Paul Tudor: Compelling case for bitcoin ?

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JBTX
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Re: Paul Tudor: Compelling case for bitcoin ?

Post by JBTX »

jhsu802701 wrote: 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.
I agree - with what is going on today, I have some sympathy for the "fiat currency" argument, but the so called solutions are awful. The speculative aspects of bit coin dwarf whatever inflation hedging properties it may or may not have. While not at all a fan of gold, at least there is a lot of history behind it.
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unclescrooge
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Re: Paul Tudor: Compelling case for bitcoin ?

Post by unclescrooge »

softwaregeek wrote: 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.
How does this fictional Indian software developer redeem his $250k of Bitcoin into Rupees? You know, in case he actually wants to buy anything in India.

I'm my opinion, Bitcoin is an elegant solution to a real world problem that doesn't actually exist.

If you're worried about the devaluation of your local currency, just use gold or US dollars/Euros.
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Forester
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Re: Paul Tudor: Compelling case for bitcoin ?

Post by Forester »

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. 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.
But you still need to quickly turn the Bitcoin into "real money", or risk a 10%+ loss (or gain) which can occur very quickly. Just holding Bitcoin incurs an uncompensated risk since it is so volatile. Bitcoin has more utility as an online speculation, online decentralised casino, than as a medium of exchange or store of value. For law abiding citizens the US dollar, Euro and so on are superior options.
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Re: Paul Tudor: Compelling case for bitcoin ?

Post by nisiprius »

SteadyOne wrote: Mon May 11, 2020 9:53 pm...The whole bitcoin thingy is a biggest financial scam in history...
To your list, I would like to add:

a) A "currency" is a unit of account, a medium of exchange, and a store of value. Nothing in the original paper sets a goal of making it a stable store of value, nor are there any design features that appear intended to stabilize it.

b) The original paper called it a "cash system" and explicitly said that it was intended to be suitable for "small casual purchases," yet the designer, personally and secretly, added a feature that guaranteed that it could not fulfill that function if it ever achieved widespread adoption: 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.
Can any bitcoin fans give a credible explanation of this, other than "shenanigans?" (Perhaps it is possible to build honest edifice on a foundation of shenanigans, but my question is whether there are shenanigans in the foundation).
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3funder
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Re: Paul Tudor: Compelling case for bitcoin ?

Post by 3funder »

Nope. To me, there are stocks, bonds, and money market funds. The rest is speculation.
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Re: Paul Tudor: Compelling case for bitcoin ?

Post by New Providence »

I don't have the tools to validate Paul Tudor's case for bitcoin. But I'll take him by his word and believe that it is a good investment for him. It has no bearing on me. Whether bitcoin, movies or pure horse breeds, sophisticated experts on each particular exotic investment can make money on it. I don't have that expertise and therefore won't invest in them.
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Re: Paul Tudor: Compelling case for bitcoin ?

Post by TheoLeo »

I have 1 % in Bitcoin since about a month and won´t be adding to it. But I am already up 24 % :D

I think its value actually lies in its phenomenal story. By owning bitcoin, you can own a piece of this story. I think it will be a geeky kind of collectable in a few decades, but always with a touch of adventurous utility in this or that apocylyptic scenario.
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Re: Paul Tudor: Compelling case for bitcoin ?

Post by nisiprius »

TheoLeo wrote: Tue May 12, 2020 11:46 am I have 1 % in Bitcoin since about a month and won´t be adding to it. But I am already up 24 % :D

I think its value actually lies in its phenomenal story. By owning bitcoin, you can own a piece of this story. I think it will be a geeky kind of collectable in a few decades, but always with a touch of adventurous utility in this or that apocylyptic scenario.
In A Random Walk Down Wall Street, Burton Malkiel has presented his personal thoughts on stock-picking in every edition, at least up through 2018. He has always said--quoting a line from Ibsen--that he wants to see "castles in the air--but on a firm foundation." Bitcoin certainly has the "castles in the air," but hardly the "firm foundation."
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Re: Paul Tudor: Compelling case for bitcoin ?

Post by firebirdparts »

unclescrooge wrote: Tue May 12, 2020 1:24 am How does this fictional Indian software developer redeem his $250k of Bitcoin into Rupees? You know, in case he actually wants to buy anything in India.

I'm my opinion, Bitcoin is an elegant solution to a real world problem that doesn't actually exist.

If you're worried about the devaluation of your local currency, just use gold or US dollars/Euros.
Bitcoin could be elegant if it was scalable. As it is, it's doomed already. I can certainly sympathize with that person whose local legal tender is "even stupider" than bitcoin. That is sad, and it's easy for us to sneer at it here in the USA. It's truly sad. That would be terrible. Everybody I know personally uses paper US dollars in that situation, but that's not really ideal either.
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unclescrooge
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Re: Paul Tudor: Compelling case for bitcoin ?

Post by unclescrooge »

firebirdparts wrote: Tue May 12, 2020 1:28 pm
unclescrooge wrote: Tue May 12, 2020 1:24 am How does this fictional Indian software developer redeem his $250k of Bitcoin into Rupees? You know, in case he actually wants to buy anything in India.

I'm my opinion, Bitcoin is an elegant solution to a real world problem that doesn't actually exist.

If you're worried about the devaluation of your local currency, just use gold or US dollars/Euros.
Bitcoin could be elegant if it was scalable. As it is, it's doomed already. I can certainly sympathize with that person whose local legal tender is "even stupider" than bitcoin. That is sad, and it's easy for us to sneer at it here in the USA. It's truly sad. That would be terrible. Everybody I know personally uses paper US dollars in that situation, but that's not really ideal either.
I said it was elegant, not practical. :mrgreen:
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Re: Paul Tudor: Compelling case for bitcoin ?

Post by garlandwhizzer »

IMO buying Bitcoin is 100% speculating pure and simple. It might be a home run or a strike out in the long run. No way to reliably tell that future. If you like gambling/speculating it might be appropriate for a small percentage of your risk assets. My upper limit of speculation tolerance is no higher than traditional broadly diversified equity which is as close to gambling as I wish to get. Others may view it differently. The massive volatility of Bitcoin in recent years demonstrates how fragile its fundamental underlying value is.

