Topic: THIS CRASH IS DIFFERENT than previous crashes... The FEDERAL RESERVE is why.... - page 6. (Read 1577 times)

Ah, you are just waiting for the crash times to come to say something anti-Bitcoin, right? But did you consider, even from a purely pragmatic economic perspective, how much money you could've made if instead of being very anti-Bitcoin you just bought in the last bear market and sold around ATH?
IMO, Bitcoin crashed in March 2020 NOT due to Fed overprinting. It crashed precisely when the pandemic was officially announced, so the crash can be attributed more to panic selling and FUD than anything else. The printing would come much later, and at that time Bitcoin was doing quite well.
I am not sure why Bitcoin fell now or if there even is a good reason, but there's no reason to believe that it won't recover this time. But I guess some people never learn. I guess we'll see you next time, when Bitcoin falls down to the miserable $80k and is once again worthless, purely speculative and all that.

I wanted to start a new thread but i guess there is no need for another thread about the current dump, which i consider to be just normal for one who understands how bitcoin works or has worked since its creation.

Let me get to it, i thought when we started having institutional investors coming into our network in their numbers that it would bring some stability, do not get me wrong, i did not think it will immediately make bitcoin stable, but i thought, and i am sure i am not the only one, that we might not see bitcoin below 20k USD or so, not that it matters too much, and from history bitcoin will go on quite fine, and other than people panicky, nothing is really happening.

So now that bitcoin went below 20k USD again, to prove me wrong about what i thought, do you think bitcoin can ever be stable, not that i worry about that too much, i buy most times there is a dip, but i still want to know, i am not talking of a near complete stability, but stable to a certain extent that will make it almost impossible for some level of crash or dips to happen, or will btc always be a coin that can dip fast and rise again.

We talk about 'mass adoption', and even if i honestly do not know what a time like that will mean for bitcoin, but is a certain level of stability one of the signs of mass adoption?

So the Fed closing the gate after the horse has bolted should be concerning to us?  All they're doing is making a feeble attempt to slow their economic freefall.  They aren't turning anything around.  And they'll abandon "tight money" the moment it suits them.  I give it two years tops before the rampant printing resumes.

Consider me "warned".   

To me there’s a reason to compare it, because in my opinion markets will take all possible options into account, to save their money. We see huge fluctuations in the short term, and in the short term the best asset varies. But for long term investors this doesn’t matter as much, there’s a reason Bitcoin is the best performing asset in the long term, it doesn’t just happen accidentally for over a decade. And we know there’s no guarantees, but doing nothing will guarantee a loss of all the time we spent working, for nothing in return. Bitcoin is risky, but fiat is more, and the market will just take the risk into account, it won’t hamper demand.

When i first got into investing i considered every possibility there is, before i even really knew about bitcoin. I compared everything from taxes and other factors(also the state of fiat) of each asset class, and my conclusion was Bitcoin is the best investment there is. No one introduced me to it. And other players in the market will act similarly. And then only after this, i learned what Bitcoin is really about.

And you’re right, you're not earning an X amount per Y days/months, but the reality is, at the banks you're actually loosing an X amount per Y days/months. There’s no reason for the majority of the market to bring their money back to the banks, first it’s a secure loss, second people know how unstable banks are at the moment (with no sign of betterment). Just because regular people are still asleep, doesn’t mean the market is.

Bad times are the best test for how strong something is, this is also a chance for Bitcoin to prove itself, for people who were unsure before.

If banks can’t even provide you 1%, what makes you think other projects can do this sustainably?

Well, you could argue that every moment in time has its unique conjunctures. As to my knowledge we never had a pandemic followed so closely by a break in political relations and a full-on economic war between the most powerful "empires" of the world. Yes, Bitcoin has never passed through this combination of events, BUT it has taken bigger hits and came back up like nothing happen.

