Exactly! It truly is impossible to know who is going to sell and when. If the dynamic shifts very quickly, the would be sellers might very well turn into the army. I have been disappointed that in the past, any attempt to organize a movement and get people to take coins off exchanges in order to expose any cracks in true ownership have not resulted in any real pump. What makes me giddy though is that up till now in history, there has been no real way to corner any market. Paper markets for precious metals have always acted like a pressure release valve. Its true that the bitcoin futures is in a way masking whatever buying interest there might be, but shortage of coins will hopefully one day become a very real thing. True scarcity of a bearer asset has never been possible until now. I'm so curious about how exchanges manage their inventory. Since I now understand that the 2 million coins quoted as being on exchanges actually refers to coins in people's accounts, its not sufficient enough of an answer for me that I am simply trading against another person when I buy bitcoin. Perhaps on exchanges like FTX when it was alive, or Binance, but most exchanges I've dealt with I assume are simply wholesalers. They have some inventory like a store, but when a hot item sells out, they need to wait until they get more stock. So if these exchanges run out, will they stop selling bitcoin? Or will they quote a higher price and hope you don't try to withdraw? I am now using a new source for KYC free bitcoin. Its non-custodial, which means when you buy, you need to enter an address to receive your coins. About twice a day, they do batched transactions. I can see my coins on-chain in the batched transaction, and it appears there are usually 30-50 other recipients, and the totals sometimes approach 1 bitcoin. So if we consider in 1 day, 2 bitcoins are purchased, this certainly isn't huge in terms of the 900 mined every day, but this is a very small operation. These coins are going right to people's wallets, and hence, the army is active! But what I really want to know is where do these coins come from? How much is the wholesale price for this exchange, and can they ever run out of inventory? Imagine the operation holds 10 BTC of their own. Its a huge price risk for them if it plummets and they paid 29k per coin, and in a day its only selling for 25k per coin. But they need to own it or else how could they transfer it out? Maybe they have a deal with a bitcoin miner, and maybe the coins come right from the miner and this operation is simply the middle-man taking a cut with never actually holding any inventory, kind of like a drop shipping company. The miner is probably not running out of coins any time soon, and they clearly always produce more, so shit... maybe I'm right. But this whole thing fascinates me. I think its important to know this because if we are all waiting for the proposed green God candle one day, it would be good to know all the mechanisms of how this all work. We know FTX said they had 80k coins in client accounts, but held nothing. Binance right now is apparently selling Bitcoin, but CZ denied it. All of these will be factors for what happens when liquidity becomes a real thing. If a daily candle is 10k, lets say from 30k to 40k, how will this affect all the exchanges? What will be the price discrepancies between exchanges? Will people be able to withdraw? I read stories all the time from the gold bugs about how some dealers run out of 10oz bars and stuff like this, but you can't really verify any of this. But with bitcoin, you either have your UTXO or you don't. Its clear as day, and how exchanges will function is something I'm very eager to see. God, I wish someone told me. I heard of it of course, and even thought why not just throw 1k at it and own 10 coins, but buying at the time was difficult I think. It really is a shame I didn't have any contacts. I might have lost it all by now, but I can't tell you how I'm hurting from buying silver for months, and hence trying to do something to protect my purchasing power, but completely missing the one thing that would have changed my life. This is the one thing we disagree on. I know you have your leveraged long on right now, but honestly, if we take a dive down to 10k very quickly, I will be giddy with excitement. I know that over the next few months, I will keep adding to my positions, so if we fall sooner rather than later, it will mean I get to accumulate more. A test of 16k would be wonderful, and a move down to 10k would be even better. And honestly, even a return to 4k, which I highly doubt, wouldn't cause me panic. Imagine the tens of thousands of people who want to buy 10k or 5k bitcoin. There simply wouldn't be enough I don't think and the only way to get these good prices will be with resting limit orders.
