cryptocurrencies

[Sarkus]

It is a longer term investment. That's what most investments are. You don't need to time an exit though. You don't need to "exit" the investment as a whole. You can easily plan when you take some out if that is needed.

Some people will need to exit. At some point they will need to cash in their investments. It's all about financial planning, and while I don't disagree that crypto (read Bitcoin) has its place, I disagree that you would really ever want to put all your eggs in that one basket, as your comment suggested, simply due to volatility and future needs. The earlier you start, and the longer you can wait before needing it, then perhaps. But it's certainly not for everyone.

Whether Bitcoin is better understood depends on the individual. It's just like anything else, if you want to understand it, you can. The best books you can read, IMO, are "The Bitcoin Standard" and "The Price of Tomorrow".

Sure. But the market as a whole needs to sufficiently understand it for the purposes they wish to use it. Else they would be remiss in utilising it, or advising its use. That's why it's currently used as a highly volatile speculation, albeit one that has shown massive growth since inception. Because that's how the majority of people still understand it. That is changing, though.

Really, all you have to do is get past one 4 year cycle. Even with the volatility it's still the best performing asset class. Due to the constant debasing of the dollar (and I see no slow down there) you could make an intelligent argument that it should be the only asset class that you own. I'm not saying that is a fact, but it can be argued intelligently.

The problem with this argument is that it is basing future performance on historic, and while the growth from inception to now has been stellar, there may come a point where it enters a more mature stage, where performance is not so good, even over longer periods. As to when and even whether it will ever enter a more mature phase can be debated as well. But I take your point.

I think the key to any investment, is to have a well thought out plan. You can make a lot of things work out with a well thought out plan and you can make a mess of most anything without one.

Sure, and much of that speaks to having a balanced portfolio sufficient that you can ride out the volatility in any one asset class by having funds available in others. And for that you need to know, or plan for, when you might want/need to draw down, or even perhaps exit.

As you know, we don't really disagree on this matter generally, but the idea of investing exclusively in it is something I'm not in agreement with. It may work for some, depending what stage of their life they're at, and what they're willing to risk, but I don't see it as a generally acceptable principle. Maybe that's my risk-appetite speaking, based on my current situation, and maybe I'll miss out on huge growth by not investing all of my money in it now. But then that does speak to my point about it not being for everyone.

Disclaimer: I am not Seattle. I'm also not an IFA. I'm merely speaking about what I consider to be reasonable common sense given my uneducated understanding of such matters.

 

[Seattle]

Some people will need to exit. At some point they will need to cash in their investments. It's all about financial planning, and while I don't disagree that crypto (read Bitcoin) has its place, I disagree that you would really ever want to put all your eggs in that one basket, as your comment suggested, simply due to volatility and future needs. The earlier you start, and the longer you can wait before needing it, then perhaps. But it's certainly not for everyone.
Sure. But the market as a whole needs to sufficiently understand it for the purposes they wish to use it. Else they would be remiss in utilising it, or advising its use. That's why it's currently used as a highly volatile speculation, albeit one that has shown massive growth since inception. Because that's how the majority of people still understand it. That is changing, though.
The problem with this argument is that it is basing future performance on historic, and while the growth from inception to now has been stellar, there may come a point where it enters a more mature stage, where performance is not so good, even over longer periods. As to when and even whether it will ever enter a more mature phase can be debated as well. But I take your point.
Sure, and much of that speaks to having a balanced portfolio sufficient that you can ride out the volatility in any one asset class by having funds available in others. And for that you need to know, or plan for, when you might want/need to draw down, or even perhaps exit.

As you know, we don't really disagree on this matter generally, but the idea of investing exclusively in it is something I'm not in agreement with. It may work for some, depending what stage of their life they're at, and what they're willing to risk, but I don't see it as a generally acceptable principle. Maybe that's my risk-appetite speaking, based on my current situation, and maybe I'll miss out on huge growth by not investing all of my money in it now. But then that does speak to my point about it not being for everyone.

Disclaimer: I am not Seattle. I'm also not an IFA. I'm merely speaking about what I consider to be reasonable common sense given my uneducated understanding of such matters.

I'm not saying that everyone should put all of their assets in Bitcoin. I'm just saying that it's not the craziest concept.

Of course the past is no guarantee of the future yet it's generally the best indicator especially when you consider how Bitcoin works. It will mature some day, for sure. So the outsized gains will come down. It will still beat the S&P 500, IMO, because that's mainly just a stand in for real inflation/debasement of the currency and since Bitcoin isn't being messed with (it can't be messed with) it will always be better than that.

I do think that most anyone's long term portfolio would be improved over a 10 year period with a 10% allocation in Bitcoin because it has a good risk/reward characteristic. In other words, $1 in Bitcoin can only go down to zero and it can go a lot higher (and does) so over time it only helps a portfolio.

 

[James R]

A lot of this still discussion still sounds to me a lot like an advertisement for Bitcoin, or perhaps an advertisement for financial services to assist investment or to give financial advice about Bitcoin.

I'm not sure why Sarkus felt he needed to add a disclaimer saying that he isn't Seattle.

What's an IFA?

