[2019-04-29] Institutional Love For Crypto Confirms Bitcoin Isn’t a Bubble

figmentofmyass

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Quote from: o_e_l_e_o on May 01, 2019, 12:58:17 AM

Quote from: figmentofmyass on April 30, 2019, 06:27:17 PM

coinbase has FDIC insurance on customer USD and its hot wallets are fully insured.

CMIIW, but I was under the impression that Coinbase's insurance is only for them, not for customers. That is to say, they will cover your money if they are hacked centrally, but if your individual account is hacked or phished, then you are shit outta luck.

Most banks, on the other hand, will still reverse charges if someone steals your credit card, for example.

yeah i would never expect a crypto exchange to reimburse customers when they get their accounts hacked. no insurance company would underwrite a policy like that given how horrible the general publics security practices are.

banks and reversible transactions definitely have their place. and if retail banks start offering crypto deposit accounts in the future, they'll be faced with the same problems as exchanges today. if customers are allowed to withdraw crypto from their accounts like cash (on-chain to their wallet) then there's no way they can cheaply offer fraud guarantees like they do today. once those coins are withdrawn, there's no getting them back.

o_e_l_e_o

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Quote from: figmentofmyass on April 30, 2019, 06:27:17 PM

coinbase has FDIC insurance on customer USD and its hot wallets are fully insured.

CMIIW, but I was under the impression that Coinbase's insurance is only for them, not for customers. That is to say, they will cover your money if they are hacked centrally, but if your individual account is hacked or phished, then you are shit outta luck.

Most banks, on the other hand, will still reverse charges if someone steals your credit card, for example.

CryptoBry

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Quote from: taskly on April 30, 2019, 02:07:05 AM

Why are we allying with the enemies now? Bitcoin was supposed to be a rebellion against institutions.

This is a very valid question and I supposed everyone in the Bitcoin industry can be asking the same since we know that Bitcoin is supposed to be the big disruption of these institutions. Now, ideally that should be. Realistically, though, we have no choice but work with these institutions as they still command the power in the traditional financial ecosystem. In other words, Bitcoin could never be an island alone.

figmentofmyass

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Quote from: BitHodler on April 30, 2019, 04:12:48 PM

People seem to have a strong dislike towards banks, but they at least know what they are doing, and you enjoy some degree of insurance over your funds, which can't be said about one single crypto exchange here.

coinbase has FDIC insurance on customer USD and its hot wallets are fully insured. combined with money transmission licenses wherever they operate, that's about as good as it gets in this ecosystem.

i'm sure banks will screw up and get hacked too given enough time. Tongue

BitHodler

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Quote from: 1Referee on April 30, 2019, 03:09:37 PM

I rather have institutions functioning as exchanges than our current shady scam exchanges that get hacked constantly and can't handle hundreds of millions in client funds.

Same here. I can't stop feeling somewhat worried whenever I have a trade open and go to bed, but I do accept the risk I expose myself to, and I always use relatively small positions.

People seem to have a strong dislike towards banks, but they at least know what they are doing, and you enjoy some degree of insurance over your funds, which can't be said about one single crypto exchange here.

Overall, I think it's only a matter of time before banks start taking over by utilizing their existing position in the financial system and even outcompete crypto exchanges by closing their bank accounts.

Oilacris

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Quote from: 1Referee on April 30, 2019, 03:09:37 PM

In the end, institutions entering this space is a good sign, because regardless of their profiteering mindset, they do believe this space isn't a fraud and won't be going anywhere. I rather have institutions functioning as exchanges than our current shady scam exchanges that get hacked constantly and can't handle hundreds of millions in client funds.

Even i do have that loyalty towards crypto but regarding on that bolded part on the thing you have said which i do completely agree with.
I do much prefer on having these centralized exchangers yet it would give out somehow some security with its traders funds rather than
entrusting current exchangers which doesn't give out any assurance. Institutional investors shows up interest do really give out a good sign.

1Referee

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Quote from: o_e_l_e_o on April 30, 2019, 11:30:23 AM

I doubt very much a single one of them are interested in the things bitcoin can offer - decentralized, trustless, not relying on third parties, deflationary, etc. They aren't looking to use bitcoin for what it was intended; they are only looking to turn a profit. You can almost guarantee that if there was suddenly a severe drop in price, these companies' interest in bitcoin would suddenly disappear.

