Posted on 05/08/2022 8:50:35 PM PDT by lasereye
Bitcoin continues to fall, extending its losses from the past week.
The largest cryptocurrency by market value dropped 4% in the last 24 hours, according to CoinGecko, breaching a key support level and hitting a daily low of $34,406.
It’s currently trading at around $34,519, down 9% in the last seven days and down 40% year to date.
Ether, the second-largest, is also in the red, down 6% in the last day and down 7.4% in the last week.
Overall, the cryptocurrency market is taking a hit, down 4.2% in the last 24-hours.
Though weekends are typically bad for Bitcoin and cryptocurrency in general, this nosedive comes after the Federal Reserve indicated it would raise interest rates by half a percentage point on Thursday, which sparked a stock-market selloff.
Bitcoin and other cryptocurrencies are increasingly moving in sync with tech stocks.
“Bearish sentiment continues to prevail as the Fed looks to slow down inflation at all costs. This has led to stronger correlations between stocks and crypto over the past six months,” crypto market analysis firm IntoTheBlock wrote in its Friday newsletter.
Lucas Outumuro, head of research at IntoTheBlock, told Fortune last week that “until the market starts looking past the impact that [quantitative tightening] and raising rates will have, I find it difficult for Bitcoin to establish a broader up-trend.”
(Excerpt) Read more at finance.yahoo.com ...
Cryto fanboys will brag about how much they made. That’s nice but is irrelevant going forward. It’s like bragging how much money you made buying Xerox or Sears stock back in the 60’s. Yes at one point you were up 50,000%, but today those shares are worthless. And that is the future of Bitcoin. A hobbyist’s creation but it is going the way of the dodo bird. Central bank digital currencies and more modern, professionally engineered crpto coins that can actually scale out will kill it off.
I understand. As with any new market/asset class, the volatility in crypto is high. I’d divide crypto into a few main categories:
1) Bitcoin. This is the top one, the highest market cap and the equivalent of a value stock in the stock market. It swings wildly in price but less so than the rest of crypto.
2) alt coin Blue Chips....these would be the top 15 or 20. You can get big price swings - more so than Bitcoin - but you can be reasonably sure these are not going belly up. Ethereum, Solana, Cardano, XRP, Polkadot, Terra, etc
3) alt coins....Coins outside the top 20 or so. This is where you can find the ones that can grow at 100X. This is also where you can find the ones that go to $0. These are truly risky assets. You really need to do your homework researching these and be careful about making too big of a bet on any single one.
4) meme coins....also called dog coins. Dogecoin and Shiba Inu are the big ones. These are worthless IMO. They do nothing. They have no technology behind them that is worth anything. I know people compare all of crypto to tulip bulbs. THESE really are tulip bulbs. The greater fool theory is the only thing holding these up.
5) stable coins....these are always worth $1 no matter what. These are not investments, they’re simply there so you can convert your money or maybe hold money in them so as to be ready to make a big purchase of other crypto currencies, etc.
6) NFT’s...ie Non Fungible Tokens are not crypto currencies. They are worthless jpeg files that people pay ridiculous amounts of money for.
It is always amusing to me to watch the dyspeptics, knownothings, and bluehairs (sometimes you hit the trifecta and get all 3 in one person!) slam crypto.
I TRIED to buy BTC when it was less than a dollar. It was so abstruse and difficult that I just gave up and put the money in silver. It has done “ok” but nothing like the meteoric rise bitcoin has seen. I did wind up buying in at 9,000 USD and change. So, yes, I am a holder. I still trade it.
In today’s “everything bubble” I try to hedge against the certain coming implosion of the US dollar (actually all state backed fiat currencies) by holding gold and silver as my primary hedge. I have been buying these since 2003 and will likely buy more as funds permit. I diversify, as any person who cannot divine the future does. That means I buy bang sticks and lead, foodstuffs, things which became rare in Argentina, Venezuela, Zimbabwe, and Ukraine during recent hyperinflations (toilet paper, soap, socks, underwear, alcohol, condoms, water filters, etc etc). I download youtube vids and keep them on DVDs and old hard drives. On my list is a generator and building a wood gas generator. If we have another dip in gas prices before the inflationary boom I would like to buy a thousand gallon propane tank.... you get the picture.
Crypto currency is a hedge against the destruction of fiat. The destruction of fiat IS coming and most of your IRAs and pensions are tied to equities and will become worthless. Frankly, most people will starve. Crypto will have utilitarian value in that it will provide a medium/mode of exchange when your crowd of flag waving idiots finally realize that chanting “USA USA USA” won’t fill their empty bellies, nor is anyone going to come and save them from the violence. In the mean time, the wild money printing we have is going to lead to violent swings. My advice is to buy some dips, get your crypto off the exchanges and off the internet entirely, and don’t obsess over the daily price swings. You should buy a little, but maybe 5-10% of your savings.
If you trade it, then it doesn’t matter and you either understand how to make money trading it like any other speculative instrument or (more likely) you would be better off going to Vegas, since most folks aren’t disciplined enough to be successful in that venue.
For the record, I plan to buy a little BTC (I trade it leveraged, which means I buy futures) if it gets down into the 28K level. As I have gotten older, I take less and less risk trading, which means the price needs to be so extreme it is like money laying in the corner screaming “come pick me up!”