 

[Seattle]

A lot of this still discussion still sounds to me a lot like an advertisement for Bitcoin, or perhaps an advertisement for financial services to assist investment or to give financial advice about Bitcoin.

I'm not sure why Sarkus felt he needed to add a disclaimer saying that he isn't Seattle.

What's an IFA?

I assume it's the UK version of an IRA or a 401k in the US. There must be something similar in Australia (retirement plan)?

I also assume the bit about Seattle was humor?

Regarding your first comment...this is what a financial discussion looks like about a new asset class. You'll notice it's not a never ending thread of insults. It's a discussion

 

[Sarkus]

I assume it's the UK version of an IRA or a 401k in the US. There must be something similar in Australia (retirement plan)?

Google is surely thy friend? . IFA = Independent Financial Advisor.
They may be known as CFPs in the US (Certified Financial Planner)?

 

[James R]

Regarding your first comment...this is what a financial discussion looks like about a new asset class.

It looks to me more like a discussion between a salesman and a customer who is leaning towards making a purchase but who has a few minor reservations.

Anyway, I'll let you get back to it.

 

[Seattle]

It looks to me more like a discussion between a salesman and a customer who is leaning towards making a purchase but who has a few minor reservations.

Anyway, I'll let you get back to it.

You have no interest in personal finance? It's not just Bitcoin that isn't discussed here. I don't see any personal finance discussed here. Does no one care about the economy and how it impacts your personal finances?

The dollar is being debased at a rapid rate. Not everyone lives in the US but most everyone is impacted by the US economy. The problems aren't largely political. Fix the money and you fix the world. Political bickering is just a distracting sideshow.

 

[Zero Point Native]

Does no one care about the economy and how it impacts your personal finances?

The current economy is certainly interesting to watch. No, scratch that. It's amusing to watch. I expect it shouldn't be too much longer before the global economy as we know it today will no longer exist, which seems pretty obvious. I don't have any concerns about the economy and the direction it is heading in and how it currently impacts or will impact my personal finances.

 

[Sarkus]

I'm not saying that everyone should put all of their assets in Bitcoin. I'm just saying that it's not the craziest concept.

It rarely is... right up to the point that it proves to be.

 

[Seattle]

It wouldn't be crazy to put all of your money into gold, it that's what you wanted to do.

 

[James R]

Seattle:

You have no interest in personal finance?

Did I say that? If I didn't, why would you assume it?

I am not very interested in Bitcoin. Certainly nowhere near as enthusiastic about it as you are. Do you have some kind of problem with that?

It's not just Bitcoin that isn't discussed here.

It's a thread titled "cryptocurrencies". Mostly it has been about Bitcoin, so far.

I don't see any personal finance discussed here. Does no one care about the economy and how it impacts your personal finances?

What does that have to do with cryptocurrencies?

The dollar is being debased at a rapid rate.

How do you figure that?

Not everyone lives in the US but most everyone is impacted by the US economy.

Unsurprising. It's the world's largest economy.

The problems aren't largely political. Fix the money and you fix the world.

In my personal opinion, there are a lot of things more important in the world than money. Your mileage may differ.

 

[Seattle]

Seattle:

Did I say that? If I didn't, why would you assume it?

For me to assume something, it would have to mean that you didn't actually say it. Otherwise, no assumption would be required.

I am not very interested in Bitcoin. Certainly nowhere near as enthusiastic about it as you are. Do you have some kind of problem with that?

Did I say that I had a problem with it. Why do you assume that I have a problem with it?

How do you figure that?

It's a fact that the dollar is being rapidly debased. The money supply was doubled during Covid (for example). In 1920, $20 bought an ounce of gold, today an ounce of gold cost more than $2,000. The ounce of gold didn't change, the dollar is just worth 100 times less.

In my personal opinion, there are a lot of things more important in the world than money. Your mileage may differ.

In my opinion, sound money would fix most problems in the world. Do you have some kind of problem with that?

 

[James R]

Seattle:

For me to assume something, it would have to mean that you didn't actually say it. Otherwise, no assumption would be required.

So, did I say it, or didn't I?

Did I say that I had a problem with it. Why do you assume that I have a problem with it?

I could reply with "For me to assume something, it would have to mean that you didn't actually say it. Otherwise, no assumption would be required." But that would be churlish, like somebody trying to avoid answering a simple question. So, here's my answer:

You did not explicitly say that you had a problem with it. I assumed you had a problem with it because you asked rhetorically whether "anybody" had an interest in personal finances. And I was the person right in front of you, so to speak.

Do you understand?

It's a fact that the dollar is being rapidly debased. The money supply was doubled during Covid (for example). In 1920, $20 bought an ounce of gold, today an ounce of gold cost more than $2,000. The ounce of gold didn't change, the dollar is just worth 100 times less.

So when you say the currency is "debased" you just mean inflation has happened. Okay. I don't disagree that has happened, and is still happening.

In my opinion, sound money would fix most problems in the world. Do you have some kind of problem with that?

Yes, I do. I think you're wrong. Do you have some kind of problem with that?

 

[Seattle]

Seattle:

So, did I say it, or didn't I?