It depends on what is causing the price to drop. It wouldn't at all surprise me if last year's brutal selloff was initiated by institutions who used the BCH vs BSV hashwar bs as an excuse to dump so that people blame that event instead of them.

Institutions always need a reason to dump to justify large price movements. I have seen it happen with stocks too. More specifically, Facebook and Tesla's stocks have been going through similar fud attack dumps, while the actual reason for the dumps was completely different.

In the end, institutions entering this space is a good sign, because regardless of their profiteering mindset, they do believe this space isn't a fraud and won't be going anywhere. I rather have institutions functioning as exchanges than our current shady scam exchanges that get hacked constantly and can't handle hundreds of millions in client funds.

Kemarit

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Quote from: o_e_l_e_o on April 30, 2019, 11:30:23 AM

Quote from: buwaytress on April 30, 2019, 06:47:27 AM

Why the need to court these who would do everything for short term gains at the expense of sustainability?

It's a good point. All these large institutions that are now starting to seriously eye-up bitcoin are looking at it purely from a "maximizing their profits" point of view. I doubt very much a single one of them are interested in the things bitcoin can offer - decentralized, trustless, not relying on third parties, deflationary, etc. They aren't looking to use bitcoin for what it was intended; they are only looking to turn a profit. You can almost guarantee that if there was suddenly a severe drop in price, these companies' interest in bitcoin would suddenly disappear.

And I think they are already inside the ecosystem for all we know. We have seen the price goes as low as $3100-$3200 and I'm speculating that those large institutions secretly bought a ton either for themselves or for their clients already. Of course, they wanted to take a piece of that pie, billion dollar industry flowing inside and out in a day. Obviously, they want to take advantage of everything that will make them more money. Those are smart people motivated by greed, and who would forget the $100 million suddenly poured? entity? or some institutional money?

hatshepsut93

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Quote from: tyz on April 29, 2019, 11:49:49 AM

Institutional Love For Crypto Confirms Bitcoin Isn’t a Bubble

Bitcoinis the 21st century’s version of tulip mania. That’s the argument that cryptocurrency cynics have lobbed at BTC since its earliest years in circulation. But, more and more evidence is showing that crypto assets, especially Bitcoin, are much more than a flash in the pan, and will instead be a revolutionary technology that will change paradigms.

https://www.newsbtc.com/2019/04/29/institutional-love-for-crypto-confirms-bitcoin-isnt-a-bubble/

Why people always try to comparing the present with past events, as if the history has some narrow set of scenarios and everything must exactly fit one of them. Bitcoin is Bitcoin, it has it's own dynamic, and I personally think that it is more complex than a binary "bubble or new paradigm". Bitcoin has a lot of merit, but it also fails to appeal to broad population, because financial freedom isn't something that most people value. For Bitcoin to become a revolution, we'd first have to see a real financial/political/social revolution that would change how people think about money.

o_e_l_e_o

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Quote from: buwaytress on April 30, 2019, 06:47:27 AM

Why the need to court these who would do everything for short term gains at the expense of sustainability?

It's a good point. All these large institutions that are now starting to seriously eye-up bitcoin are looking at it purely from a "maximizing their profits" point of view. I doubt very much a single one of them are interested in the things bitcoin can offer - decentralized, trustless, not relying on third parties, deflationary, etc. They aren't looking to use bitcoin for what it was intended; they are only looking to turn a profit. You can almost guarantee that if there was suddenly a severe drop in price, these companies' interest in bitcoin would suddenly disappear.

CryptoBry

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Maybe at the early stage of Bitcoin, the argument that it can just be the digital version of the tulip mania maybe holding some water but at this stage I think the picture is quite clear: Bitcoin is here to stay even though it is not really perfect and the road ahead can also be bumpy. Compared to the fiat money, Bitcoin officially started just mere 10 years ago yet this is already a global force. Maybe people who remained negative about Bitcoin do not really vetted this whole thing well and they are just using their freedom to parrot their own self-serving interest...so maybe we should leave these cynics as they might be enjoying whatever they are doing.

buwaytress

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But didn't institutional love for dotcoms and tech startups circa 1990s, as well as for real estate, all helped drive and confirm the bubbles in those cases? Because you can't create a bubble if you don't got them cash heavy hitters throwing their hats into the circle.