There are theoretical very high long term rewards and very real long term risks in Bitcoin. The reason for Bitcoin creation was that currencies at least in theory can be debased by the ever increasing creation of more currency by central banks and deficit spending. In theory that produces inflation which debases the value of the currency. In practice in Japan since 1990, and in Europe and the US for more than 13 years, incredibly massive new currency production not only didn't produce inflation, but actually inflation decreased in spite of trillions of QE and deficit spending in all developed economies. Trillions of M1 money supply created but no debasement at all of currency value. DMs have struggled mightily, pulled out all the monetary and fiscal policy stops, but have been unsuccessful in creating even 2% inflation. At some point this might change but that point is not visible in the foreseeable future and most analysts believe that inflation is not going to be a real risk going forward in DMs. So the question becomes: is there a real practical rather than theoretical need for a digital currency? Time will tell, no far the answer is no.

Then there is the issue of government oversight. Bitcoin lends itself nicely to money laundering, and also to massive illegal and non-traceable movement of financial assets across all borders and between all parties. Drug cartels, organized crime, etc., like the anonymity, but governments don't like it because it can circumvents their regulatory laws. Governments have it within their power to either restrict of outlaw the use of blockchain" currencies" to purchase goods and services within their jurisdictions. That is a risk, perhaps a remote possibility, but it could happen. It it does happen and you can't spend your Bitcoin where you want to, what is its value then?

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Re: Paul Tudor: Compelling case for bitcoin ?

Post by TeeDee »

I’m pretty sure he said specifically that a 1% allocation to Bitcoin make sense for speculation. And speculation is part of investment returns.
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Re: Paul Tudor: Compelling case for bitcoin ?

Post by oldfort »

There are over 2,000 crypto-currencies. Why is bitcoin any better than Dogecoin, which was created as a joke?
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wassabi
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Re: Paul Tudor: Compelling case for bitcoin ?

Post by wassabi »

SteadyOne wrote: Mon May 11, 2020 9:53 pm
The whole bitcoin thingy is a biggest financial scam in history.

-Nobody knows who created it.
Why does that matter?
-No way to get it back if it’s stolen.
Not much different than cash. Cash is not traceable in most cases. Bitcoin is.
-Mostly used for illegal activity and crime.
Perhaps in the first few years, but that's not the case at all right now and you should probably update your knowledge. The vast majority of bitcoin trade volume is from institutions and high net worth individuals.
-Transactions cannot be reversed or disputed.
Legitimate companies use bitcoin with no problem. Look at overstock.com. It's not hard for a company to implement an escrow system for two parties making a purchase. That said, I don't think bitcoin's strength is in it's use as a currency.
-Proponents say it’s very secure, but massive breaches and scams on exchanges are commonplace.
This is 100% on the exchange. Just like any valuable, you can lose it if you don't protect it.
-If you lose your password your moneys are not recoverable.
Some see this as a strength and there are ways to manage it. Again, bitcoin's strength is not in its use as a currency.
-The technology is not proprietary-there are thousands of competitors.
Not sure of your point.
-Governments may decide to outlaw it and shut it down at any time
Similar to what the U.S. did with gold in the early 20th century? Governments can outlaw anything they want, any time they want.
-The engine itself probably can be hacked or taken over by government agencies.
Not sure of your point, but on the surface it seems grossly incorrect.
-In order to function it requires an operational complex electronic infrastructure-that will be non-existent in times of world catastrophe.
Operational complex infrastructure = the internet. If the internet does not exist, then we have much bigger problems.
Physical gold beats bitcoin and similar pseudo currencies in most categories above.
That's your opinion. Gold is a better store of wealth and can function as a currency because it is globally accepted. People who believe bitcoin is part of the future believe individuals, and eventually countries, will accept it as a store of wealth and type of currency. The debate right now is not gold OR bitcoin, when one can simply own both.
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Re: Paul Tudor: Compelling case for bitcoin ?

Post by am »

Going to 0, rat poison squared, scam etc. When will this happen? It’s been years and it keeps going up. Traded and owned by millions across the globe. What event would trigger the drop to worthless? I highly doubt most who own and trade it think like those on this forum. Can’t they keep it going for years to come?
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Re: Paul Tudor: Compelling case for bitcoin ?

Post by oldfort »

am wrote: Tue May 12, 2020 6:49 pm Going to 0, rat poison squared, scam etc. When will this happen? It’s been years and it keeps going up. Traded and owned by millions across the globe. What event would trigger the drop to worthless? I highly doubt most who own and trade it think like those on this forum. Can’t they keep it going for years to come?
Madoff's Ponzi scheme lasted over twenty years. At some point, you run out of greater fools or the fools move on to one of the other 2000 cryptocurrencies in existence. Governments can get involved and work to snuff it out of existence.

https://cointelegraph.com/news/china-sh ... rading-ban
am
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Re: Paul Tudor: Compelling case for bitcoin ?

Post by am »

oldfort wrote: Tue May 12, 2020 7:02 pm
am wrote: Tue May 12, 2020 6:49 pm Going to 0, rat poison squared, scam etc. When will this happen? It’s been years and it keeps going up. Traded and owned by millions across the globe. What event would trigger the drop to worthless? I highly doubt most who own and trade it think like those on this forum. Can’t they keep it going for years to come?
Madoff's Ponzi scheme lasted over twenty years. At some point, you run out of greater fools or the fools move on to one of the other 2000 cryptocurrencies in existence. Governments can get involved and work to snuff it out of existence.

https://cointelegraph.com/news/china-sh ... rading-ban
Aren’t things like collectibles, art, wine, jewelry also require a greater fool to come along as there are no dividends, interest or rent? And since bitcoin is all over the world with billions of people, there is no end in sight for the supply of fools.
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Re: Paul Tudor: Compelling case for bitcoin ?

