Posted on 05/08/2022 8:50:35 PM PDT by lasereye
Bitcoin becoming a playground for day traders and large institutional traders buying in and treating it as a “risk on” asset (trading in lock step with the NASDAQ). Adds to volatility and they are missing the point of Bitcoin.
Not really a useful metric since that doesn’t take into account Lightning transactions (or its potential), and the fact that transaction value is roughly 50x where it was 2 years ago.
That does continue to build the case for it as a speculative asset though…
Price has fallen the last 6 months by 50% and so has volume. Volume should have gone up as the price fell. It didnt.
That doesn’t make any sense for a couple of reasons.
First, no builder (or any other merchant or services provider) is drafting price quotes in bitcoin. They’re using whatever currency they have to pay taxes in to price goods and services.
Second, a merchant, services provider, or builder doesn’t have to hold bitcoin to accept it. They can either use a crypto payment processor to settle the transaction in fiat, or they can exchange it at the time of the transaction.
Very few businesses are going to want to hold bitcoin or any other crypto because you have to use non-GAAP accounting to keep it on your balance sheet.
It’s very popular in South America as a payment type for real estate as lots of South Americans bought in early in the crypto game, and a lot of South American governments don’t count a crypto transaction, large or otherwise, as a taxable event.
The strong dollar is killing it. It will swing back. Not tomorrow. But it will take a while.
The thing is that mindset would have had you out when it doubled.
With Bitcoin you skim the top, and don’t be left holding enough to keep you up at night when it tanks.
If you have been through these cycles, you know you have to cut your holdings and then weather the next storm.
There is always another storm coming.
Daily volume has followed an almost identical weekly pattern for the last 6 months, and transaction value is steady over the same 6 month period.
I thought you said “a few of years ago” was the peak. Now you’re measuring from the historical high 6 months ago? Did bitcoin lose its value as a speculative asset “a few years ago” or 6 months ago; it’s not a trivial difference.
Just using btc as a short term payment method in real estate offers no real advantages over traditional payment methods such as a wire or certified check.
I used the 6 month timeframe simply to rule out lower volume due to higher price (coins worth more, less coins trade), since to price went down during that period.
No advantages for the buyer or the seller?
For the seller, the advantages are almost instant settlement, and no cross-border fees if money is moving in between countries.
For the buyer, they’re almost always spending gains anyway, and it’s cheaper to pay in Bitcoin than to cash out what you need on an exchange, then pay the wire or ACH fees.
All the exchanges. Volume is trending lower.
https://data.bitcoinity.org/markets/volume/2y?c=e&r=month&t=a
If you’re judging long term viability based off of 6 months performance, then bitcoin is not the speculative asset for you.
A wire is $25. A certified check is a few dollars. What would the exchange cash out fee be for that hypothetical $600K real estate deal?
The cardinal rule in trading is quickly cut your losses. Losing 50% in 6 months and still holding is wild Vegas gambling.
If the seller were going to accept a P2P transaction, it would depend on which exchange you use and your level of trading. But probably around 25 basis points at that level. You would likely charge the seller a "processing fee" for paying in crypto if that was the case, just like is often done for credit card transactions.
For a crypto-fiat payment processor on the transaction (instead of P2P), around 1% to the buyer.
It's more applicable in high fee/tax scenarios, so for instance in Argentina, any money moving out is held for 30 days by the Argentine government, and taxed at around 30%. If you wanted to get money out of Argentina, or a country with similar protective tariff-like money transfer laws, bitcoin would be the superior way to do it.
I'm not trading.
Losing 50% in 6 months and still holding is wild Vegas gambling.
It's clear that bitcoin isn't for you if you're approaching it with the same mindset as securities and commodities trading.
I personally don't plan to ever sell, no matter what anyone says.
“I personally don’t plan to ever sell,”
You will ride it all the way to zero like a true believer, doubling down on the losses the whole time. I’ll check back every 6 months.
Futures just bounced off $29,700.
They care that the government devalued the bolivar another 20% that week, and the bolivars in their possession LOST VALUE by that amount when buying chicken.
Government can't devalue bitcoin, so that's an irrelevant point.
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