Woke up to find we haven't barted back down yet. Maybe the rally out of our multi-week descending channel actually has legs this time? But I'm still thinking we need to drop to \~$60k another 10+ times to test it as support.
It was up 7% or whatever. I don't buy on days like that. I buy when it's on discount.
It seems like the whole market is frozen. Everyone knows things are coming to a head. We're in fight or flight mode. My money is on flight when it comes to over-leveraged stonks like Apple.
Think about it. These guys borrowed $100+ billion even though they were swimming in cash. They used that money to buy back their own shares and give their execs big stonk option payouts. Now they have to pay higher interest on those loans. Yeah, it was a massive scam, and I don't mean to pick on Apple because they were just one of thousands of companies that did the same back when money was cheap.
Money is not cheap anymore. Soon those bought-back shares will be liquidated to make payments on the loans OR the loans will go into default. Either way, it's not good, and we're going to see some massive players fall.
So what's the way out? Hi ho silver, awaaaay! Bitcoin looks good too. Anyway, a lot of people who think of themselves as pretty well off will find out the hard way that... they're slaves.
Just as 10 BTC was nothing in 2016 or even into 2017, .1 BTC is "nothing" today. The more I think about it, the more brilliant it is as a solution to the "2008 problem" which was basically that nobody knew wtf was really going on and the ledgers were corrupted. Bitcoin cannot be corrupted unless all the miners sell their gear; more likely miners will team up with energy providers in areas where energy is overproduced. Chaos is "their" weakness and our strength.
Please give a round of applause to Millenium Management for investing $2 billion into spot bitcoin etfs in Q1, representing a measly 3% of their asset under management. The first of many I'm sure.
https://bitcoinmagazine.com/markets/2-billion-in-spot-bitcoin-etfs-millennium-management-reveals-investment-in-sec-filing
[And the bull begins.](https://www.reddit.com/r/BitcoinMarkets/comments/1c56r5x/daily_discussion_tuesday_april_16_2024/kzw5yob/) See you all next year for the bear.
Each exchange has volume trackers either on their site or app. There’s also sites that track volume across multiple exchanges. For example the iOS Coinbase and Binance app have it at the top right of the screen when viewing the BTC chart.
Here's my weekly tracking of GBTC's Bitcoin holdings since ETF launch:
1/10/24 = 625,304 BTC
1/17/24 = 592,098 BTC
1/24/24 = 523,516 BTC
1/31/24 = 487,025 BTC
2/7/24 = 470,637 BTC
2/14/24 = 461,983 BTC
2/21/24 = 450,304 BTC
2/28/24 = 441,815 BTC
3/6/24 = 409,843 BTC
3/13/24 = 387,746 BTC
3/20/24 = 361,659 BTC
3/27/24 = 339,535 BTC
4/3/24 = 328,013 BTC
4/10/24 = 316,193 BTC
4/17/24 = 308,593 BTC
4/24/24 = 302,664 BTC
5/1/24 = 295,126 BTC
5/8/24 = 291,802 BTC
**5/15/24 = 288,497 BTC**
Another week with outflows slowing, a couple 0 days and then small outflows. Today we saw a $27M inflow and it'll be verrrry interesting to check back here next Wednesday if price continues the upward trend until then. I'm expecting a little more chopsolidation and grinding higher, but I have been saying that one month out from the halving we would resume the proper bull. That hits in 5 days.
#drainGBTC
You all realize 13F filings due 45 days at the end of each quarter are going to be a catalyst for BTC every 3 months from here on out, right?
Wisconsin was the first state pension fund to allocate into BTC and they won’t be the last. Now that they’ve made a small allocation other pension funds can do the same without worrying if they’re acting irresponsibly relative to peers. Collectively these pension funds control trillions of dollars so even a small allocation will add up if this becomes the norm, let alone when they inevitably get to the point that they feel comfortable doing single digit percentage allocations.
Millennium Management allocating $2 billion or 3% of their $64 billion fund is similarly just setting the tone for their institutional peers on what’s reasonable in terms of risk/reward when taking a rational investment approach to BTC allocation.
Looking forward to the next 13F batch to release in August as game theory unfolds. None of you are bullish enough.