Post by oldfort »

am wrote: Tue May 12, 2020 7:20 pm
oldfort wrote: Tue May 12, 2020 7:02 pm
am wrote: Tue May 12, 2020 6:49 pm Going to 0, rat poison squared, scam etc. When will this happen? It’s been years and it keeps going up. Traded and owned by millions across the globe. What event would trigger the drop to worthless? I highly doubt most who own and trade it think like those on this forum. Can’t they keep it going for years to come?
Madoff's Ponzi scheme lasted over twenty years. At some point, you run out of greater fools or the fools move on to one of the other 2000 cryptocurrencies in existence. Governments can get involved and work to snuff it out of existence.

https://cointelegraph.com/news/china-sh ... rading-ban
Aren’t things like collectibles, art, wine, jewelry also require a greater fool to come along as there are no dividends, interest or rent? And since bitcoin is all over the world with billions of people, there is no end in sight for the supply of fools.
No, wine can be drunk, jewelry can be worn, and art used to decorate a home or office. How do you use bitcoin for consumption?
am
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Re: Paul Tudor: Compelling case for bitcoin ?

Post by am »

oldfort wrote: Tue May 12, 2020 7:30 pm
am wrote: Tue May 12, 2020 7:20 pm
oldfort wrote: Tue May 12, 2020 7:02 pm
am wrote: Tue May 12, 2020 6:49 pm Going to 0, rat poison squared, scam etc. When will this happen? It’s been years and it keeps going up. Traded and owned by millions across the globe. What event would trigger the drop to worthless? I highly doubt most who own and trade it think like those on this forum. Can’t they keep it going for years to come?
Madoff's Ponzi scheme lasted over twenty years. At some point, you run out of greater fools or the fools move on to one of the other 2000 cryptocurrencies in existence. Governments can get involved and work to snuff it out of existence.

https://cointelegraph.com/news/china-sh ... rading-ban
Aren’t things like collectibles, art, wine, jewelry also require a greater fool to come along as there are no dividends, interest or rent? And since bitcoin is all over the world with billions of people, there is no end in sight for the supply of fools.
No, wine can be drunk, jewelry can be worn, and art used to decorate a home or office. How do you use bitcoin for consumption?
At what point if ever would bitcoin be accepted as something worth placing a small allocation to? Say it’s still around 20 yrs from now trading at 50k a coin? Would we still say it’s a scam, beanie babies, etc.

https://www.coindesk.com/bitcoin-can-bo ... wise-study
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Re: Paul Tudor: Compelling case for bitcoin ?

Post by Patzer »

The argument to buy Bitcoin is like he argument to buy Pets.com in 1999, because the internet is amazing and it's going to be the future.

Pets.com went bankrupt in 2000 along with many of the dot com companies.
The idea of the internet lived on and succeeded, but many of today's tech winners didn't even exist back then.

I suspect there will be successful digital currencies in 2040, but see no compelling reason to believe Bitcoin will be the one that prevails.
Last edited by Patzer on Tue May 12, 2020 8:16 pm, edited 1 time in total.
oldfort
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Re: Paul Tudor: Compelling case for bitcoin ?

Post by oldfort »

am wrote: Tue May 12, 2020 7:53 pm At what point if ever would bitcoin be accepted as something worth placing a small allocation to? Say it’s still around 20 yrs from now trading at 50k a coin? Would we still say it’s a scam, beanie babies, etc.

https://www.coindesk.com/bitcoin-can-bo ... wise-study
I give this less than a 0.1% chance of happening. If nothing else, in another 30 years or so, quantum computers will be able to break the crypto behind bitcoin.
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Re: Paul Tudor: Compelling case for bitcoin ?

Post by Nate79 »

It's been a while since we have had a Ponzicoin thread. I'll just add this right here: Dave Ramsey is EXTREMELY anti bitcoin...... :D
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Re: Paul Tudor: Compelling case for bitcoin ?

Post by dmcmahon »

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.
I think that’s a non-zero probability event and I’ve thought so for many years. I’d want things of tangible value as a hedge.
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Re: Paul Tudor: Compelling case for bitcoin ?

Post by Dominic »

The value of a fiat currency comes mostly from the issuing government's mandate that taxes be paid in that currency, its requirement that that currency be accepted by businesses.

The value of Bitcoin comes solely from sentiment. Any day, another crypto currency with faster transaction processing or new features could come along. Businesses that accept Bitcoin could give up on accepting such a volatile currency. More exchanges could get attacked and people might get scared off.

If you want a store of real value and don't trust TIPS, buy precious metals, real estate, or even corporate equity.
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Re: Paul Tudor: Compelling case for bitcoin ?

Post by SteadyOne »

wassabi wrote: Tue May 12, 2020 6:45 pm
SteadyOne wrote: Mon May 11, 2020 9:53 pm
The whole bitcoin thingy is a biggest financial scam in history.

-Nobody knows who created it.
Why does that matter?
-No way to get it back if it’s stolen.
Not much different than cash. Cash is not traceable in most cases. Bitcoin is.
-Mostly used for illegal activity and crime.
Perhaps in the first few years, but that's not the case at all right now and you should probably update your knowledge. The vast majority of bitcoin trade volume is from institutions and high net worth individuals.
-Transactions cannot be reversed or disputed.
Legitimate companies use bitcoin with no problem. Look at overstock.com. It's not hard for a company to implement an escrow system for two parties making a purchase. That said, I don't think bitcoin's strength is in it's use as a currency.
-Proponents say it’s very secure, but massive breaches and scams on exchanges are commonplace.
This is 100% on the exchange. Just like any valuable, you can lose it if you don't protect it.
-If you lose your password your moneys are not recoverable.
Some see this as a strength and there are ways to manage it. Again, bitcoin's strength is not in its use as a currency.
-The technology is not proprietary-there are thousands of competitors.
Not sure of your point.
-Governments may decide to outlaw it and shut it down at any time
Similar to what the U.S. did with gold in the early 20th century? Governments can outlaw anything they want, any time they want.
-The engine itself probably can be hacked or taken over by government agencies.
Not sure of your point, but on the surface it seems grossly incorrect.
-In order to function it requires an operational complex electronic infrastructure-that will be non-existent in times of world catastrophe.
Operational complex infrastructure = the internet. If the internet does not exist, then we have much bigger problems.
Physical gold beats bitcoin and similar pseudo currencies in most categories above.
That's your opinion. Gold is a better store of wealth and can function as a currency because it is globally accepted. People who believe bitcoin is part of the future believe individuals, and eventually countries, will accept it as a store of wealth and type of currency. The debate right now is not gold OR bitcoin, when one can simply own both.
I almost forgot that capital gains for bitcoin are taxed at the collectibles rate and it does not pay dividends. oh well.

