information is stolen or misused, it's trivial to get the charges reversed. Who makes me whole if my bitcoin wallet gets stolen?
That is why it is hard to get consumers to switch. As a merchant, bring on the bitcoin.

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Re: Paul Tudor: Compelling case for bitcoin ?

Post by DesertMan » Mon May 11, 2020 7:45 pm

DesertMan wrote:
Mon May 11, 2020 1:06 pm
All the good stuff he attributed to bitcoin is equally applicable to physical gold. Gold has the added advantage of never going obsolete.
CNBC; Bitcoin undergoes 3rd 'halving', falls vs U.S. dollar

https://www.cnbc.com/2020/05/11/bitcoin ... idappshare

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Re: Paul Tudor: Compelling case for bitcoin ?

Post by Humility101 » Mon May 11, 2020 9:27 pm

softwaregeek wrote:
Mon May 11, 2020 5:55 pm
I am an exec at a crypto company.
Who isn’t these days?!

I was an executive at a Tulip Company in 1637, but I decided to pivot to crypto and started my own cryptocurrency called BuyAfterMeCoin.

Don’t confuse the concept of distributed blockchain ledger which is a legitimate technology with speculative crypto created out of thin air.

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Re: Paul Tudor: Compelling case for bitcoin ?

Post by SteadyOne » Mon May 11, 2020 9:53 pm

indexlover wrote:
Mon May 11, 2020 12:35 pm
Have you seen this article by Paul Tudor ?

https://www.docdroid.net/2nTB6aY/may-20 ... utlook-pdf

"The most compelling argument for owning Bitcoin is the coming digitization of currency everywhere, accelerated by COVID-19. Bull markets are built on an ever-expanding universe of buyers.Central to the price of Bitcoin is how many more (or less) owners of Bitcoin will there be beyond the 60 million who currently own it? The probable introduction ofFacebook’s Libra (whose value will be pegged to the US dollar and will not be a store of value in that sense) as well as China’s DCEP, also tied to the yuan, will make virtual digital wallets a commonplace tool for the world. It will make the understanding, utility, and ease of ownership of Bitcoin a much more commonplace option than it is today.

Owning Bitcoin is a great way to defend oneself against the GMI (Great Monetary Inflation) , given the current fact set. As Satoshi Nakamoto, the anonymous creator of Bitcoin, stated in anonline forum around the time he launched Bitcoin, “the root problem with conventional currency is all the trust that’s required to make it work. The central bank must be trusted not to debase the currency, but the history of fiat currencies is full of breaches of that trust.” I am not an advocate of Bitcoin ownership in isolation, but do recognize its potential in a period when we have the most unorthodox economic policies in modern history. So, we need to adapt our investmentstrategy. We have updated theTudor BVI offering memoranda to disclose that we may trade Bitcoin futures for Tudor BVI. We have set the initial maximum exposure guideline for purchasing Bitcoin futures to a low single digit exposure percentage of Tudor BVI’s net assets, which seems prudent.We will review this exposure guideline regularly."

Thoughts ?
The whole bitcoin thingy is a biggest financial scam in history.

-Nobody knows who created it.
-No way to get it back if it’s stolen.
-Mostly used for illegal activity and crime.
-Transactions cannot be reversed or disputed.
-Proponents say it’s very secure, but massive breaches and scams on exchanges are commonplace.
-If you lose your password your moneys are not recoverable.
-The technology is not proprietary-there are thousands of competitors.
-Governments may decide to outlaw it and shut it down at any time
-The engine itself probably can be hacked or taken over by government agencies.
-In order to function it requires an operational complex electronic infrastructure-that will be non-existent in times of world catastrophe.

Physical gold beats bitcoin and similar pseudo currencies in most categories above.
“Every de­duc­tion is al­lowed as a mat­ter of leg­isla­tive grace.” US Federal Court

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Re: Paul Tudor: Compelling case for bitcoin ?

Post by SteadyOne » Mon May 11, 2020 10:03 pm

SimpleGift wrote:
Mon May 11, 2020 5:18 pm
telemark wrote:
Mon May 11, 2020 3:33 pm
I've always preferred using physical currency, actual bills and coins, but since Covid-19 I've switched almost completely to using digitized currency in the form of credit cards. No blockchain needed or even possible where I usually shop.
One of the policy recommendations at least being discussed by monetary economists is doing away with physical currency completely and transitioning exclusively toward digital currency (credit and debit cards). The gradual trend around the world today is toward cashless societies, with leading-edge countries like Sweden where only 2% of transactions are now in cash.

My concern is that once a society becomes completely cashless, there's no limit to how far into negative territory that interest rates can driven by central banks. The existence of paper money today limits how far rates can become negative (i.e., at the cost of storing physical cash). Economists who are advocating for cashless societies talk about negative interest rates in the -4% to -6% range, as a form of monetary stimulus. Practically, there'd be no limit to the extent of negative rates.

Not sure that I'd want to live in a completely cashless world, with negative interest rates that extreme.
Or cancel currency you hold for whatever reason.

That’s is why the world can absorb huge amount of US paper currency. In 2014, about 3/4 of $1.3 trillion paper currency was in $100 bills. Most likely abroad in places where people do not trust their own governments.
“Every de­duc­tion is al­lowed as a mat­ter of leg­isla­tive grace.” US Federal Court

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Re: Paul Tudor: Compelling case for bitcoin ?

Post by typical.investor » Mon May 11, 2020 10:37 pm

softwaregeek wrote:
Mon May 11, 2020 5:55 pm
Let's say you're an Indian software engineer in the US that wants to send $250k back to India at the end of your H1B. Sure, you could lose $1000+ in the hidden exchange rate conversion and wire, or you could send it in bitcoin and save yourself some real cash.
I would suggest using Interactive Brokers instead. They have extremely favorable exchange rates.

Transfer USD in from your US bank, convert it, transfer it out via your Indian bank if needed for spending. Or convert it to whatever currency you are going to invest in (Euro or Pounds for London domiciled funds perhaps).

I don't see holding $250k in bitcoin as a non-trivial risk. Exchanges have risks, holding it yourself involves risk (don't get hacked an be backed up), there is currency (value fluctuation) risk, and it's not a universal medium of exchange so you may face a cost converting back out to cash.

I do transfer $130k/year to the US from overseas but see bitcoin as too risky to do so.

Of course, don't wire the $250k to the account your realtor just sent you either even if you are planning to do that to buy a house. There is little recourse to get it back if someone has hacked their mail and the account number you got sent isn't legit.

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Re: Paul Tudor: Compelling case for bitcoin ?

Post by randomguy » Mon May 11, 2020 10:49 pm

softwaregeek wrote:
Mon May 11, 2020 5:55 pm
This is especially true when you take into account international FX fees. Let's say you're an Indian software engineer in the US that wants to send $250k back to India at the end of your H1B. Sure, you could lose $1000+ in the hidden exchange rate conversion and wire, or you could send it in bitcoin and save yourself some real cash.
So I bought 250k of bitcoin at 5200 and by the time the person at the other end can convert it (it took them say 2 hours), bitcoin is at 3800. So instead of losing a few thousand, I lost 50k.:)

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