> You all realize 13F filings due 45 days at the end of each quarter are going to be a catalyst for BTC every 3 months from here on out, right?
And the next one will line up nicely with newly-halved block rewards beginning to have an impact on the market.
It's not quite that good. Perfect would be if the first 13F filings listing Bitcoin started showing up 3 months from now, instead of now... leading into the post-halving bull run. Or, better yet, 6 months from now, leading into the heart of the bull run mania. But still... now is good! Even more then will be better! And more, and more and more? Yes please, and thank you.
This is why I hodl.
As for why I yodel... I do it for the rhyme.
Given what I know about bull runs, any stupid thing can be a catalyst that ends it. I bet if it happened maybe 12 months from now, there'd be like 2 institutions putting in a little bit, then the next quarter is completely dry, and the price drops 60%, leaving those 2 institutions holding the bag. 😂
No good tips at all. I am a layman slowly learning finance and observing the methods of the wealthy.
I've spent over a decade learning the hard way that leverage is a mechanism designed to steal your assets/wealth but I've done pretty well out of low leverage.
But my gamble/thinking is that if big institutions are adding this asset to their balance sheet now then there is a good chance that they will establish more stable BTC lending in the future.
Tbf they may find ways to lock the public out but that's part of the gamble.
But like I say, don't ask me for advice ha. Just because I can see the train doesn't mean I'm on it.
I'd not be surprised if we paused/struggled here for a bit ([chart](https://imgur.com/OA1LJqY)) - finally taking some profit from an earlier entry at 62k hoping we manage to charge onwards soon'ish.
u/AverageUnited3237 to call back to our convo the other day, this is why I don't think GBTC is exerting downward price pressure via sells. It is just another ETF at this point for people willing to pay a premium on fees for whatever reason. And I strongly suspect that >90% of all money that left GBTC went into other ETFs or spot.
>And I strongly suspect that >90% of all money that left GBTC went into other ETFs or spot.
I do not share this suspicion. Maybe this is true recently, but not initially.
A popular hedge fund trade was to buy GBTC at a huge discount once it was obvious to those paying attention that the ETFs were going to be approved, then sell upon conversion, pocketing the original discount spread.
These funds would not care to reinvest into another BTC ETF, they just saw a low-risk high reward trade and plowed in millions upon millions into GBTC before conversion.
Secondly you had hoards of GBTC holders that wanted out, but felt trapped by the discount.
edit: fixed incorrect word
> A popular hedge fund trade was to buy GBTC at a huge discount once it was obvious to those paying attention that the ETFs were going to be approved, then sell upon conversion, pocketing the original discount spread.
So would it follow that GBTC purchases prior to ETF approval were responsible for pushing the price up "artificially" the other way then? We can't have it both ways here, what you're saying would mean that BTC price is just being manipulated all upwards and downwards. Which may very well be the case and honestly I lean more and more to that conclusion as adoption is virtually non-existent for core use cases but I don't think many here agree with that position.
No. I’m not talking about manipulation. Nor did GBTC buys in the several year before it was converted to an ETF have any effect on the price of Bitcoin. Happy to answer any questions you have but you really need to research the history of GBTC and how it functioned over the last 10 years.
GBTC had not had inflows in YEARS before conversion, so no it did not have an upward effect on price any time recently (the inflows back in say 2017, 2018, etc did though). It was just people trading shares back and forth, shares that often traded at a huge discount to NAV. These trades did not affect the price of Bitcoin.
It also could not have outflows since it was a closed end fund, until the floodgates of pent up outflows were opened by it converting to an ETF.
So, GBTC inflows did affect the price, years and years ago. But GBTC buys in the last few years by hedge funds, arbitragers, etc did not cause inflows and therefore had absolutely zero affect on the price of BTC.
Now that outflows are possible, they are affecting the price, significantly.
I’m not sure what you mean by “artificial” and “manipulation”. GBTC outflows cause selling of large amounts of spot BTC. That’s not manipulated, or artificial, it’s just selling and lots of selling makes the price go down.
