Just received a reality check on the sentiment of Bitcoin from a old-school-boomer & no-coiner this evening. A retired investor involved in the old money world of tax, and very curious on cryptocurrencies and their upside potential.
It seems that your introductory paragraph does kind of show the overall crux of my various quibbles - and in that regard, an seemingly central aspect of my quibble is to go to people who have been experts in their field regarding traditional investments and to seemingly give them too much credence regarding a topic like bitcoin, a topic that they likely have not spent a lot of time to understand - and perhaps they even end up making the mistake of trying to compare bitcoin too much to their other areas of knowledge in regards to assets. So, yeah in 2013 they may have spent 1- 5 hours studying bitcoin, and in 2017 they may have spent an additional 10-50 hours studying bitcoin, and maybe in 2021 they get into the 100 to 300 hours of studying bitcoin and they per start to perceive their lil selfies as experts or quasi-experts because they are experts in other related fields.
To clarify, this was someone with 0 knowledge, hence their desire to learn how an asset like Bitcoin could increase so dramatically over the years.
However. Despite my conversation being focused around Bitcoin as an investment, and only Bitcoin, they still had their mind focused on the overall value of cryptocurrencies, rather than simply Bitcoin. More interested in "what cryptocurrencies to invest in" rather than "how much to invest in Bitcoin" as it were. Despite another boomer referencing the potential of Ethereum, the analogy I used was that a blockchain platform is like Windows, even if it's the most valuable one. There may be good upgrades, there may be others that go wrong, and when it comes to value transactions, going wrong is a serious problem. Ie it's not an immutable ledger like Bitcoin.
Of course, a lot of people try to approach topics from a kind of open-minded approach which can really fuck them up in the bitcoin space - when probably the better approach is to study bitcoin first before getting distracted by the various pieces of shit out there.. Yes, like you seem to have been saying, there are innovations on the various other shit projects, but there seems to be some kind of need to really get toxic in regards to the topic by saying something like: "focus the fuck on bitcoin first before getting distracted by various other bells and whistles" Once you understand bitcoin, then that will put those other projects (various levels of shit and imitations and snake oil and scams) into perspective/
I think my point was merely how when Bitcoin is discussed in the media, it's nearly always lumped together with other Top 10 altcoins, hence the point below that I make. It means for anyone wanting to know more, they will often feel the need to investigate a handful or other coins as well, which ultimately for a newcomer would be overwhelming as well as very confusing and therefore offputting. Some will first try and understand Bitcoin before anything else, but not as many as in the past I think. 2017 was very different, everything else was more or less brand new, so discussed much less I feel, while Bitcoin was already 8 years old. Now some other coins have been around for 5+ years, while Bitcoin 10+, the difference between how new these other innovations are compared to BTC is much less, excluding obviously some out-liars which are new to this cycle.
All in all, Bitcoin being a minority of the cryptocurrency market became an obvious issue to this conversation, because it is only a piece of the speculation pie right now as opposed to the main chunk. Being the no.1 cryptocurrency appears almost irrelevant at this point and it felt unnoticed. It's recognised more so as the first cryptographic form of money, but not the most reliable nor the most valuable it seems. This again was a reminder of why I "feel" Bitcoin needs to reclaim 50% of market dominance in order to reach 6 figures, even if temporarily, just to show how it can lead in this market rather than continue to fall behind.
You seem to be confused as others in regards to such a bullshit point. You really believe bitcoin dominance matters in terms of the value of bitcoin and in terms of value going to continue to flow into bitcoin?
Yes and no really, it's subjective. When Bitcoin is the majority of the market, it set's the pace for other altcoins and leads the way. When altcoins are the majority of the market, I'd argue it's possible they become the leaders and BTC is instead following suit. Controversial I know, but at what point does Bitcoin become less self-determined due to not being the main influence in the cryptocurency market? Ultimately I don't believe Bitcoin's pace in the market is solely determined by itself, because it's part of a broader market, even it's price is self-determined. Something you no doubt completely disagree with, but there we go.
It's less about BTC dominance influencing Bitcoin's price, but more about what is leading the way in this digital market. It also depends on volumes and where liquidity is coming from. While I haven't checked recently, if the minority of volume is coming from fiat or stablecoins, but instead altcoins (which has in the past been the case), then yes value flowing into Bitcoin becomes more dependant on altcoins. For example at the moment there isn't a need for more fiat-based liquidity to come into the market, if BTC dominance rose from 40% to 60% (+50%), then it'd be more than possible to see price do the same.
This isn't intended as an attack on Bitcoin, but a realisation that altcoin dominance has become problematic to gaining older investors.