Gradually, then suddenly I see your point of a supply shock that would cause bitcoin price to go to $1M overnight or a very short time, but honestly, that is not a good thing Balaji's bet which he lost was thinking of a scenario where hundreds or thousands of US banks start cascading into bankruptcy causing a flood of money to go to bitcoin, but in that scenario, I can also see the US gov shutting down all the US crypto exchanges and/or all US crypto companies and confiscating all the bitcoins and declaring them illegal to own for any US resident That's not a good thing I saw a Twitter post recently (or maybe mentioned in a youtube video) that if bitcoin price goes to $1M overnight, would you sell all your bitcoins for US $? It's an interesting thought experiment, because after doing that, you'd be left with no bitcoins, sure you may have a lambo and even a house, but you'd be trapped in the same fiat prison that is guaranteed to continue to debase Bitcoin at $25k going to $1m is 4,000% and it could happen in 7 years. That is a more sustainable and organic move Bitcoin moved 10,000% within 2 years and not much discussion of it on ET Patience, my friend. Patience https://www.elitetrader.com/et/thre...itcoin-believers-still-comfy-about-it.288985/
Wow, such an interesting thread. I just scanned it, but if I look at a chart at that point, we see this. Blue arrow points to the date of the thread. And yes, it does look not too awesome at that point. But of course, if we zoom out a bit more, we get this. I didn't even bother to include the top so that we can at least see somewhat what is going on at the blue arrow. I think the boom-bust cycles is one of the reasons why I got orange pilled. In 2013, bitcoin could have very easily been a tulip bubble moment. But the tulip prices never did recover. Once bitcoin did the 80-90% drop a few times and continued to recover, that right there said the tulip mania wasn't an example you could use to evaluate things going forward. I was around ET at this time, but didn't venture into the crypto forum at all unfortunately. I'm honestly not sure how it can be stable once it really gets going. I see price targets on gold of maybe $2,500 if things go really well. Are you fucking kidding me? I'm supposed to hope for a 25% increase as the best gain to look forward to? If silver gets to ATH at $50, that means a 100% gain from here. This is pathetic! Bitcoin just getting to ATH is almost a 300% move from here. So at some point, everyone will realize that there will be no better performing asset once it gets going. Maybe its a slow grind to ATH. Maybe there is significant selling at 100k. But each move higher will I think suck in more allocations from elsewhere. And this will be at a time when the technology and ease of use will be so much better. I vaguely remember thinking about buying bitcoin, but keeping track of private keys was scary. I see BIP39 was introduced in 2013, but I wonder when hardware wallets really became common place. Also, 10 years ago, internet banking and online brokerages perhaps weren't also as common as they are now. So the rise of bitcoin happened with all these other technologies that people began to accept. My point being that going forward, it will be easier to buy, easier to self custody, and perhaps even more obvious that every other asset class will be trailing bitcoin. The moves at this point might be nothing like organic. I suspect that if I had 1 bitcoin and it hits a sweet price where I can sell it and buy property without having to have a mortgage, that is a great trade and reason to sell. But if selling simply for the sake of holding fiat, as you say, might not be a wise trade. So any selling might actually be absorbed. Maybe I'm a bit too optimistic, but I do think that once bitcoin really goes mainstream, the value will be very much like what Jeff Booth says, how the cost of everything goes down to the price of production. So, the cost of housing will settle at a price that is balanced with local wages. There won't be a premium for an investor to extract by hoping for price appreciation while the renter pays off the mortgage. Precious metals will simply reflect the cost of production to make jewelry. Bitcoin will be like USD. Everybody wants dollars because as fiat goes, its the best one in the world. Likewise, bitcoin will be the best store of value, and as this becomes more apparent, I think the price rise won't be all that steady. With real estate, there is kind of a ceiling to price because either it reflects wages, or the amount an investor is willing splurge to park their money. Stocks also kind of have a max as well because eventually the company has to show sales or growth or something. Sure we can have a PE ratio of 100 or crazy shit like this for a while, but its not sustainable. But with bitcoin, the more people want it, the more the price just updates to reflect the need to buy sats. About the only limit is if it replaced all traditional global wealth. I saw a great episode on What Bitcoin Did with Jeff Snyder and Lynn Alden. These two really hate eachother... but the only criticism Jeff is making is that bitcoin is inelastic. Yes, we can't just print more of it. But I think the elasticity comes in the form of price. Price can easily rise, thereby making more sats available. Then the price of everything else just adjusts, and problem solved.