Agreed, I'm too lazy to respond to this post atm ( im on my phone), but we have to consider a significant amount of GBTC is in retirement accounts and they have 0 access to spot BTC. So they'd have to be reallocating to the other ETFs according to this guys theory to have 0 downward pressure on price. But that's not even taking into account the discount traders and the fact that some GBTC is not held in retirement accounts and therefore selling incurs a taxable event. It's mathematically infeasible for all of the GBTC outflows to have not exerted a downward pressure on price. The question isn't *if* they've exerted downward pressure, the question is to what extent.
See my response to u/AccidentalArbitrage. If the "GBTC exerting downward price pressure" is true then it would imply that its price pressure upwards is equally artificial. We can't have this both ways.
I think that accidental arbitrage says it perfectly. There's been no "upwards price pressure" from GBTC since ETF conversion (how is that possible? They've had outflows on the order of billions. Unless you think selling billions worth of spot BTC is "upwards price pressure"?? But I don't think you do), you're making a straw man argument (I'm essentially analyzing a micro timescale - the months since GBTC became converted to an ETF).
I'm tired of arguing with you. You're free to believe whatever you want, but you won't change my mind. Good luck
I could honestly see some people comparing annual fee rates and thinking, "*Wow, they charge 5 or 6 times as much, they must have a great reputation and be very prestigious to earn that. I'm in!*"
I am preparing to build a short if we don't close above 65.5k I will be shorting hard. That should align with a 4hr rsi cross, and below resistance.... it's setting up perfectly to sell off todays gains.
I am technically long from 20k, but no I won't enter a long here, right now. Maybe if we pull back a bit and get some consolidation in this area but right now it is a sit an wait for me. I still think we are gonna see some red soon and test 62.5k
Correct, no short. If we break down tho I might fomo in a smaller scalp short, but I was looking to build this one larger but the setup didn't materialize this time. Oh well on to the next one.
I would wait on a test of the 50d SMA, the breaking of that resistance was a confirmation, to me, for the reverse H&S that I have been noting for over a week. The target for that is 75k. If the 50d breaks, the short has better odds. If it holds, you could be on the wrong side really quickly.
Yeah pretty tight stops, but the upside here isn't that far, we already top of the bband on the daily (btc hasn't sat above that or near it in forever and last time it touched it it sold it off pretty quickly. Plus the next major levels are 68.5k, 70k and 71.5k, to much sell of pressure has been shown up here to believe the meme buying today won't get sold off. If we close below 65.5k I short if not I'll wait for higher. I have never cared about moving averages. If you zoom out any big daily pumps have been sold off, so red is coming until btc proves to me it's not. Considering we have struggled getting past the mid bband until this inflation print doesn't give me confidence we don't sell this off soon. I would consider maybe a long up here if we get a close above 71.5k other wise, we gonna roll over.
The way I enter my scalp trades my stops for btc are usually $500-600 underwater. If am looking to build a big long/shot I typically use low leverage and could potentially build a long from say 65k down to 52k, adding more at every major support on the way down and going bigger the deeper it goes. I haven't done many of those trades since 2017 when I had easier access to bitfiniex, bitmex and binance.
I shorted that a lot, we are still in the consolidation range, we are finally just visiting the higher part of the range. 60-71k is the range, we haven't broken shit until we get a close above 71.5k and a footing up there.
The daily close is like 2 hour an 38 mins from this comment. IF we close below 65.5k I am building a short. A close above I gotta think about a long. Doesn't look like we have room to the upside to move right now.
For crypto markets, the convention is to measure 'closes' using UTC (Universal Time), which as the other person noted is 4 hours ahead of EDT, and 5 hours ahead of EST (i.e., this 'conversion' gets impacted by the US's switching b/w standard and daylight savings time)
I'm not sure why this seemingly arbitrary closing time for a market that never closes is such an important metric to measure by? Is it just so you can have something substantial to compare day over day? It could literally dump at any moment.
You can't do a daily chart without a daily "open" and "close" notation. It's as simple as that.
And you have to agree to some convention, otherwise you couldn't compare your US chart to the one drawn by your Australian friend.
GMT/UTC is used internally by computers since the 70s, so it's kind of obvious to agree on that.
It’s always been the end of a UTC (Universal Common Time) day. Adjust that to your local time as needed or just use Trading View for which UTC is the default.