From my perspective this is just another test for the allegedly best store-of-value asset the humanity ever had. We need to take into account that the big fortunes are made in recessions. The deep pockets know* how to play with the emotions of the crowds. Bitcoin's liquidity is still on the lower side and in combination with the high leverage used by many players (often retail) produces big dips in price.

It will take time for Bitcoin to become more resistant to the economic cycles, but Rome wasn't built in a day and good things take time. Zoom out if you're in doubt

Not this guy again 

Where are these trolls and paid shills when the price are booming? Their drivels means nothing when the price of Bitcoins recover, so they wait like a bunch of vultures to feast when the price goes down. 

Bitcoin is the "Microsoft" of the Crypto currency world..... and Shit coins & NFTs are the "Mom-and-pop" shops that goes bankrupt, when there are economic hardship in the global economy.

The best thing about posts like this... is when we hit all-time-high prices, then we rub it back in their faces ..when they hide in their little troll caves. 

Absolutely. But the similarities are striking. There is an endless stream of people who are looking for the next get rich quick scheme, and a similarly endless stream of scammers who will exploit this mentality. I'd bet that at some point in the next 3-5 years during the next major bull run that NFTs are all but forgotten, and there is some new exciting, shiny, and ultimately useless craze which will result in a lot of people losing a lot of money.

Go and ask all the people who were getting 20% returns on Celsius how "guaranteed" their returns are. The fact is that nothing which is offering those ridiculous returns is risk free, as thousands of people have recently found out by losing everything.

3%? That's a lot, in the best case scenario the best you'd get is 0.50%-1%. No one can guarantee you anything, 10€ in 2012 isn't worth 10€ in 2022. Our purchasing power has been severely affected the past few months due to the rising inflation. Bitcoin on the other hand, despite the crash, is still worth more than it was worth in 2019-2020.

Staking in such cases can provide more guaranteed results in terms of investment, usually surpassing 10-15% APY. And could possibly balance inflation in a way.

Interesting point, that I hadn't come to the conclusion of. I'm a big believer in correlation doesn't mean causation, but this is quite a good way of looking at things. I remember how mad the 2017 craze of ICOs was, I mean we're still recovering here on the forum from the amount of spam that invited in, but also the effect it had on cryptocurrency adoption.

Although, I didn't make the connection of the recent NFT, and other shit coins that have been peddled recently. So, while on one hand it doesn't look like the market is following the exact same pattern that some people claim it to be, it does have some interesting deja vu with the ICO, and NFT craze.

And so the cycle repeats. I remember back in in the 2017 bull market where people were throwing money left right and center in to every completely pointless and stupid ICO that came along. The ICO bubble burst, the whole market crashed, 99.9% of those shitcoins died and were never heard of again, and bitcoin just kept going as it always does. This time round people threw their money away on picture of monkeys, shitcoins like Luna, and scam centralized platforms like Celsius. But bitcoin will keep going as it always does.

But as you say, it can't outperform inflation, which can rapidly spiral way out of control as we are currently seeing. You might end up with more fiat than you started with, but the purchasing power of that fiat will be markedly reduced.

Let's hope so!

Yeah, it's different, BTC never had a threat of recession on its tail because it emerged on the tail end of the last one. But that doesn't tell us much by itself. I doubt this will be an end to crypto or BTC, it may weed out the shitcoins, but the major players have some solid ground to stand on. What we might see is a bit longer crypto winter than it was previously thought of, and that's understandable, it's a shitshow all around the world and BTC is not immune to such economic trends.

Yes, but it's not enough. Offering me ~3% in returns when there's a nearly 10% inflation in my country does only make me poorer.

And nobody guarantees you that the value of the dollar, the euro, the pound will continue as is. It might rise, it might fall. But, nobody knows for sure. Same goes for bitcoin. However, during the last 10 years, bitcoin has risen by more than 180% in every year, on average, while the fiat currency I use has a cumulative inflation of 18.58%, from 2012 to present.