In order to materially benefit from bitcoin one should invest a material portion of their portfolio, if they believe strongly that bitcoin (or similar) will go vertical very very soon. Well, most, including Mr. Tudor recommend measly 1%. May be 3%? What?? How about 50% if it’s a sure thing? Or 75%? I do not see such recommendations. 1% investment is noise.

It’s funny that everyone is creating their own bitcoin. Last year JPMorgan Chase, the nation's largest bank, launched its own cryptocurrency JPM Coin that has a fixed value redeemable for one US dollar. Walmart has patented plans for a Stablecoin. There are also Ripple, Etherium, Litecoin. Which one will be around in 10 years?
“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 »

dmcmahon wrote: Tue May 12, 2020 9:27 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.
I think that’s a non-zero probability event and I’ve thought so for many years. I’d want things of tangible value as a hedge.
What worked in prior hyperinflation scenarios like Weimar Germany? Real estate, gold. Equity worked well too.
“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 langlands »

SteadyOne wrote: Tue May 12, 2020 9:41 pm
I almost forgot that capital gains for bitcoin are taxed at the collectibles rate and it does not pay dividends. oh well.

In order to materially benefit from bitcoin one should invest a material portion of their portfolio, if they believe strongly that bitcoin (or similar) will go vertical very very soon. Well, most, including Mr. Tudor recommend measly 1%. May be 3%? What?? How about 50% if it’s a sure thing? Or 75%? I do not see such recommendations. 1% investment is noise.

It’s funny that everyone is creating their own bitcoin. Last year JPMorgan Chase, the nation's largest bank, launched its own cryptocurrency JPM Coin that has a fixed value redeemable for one US dollar. Walmart has patented plans for a Stablecoin. There are also Ripple, Etherium, Litecoin. Which one will be around in 10 years?
1% is quite a small amount, but increasing it to around 3% is already definitely not investment noise if you view it as a hedge against a remote but catastrophic event. No reasonable bitcoin investor think it's a "sure thing." The idea is that in a disastrous scenario, bitcoin will spike by 10x while the rest of your portfolio collapses. In the most extreme case where everything else becomes worthless, you're still left with 30% of your portfolio, which is much much better than 0%. And there's always the possibility that nothing disastrous happens at all and bitcoin becomes a mainstream competitor to gold as a store of value. The person who is reluctant to own gold is probably right to not touch bitcoin with a 10 foot pole. But if you are already onboard with gold, bitcoin is a reasonable addition as diversification if nothing else.
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Re: Paul Tudor: Compelling case for bitcoin ?

Post by sarabayo »

fredflinstone wrote: 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.
If one of Bitcoin's supposed advantages over fiat currencies is that it's easier to do cardless digital transactions with it, then doesn't the rise of cardless digital transactions in fiat currencies threaten Bitcoin, rather than help it? It means that Bitcoin loses one more argument with fiat currencies. The jump may have become smaller but the incentive to make the jump has also become smaller (even if there ever really was one).
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Re: Paul Tudor: Compelling case for bitcoin ?

Post by sf_tech_saver »

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 ?
Honestly, the case that Bitcoin is crazier than gold will get harder to make every year that it continues to maintain value because of the arbitrary but real human demand to hold it.

I own neither-- as neither are investments -- but every gold fan on Bogleheads should be cautious about throwing any stones at Bitcoin :) IMHO
VTI is a modern marvel
typical.investor
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Re: Paul Tudor: Compelling case for bitcoin ?

Post by typical.investor »

sf_tech_saver wrote: Wed May 13, 2020 12:01 am Honestly, the case that Bitcoin is crazier than gold will get harder to make every year that it continues to maintain value because of the arbitrary but real human demand to hold it.

I own neither-- as neither are investments -- but every gold fan on Bogleheads should be cautious about throwing any stones at Bitcoin :) IMHO
I disagree that bitcoin holding value shows it's comparable to gold.

With 80% of bitcoin mining controlled by 6 pools (5 of them being it China) and bitcoin being vulnerable to any coordinated attack of greater than 50% of mining, a stable bitcoin price by itself isn't that reassuring as a store of value.

An altering of the blockchain to favor the 51% of the miners running the attack *might* be illegal under the the Computer Fraud and Abuse Act (CFAA), but it *might* not.

It would seem to come down to the interpretation of “intentionally causes damages without authorization”. There have been conflicting court interpretations as to what "without authorization" means with rulings saying there is no CFAA violation when access is authorized.

I see no legal standing for restricting miners from working on the longest chain which effectively gives the power to rewrite transactions from other chains. After all, this is what they have always done and how blockchains work.

Consult your lawyer if you want, maybe there are other statues. In any case, I see gold ownership as having clearer legal standing, and a better store of value.

I hold 0.0% of assets in gold and bitcoin, and favor equities to counter inflation risk.
DonIce
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Re: Paul Tudor: Compelling case for bitcoin ?