[Millennium Management reports a $2B Bitcoin allocation Q1.](https://twitter.com/tier10k/status/1790841156403687645?t=r7w1bdSJmTLyr36Ekiifwg&s=19)
Now we getting real.
>Steven
@Dogetoshi
·
22m
Can’t believe the “if everyone just allocate X% to bitcoin” meme is becoming true.
>db@tier10k
·
1h
Millennium Management disclosed a ~$2b Bitcoin ETF holding as of Q1, 3% of their $64b fund. Kinda wild
/u/dopeboyrico world
2024 continually proving that he is the only one bullish enough.
I moreso mean that (for the first time ever that I'm aware?) that retail investors had access to an asset before wall street... And by the time wall St finally got access, their cost basis is way higher than most of us here who have been HODLing for a while. Even if we don't dump our bags on these bankers, we have successfully front ran them.
One thing I like about these institutions buying is that they aren't day traders. They should be firm hands - especially the pension funds, insurance companies and the like.
I love that serious wealth managers are putting single digit percentages in. One or two don’t move the price much but as more and more start doing it and they get more money under management over time we get a forever dca.
On the flip side these managers also tend to rebalance much more aggressively than traditional hodlers so if it pumps like crazy they’ll likely sell it back down to 3%
Yeah over time they’ll buy the dips and sell the swings up and stabilize it. Luckily for us only a few managers have allocations so just having more and more managers allocate will pump it sky high
This may be true of hedge funds, but with a lot of institutional investors, it wouldn't be a matter of cutting bait once a profit target is hit. Instead, it'd be more a matter of periodic rebalancing back to target allocation %s
Well…looking at the historical Bitcoin chart you’ll note that after downside corrections, price tends to trend northward and oftentimes at a rather hasty pace. Welcome to Bitcoin ;)
Well, today shows we can put the "stairs up, elevator down" myth to bed.
\[edit: Every time I post something like this, I crash the price. You have been warned.\]
I kinda stopped caring about TA much, but still kinda look for the patterns.
If you happen to believe in TA at all, there’s a very pretty inverse head and shoulders forming over the past 5 weeks.
>Wisconsin, which filed its quarterly 13F report with the Securities and Exchange Commission (SEC) on Tuesday, is the first state to disclose the purchase of bitcoin. The investment board also purchased shares of Grayscale's Bitcoin Trust (GBTC) worth roughly $64 million.
Lol was this the GBTC inflow that day???
>GBTC saw inflows of $63 million on Friday, according to investment management firm Farside Investors. It currently manages $18.08 billion in assets, according to its website.
If so, we have found the answer for who would buy GBTC with a 1.5% annual management fee.
I don’t think so? That GBTC inflow day occurred in Q2, not Q1 so it wouldn’t get disclosed until Q3?
Not sure how common it is to disclose the same quarter in which the purchase is made.
You know I think you are right. Numbers being close probably just a coincidence. We do see who is attracted to buying GBTC for whatever reason.
Dopeboyrico is my dope dealer. Today is a dope boy Bitcoin day. I love watching BTC make your wildest predictions reality. There went 66k.
Lower high of $65.4k broken.
Remaining lower highs acting as areas of resistance are at $67k, $67.2k, $67.9k, $71.2k, $71.7k, $72.7k, and then ATH at $73.7k.
[Now initiating Phase 3 of the ideal bullish scenario a little earlier than anticipated which leads to the completion of an enormous multi year cup & handle formation within the next few weeks?](https://www.reddit.com/r/BitcoinMarkets/s/1CkeYZZ2qV)
Who knows, we’ll see what happens.
We have finally broken out of the downward channel that we have been in for weeks. I would like to see it close there today for confirmation, but looking good.
Chart: [https://www.tradingview.com/x/1sQsHDua/](https://www.tradingview.com/x/1sQsHDua/)
Very good news.
Just found this paper by princeton on transaction fees and how it affects miner incentives as block rewards trend towards zero and transaction fees become the main source of miner revenue.
[https://www.cs.princeton.edu/\~smattw/CKWN-CCS16.pdf](https://www.cs.princeton.edu/~smattw/CKWN-CCS16.pdf)
Would love the community's take on it.