They should figure it out sooner or later.. maybe after some rug pulls.. maybe after they get into scamming others? who knows? The widespread levels of distraction should not be our problems.. at least not on a personal level.. just because other peeps are distracted does not mean that we should be buying into that or giving credence to it as if it were some kind of solid investment thesis to be investing into pump and dumps, various kinds of snake oil and ponzi schemes.. even if a lot of money can be made by going in that direction.
Well yes you would hope so, and most newcomers do learn eventually I think. But there are always more newcomers, and so far for the past 4 years Bitcoin has continued to lose it's dominance while consequently altcoins gain dominance. If this continues as it has for multiple years now, then by default Bitcoin's importance in comparison to all other altcoins becomes less significant, statistically speaking at least, even if obviously not fundamentally and continues to gain importance when compared to the likes of fiat currencies or Gold for example. While institutions would ignore this, hedge funds, retail investors and traders will acknowledge it I think, as they do already when gaining exposure to cryptocurrency.
This is simply what I believe. First the altcoin profits as well as liquidity need to move back to Bitcoin, as part of a Bitcoin season.
Oh gawd.. you do sound distracted. Are you not toknormal or some other shitcoiner talking about the breathing of cycles.. blah blah blah. bitcoin needs to have a marketing department to get the word out there, right?
No need for a marketing department, but I do believe in the "ebbs and flows" of the market. There are tides and there are currents to put it simply. The tide is the longer term trend, it's obviously stronger than the currents within, while one of the currents is the liquidity shifting in and out of altcoins for example, another current would be it's main trading pair(s) - USD(T) - and the inflation occurring behind the scenes. A lot of liquidity has moved from BTC to alts this year, which is a trend in itself, hence I'd expect this liquidity to eventually shift back to Bitcoin. Bare in mind there is more liquidity in the rest of the market combined than in Bitcoin at the moment. There are also a lot more altcoin fiat pairs these days, many more than in 2017/2018 era, so there is now fiat going directly into altcoins rather than via Bitcoin as well.
This, as a trader, I've really noticed this year with ETH that previously the majority of it's volume (and therefore price directions) came from BTC, and therefore it's fiat value would follow suit, but now there is more from fiat volume which has become more relevant to determine price movements, and therefore it's BTC price appears to be following suit. The pairs that have the most volume are usually the values that determine up or down, it used to more or less exclusively be it's BTC, but times have changes. The relevance is these altcoins with higher liquidity are becoming detached price-wise from Bitcoin, so is less likely the liquidity flows to BTC if that's not where it came from, but instead directly back to fiat. The point I'm trying to make is that these currents are changing and evolving, becoming more independent from BTC.
To clarify though, by "Bitcoin season" I don't mean Bitcoin going up in price. It's meant Bitcoin re-gaining it's market dominance, whether price goes up or not (it's irrelevant to this concept).
I'm not against some market weighted diversification strategy of (for example) 80% Bitcoin and 20% Ethereum, but clearly it comes at a price. Because while boomers are happy to invest 20% in ETH, Gen Z are more inclined to invest 50% in Ethereum and 50% in the latest speculative technology that may or may not succeed, without even considering Bitcoin, it can come across as "too old for them" or "too expensive". It's as if Bitcoin is for the boomers, and the Millennials and younger want something more speculative, more risky. As if Bitcoin isn't speculative enough. This is confirmed by the fact that altcoins are the majority of the cryptocurrency market, not Bitcoin anymore. Not since 2017/2018 altseason. This is just my experience, but it is what I see right now. Soon enough, things will need to change in order to move forward.
This is a bunch of blah blah blah nonsense.. there is not really any need to diversify within this industry - especially into penny stocks, ponzi schemes and scams.. bitcoin is already identified as the industry leader.
I think you'll find this point fits well with what I said before, that I'm not against newcomers diversifying 10-20% into altcoins in order to get rekt and learn their lesson. In fact, I think it's healthy.
By the way, it does not hurt to diversify into property, equities, cash and perhaps some other areas.. and surely if you are a young investor and you are starting out ONLY investing into bitcoin, then you might start your first cycle or two just investing into bitcoin (and cash perhaps) before diversifying out once your investment and value is built to some greater degree.. perhaps more than $10k in value or $50k in value.. sometimes there is not as big of a deal to diversify if you are just getting started and you have not built too much value, yet..
You say this, but the market suggests otherwise. While not all are new investors, looks like the majority are, and they are diversifying if we analyse how the market is weighted. The old saying of "never put all your eggs in the same basket" isn't considered to being holding BTC as well as cash, that sounds a lot more like averaging your way in and saving back from capital for further investment.