Post by DonIce »

langlands wrote: Tue May 12, 2020 9:56 pm 1% is quite a small amount, but increasing it to around 3% is already definitely not investment noise if you view it as a hedge against a remote but catastrophic event. No reasonable bitcoin investor think it's a "sure thing." The idea is that in a disastrous scenario, bitcoin will spike by 10x while the rest of your portfolio collapses. In the most extreme case where everything else becomes worthless, you're still left with 30% of your portfolio, which is much much better than 0%. And there's always the possibility that nothing disastrous happens at all and bitcoin becomes a mainstream competitor to gold as a store of value. The person who is reluctant to own gold is probably right to not touch bitcoin with a 10 foot pole. But if you are already onboard with gold, bitcoin is a reasonable addition as diversification if nothing else.
What kind of "catastrophic" event would lead to the rest of your portfolio (stocks and bonds) becoming worthless, while bitcoin is in high demand? Stocks includes stocks of the companies that, among other things, provide the internet and the electricity needed for the bitcoin network to operate. Along with food, transportation, etc. Bonds include bonds of the US government, which would only default on their bonds in the direst circumstances. If stocks and bonds become worthless, that essentially means that there is no more functional economy, no electricity, no internet, no more free market, no more capitalism, and no more functioning government. In this "catastrophic" scenario, you really think that bitcoin will be in demand? For one, the internet will be down, meaning that you can't reasonably use bitcoins.

Or perhaps you are thinking of a catastrophic event where the government decides to confiscate financial assets. Like a communist revolution, perhaps? They'll decide to take away your stocks and bonds. And you think that under this scenario, the government really won't be able to get to your bitcoins? Even if your bitcoins themselves remain secure, if you actually try to use them for anything, that will be traceable.
PVW
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Re: Paul Tudor: Compelling case for bitcoin ?

Post by PVW »

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

[...]

Thoughts ?
My feeling is that Bitcoin is the prime example of the Greater Fool theory of investing, but I try not to let my feelings inform my investing decisions.

Jones and Giorgianni discuss the case for Bitcoin in terms of a currency - as a store of value and a hedge against the "Great Monetary Inflation". From this argument, they take the leap of faith that Bitcoin is a good speculative investment because it's the "best" currency.

These are not ideas that affect my investment decisions. I don't directly invest in currency and monetary policy doesn't affect my decisions.

If I was a speculator, I would need more convincing than the arguments by Jones and Giorgianni. They don't present, and possibly haven't investigated, the negative case for Bitcoin. All their points are based on the "idea" of Bitcoin, but the current reality is far off the mark. It's value varies widely. It can't be used for everyday transactions. It is subject to manipulation. There is a non-zero chance that it will be subject to government regulation. It is not the only choice for non-fiat currency. Powerful commercial forces are working to replace it.

Even if I thought non-fiat currency was taking off, I wouldn't bet on Bitcoin to be the winner.
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Re: Paul Tudor: Compelling case for bitcoin ?

Post by jpelder »

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.
We're on the same page there. If I wanted to gamble, I'd go out to Cherokee, NC and throw money in the slot machines at the casino. At least the profit goes to a good cause there.

I wonder if Paul Tudor is trying to pump and dump some of his Bitcoin holdings
sf_tech_saver
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Re: Paul Tudor: Compelling case for bitcoin ?

Post by sf_tech_saver »

typical.investor wrote: Wed May 13, 2020 12:51 am
sf_tech_saver wrote: Wed May 13, 2020 12:01 am Honestly, the case that Bitcoin is crazier than gold will get harder to make every year that it continues to maintain value because of the arbitrary but real human demand to hold it.

I own neither-- as neither are investments -- but every gold fan on Bogleheads should be cautious about throwing any stones at Bitcoin :) IMHO
I disagree that bitcoin holding value shows it's comparable to gold.

With 80% of bitcoin mining controlled by 6 pools (5 of them being it China) and bitcoin being vulnerable to any coordinated attack of greater than 50% of mining, a stable bitcoin price by itself isn't that reassuring as a store of value.

An altering of the blockchain to favor the 51% of the miners running the attack *might* be illegal under the the Computer Fraud and Abuse Act (CFAA), but it *might* not.

It would seem to come down to the interpretation of “intentionally causes damages without authorization”. There have been conflicting court interpretations as to what "without authorization" means with rulings saying there is no CFAA violation when access is authorized.

I see no legal standing for restricting miners from working on the longest chain which effectively gives the power to rewrite transactions from other chains. After all, this is what they have always done and how blockchains work.

Consult your lawyer if you want, maybe there are other statues. In any case, I see gold ownership as having clearer legal standing, and a better store of value.

I hold 0.0% of assets in gold and bitcoin, and favor equities to counter inflation risk.
I can agree with everything you just said--but the current value of gold is also entirely arbitrarily attached to the demand for it. Unless something has free cash flow and earnings.....

Gold's advantage is that demand for it is proven over most of human history. Finding an asteroid full of a continent size mine of gold can't change the value of Apple's free cash flow as an investment...but it could sure alter the value of a lump of something :)

To be clear: I own neither, I buy VTI -- its an investment.
VTI is a modern marvel
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firebirdparts
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Re: Paul Tudor: Compelling case for bitcoin ?

Post by firebirdparts »

am wrote: Tue May 12, 2020 7:20 pm
Aren’t things like collectibles, art, wine, jewelry also require a greater fool to come along as there are no dividends, interest or rent? And since bitcoin is all over the world with billions of people, there is no end in sight for the supply of fools.
of course. It's important to just call it what it is, rather than to make up some obvious fabrication about the future. If you just call it what it is, it'll be fine. Honestly, they pick up gold out of the dirt. How is bitcoin any dumber? It's not.

The key is that it is a collectible, and it's an ethereal collectible. It's not money. Anybody starts a conversion attributing more complex "truths" about these things than you would to a baseball card, that's just a dumb person. Don't listen.
A fool and your money are soon partners
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Re: Paul Tudor: Compelling case for bitcoin ?

Post by am »

firebirdparts wrote: Thu May 14, 2020 11:20 am
am wrote: Tue May 12, 2020 7:20 pm
Aren’t things like collectibles, art, wine, jewelry also require a greater fool to come along as there are no dividends, interest or rent? And since bitcoin is all over the world with billions of people, there is no end in sight for the supply of fools.
of course. It's important to just call it what it is, rather than to make up some obvious fabrication about the future. If you just call it what it is, it'll be fine. Honestly, they pick up gold out of the dirt. How is bitcoin any dumber? It's not.