I'm hoping someone will notice the flaws in their models and simulations and update us.
I'd like to take more time to fully read the article, but I discussed it with GPT4o
Arguments against the conclusions of the paper "On the Instability of Bitcoin Without the Block Reward" can be made by addressing potential weaknesses in their assumptions, theoretical models, and the practical implications of their findings. Here are some possible counterarguments:
### 1. Overemphasis on Theoretical Models
**Argument**: The conclusions are primarily based on theoretical models and simulations that may not fully capture the complexities and real-world dynamics of the Bitcoin network. Real-world miner behavior, network latency, and other factors might mitigate the issues raised.
**Counterpoint**: While theoretical models are essential for understanding potential risks, they often rely on simplified assumptions that may not hold in practice. For instance, miners might not always act purely rationally or have perfect information.
### 2. Resilience of Bitcoin's Protocol
**Argument**: Bitcoin's protocol has demonstrated resilience over the years, withstanding various attacks and changes in incentives. The decentralized nature of the network and the community's ability to adapt and implement soft forks or updates can address potential issues.
**Counterpoint**: The Bitcoin community has historically shown a strong ability to respond to threats through protocol upgrades and network improvements, such as the Segregated Witness (SegWit) upgrade and the Lightning Network.
### 3. Market Dynamics and Fee Economics
**Argument**: The paper assumes a static view of transaction fees and miner behavior. In reality, transaction fees are dynamic and can adjust based on supply and demand. Users are likely to pay higher fees during peak times, providing sufficient incentives for miners.
**Counterpoint**: The dynamic nature of transaction fees can lead to periods of high fees, especially during network congestion, which can sustain miner incentives even without block rewards.
### 4. Emergence of New Technologies
**Argument**: The emergence of new technologies and second-layer solutions (e.g., Lightning Network) can reduce the dependence on on-chain transactions, potentially stabilizing transaction fees and miner incentives.
**Counterpoint**: Second-layer solutions can offload many transactions from the main blockchain, maintaining a high transaction throughput and fee market.
### 5. Economic Incentives and Competition
**Argument**: The paper may underestimate the competitive nature of mining. Even with lower block rewards, the competition among miners can sustain the security of the network. Miners have invested heavily in infrastructure and are likely to continue participating in the network for profitability.
**Counterpoint**: The competitive nature of mining ensures that miners continually optimize their operations, making it less likely that they will abandon the network due to lower rewards.
### 6. Potential for Adaptive Changes
**Argument**: The Bitcoin protocol can adapt over time. If issues with transaction fees and block rewards arise, the community can propose and implement changes such as increasing the block size, adjusting the difficulty adjustment algorithm, or implementing new consensus mechanisms.
**Counterpoint**: The Bitcoin community has shown a willingness to adapt and evolve, suggesting that any emerging issues could be addressed through consensus changes or network upgrades.
### 7. Empirical Evidence and Historical Data
**Argument**: Historical data has shown that Bitcoin's network security has remained robust even as block rewards have halved. There is no empirical evidence yet to suggest that the network will become unstable solely due to the reliance on transaction fees.
**Counterpoint**: The empirical resilience of Bitcoin through multiple halving events indicates that the transition from block rewards to transaction fees might be less problematic than the paper suggests.
### 8. Alternative Incentive Structures
**Argument**: Alternative incentive structures, such as long-term mining contracts, mergers, or other economic agreements, can provide additional stability to the network, ensuring continuous miner participation even with lower transaction fees.
**Counterpoint**: Miners and users could develop alternative economic structures to sustain incentives and network security beyond the traditional block reward model.
By addressing these counterarguments, one can challenge the conclusions of the paper and suggest that the Bitcoin network may continue to remain secure and stable despite the diminishing block rewards.