There's no reason to compare bank interests with Bitcoin's performance. Banks offer a stable or floating rate for your investment/deposit every 3/6/12 months. Bitcoin on the other hand, doesn't guarantee you a certain percentage of performance, but the possibility to rise in the future. It can't guarantee you that it'll earn its money. History has shown that the probabilities of recovery are decent, however, you're not earning an X amount per Y days/months. It's an asset similar to how stocks perform.

Don't get me wrong, bank's interest is close to zero and can't outperform the yearly inflation rate.

It’s not correlated, because Bitcoin still outperforms any interest rate a bank could offer.

The people that would put their money into the bank for interest(for a loss because it still won’t outperform inflation), will be the people who buy Bitcoin last anyways. So i dont think it influences the demand side that much.

The only effect it would have, is that speculators can’t easily ape into Bitcoin or any other investments with borrowed money. Which would probably favor Bitcoin, because the market would be more hesitant to get into braindead projects or empty hypes. So higher interest rates could actually favor Bitcoin, and for sure won’t hurt it.

And as we saw now, it’s better for Bitcoin if people don’t leverage too much into it. We don’t need actors like celsius bringing down the whole market, because they gamble too much.

Higher interest rates favor the savers and disfavor the borrowers. It reduces, first, productivity and, later, consumption. However, I'm not sure there's a strict correlation between those two and bitcoin. Aren't many using bitcoin as savings and/or store of value?

That's true for everything. Food is worth what people are willing to pay for it, gold is worth what people are willing to pay for it, cars are worth what people are willing to pay for them. It has nothing to do with intrinsic value.

There is no doubt that the rampant fiat money printing helped to drive the last bull run up to $60k, but it is hardly the only reason. Sure, without it the price will dip as we are seeing, but it isn't going anywhere near zero. The fundamentals of bitcoin haven't changed and bitcoin will continue working just fine.

When inflation is 8.6%, your 2.8% returns are actually a ~6% loss.

Nope, sorry. America is the only country in the world. Everyone knows that.

If anything, the rates will only go up further.

Bull crap.

Bitcoin is still running strong just like it has been doing for more than 10 years. The price means nothing. The fundamentals haven’t changed. 1btc = 1btc. Who gives a flying cocktail about the dollar anyhow?

These high interest rates will only kill the dollar and when it happens, bitcoin will take over. Powell can’t risk this so soon he will chicken out and lower the rates again. Then bitcoin will go above $200k.

You do realise that you aren't really smart, don't you op? If you were, you wouldn't call yourself 'Hardfacts' which is cringey and you would actually learn from the mistakes that you made related to criticising BTC in the past.

Here's a fact for you. The entire cryptocurrency market isn't completely dependent on the US government or the Federal Reserve even though it does get influenced to a certain extent now and then.

BTC is a cryptocurrency that always bounces back no matter what which is another fact that I have learnt over the years.

Have to agree with the OP, regardless of how he "behaved" in this forum by defending someone or not, this is irrelevant.

The interest rates and the era of the big crash of Lehman Brothers, where some even UK banks collapsed (Northern Rock, Kaupthing Isle of Man and others) - during this time the investors, the hedge funds, the institutions - they got used to "cheap money" i.e. printing money endlessly, with 0 interest rates given.

Now times are changing, the rates are up, the costs of living are skyrocketing globally - hedge funds want the US dollar, as much as it represents so much debt, the US isn't going anywhere, it's here to stay for at least another century or half of it.

The dollar has value with this debt, the debt is being carried over many years and investors can get nice returns if they invest in government bonds (i.e. treasury bonds):

https://www.bloomberg.com/markets/rates-bonds/government-bonds/us

These are safe returns, and can be speculative (i.e. you don't only gain 3%, you also gain appreciation of the currency), nonetheless 2.8% in 1 year is quite nice, it sounds low for many but the era of "cheap money" is pretty over.

So investors prefer it this way, also the tensions in the world (Russia Ukraine and now Russia US) and other issues as well as fear all bring "flight to safety" - it could stop at some point, but right now it feels like a shift and not a process that wants to stop.