Your mileage may vary
All NFT's, with Bitcoin using the greatest amount of electrical power to create one of itself. When the big selloff starts, items 1 - 6 will be the first things people rush to get rid of.
bitcoin is currently in the dump cycle. Look for the pump cycle to start shortly.
Buy low sell high, there are always new folks buying in to give you their money.
BITCOIN IS THE ULTIMATE FIAT. BACKED BY ABSOLUTELY NOTHING.
What backs Bitcoin others than other greater fools that think some computer algorithm churning away represents real wealth?
They say that some who win big lottery jackpots continue to play after the win.Not me...I'd be done once I cashed that big check.
That's complete amateur hour nonsense. If true definitions like this would not say "backed".
"Fiat money is a government-issued currency that is not backed by a physical commodity, such as gold or silver, but rather by the government that issued it. "
https://www.investopedia.com/terms/f/fiatmoney.asp
It may have other purposes besides currency (for example silver has an industrial use component) but those other uses never ever ever justify the "price" of a currency
So when Russian just announced the ruble was "backed" by gold, traders adjusted the price of rubles. But according to you, they can't justify that price adjustment by the new backing. You live in an alternative universe from the rest of the trading and financial community.
Definition of money 1 : something generally accepted as a medium of exchange, a measure of value, or a means of payment:
So know it all, what is the maximum rate for bitcoin transactions?
"However, the impracticality of commodity money created the shift towards “representative money” – money that lacks intrinsic value but is backed by its ability to be traded for a physical commodity. The most notable use of representative money is under the gold standard, where each country’s currency is tied to a fixed amount of gold."
https://corporatefinanceinstitute.com/resources/knowledge/economics/how-is-currency-valued/
"You don't understand that nothing "backs" any money."The ruble is a rare exception. Bitcoin is no different from most currencies.
That's complete amateur hour nonsense. If true definitions like this would not say "backed".
"Fiat money is a government-issued currency that is not backed by a physical commodity, such as gold or silver, but rather by the government that issued it. "
So when Russian just announced the ruble was "backed" by gold, traders adjusted the price of rubles. But according to you, they can't justify that price adjustment by the new backing. You live in an alternative universe from the rest of the trading and financial community.
Backing the ruble with gold is to ensure that it doesn't collapse compared to other major currencies - which are not backed with gold. In other words someone will accept payment in rubles without fearing it will be worth fewer dollars than it was when they accepted the payment. When you say traders adjusted the price of rubles you mean in dollars, euros etc.
The point remains that currency gets its value from the fact that it is a medium of exchange, not from being backed by something. Gold's value arguably largely rests on the fact that it is a type of currency, i.e. it can be used as a medium of exchange.
So did Zimbabwe dollars or Venezuelan bolivars stop being mediums of exchange? If not, then what caused their values to dramatically change?
This is a good link on how currencies are valued. Way more involved than your what you said above.
https://corporatefinanceinstitute.com/resources/knowledge/economics/how-is-currency-valued/
Bitcoin has lost half of it's value during the last 6 months. So did it become 50% less of a "medium of exchange" during that time?
WRONG! You blow a lot of smoke but once again are living in your own universe. That answer shows you don't know that much about bitcoin other then pouring money into it else you would know exactly what that question referred to. Is is widely discussed. It is why bitcoin will be going the way of the dodo bird as I said because this is a huge design flaw that limits it's ability to scale out. Other coins professionally engineered to scale out will replace bitcoin.
https://en.bitcoinwiki.org/wiki/Maximum_transaction_rate
Maximum transaction rate
The maximum transaction rate is the block size limit divided by the average transaction size. The block size limit is well known, 1MB, however the average transaction size isn't. Here we'll look at what influences that size.
...
Each transaction input requires at least 41 bytes for the previous transaction reference and other headers and each transaction output requires an additional 9 bytes of headers. Finally every transaction has a header at least 10 bytes long. Added up we get 166 bytes for the minimum-sized Bitcoin transaction. For 1MB (1,000,000 byte) blocks this implies a theoretical maximum rate of 10tx/s.
https://en.m.wikipedia.org/wiki/Bitcoin_scalability_problem
The Bitcoin scalability problem refers to the limited capability of the Bitcoin network to handle large amounts of transaction data on its platform in a short span of time.[1] It is related to the fact that records (known as blocks) in the Bitcoin blockchain are limited in size and frequency.[2] Number of transactions per month, on a logarithmic scale
Bitcoin's blocks contain the transactions on the bitcoin network.[3]: ch. 2 The on-chain transaction processing capacity of the bitcoin network is limited by the average block creation time of 10 minutes and the original block size limit of 1 megabyte. These jointly constrain the network's throughput. The transaction processing capacity maximum estimated using an average or median transaction size is between 3.3 and 7 transactions per second.
Not sure what your point is. Gold has had large drops at various times. Currencies have had huge drops compared to other currencies.
Whats not to understand? You said this:
“’The point remains that currency gets its value from the fact that it is a medium of exchange”
And I pointed out difference currencies did not cease being “medians of exchange” and yet had huge valuation changes.
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