A bit of housekeeping: You might get duplicates of the newsletter this week while we change to this new one. If you stop getting them, please re-subscribe at profstonge.substack.com. Unless you live under a rock you've heard Bitcoin's price is soaring.
I think it is more a replacement of investments in real estate, bond & stocks rather than a replacement of a currency (i.e., real savings)... That said,
Good 'mental picture' explanation of the bitcoin halving:
"think of it like half the gold mines in the world suddenly shut down and can never re-open"
I can’t predict where bitcoin will end up in the short term, but I can’t say I am confident of its high long term value.
The appeal and fundamental reasoning for it having any value is pinned upon its limited quantity. Modeled after Gold or Silver which are finite resources. There are some big differences that exist for Bitcoin that do not exist for Gold or Silver.
Bitcoin has many potential substitutes. How many competing cryptocurrencies exist today? Hundreds, thousands, I really do not know the total. If some big holder of bitcoin wants to ramp up the price of a certain competing coin, all they have to do is move a large amount in a short time to coin x. Coin x shoots up in value as others pile in for the action and the original person or group sells slowly on the rise and later on repeat the process. I am sure this is happening now as price manipulation occurs in most all markets. The Fed can crash the price at any time by just buying huge amounts and withdrawing it quickly. This is the not the main problem though.
While bitcoin is limited in the number of coins, so are all other cryptocurrencies. It is more a matter of utility of the cryptocurrency that is going to determine which is used in the long term than any other factor. Bitcoin has the edge on utility as it ahead of most other competing coins, but its disadvantage in the long run is its volatility. As long as it is volatile it cannot really be used as a mainstream currency. As it has many competitors, it is likely that many other cryptocurrencies will gain their share of the pie as well. So while bitcoin has a limited number of coins, it also has a potential endless number of competing cryptocurrencies which long term kind of negates the benefit of limited coinage. As other cryptocurrencies gain utility what really makes bitcoin so special that it remains the dominant cryptocurrency? Cryptocurrency will go through a commodification process regardless of their individual limited supply because the total supply of cryptocurrencies and coins as a whole is virtually unlimited. To sum it up, the coins backed by nothing and limited supply not being of any practical value, means the price is eventually worthless.
I would put it in these general phases for bitcoin and similar popular cryptocurrencies.
The introductory phase which has already taken place.
The adoption phase which has also largely taken place but is ongoing.
The mania phase that started a while ago and is increasing.
Future phases could be:
Commodification phase where there is an increasing use of various forms of cryptocurrency.
Devaluation phase. The natural result of an increased commodification of cryptocurrency and coins.
It is my speculation that this form of cryptocurrency has a fatal flaw that cannot be resolved in the long run. However, that does not mean all cryptocurrency is doomed, but other forms will take its place.
Back to gold, silver and other hard assets. The biggest advantage of cryptocurrency in the long term is its utility as a replacement for currency.
If my first premise is correct, and that remains to be seen, cryptocurrency will have to be backed up by real physical assets. Simply because there is actual value in real world assets that cannot be negated. The other advantage is more price stability.
These assets can be gold, silver, and or multiple commodities. The market will figure out a proper combination. The concept of bitcoin is sound on paper, but it isn’t in real life because of competition that can duplicate the model over and over again.
You can’t create gold, silver, wheat or corn in unlimited quantities.
Smarter people than me have most likely already figured out as much and will play the game accordingly. Know when to cash in the chips and watch for the upcoming phases. There is still money to be made whenever a mania exists. The trick is to know when it is over before it is over. Not easy to do. Hedge your gains by putting some of them into tangible assets.
Don’t like being the guy pissing in the punchbowl, but there will be some spectacular losses for some and it is usually the average person, not the ones who are well heeled. They already know how the game ends and know how to play it.
Bitcoin has established itself as a legitimate investment asset, and the ETFs were the catalyst for broad appeal. Curiously, this is a unique US feature. In other regions (Europe, and I guess many Asian countries which follow similar fund rules) an ETF on bitcoin is not possible due to concentration rules. It gives US investors a head start, and as things stand European regulators will sleep over this sea change.
It can, and just about as easily as gold. Self-custodied gold was secure in your home during the US gold ban, but was effectively completely illiquid. A bitcoin confiscation and ban would be the same. You can still "have" it, but good luck using it for anything.
The ETFs would be done, though. All the BTC custodied by regulated custodians would be turned over, of course.
I highly recommend this short podcast by the @inflation_guy as he discusses bitcoin ETF's and a very possible denouement. the timing is, of course, uncertain, but it is worth understanding the way these things work if you are going to buy the ETFs
What does this dumb fucking PHD have his PHD in psychology, or transgender study???
BITCOIN is NSA in ever fucking dimension..
SUCKING ORANGE-COCK with ROGAN
You don’t have to live this way
It just takes one, to do a "Aaron Bushnell" and go self-immolate on the Lawn of Obama's house or any elite, just make sure you post a video first and tell them 200,000 Dead palestine children sent you
If your into the ukro-nazi thingy, then say 500K dead ukrainians send you
I think it is more a replacement of investments in real estate, bond & stocks rather than a replacement of a currency (i.e., real savings)... That said,
Good 'mental picture' explanation of the bitcoin halving:
"think of it like half the gold mines in the world suddenly shut down and can never re-open"
I can’t predict where bitcoin will end up in the short term, but I can’t say I am confident of its high long term value.