In fact, I'm certain the 2017 bubble (hey, bubbles aren't so bad) was precisely down to institutional entry.

But yeah, why are we all sleeping with the enemy now? Why the need to court these who would do everything for short term gains at the expense of sustainability?

Lucius

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There will always be those who are for bitcoin, and those who will be against it, no matter how the situation will develop. Perhaps a prevailing thought is that institutions only now showing love for crypto, but it is certainly far from the truth. They are always a few steps ahead of others, and I think they already have a lot of bitcoin under their control.

It is also true that some big institutions as JP Morgan make thier own private coins, just because they like to be in full control. But in the same time they know that only bitcoin is completely decentralized and that it has a limited amount of coins. What represents the greatest risk to such institutions is lack of control and of supply, so only way for them is to buy as much as they can at a time when the price is actually very low - if we take into account the potential that bitcoin has in the future.

o_e_l_e_o

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Quote from: NeuroticFish on April 30, 2019, 02:06:14 AM

I'd say that these are the institutions in discussion here.

Yeah, this is an important distinction to make I think. Companies like JP Morgan are focused on maximizing their own profits and staying in control. They are unlikely to get involved in bitcoin in any meaningful way, instead opting to create their own private and centralized coin. Companies like Fidelity, on the other hand, are interested in medium and long term investments on behalf of their clients. These are the companies who will be buying bitcoin or bitcoin related products like ETFs.

taskly

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Why are we allying with the enemies now? Bitcoin was supposed to be a rebellion against institutions.

Naida_BR

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I think that institutions was denying all this time Bitcoin and cryptocurrencies because they just wanted to "earn" some time in order to get involved in the ecosystem without anyone noticing, or to study the technologies and create their own chains.
Bitcoin isn't a bubble... It has sustained all these years in an environment that it is unclear and very offensive to this technology but still it is alive.

NeuroticFish

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Quote from: Bitcoin_Arena on April 29, 2019, 05:46:19 PM

What i think the institutions would try to do is try to create their own cryptocurrencies that they can control. I don't honestly see them adopting bitcoin.

There are institutions that work with money and which will probably try to make their centralized (stable?)coins.

And there are institutions that trade and invest into whatever can make them profit, diversifying their portfolios in a way to balance as good as possible the risk and the profit. I'd say that these are the institutions in discussion here. They would simply invest into crypto or crypto related investment vehicles.

Kakmakr

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This is really a fresh breath of air type of article with a good argument to crush most Tulip cynics. Wink

" Bitcoin has a hefty $94 billion market capitalization, making it the world’s 12th largest base money. " - Impressive and one of the reasons why institutional investors are sitting up and showing some interest. Wink

Bitcoin futures contracts are popping up all over the place now and this would not happen if there were no interest being showed by investors. Wink

Bitcoin has also been the top performing "currency" and "commodity" back in 2016/2017. Cool

Bitcoin_Arena

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Much of the institutions were living in denial back then but then bitcoin continued prove them wrong and what we see now is some of them coming out to show some love for BTC.
But i would really love it if the more and more common people got empowered to use bitcoin rather than these institutions.
What i think the institutions would try to do is try to create their own cryptocurrencies that they can control. I don't honestly see them adopting bitcoin.

o_e_l_e_o

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Quote

So yes, Bitcoin’s chart structure is starting to differentiate itself from every bubble ever.

I mean, yes, but if you look at other metrics of growth and adoption, it has quite obviously not been a bubble for some time. Total daily transactions growing. Hash rate growing. Number of unique addresses and wallets growing. Exchanges reporting record levels of new users. And as this article states, institutions like Fidelity starting to show real interest and involvement.

Quote

Bernstein centered his thoughts around the fact that with the growth in popularity of certain monetary policies, namely modern monetary theory (MMT) and quantitative easing (QE), and certain macroeconomic factors, hyperinflation in western societies could soon become the norm.

This is a very interesting quote. Add to that that most western countries have both a looming debt crisis and a looming pension crisis (due to baby boomers retiring and there being fewer millennials/Gen Zs joining the workforce to replace them). When countries start printing money en masse, bitcoin will be a welcome reprieve.

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