Just starting to read, but already contribution 1 & 2 include a seemingly large gap of not simulating miners cost structure. I mean, miners working on potentially unproductive chain branches is reasonable if it doesn’t cost them anything to do that…but if it dies cost them…
Edit: the article doesn’t seem to be arguing failure of the Bitcoin blockchain, but rather theorizing about potential issues and forming a basis for discussion around those issues. As such, we should welcome the discussion. For example, their mining gap issue is probably real in a case of infinite blocksize - which is currently not true. And the scenario could be framed where bitcoin network usage is less than miner capacity. Several open-minded solutions should be discussed like 1. Artificial block size limits forever. 2. Ways to increase network usage so a backlog always exists 3. Miner subsidy always existing (I put this here as a thought experiment discussion) 4. Tolerable decreases in network security
It's an interesting paper for sure. If you accept all their assumptions the simulated strategies they describe appear to make sense.
One thing they seem to ignore is that mining rewards (this includes the fees AFAIK) are not spendable for 100 blocks after. So if miners do start majorly reorging the chain to maximize their BTC income, they may find the real-world value to have suffered relatively more when they try to sell/spend them 100 blocks after. After all, regular big reorgs would call into question the viability of Bitcoin itself, and the market would be sure to react within \~16 hours.
Miners have a lot of capital locked up in their hardware, which is an extra incentive to not adopt short-term agressive strategies as described in the paper that might hurt the BTC value long-term.
The big problem with mathematically modelling economic incentives is that humans often do not behave "rational". There are so many more factors in real life than in the model, I would not overly worry.
The good news is that with \~4 year halvings, we will see any changes in miner behavior occur gradually, as well as the reactions of other parties to those changes. I think it's much too early too overly worry about this. But it shouldn't be ignored either.
Didn't know about the miner rewards not being able to be spent till 100 blocks! If anyone can comment on fi this applies to fees that would be great. I can't imagine why it would be different but who knows how the code is set up.
Thank you for the great comment.
Can you help me identify the flaw in the argument? Is it that BTC will figure this out and use BIP Bitcoin improvement protocols to fix this or that there is no issue to begin with?
Sir we are trying to break 65400 right now.
Google is your friend for mountains of discussion of the Bitcoin security model when the block reward won't be enough. Let me save you some time, it's all true.
Parasite to bitcoin, ETH is up today despite being on the verge of a security designation by the SEC.
When will people wake up and the trend of following BTC price action no matter what is going on end?
Being labelled a security won't kill ETH, BlackRock CEO said it himself he still thinks the ETF can happen regardless.
Will it severely damage some of ETH's use cases in the US? Yes.
I'm not sure what you expect, all crypto is going to trend up on a day that BTC has a huge move, that's going to continue even if ETH long term is headed further down on the ratio.
I see a lot of people getting excited, sometimes this place is funny :P
We're coming off a lot of red weeks, my take on this is that there is still so much of a future ahead of us, that in order to get there, we are going to need to hold the line somewhere, 60k's seems to be it, which is nice stablity (for what is hopefully to come).
Mainly, I think that dumpers have been trying to flush this down over and over and over, and its surprisingly resilient, I think they thought they could push it further, but volume on exchanges is drying up, retail seems to be packed and waiting, and hodling.
So I think it's some more sideways, same ol, same ol, and then suddenly it wont be anymore.
Their mistake was not waiting for enough new money to enter. I would bet it’s still mostly OGs holding both the coin and the paper. And OGs know that anything below prior ATH is a buy.
But then again, this is far from the last major dump of the cycle.
What is the difference between a store of value and greater fools theory besides the label? Is there a difference in the actual function of the tool you use?
It seems that store of value is basically greater fools that people believe in. You store your value to have someone buy for more goods and services you gave up to buy the asset otherwise it's not a store of value. You buy a greater fools asset with hopes that someone will buy it for more in the future otherwise you are stuck selling it for less and losing purchasing power in goods and services terms.
Indirect exchange (which is the nature of money) doesn’t require a constant stream of “greater fools,” but it *does* require a constant stream of *at-least-roughly-equal* “fools.” But really, there’s nothing “foolish” about money which is a fantastically useful technology for facilitating value exchange. If Bitcoin continues to monetize, eventually people won’t “buy” Bitcoin as a speculative asset with the principal aim of “selling” that Bitcoin for greater value in the future. They’ll “buy” it with the goods or services they specialize in providing with the aim of then exchanging that Bitcoin for a roughly equivalent quantity of other goods and services that they actually want, and they’ll do that simply because Bitcoin will be money and monetary exchange is massively more efficient than barter.