ET has the best traders and seem to know about early market structure, but... Here's another thread you might find interesting https://www.elitetrader.com/et/thre...s-year-but-is-it-ready-for-prime-time.300023/ I missed out on the Eth ico and even after it was out, I did not become interested early to get involved with the smart contract ecosystem If you buy property in exchange for 1 bitcoin, sure it may seem like a good trade, but a house has property tax, maintenance costs 1-2% property tax over the course of 30 years means you lose ~50% of the nominal value to Uncle Sam, but wait, RE always appreciates, right? Hmmnnn, so the argument is to own RE for the monetary premium, not the actual utility? I suggest you watch Luke Broyles videos Imho, you're not as orange-pilled, yet, and it's ok, hard-core bitcoiners have a high confidence that bitcoin will go to $1M by 2030 but it's not going to stop there, it will continue to go up forever Could we bitcoiners be wrong? Absolutely!!! But as I type this right now... All is good When Jeff Booth says all prices will converge to the marginal cost of production, he's referring to things within the (manipulated fiat) system. Bitcoin is outside of that fiat system In fact, Jeff Booth also says everything will go to zero when priced in Bitcoin NFA, but I hope to orange-pill you even more my friend https://watcher.guru/news/can-bitcoin-achieve-fidelitys-1-billion-by-2038-prediction
I should have clarified to say that the property would be for me to live in! Now, if renting turns out to be cheaper in the long run than owning, then perhaps that is something to consider. But I speak with confidence because my dad fortunately owns his own townhouse, but if he was to rent, no way would be be able to get by on his little pension. The property taxes and maintenance fees add up to a fraction of what it would cost to rent in this environment. Clearly, buying a property right now in some markets is insane, and renting is much cheaper. But if we do the math right, and suppose that rent costs continue until you die, whereas mortgage costs could end after 20 or 25 years, and then you continue to live in the house rent free for another 20-25 years and pay only taxes and maintenance, then this may very well turn out to be the better option, if those prices and rates ever come down. I hope that my suggestion to buy a property didn't come across as an investment, but maybe that is what you were thinking. I will dig into those links!
It really is funny to see the opinions at the time, and fast forward now to the result. That is also partly why for me, it makes no sense to invest in equities. Sure, there is risk of ruin with bitcoin, but the asymmetric bet of crypto is insane. One of the things I don't like is the attacks on everything but bitcoin. I think DeFi will absolutely be a thing in the future. Maybe it will require regulatory approval, or even security designations. And maybe ETH won't be the blockchain used in the end. But if you consider all the woke narratives these days regarding inclusion for example, what is more inclusive, a traditional bank with shitty employees or software protocols? Regular banking is 100% discriminatory, so if governments really wanted to push the equality narrative, they would let the computers handle it, versus humans. Anyway, my point with all this is that if you consider how much DeFi can displace in the traditional world, we are talking about taking the biggest banks in the world, and using the combined market cap of those companies as a starting point for figuring out the value of this new system. So ya, growth potential is insane. Bring it on! But the second link didn't quite do it for me. I actually don't think you can invest 1 million into equities today and get to grow this to 1 billion in 20 years. I have a hunch that growth will be drastically slowing down, unless matched by an inflationary event. The growth of the past decade for example has been concentrated in the top 10% and 1% of the population. They have literally stolen production from the future. To survive, people have taken on debt and suffered a worse quality of life. So the question is, can we do this for another decade? If you have a million dollar house that cost you 200k, and the only reason for growth was because rates were low, can it do another 3-4X, even if rates come down again? Can it reach 4-5 million while everything else remains the same? In Canada, we already have people buying houses that are 8-10x their yearly salary. This ratio used to be 4x. And because wages aren't keeping up with house prices, there is no way this trend will continue. I know immigration is insane, and I'm not saying prices will come down, but I doubt with 99% certainty that the next 20 years of real estate won't be like the last 20. I love this chart. It shows how insane house prices are when compared to both population and incomes. In fact, in Canada, the GDP came in at about 2%, or just under, which they suggest is strong growth, but when you consider the 1 million extra immigrants, a record number, GDP growth is I bet negative on a per capita basis. So my point is that to get to where we are today, everything had to be taken from the middle class and poor. How will be finance the next wave of growth? Who will we steal from? Tredeau is trying the immigration route, but the idiot doesn't realize these people need somewhere to live. Sure its easy to assume more people