Topic: Wall Observer BTC/USD - Bitcoin price movement tracking & discussion - page 24510. (Read 26711388 times)

TL;DR : All hail the hoarders http://nakamotoinstitute.org/mempool/im-hoarding-bitcoins-and-no-you-cant-have-any/

I wouldn't but the reality is the expectation of growth in its value exist and you cannot simply pretend to remove it from your equation because it fits your argument.

Bitcoin is absolutely a secure store of value. More secure than any alternatives on the market. Stable? Obviously not but is stability a requisite to qualify as a store of value? I do not think so. Especially when considering this growth expectation it makes even more sense to store the value of your wealth in such an asset.

If you choose to ignore the daily fluctuation and look at the big picture, Bitcoin has been trending up since its inception. It has been what some would qualify as an EXCELLENT store of value historically, especially for those who were early to adopt it.

So far Bitcoin as grown exactly because of its store of value properties and certainly NOT because of "Bitcoin buying stuff". Why should we expect this to change so soon?

Explanation

Yes, that is also correct, but it is the aspect of aggregate demand for store of value in bitcoin.  
In fact, you ALSO have a "velocity" aspect in your formula, but it is hidden in N !  
You are considering people "storing value for a long time" in N.  
But it is in fact the "average number of people at a given moment in time wanting to store value A in bitcoin".
This average could be made up by 100 people holding coins indefinitely ; or it could be made up by 1200 people per year wanting to store value A for a month.  Or it could be made up by 10 people per year wanting to store value for 10 years.

As I said in my earlier posting, I don't believe that bitcoin will be considered as a secure store of value for a very, very long time.  I think the main price drive will come from bitcoin buying stuff.

Honestly, would *you* store value in bitcoin right now, if you didn't have any expectation of growth of its value ("to the moon") ?

Speculation will be the driving force for Bitcoin until mass adoption.

It was designed by Satoshi to be so. Speculation is the bootstrapping method for Bitcoin to gain mass acceptance and only then will it realize its promises as a mean-of-exchange

the fractal is real, wonder if what happens next will tell the future for the longer term trend

That horrible formula is just plain bookkeeping, there's no discussion about whether it is correct or not (it applies always, trivially), the discussion is whether it is useful (that is, whether the quantities that appear in it, can be sensibly estimated in an independent way).

We both agree that what sets the price of bitcoin, is the aggregate demand for "holding value in bitcoin" as compared to the offer.  But that doesn't help us much !  We have to know *what drives that demand*.

In other words, what makes "people fight for bitcoins".  What is their *drive*.

For the moment, the drive is of course "to the moon" type of speculation, but that can only last a finite time, and should normally be rooted in an expectation of a high bitcoin price *for another reason*.

Now, I see two drives to "make people fight to have a bitcoin".  One is indeed, "long term store of value", that is, in competition with gold and so on.  Then my formula is still valid, but doesn't mean much, what counts is what fraction of the universal aggregate demand for "long term store of value" will be taken by bitcoin, as compared to gold, stock market, real estate, and all other "stores of value".

The other is that bitcoin is used as money to buy things with.  That *also* implies holding bitcoin, between the time you get it, and the time you spend it.  And *there* my formula is mightily useful.  Because the amount of stuff bought with bitcoin, together with the average holding times between two of such buyings, determines the value of bitcoin.

And now my point is that bitcoin will, if it succeeds, essentially first have to do the *second* thing.  Nobody is going to trust bitcoin as a long term store of value in my opinion before it has settled as "money that buys stuff".  

Of course, in the real market, there will be competition for bitcoin for both uses (to "buy stuff with" and to "store value for much later"), so the effect will compound the prices.  But I would guess that the first part is going to take a long long long time.  
Gold was for a long time a means of payment ; that is why people also considered it as a store of value.  There was trust that gold would still buy stuff 20 years later.  Now, the buying function of gold has essentially disappeared and it has only kept his "store of value" function.  But there is still this century-long trust in gold as store of value which was build up over many many centuries.   It takes a lot of trust to put value in a long-term store.  I don't think that bitcoin will get that trust immediately.  
However, bitcoin as a means of payment, yes, I hope so.  The idea that you have "international money" that is valid everywhere in the world, yes.  And then, if that is the main usage of bitcoin, my formula applies.


Yes, that's what "store of value" means.  I agree, except with your last statement.  Nothing can be designed to "not lose value", after all, it is speculative, it depends on the trust people put in it.  Especially in the long term.  What you mean is that bitcoin is a collectable: there's a finite, known amount of it.  Similar to gold (if you include mining reserves under the ground), or to land, or to Rembrandt paintings.  They don't make any anymore.



Yes and no.  That is what we are all hoping for, and that is why I think it is a good bet to buy some bitcoin now.  But actually, we don't really *know* and the real indicator is the price.  We really don't know whether we didn't already reach equilibrium between offer and demand.  Most people holding bitcoin (like me) do this NOT as a store of value, but for purely speculative reasons because they hope "to the moon".  
I'm not even sure that if you were in some sense to know that it is NOT going to the moon, you would still hold bitcoin "as a store of value".  I would think bitcoin too volatile and too risky as compared even to fiat.  I'm only in it because it would be silly to MISS the rocket too the moon.  But for the moment I still consider fiat a surer store of value than bitcoin if there was not the "to the moon" incentive.  
I wouldn't place all of my savings into bitcoin for the moment as a "store of value".

So if this "to the moon" incentive would be gone, I'm not even sure that the demand for store of value would be as large as the people holding coins now.  Most of them are in it for the ticket to the moon, not as a store of value in my opinion.  

So if you want to have an idea of the steady state aggregate demand for "store of value" you should leave out the speculative drive, which is probably the main drive right now to hold coins.  And then, I don't know if many people are in it.

This is why I think that that cannot be the support for the bitcoin price for a long, long time.  I think that the main steady state drive will be "buying stuff", with my formula.

And all of that talk (news) about your death was highly exaggerated and of course premature.....  

If you have to put your stops so tight, you're using too much leverage.

Trading on noise is just a matter of time before you get screwed.

I'd suggest you try to figure out the larger picture, but I'm not allowed to suggest anything.

FOR FUK SAKE

had my leverage stop loss at the motherfucking bottom.

Good to see you have the real time machine!

Explanation

Welcome back

*edit, please stay chillax on the bullishness, still trying to accumulate here, thx, and best wishes.

They gave you bail already?

i just stopped here to make a buy,

back into the time machine i go.

Welcome back Adam.

Anyone discuss the huobi bitvc issues? That spike in China hurt some traders.

He's back!