The appeal and fundamental reasoning for it having any value is pinned upon its limited quantity. Modeled after Gold or Silver which are finite resources. There are some big differences that exist for Bitcoin that do not exist for Gold or Silver.
Bitcoin has many potential substitutes. How many competing cryptocurrencies exist today? Hundreds, thousands, I really do not know the total. If some big holder of bitcoin wants to ramp up the price of a certain competing coin, all they have to do is move a large amount in a short time to coin x. Coin x shoots up in value as others pile in for the action and the original person or group sells slowly on the rise and later on repeat the process. I am sure this is happening now as price manipulation occurs in most all markets. The Fed can crash the price at any time by just buying huge amounts and withdrawing it quickly. This is the not the main problem though.
While bitcoin is limited in the number of coins, so are all other cryptocurrencies. It is more a matter of utility of the cryptocurrency that is going to determine which is used in the long term than any other factor. Bitcoin has the edge on utility as it ahead of most other competing coins, but its disadvantage in the long run is its volatility. As long as it is volatile it cannot really be used as a mainstream currency. As it has many competitors, it is likely that many other cryptocurrencies will gain their share of the pie as well. So while bitcoin has a limited number of coins, it also has a potential endless number of competing cryptocurrencies which long term kind of negates the benefit of limited coinage. As other cryptocurrencies gain utility what really makes bitcoin so special that it remains the dominant cryptocurrency? Cryptocurrency will go through a commodification process regardless of their individual limited supply because the total supply of cryptocurrencies and coins as a whole is virtually unlimited. To sum it up, the coins backed by nothing and limited supply not being of any practical value, means the price is eventually worthless.
I would put it in these general phases for bitcoin and similar popular cryptocurrencies.
The introductory phase which has already taken place.
The adoption phase which has also largely taken place but is ongoing.
The mania phase that started a while ago and is increasing.
Future phases could be:
Commodification phase where there is an increasing use of various forms of cryptocurrency.
Devaluation phase. The natural result of an increased commodification of cryptocurrency and coins.
It is my speculation that this form of cryptocurrency has a fatal flaw that cannot be resolved in the long run. However, that does not mean all cryptocurrency is doomed, but other forms will take its place.
Back to gold, silver and other hard assets. The biggest advantage of cryptocurrency in the long term is its utility as a replacement for currency.
If my first premise is correct, and that remains to be seen, cryptocurrency will have to be backed up by real physical assets. Simply because there is actual value in real world assets that cannot be negated. The other advantage is more price stability.
These assets can be gold, silver, and or multiple commodities. The market will figure out a proper combination. The concept of bitcoin is sound on paper, but it isn’t in real life because of competition that can duplicate the model over and over again.
You can’t create gold, silver, wheat or corn in unlimited quantities.
Smarter people than me have most likely already figured out as much and will play the game accordingly. Know when to cash in the chips and watch for the upcoming phases. There is still money to be made whenever a mania exists. The trick is to know when it is over before it is over. Not easy to do. Hedge your gains by putting some of them into tangible assets.
Don’t like being the guy pissing in the punchbowl, but there will be some spectacular losses for some and it is usually the average person, not the ones who are well heeled. They already know how the game ends and know how to play it.
Bitcoin has established itself as a legitimate investment asset, and the ETFs were the catalyst for broad appeal. Curiously, this is a unique US feature. In other regions (Europe, and I guess many Asian countries which follow similar fund rules) an ETF on bitcoin is not possible due to concentration rules. It gives US investors a head start, and as things stand European regulators will sleep over this sea change.
TO THE MOON
You are so good at breaking complex concepts down for many to understand on a fundamental level. A true gift, indeed. Thank you!
"Meanwhile, Bitcoin cannot be seized"
It can, and just about as easily as gold. Self-custodied gold was secure in your home during the US gold ban, but was effectively completely illiquid. A bitcoin confiscation and ban would be the same. You can still "have" it, but good luck using it for anything.
The ETFs would be done, though. All the BTC custodied by regulated custodians would be turned over, of course.
I highly recommend this short podcast by the @inflation_guy as he discusses bitcoin ETF's and a very possible denouement. the timing is, of course, uncertain, but it is worth understanding the way these things work if you are going to buy the ETFs
https://podcasts.apple.com/us/podcast/cents-and-sensibility-the-inflation-guy-podcast/id1583764464
What does this dumb fucking PHD have his PHD in psychology, or transgender study???
BITCOIN is NSA in ever fucking dimension..
SUCKING ORANGE-COCK with ROGAN
You don’t have to live this way
It just takes one, to do a "Aaron Bushnell" and go self-immolate on the Lawn of Obama's house or any elite, just make sure you post a video first and tell them 200,000 Dead palestine children sent you
If your into the ukro-nazi thingy, then say 500K dead ukrainians send you
You don't think Bitcoin is sustainable?