The key is that it is a collectible, and it's an ethereal collectible. It's not money. Anybody starts a conversion attributing more complex "truths" about these things than you would to a baseball card, that's just a dumb person. Don't listen.
Yes humans have attributed value to bitcoin just like they have to baseball cards which are pieces of cardboard with photos and a limited supply. I don’t anticipate my collection of old wax pack boxes to crash to 0 and I don’t expect bitcoin to do so either.
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Re: Paul Tudor: Compelling case for bitcoin ?

Post by oldfort »

am wrote: Thu May 14, 2020 1:58 pm
firebirdparts wrote: Thu May 14, 2020 11:20 am
am wrote: Tue May 12, 2020 7:20 pm
Aren’t things like collectibles, art, wine, jewelry also require a greater fool to come along as there are no dividends, interest or rent? And since bitcoin is all over the world with billions of people, there is no end in sight for the supply of fools.
of course. It's important to just call it what it is, rather than to make up some obvious fabrication about the future. If you just call it what it is, it'll be fine. Honestly, they pick up gold out of the dirt. How is bitcoin any dumber? It's not.

The key is that it is a collectible, and it's an ethereal collectible. It's not money. Anybody starts a conversion attributing more complex "truths" about these things than you would to a baseball card, that's just a dumb person. Don't listen.
Yes humans have attributed value to bitcoin just like they have to baseball cards which are pieces of cardboard with photos and a limited supply. I don’t anticipate my collection of old wax pack boxes to crash to 0 and I don’t expect bitcoin to do so either.
Using the baseball card analogy, I would buy baseball cards because they provide joy in owning them. I wouldn’t invest a significant portion of my net worth in baseball cards because
I think they’re a great investment. It strikes as me as more than a little crazy to think baseball cards will be an effective hedge against a Venezuelan style economic meltdown.
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Re: Paul Tudor: Compelling case for bitcoin ?

Post by ohboy! »

Majority of people here have no idea what Bitcoin or cryptocurrency are or how they work short of reading their yahoo or google newsfeed headlines. Not understanding something threatens what they do understand, such as holding majority of assets in vanguard funds. Some day immutable ledgers, cryptography, and computing power might be seen as valuable to these types, or maybe not. It doesn't take much research to see that major institutions, governments, technology experts, as well as respectable economists do see the value in cryptocurrency and the blockchain. It's certainly possible that bitcoin itself could lose all value. It's also possible it goes to $100m USD per BTC.

I think for this community it would make more sense to invest in a fund that holds cryptos by marketcap.

The boomers will probably print money to avoid reality until they pass, leaving the next generation with nothing but debt. That's already seen by millennials swamped with student loans and unable to afford housing. Somewhere in the generation transition I suspect people will look to trust a system that has a fixed quantity, and is secure.

BTC has been a good investment for me, purchasing at $600-$900 a coin. Sold my holdings to recoup my initial investment and now have a piece of the pie shall it go to the moon.
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Re: Paul Tudor: Compelling case for bitcoin ?

Post by minimalistmarc »

It always amuses me how millennials fail to realise that they will one day also be boomers.

Ahh, I’d love to be in my 20s again!
oldfort
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Re: Paul Tudor: Compelling case for bitcoin ?

Post by oldfort »

ohboy! wrote: Thu May 14, 2020 2:51 pm It doesn't take much research to see that major institutions, governments, technology experts, as well as respectable economists do see the value in cryptocurrency and the blockchain.
If governments see the value, can you name one government where you can pay your taxes in bitcoin?
langlands
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Re: Paul Tudor: Compelling case for bitcoin ?

Post by langlands »

oldfort wrote: Thu May 14, 2020 3:25 pm
ohboy! wrote: Thu May 14, 2020 2:51 pm It doesn't take much research to see that major institutions, governments, technology experts, as well as respectable economists do see the value in cryptocurrency and the blockchain.
If governments see the value, can you name one government where you can pay your taxes in bitcoin?
Bitcoin is not mentioned in his sentence.

If you didn't know, China is currently working on a digital currency that relies on blockchain technology. Naturally the Chinese government and cryptocurrency community have wildly divergent political views, so the digital currency will look very different from Bitcoin. But it's clear that the technology behind digital currency and blockchain is considered very valuable and worth examining by many political and financial institutions. Whether Bitcoin specifically or indeed any of the current cryptocurrencies hold their value is of course a different matter. But cryptocurrencies have hit on a germ of an idea that will become increasingly important as financial services become increasingly digitized.
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Re: Paul Tudor: Compelling case for bitcoin ?

Post by wassabi »

oldfort wrote: Thu May 14, 2020 3:25 pm
ohboy! wrote: Thu May 14, 2020 2:51 pm It doesn't take much research to see that major institutions, governments, technology experts, as well as respectable economists do see the value in cryptocurrency and the blockchain.
If governments see the value, can you name one government where you can pay your taxes in bitcoin?
You can't pay your taxes in gold either, yet the U.S. government holds hundreds of billions in gold reserves. Bitcoin is not a currency, however, that doesn't mean it can be viewed/held as an investment.
oldfort
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Re: Paul Tudor: Compelling case for bitcoin ?

Post by oldfort »

langlands wrote: Thu May 14, 2020 4:33 pm
oldfort wrote: Thu May 14, 2020 3:25 pm
ohboy! wrote: Thu May 14, 2020 2:51 pm It doesn't take much research to see that major institutions, governments, technology experts, as well as respectable economists do see the value in cryptocurrency and the blockchain.
If governments see the value, can you name one government where you can pay your taxes in bitcoin?
Bitcoin is not mentioned in his sentence.