means more food and more stuff that it bought, but it also means more services needed and more housing needed. And none of this is possible in the current system. And lets also not forget, much of this growth has come on the back of both government and consumer debt. So there really is no growth, its actually a worse situation. To bring this all more into balance, it has been suggested that we run inflation hot, like double digits for years, and if we double GDP, the debt to GDP ratio can drop below 100%. But how will people survive this inflation? And if instead we have deflation, then there will be no stock market growth. Now people will say technology and productivity will save us. Ok, sure, the machines and AI will do all the heavy lifting. But this would require these companies to be very generous with distributing the wealth to every citizen, and also giving governments piles of cash to spend, and also paying down the debt. But I'm fairly certain that none of this will happen. Productivity does not get shared. OMG... the analogy just hit me. Its going to be like Bitcoin sucking all the wealth from every sector. When gold drops a few trillion, bitcoin will go up a few trillion. When rich people sell their investment properties and housing values drop, bitcoin will go up. Same thing for stock markets. Now this won't mean that we have growth, it will just mean that the value is being transferred to bitcoin. Maybe the price of bitcoin won't even reach astronomical values, but everything else will be dropping, so on a relative basis, bitcoin will continue to grow as everything else drops. Imagine all the Uber drivers, taxi drivers, bus drivers, truckers, etc. when Tesla finally, by some miracle, solves FSD. Will they sell more cars? I'm not sure... maybe we already have enough on the road that when each one is used as a robotaxi, it will actually require fewer cars. So maybe Tesla actually drops in price because they kill their own demand. Just like we need fewer farmers these days than 50 years ago, we might actually need fewer cars in the future. Now Tesla might do ok as a company if they get a cut from every ride, but all those jobs are gone, and we can't say those people will just do something else. The guys on scooters delivering food are already 1 step above being useless. If we take this job away from them, there is literally nothing else for them to do. I have seen people say that the future will allow people to explore their creativity, etc. Sure, but once again, only if the companies that are raking it in will share, and they won't. So I see no magical 10x equity growth over the next decade or two. If we hyperinflate, then this stock market growth isn't really the same thing as the last 20 years that really made people rich. It probably won't even be enough to maintain your purchasing power. I think of it like laws of nature. A bird can only be so big because above a certain size, the wings would have to be too big, and hence the bird would be too heavy. A building made of wood can only be built so high because of the strength of timber. Likewise, the economy cannot grow much bigger because wages haven't kept up with inflation, and the debt is too high. The top stocks are sucking all the value away from the other 95% which will eventually die. But there really is no growth if you ask me. We are just re-arranging chairs on the Titanic.
I might have misunderstood your post, but it sounded to me if you can trade your (last) bitcoin for real estate, you would do so? Don't worry about the Fidelity prediction of $1B article, that came out a while back, I was only trying to make a point that bitcoin will not stop at $1M or even $10M price I can see a reasoning of trading 1 bitcoin for real estate if owning 2 bitcoins or more, but this is more of a diversification trading highly liquid 24/7 global asset for a less volatile but highly illiquid and geographically constraint asset A bitcoin whale paid over 5,000 bitcoins for a $4M house in 2017 https://www.nasdaq.com/articles/man...illion-buying-a-house-with-bitcoin-2017-01-26 Here's a good thread from on real estate using nakamoto portfolio theory valuation method
Excellent thread and I fully agree. The government risk is huge. When governments get desperate, they will go after everything, and real estate will be incredibly difficult to hide. I do kind of agree though. We can't have people parking money in real estate when its necessary for survival. You have numbered companies owning houses that hide the true owner. But of course, its understandable why so much money went into RE, given that there wasn't another good way to store wealth.
The fiat system is designed to inflate. Inflation is key to its continued survival. Without inflation, the fiat system will collapse If 2023 Global GDP is $100 Trillion, maybe it will be $1 Quadrillion in 2043 with much of the nominal growth due to monetary inflation There is a hidden risk of having much of your wealth stored in RE, it functions as an anchor. Many jews were trapped during the Nazi invasion A hack I've been using is to watch YouTube videos on 1.75x speed This is not Luke Broyles but also very good explanation of RE vs Bitcoin
@NoahA on the subject of supply shock, here's a dude focused on tracking the illiquid supply of bitcoins Hyperbitcoinization or supply-shock within the next 2-3 halving cycles. In line with the $1M/btc price prediction me and lot of bitcoiners believe will happen