Not forgetting that in 2017, diversifying wasn't the worst idea if you were being conservative and taking profits when prices went parabolic. The top for most altcoins came a month later than Bitcoin, so if newcomers (such as myself back then) were cashing out at different times, then there is as much if not more money to be made. It's the bear market that catches newcomers out, not the bull market.
As long as newcomers are being careful and taking profits (at least initial investment amounts), then unfortunately the success of diversifying often leads to the mistakes coming later in a bear market. Because while losing 50-75% of your altcoin value to BTC in a Bitcoin season, like I'm anticipating, it's still possible to make the same amount of money or otherwise more so. Not to mention that when initial investments come from fiat, newcomers don't feel like they've lost anything as long as the fiat value is stable, even if they can feel like they are missing out on current increases in value.
Having access to moving shares into a Bitcoin ETF is a safe and easy way to gain the exposure of Bitcoin's potential, something that other cryptocurrencies simply do not provide. This is where Bitcoin gains it's edge in the market I believe, because if you sign up to a cryptocurrency exchange you can gain exposure to all sorts, but if you invest in ETFs, you can only get Bitcoin. First mover advantage right there.
I hear what you are saying, but seems to be a BIG so fucking what. Yeah bitcoin is the first, but it is not ONLY the first because a variety of shitcoins were later.. yeah, some of those shitcoins might get ETFs too.. or some variety of an ETF shitcoin package may well come available and help to distract retards into buying into that crap.
So, yeah.. for now, bitcoin is the ONLY ETF.. but seems almost like a big so fucking what the point that you are making... or at least the way that you are making it.
Maybe it's the way I'm making it. Even if other altcoins get ETFs, Bitcoin still doesn't lose it's first mover advantage, it will have more price history to look at and analyse, at least for the next 4-5 years until the next financial instrument and evolution comes along - probably Western counties actually holding Bitcoin like they do Gold for example, payment processors like Visa/Mastercard integration. It's for those who don't know anything about cryptocurrency (and don't need to either), for those who simply want to gain exposure to it's price movements (a bit like futures market really, but instead with less trading).
Eventually investment comes from those who want to reduce risk, or otherwise gain exposure to BTC as a reserve asset. They don't need to understand or learn anything, they just need to know it's worthwhile to hold in a portfolio. Similar to how other institutions, like pension funds, and now starting to dabble in Bitcoin with a % or two. They don't want to do this, but they know they have to in order to reduce risk. Probably that's not the best analogy, but one based on investors shifting away from the computer literate and experienced traders, towards experienced investors, or more institutions really.
The makeup of Bitcoin investors has evolved dramatically in recent years, from initially nerds to speculators to institutions. I merely consider that this will continue, from those who understand more to those who understand less. This to me seems like an inevitable progression in Bitcoin as an investment class, to the point where bank customers are holding Bitcoin (via traditional financial mechanisms) without even really knowing what it is or how it works. Most customers never had an idea how credit or debit cards actually functioned, ie the payment processing side etc, but they all adopted it regardless, because it wasn't relevant as long as it worked. Most people don't have an interest in learning either, they just want to save money in a way that works. The less they know and have to spend time learning the better for them.
We can talk to end of time of why Bitcoin is more reliable, more valuable, a better investment and form of reserve currency, as well as a reserve asset, but ultimately other cryptocurrencies will always distort the idea of investing in it, rather than incentivize it. Not to mention most won't understand fundamentally nor technologically why Bitcoin is more reliable and therefore more valuable.. Because it simply confuses the idea of Bitcoin being on a playing field with altcoins, rather than a playing field with fiat currencies. Whereas the idea of a ledger being 100% reliable and 100% immutable is unique. I hope that makes sense.
They might learn better or they might not, and some of our own roles on a personal level is to figure out how we are going to be playing our own game and diversification.. and seems dumb as fuck to me to be considering a 80% BTC 20% ETH as any kind of prudent allocation, but hey.. do what you like in terms of staying distracted, even if ETH may (or may not) have several more pump and dump smoke and mirror bullshit to pull off including that other scammers continue to build on it. By the way, can we stop talking about that bullshit coin in this thread? There are other threads on this forum (and even other forums) for that.
The reason I reference 20% is because this is currently Ethereum's dominance in the market, so something that newcomers may acknowledge and consider a fair allocation. As I said before, being diversified in the uptrend isn't necessarily going to get you rekt. It's thinking that also being diversified in a downtrend when Bitcoin re-gains it's market dominance is a good idea, when so far it never has been. Admittedly I think many who are grateful for diversifying in the bull market maintain this diversification strategy when accumulating in the bear market, which is where is all goes wrong, not so much during the up trend.