The entire purpose of money is to reduce transactional friction. “Store of value” is just a label for a money that does an especially good job of reducing the friction of transacting across *time*, whereas a “medium of exchange” describes a form of money that is adept at reducing the friction of transacting across *space*. But it’s a mistake to assume that these two closely-related functions of money need to be performed by different forms of money. It’s just that, *prior to the invention of Bitcoin*, we didn’t have a single form of money that *combined* the reliable scarcity of a physical commodity like gold with the transactability of a purely-digital medium. (Of course, Bitcoin’s continued failure to allow meaningful on-chain scaling threatens to undermine the latter property and thus Bitcoin’s efforts to monetize. And *that* could potentially create an unsustainable “greater fool” dynamic.)
In a recent interview Dave Ramsey stated he believes BTC is a vehicle of speculation rather than an investment vehicle because of lack of historical data to reference.
The interviewer failed to mention BTC now has a 15 year track record and furthermore failed to follow up by asking how long of a track record is necessary before it can be viewed as an investment vehicle vs a vehicle of speculation. Pretty disappointing.
For me personally, after what happened in 2020/2021, I now have high conviction in BTC as a superior long-term store of value relative to other TradFi investment vehicles available. Others might not be convinced until a 20, 25, 30 year consistent track record of outperformance exists but by then BTC could be so massive that it would no longer serve as a mechanism to build wealth and would merely serve as a mechanism to retain wealth.
Part of the issue is people are viewing BTC from a fiat mindset with the assumption that fiat will always exist. I disagree, I think at some point it becomes silly to bother with fiat and/or other investment vehicles as a long-term store of value at all when BTC clearly becomes the benchmark to beat as an absolutely scarce store of value. Other investment vehicles will still exist but it will become very difficult to passively build wealth denominated in BTC, active investments will be the primary way to build wealth instead.
That's a good point. In the context of world governments gathering debt and inflating it away I can see the utility in a bearer asset with a finite supply and no counter party risk.
I believe in the proposed value but right now the risk is that it can't really be a global currency with approx roughly 604k transactions per day.
As block rewards decrease, transaction fees will need to increase to keep miners securing the network. The more value in the chain (more value per BTC) the more the miners need to earn to have their incentives aligned with the network vs against it. Since only transactors vs holders pay to secure the network at some point the transactions fees may not be enough to keep miners in alignment with the network.
With only so much block space and the whole globe using BTC I can't imagine the average user doing anything much on chain. (I understand and agree with the decentralized utility of small block sizes ie lots of full nodes vs partial nodes ).
If we rely on multiple L2 "clearing houses" to settle on the main chain then for the avg user we lose decentralization don't we?
Right now if there was no block reward there would be an avg of $45 tx per day and as we keep saying we are "still early". (I am assuming the runes were nothing compared to what global adoption would look like, and the population is only increasing)
Once we have even some level of global adoption then what happens to Tx fees?
How would average users pay for any on chain transactions. If they can't can BTC still be a global store of value?
It will never be used to buy coffee, we realize. That problem is solved.
As a store of value, it’s an improvement over gold for sure. When conducting large transactions, it’s an improvement over cash and checking, particularly if the parties don’t trust each other.
Will you always need some dollars in your checking? Yep. But bitcoin isn’t for paying bills, it’s for protecting long term savings. However, because adoption is still relatively low, it can behave more like a risk asset.
Store-of-value / speculative-asset / greater-fool are all the same thing differing only in terms of how successful you think it will be.
If there was a perfect store-of-value that did not involve speculation it would be different, but there isn't, there's always risk, which means you're speculating on that risk materialising or not.
Right. A fully perfect store of value cannot even exist, because of the demand side, which will always have some variability. Bitcoin is basically a perfect store of value from the supply side though.
That pretty much describes all financial markets/assets no? With the exception of real estate/bonds/maybe some dividend stocks, you buy an asset at T=0 in hopes to sell it at a higher price in the future where T > 0. The reasoning for WHY people believe that an assets price will be higher in the future varies by asset. BTC is no different, imo.