If you didn't know, China is currently working on a digital currency that relies on blockchain technology. Naturally the Chinese government and cryptocurrency community have wildly divergent political views, so the digital currency will look very different from Bitcoin. But it's clear that the technology behind digital currency and blockchain is considered very valuable and worth examining by many political and financial institutions. Whether Bitcoin specifically or indeed any of the current cryptocurrencies hold their value is of course a different matter. But cryptocurrencies have hit on a germ of an idea that will become increasingly important as financial services become increasingly digitized.
The original topic was about bitcoin. China's digital currency is not a crypto-currency. The supply of china's digital currency will be controlled by the PBOC, not crypto-currency mining. If the raison d'etre of crypto-currencies is to take control of the money supply away from central banks, China's digital currency doesn't do this. From an investment standpoint, there's no difference in buying China's digital currency and making a normal foreign exchange bet on the yuan.
typical.investor
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Re: Paul Tudor: Compelling case for bitcoin ?

Post by typical.investor »

ohboy! wrote: Thu May 14, 2020 2:51 pm Majority of people here have no idea what Bitcoin or cryptocurrency are or how they work short of reading their yahoo or google newsfeed headlines. Not understanding something threatens what they do understand, such as holding majority of assets in vanguard funds.
Those who do understand contribute informative posts. Anyway, bet I could implement my own coin before you.
ohboy! wrote: Thu May 14, 2020 2:51 pm I think for this community it would make more sense to invest in a fund that holds cryptos by marketcap.
Awful suggestion. I suggest looking at this from bitcoin's fundamentals. It derives value from 1) payment/exchange utility and 2) scarcity. Investing in the 1300 or so cryptos out there mutes the scarcity argument - cryptos are infinite. We are left with cryptos as a payment system and everyone knows it can't scale to handle what Visa can without users paying miners a liquidity cost. Sure, work is being done in the area but I say let the winners emerge and buy stocks in their companies. Companies are trying to use blockchain for all its worth.

ohboy! wrote: Thu May 14, 2020 2:51 pm The boomers will probably print money to avoid reality until they pass, leaving the next generation with nothing but debt. That's already seen by millennials swamped with student loans and unable to afford housing. Somewhere in the generation transition I suspect people will look to trust a system that has a fixed quantity, and is secure.
I see an identity issue here. Bitcoins are different than any other fad I think. They give social identity people crave.

I am not a boomer but I do see a fair number of them looking to simplify their financial lives. Bitcoins are a headache. Can't store them on an exchange for security fears. There is little protection if lost. If stored locally, you have to do it securely and back them up. Heirs must be able to find and access them.
ohboy! wrote: Thu May 14, 2020 2:51 pm BTC has been a good investment for me, purchasing at $600-$900 a coin. Sold my holdings to recoup my initial investment and now have a piece of the pie shall it go to the moon.
That's cool. Well done. You took the opportunity that was there. Many did the same early with FANG stocks. Whatever the past may have been, the future of those investments depends on their fundamentals though.

Don't get me wrong, I love tech. Bitcoin is great in the way it helps people in Venezuela say get cancer medicine for their mother or buying Amazon gift cards to obtain items not in stores. Argentina is another area using it more. Still, many Venezuelans who have used bitcoin say they prefer the (unfortunately high) rates at money exchanges due to the cost of exchanging in and out of bitcoin and also losses due to fraud.

I do have an allocation to emerging small cap companies, but I just don't see what economic rationale there is in cryptos which are vulnerable security wise (bitcoin is vulnerable to a 51% attack as only a handful of mining groups control the majority of mining).
oldfort
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Re: Paul Tudor: Compelling case for bitcoin ?

Post by oldfort »

wassabi wrote: Thu May 14, 2020 4:39 pm
oldfort wrote: Thu May 14, 2020 3:25 pm
ohboy! wrote: Thu May 14, 2020 2:51 pm It doesn't take much research to see that major institutions, governments, technology experts, as well as respectable economists do see the value in cryptocurrency and the blockchain.
If governments see the value, can you name one government where you can pay your taxes in bitcoin?
You can't pay your taxes in gold either, yet the U.S. government holds hundreds of billions in gold reserves. Bitcoin is not a currency, however, that doesn't mean it can be viewed/held as an investment.
I don't recommend investing in gold either but:
1) The supply of crypto-currencies is effectively infinite. There's a limited supply of gold in the world.
2) Gold has practical uses. It's a good conductor. People can wear it in jewelry, wedding rings, and watches.
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ohboy!
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Re: Paul Tudor: Compelling case for bitcoin ?

Post by ohboy! »

typical.investor wrote: Thu May 14, 2020 5:57 pm
ohboy! wrote: Thu May 14, 2020 2:51 pm Majority of people here have no idea what Bitcoin or cryptocurrency are or how they work short of reading their yahoo or google newsfeed headlines. Not understanding something threatens what they do understand, such as holding majority of assets in vanguard funds.
Those who do understand contribute informative posts. Anyway, bet I could implement my own coin before you.
ohboy! wrote: Thu May 14, 2020 2:51 pm I think for this community it would make more sense to invest in a fund that holds cryptos by marketcap.
Awful suggestion. I suggest looking at this from bitcoin's fundamentals. It derives value from 1) payment/exchange utility and 2) scarcity. Investing in the 1300 or so cryptos out there mutes the scarcity argument - cryptos are infinite. We are left with cryptos as a payment system and everyone knows it can't scale to handle what Visa can without users paying miners a liquidity cost. Sure, work is being done in the area but I say let the winners emerge and buy stocks in their companies. Companies are trying to use blockchain for all its worth.

ohboy! wrote: Thu May 14, 2020 2:51 pm The boomers will probably print money to avoid reality until they pass, leaving the next generation with nothing but debt. That's already seen by millennials swamped with student loans and unable to afford housing. Somewhere in the generation transition I suspect people will look to trust a system that has a fixed quantity, and is secure.
I see an identity issue here. Bitcoins are different than any other fad I think. They give social identity people crave.

I am not a boomer but I do see a fair number of them looking to simplify their financial lives. Bitcoins are a headache. Can't store them on an exchange for security fears. There is little protection if lost. If stored locally, you have to do it securely and back them up. Heirs must be able to find and access them.
ohboy! wrote: Thu May 14, 2020 2:51 pm BTC has been a good investment for me, purchasing at $600-$900 a coin. Sold my holdings to recoup my initial investment and now have a piece of the pie shall it go to the moon.
That's cool. Well done. You took the opportunity that was there. Many did the same early with FANG stocks. Whatever the past may have been, the future of those investments depends on their fundamentals though.

