Topic: Another topic about Bitcoin and inflation: show me if I'm wrong - page 2. (Read 400 times)

I am in accordance with this reply. Bitcoin is a very young asset [under 2 decades] compared with others like Gold, which was discovered thousands of years ago. The focus will shift slowly from a speculative asset to a store of value down the line.

Time is the greatest indicator here. Bitcoin went from nothing to excess of $60k. Certainly, people would be excited about it, and want to get rich as well, with time bitcoin should morph into a much more mature state with a bigger audience who understand how it can be used.
I think it is too early to try and define what it is or is not.

- Jay -

I don't think that the speculators' expectations (a ROI) matter that much. I mean that nobody (from those invested in) would mind if gold price skyrockets. But it doesn't.

I think that the fact the market is young and not properly regulated everywhere (allowing market manipulation) do create this volatility. I think that the even younger businesses (and scams too) relying on Bitcoin price - altcoins (yes, let's not fool ourselves), DeFi, whatever - do affect the volatility big time (just remember Luna buying, and also Luna crash). I think that this kind of things are related to the volatility, not speculators' wishes.


Indeed, here we're on the same page: this can happen only when it's widely adopted, also meaning that big corporations and banks will all be heavily invested into bitcoin.
But I think you're overrating trader-gamblers who are risking their lunch money to get some more pennies.

Good point.
Perhaps because investors and speculators  spend money on the gold market to protect their portfolio and aren't really looking to make a high return on investment. For exemple I did but I will be happy even with 0%. Weird but true because even with 0% I win.
While with the crypto market, they're looking to make a 'big' R.O.I. I would say it's a different audience or a diversity (a golden rule while investing)

The thing is with the crypto market, we're including the capitalist system and all the problems that come with it. The same problems that the cypherpunks criticized decades ago. Hence the creation of various alternative currencies (as you know Bitcoin is not the first). So people blame capitalism but reproduce the same errors with the decentralized finance. People claim for a decentralized currency but use every thing centralized (exchange platforms, custodial wallets, BTC cards and everything else). I find it harder to find "true bitcoiners" compared to some years ago

With the gold market, it's rather difficult to jeopardize the market. I don't know.


Fair enough, I can't argue...


But it can't happen until Bitcoin is massively adopted. When I say massively I mean much more than a dozen of countries and institutions. And nowadays, people are rarely interested to use BTC for real use cases. All they want is to join Binance, to be KYC'ed as soon as possible, and to make the most as they can. Even if they need to buy an altcoin full of non sense


True.


I do think they are looking for better returns and it seems that crypto is now being targeted.

Regarding companies surviving the crisis more efficiently. For those concerned, I have the feeling that it is because they are directly or partially associated with the crisis. Or maybe it's the GAFAMs. Let's not forget that many companies received hundreds of millions in state aid during the crisis. Without that, many would have closed.

It's quite a weird market though because bonds (including just government bonds) didn't survive well either.

---

Most investors now are looking to invest in global infrastructure that can drive their own increases market share/dominance (I don't know if we can include bitcoin in that, perhaps, but a lot of companies survived much better than what would be expected).


There are times that are both happy and sad in this market as there are points where, if everyone bought a coin before then and held it, they'd be in profit now - it's sad personal circumstance and other things can force people to sell at a loss but you can't backup the price.

Most investments demand a few years in the market. European stocks used to face 3 years of bear times, 3 years of stagnation and 3 years of growth (on average) - you might've needed to be in the market for 7 years to have made a good profit on your investment. A lot of etfs for bitcoin normally suggest a minimum term of 4 years before their pessimistic estimates become positive (not sure if this is the one neurotic fish is quoting, I saw it on a factsheet from a Swedish bitcoin etf manager - it was an interesting read).

Edit: their recommended investment period was updated to 5 years.

While I do agree that most see crypto as a speculative asset, I don't agree that the investors and speculators are the main reason for the volatility. Gold also attracts investors and speculators and the volatility is rather small.


Gold or art are investments seen as store of value, yet they cannot really be used to buy goods and services.


The easier an asset can be sold, the more the chance it will lose value it's price will drop; I think that this is one of the reasons art and gold tend to look somewhat better when there's crisis.


Bitcoin historically is great investment for long term - minimum 4 years period. I think that it's not a store of value yet though. I expect though that in the future it will be shifting though from a very volatile asset to a more traditional store of value, where people won't have to wait for 4 years to be pretty much certain they're not losing.

If you disagree, explain your point of view

When you observe the Bitcoin market, it is much more used as a financial asset than as an alternative currency. ( Except for countries like El Salvador and others but that is very minimal and the emergence of digital currencies from central banks will not really move things in the right direction). Even in El Salvador, where it is rarely used, it is a bit of a failure, speaking about adoption.

It is a fact that people perceive Bitcoin &co as an asset class in which they can invest and get a return on investment. The higher % possible (why not I heard Santa is real) even if they need to buy the latest shitcoin of the week! Which makes cryptos behave following a speculative logic. If a market attracts investors, it becomes volatile, while if the market attract people with a real need, it won't be the same. Yes, still volatile but a lot lot less.


Store of value ≠ Save haven Bitcoin has no place in both

Similarly, Bitcoin cannot be considered a store of value as we cannot (for the time being) use it to buy goods or services.
The function of a safe-haven asset is to withstand a crisis without losing value. Did Bitcoin survive? Not really. In fact, you may notice that the market is increasingly correlated to traditional finance (the result of considering Bitcoin as an investment instrument).

Whereas a store of value must be able to maintain its purchasing power over time. Where is the purchasing power protection for people who invested all their savings when the price was 60k, 50k, 40k, 30k?
Inflation is the role of central banks to regulate/limit/brake it. How do you want it to be the same with Bitcoin?