I could reply with "For me to assume something, it would have to mean that you didn't actually say it. Otherwise, no assumption would be required." But that would be churlish, like somebody trying to avoid answering a simple question. So, here's my answer:

You did not explicitly say that you had a problem with it. I assumed you had a problem with it because you asked rhetorically whether "anybody" had an interest in personal finances. And I was the person right in front of you, so to speak.

Do you understand?

Sure, I understand that you frequently like to unnecessarily pick a "fight". That's an assumption but all of the evidence between you and well, most everyone else, points in that direction.

So when you say the currency is "debased" you just mean inflation has happened. Okay. I don't disagree that has happened, and is still happening.

There is "goods inflation" and then there is "monetary inflation". You could produce so called "Veblen Goods" (luxury goods) and you might be able to just arbitrarily raise the price because supply is limited and for some goods that isn't a problem (Rolls Royce).

However debasing the purchasing power of the dollar is a monetary problem caused by government debt and poor fiscal policies as well. Today the debt is mounting just because the government spends much more than it takes in and just monetizes the debt by "creating" more to pay the interest on the debt.

You can't do that with Bitcoin. That was the idea behind the gold standard but the government could decide to go off the gold standard, and did. They don't have that ability with Bitcoin.

There were periods in the 1800's when prices were fairly stable, government was smaller, the currency was backed by gold and you didn't have the Fed trying to micro-manage the economy (and generally making things worse).

Yes, I do. I think you're wrong. Do you have some kind of problem with that?

I'm never wrong but I'm humble enough to realize that I could be wrong one day. Strong money means not debasing the currency. When you can't just print money you tend to not have as many wars and the wars are shorter, because if you have to raise taxes for a war, people aren't going to go for that easily or for long.

If you can't debase the currency it makes for a more equal economic outcome. There will still be those with more and those with less but it will result in a more equal and level playing field.

Now, 2% inflation, for example, just means that we are "OK" with the government only stealing 2% from us instead of 6%. It's still taking from us. Those with the means can partially negate this at least by investing in some assets that will keep up with that inflation.

Those who have less, may not have any left to invest with so they see prices go up, have to pay those higher prices but don't have assets that are going up to help offset that.

Stable prices are particularly good for the lower economic segments of society. Just as micromanaging an economy doesn't work very efficiency in the production of goods decision making (see Soviet planned economies). We know that the free market pricing mechanism results in the most efficient way to allocate scarce resources.

It's the same with the Fed trying to micro-manage the economy. If the economy goes down instead of just letting the free market deal with it and automatically correct, they generally try to stimulate the economy but they do so too late, when the economy is already coming back up.

Therefore they cause/add to inflation. Then they raise rates to deal with inflation but they are late to the game and cause the next recession.

The solution is to let the efficient markets work, don't "print" money in an attempt to "fix" the problem that you just made worse. As I said, strong money, like Bitcoin, is the solution.

You, I'm guessing, just took my "strong money" comment to mean that money is more important than people or some such view. That's why you are wrong and I am right. As you say, sometimes there is objectively just one correct view on a subject.

In this case, I'm right and you are "wrong" simply through lack of education of the subject matter on your part. We can all learn though, wouldn't you agree? Or perhaps I should say, "do you understand"?

 

[James R]

You, I'm guessing, just took my "strong money" comment to mean that money is more important than people or some such view. That's why you are wrong and I am right

No. It's why I'm right and you're still wrong.

 

[Seattle]

No. It's why I'm right and you're still wrong.

How can I "still" be wrong if I've never been wrong? Do you understand?

 

[James R]

How can I "still" be wrong if I've never been wrong? Do you understand?

I understand that you have a problem. You believe you can never be wrong, for some reason. That's delusional, Seattle.

 

[Seattle]

I understand that you have a problem. You believe you can never be wrong, for some reason. That's delusional, Seattle.

When you consistently don't get humor, get along with no one, take everything literally that's a problem.

 

[exchemist]

When you consistently don't get humor, get along with no one, take everything literally that's a problem.

Yes I thought your post 292 was a very accurate pastiche of James's debating style.

 

[Sarkus]

Here's a new one on me...
Just been browsing the felon Donald Trump's Truth Social account, and he posted this (I won't link, but this is a copy...)

"VOTE FOR TRUMP! Bitcoin mining may be our last line of defense against a CBDC. Biden’s hatred of Bitcoin only helps China, Russia, and the Radical Communist Left. We want all the remaining Bitcoin to be MADE IN THE USA!!! It will help us be ENERGY DOMINANT!!!" - felon Donald Trump - Truth Social

CBDC - Central Bank Digital Currency

Now, it seems Biden is generally against Bitcoin (although his administration's stance has seemingly softened recently), so typically Trump jumps on the chance to take the opposite position so as to appeal to Bitcoin owners/users etc. That's not so much the issue. It's the part I've bolded above that has me scratching my head... how exactly would all the mining being done in the US help the US to be "ENERGY DOMINANT"???
Is there anyone out there who can help me understand? What am I missing? Or is it simply that the felon has zero comprehension of what Bitcoin is, what a CBDC is, what mining is, and how it might impact US energy?