Don't get me wrong, I love tech. Bitcoin is great in the way it helps people in Venezuela say get cancer medicine for their mother or buying Amazon gift cards to obtain items not in stores. Argentina is another area using it more. Still, many Venezuelans who have used bitcoin say they prefer the (unfortunately high) rates at money exchanges due to the cost of exchanging in and out of bitcoin and also losses due to fraud.

I do have an allocation to emerging small cap companies, but I just don't see what economic rationale there is in cryptos which are vulnerable security wise (bitcoin is vulnerable to a 51% attack as only a handful of mining groups control the majority of mining).
I’m not an expert on crypto funds but here is one:
https://static.bitwiseinvestments.com/F ... -Sheet.pdf
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Re: Paul Tudor: Compelling case for bitcoin ?

Post by ohboy! »

oldfort wrote: Thu May 14, 2020 7:10 pm
wassabi wrote: Thu May 14, 2020 4:39 pm
oldfort wrote: Thu May 14, 2020 3:25 pm
ohboy! wrote: Thu May 14, 2020 2:51 pm It doesn't take much research to see that major institutions, governments, technology experts, as well as respectable economists do see the value in cryptocurrency and the blockchain.
If governments see the value, can you name one government where you can pay your taxes in bitcoin?
You can't pay your taxes in gold either, yet the U.S. government holds hundreds of billions in gold reserves. Bitcoin is not a currency, however, that doesn't mean it can be viewed/held as an investment.
I don't recommend investing in gold either but:
1) The supply of crypto-currencies is effectively infinite. There's a limited supply of gold in the world.
2) Gold has practical uses. It's a good conductor. People can wear it in jewelry, wedding rings, and watches.
One of the main identifiers of bitcoin is that the supply is not infinite. Only 21m will ever be created.

Again you are underestimating the value of secure networked decentralized computing power. It’s like only valuing Amazon for their prime delivery services and overlooking AWS completely.
oldfort
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Re: Paul Tudor: Compelling case for bitcoin ?

Post by oldfort »

ohboy! wrote: Thu May 14, 2020 7:35 pm
oldfort wrote: Thu May 14, 2020 7:10 pm
wassabi wrote: Thu May 14, 2020 4:39 pm
oldfort wrote: Thu May 14, 2020 3:25 pm
ohboy! wrote: Thu May 14, 2020 2:51 pm It doesn't take much research to see that major institutions, governments, technology experts, as well as respectable economists do see the value in cryptocurrency and the blockchain.
If governments see the value, can you name one government where you can pay your taxes in bitcoin?
You can't pay your taxes in gold either, yet the U.S. government holds hundreds of billions in gold reserves. Bitcoin is not a currency, however, that doesn't mean it can be viewed/held as an investment.
I don't recommend investing in gold either but:
1) The supply of crypto-currencies is effectively infinite. There's a limited supply of gold in the world.
2) Gold has practical uses. It's a good conductor. People can wear it in jewelry, wedding rings, and watches.
One of the main identifiers of bitcoin is that the supply is not infinite. Only 21m will ever be created.

Again you are underestimating the value of secure networked decentralized computing power. It’s like only valuing Amazon for their prime delivery services and overlooking AWS completely.
The supply of BTC may be finite, but the supply of crypto-currencies is infinite. There are over 2000 crypto-currencies in existence and the list is growing. Bitcoin itself has undergone several hard forks.
Humility101
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Re: Paul Tudor: Compelling case for bitcoin ?

Post by Humility101 »

ohboy! wrote: Thu May 14, 2020 7:35 pm
oldfort wrote: Thu May 14, 2020 7:10 pm
wassabi wrote: Thu May 14, 2020 4:39 pm
oldfort wrote: Thu May 14, 2020 3:25 pm
ohboy! wrote: Thu May 14, 2020 2:51 pm It doesn't take much research to see that major institutions, governments, technology experts, as well as respectable economists do see the value in cryptocurrency and the blockchain.
If governments see the value, can you name one government where you can pay your taxes in bitcoin?
You can't pay your taxes in gold either, yet the U.S. government holds hundreds of billions in gold reserves. Bitcoin is not a currency, however, that doesn't mean it can be viewed/held as an investment.
I don't recommend investing in gold either but:
1) The supply of crypto-currencies is effectively infinite. There's a limited supply of gold in the world.
2) Gold has practical uses. It's a good conductor. People can wear it in jewelry, wedding rings, and watches.
One of the main identifiers of bitcoin is that the supply is not infinite. Only 21m will ever be created.

Again you are underestimating the value of secure networked decentralized computing power. It’s like only valuing Amazon for their prime delivery services and overlooking AWS completely.
While he/she may underestimating the value of secure networked decentralized computing power, you are neglecting to differentiate between said concept (blockchain) with a cryptocurrency that uses this concept. There is a lot of value in roads, but there are many different types of cars that drive on them!
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Re: Paul Tudor: Compelling case for bitcoin ?

Post by nisiprius »

ohboy! wrote: Thu May 14, 2020 7:35 pm...Again you are underestimating the value of secure networked decentralized computing power...
Seems like a non sequitur to me. I'm sure that secure networked decentralized computing power is valuable, but what does that have to do with buying bitcoin?

I'm sure that blockchain technology is useful, but not everything that uses blockchain technology will automatically be successful.

One might have seen the Xerox Alto in 1973, have correctly estimated the value of a mouse, bitmapped graphics, WYSIWYG editing, object-oriented programming, and Ethernet networking. One might have seen correctly that this was the future of computing.

And $10,000 invested in XRX stock on 3/1/1973, with dividends reinvested, would be worth $3,173 today.
Last edited by nisiprius on Thu May 14, 2020 8:30 pm, edited 1 time in total.
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