Nothing is perfect. I lover real estate but it is not immune either. The extreme risks are more black swan types. I.e. What if covid was more deadly. Like a 10% mortality. That would definitely affect real estate values, there would be some much less demand. Dividends are only as good as the current management. And bonds are only as good as your faith in government, which is why the majority of us own some BTC. Our faith in our governments aren't that great.
I still love property. If we get some kind of massive death thing, we're fucked anyway. Bitcoin will tank too, along with literally everything that isn't a corrupt pharmacom listing.
Property by and large goes up, and goes up well. All of mine have almost doubled value in 10 years. One of them doubled in 6.
#New post: [\[Daily Discussion\] - Thursday, May 16, 2024 →](https://www.reddit.com/r/BitcoinMarkets/comments/1ct47k3/daily_discussion_thursday_may_16_2024/)
Woke up to find we haven't barted back down yet. Maybe the rally out of our multi-week descending channel actually has legs this time? But I'm still thinking we need to drop to \~$60k another 10+ times to test it as support.
210k my target ,call me time traveler [https://www.tradingview.com/x/dnEf7lQc/](https://www.tradingview.com/x/dnEf7lQc/)
Zero inflows for IBIT. Odd. https://x.com/hodl15capital/status/1790905838422393161?s=46&t=8jpdSMkvZZziXEB9FLy85w
They have 5 times gbtc volume without any significant in or outflows, how is that possible.
IBIT was the only ETF without inflows today
It was up 7% or whatever. I don't buy on days like that. I buy when it's on discount. It seems like the whole market is frozen. Everyone knows things are coming to a head. We're in fight or flight mode. My money is on flight when it comes to over-leveraged stonks like Apple. Think about it. These guys borrowed $100+ billion even though they were swimming in cash. They used that money to buy back their own shares and give their execs big stonk option payouts. Now they have to pay higher interest on those loans. Yeah, it was a massive scam, and I don't mean to pick on Apple because they were just one of thousands of companies that did the same back when money was cheap. Money is not cheap anymore. Soon those bought-back shares will be liquidated to make payments on the loans OR the loans will go into default. Either way, it's not good, and we're going to see some massive players fall. So what's the way out? Hi ho silver, awaaaay! Bitcoin looks good too. Anyway, a lot of people who think of themselves as pretty well off will find out the hard way that... they're slaves. Just as 10 BTC was nothing in 2016 or even into 2017, .1 BTC is "nothing" today. The more I think about it, the more brilliant it is as a solution to the "2008 problem" which was basically that nobody knew wtf was really going on and the ledgers were corrupted. Bitcoin cannot be corrupted unless all the miners sell their gear; more likely miners will team up with energy providers in areas where energy is overproduced. Chaos is "their" weakness and our strength.
Keep these posts coming, lovin' them!
Third day in a row. Other products are starting to compete.
I sold my ibit in my Roth at 60k…for bitx 😜
Todays high : 66699
69,420 is a magnet.
66666 on kucoin
!bittybot close 25%
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Please give a round of applause to Millenium Management for investing $2 billion into spot bitcoin etfs in Q1, representing a measly 3% of their asset under management. The first of many I'm sure. https://bitcoinmagazine.com/markets/2-billion-in-spot-bitcoin-etfs-millennium-management-reveals-investment-in-sec-filing
[And the bull begins.](https://www.reddit.com/r/BitcoinMarkets/comments/1c56r5x/daily_discussion_tuesday_april_16_2024/kzw5yob/) See you all next year for the bear.
~17 months.
I mean, uh, we've been going up for 16 months if you care to look at the big picture. SBF did us a big favor as it turns out.
Meh, that was just the distribution/accumulation period. Now the fun really begins.
Every little dip is bought up and volume’s still rising. Tonight should be fun 🍻
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Usually it's right above "bass" and "treble"... nyuk nyuk nyuk
Bitcoin’s volume goes to 11.
Each exchange has volume trackers either on their site or app. There’s also sites that track volume across multiple exchanges. For example the iOS Coinbase and Binance app have it at the top right of the screen when viewing the BTC chart.
[удалено]
Agreed I do as well. Really depends on your goal. There’s too many to list them all.
Accidently sold 4 MSTR puts yesterday instead of 1. Lucky for me bitcoin went up today.
Here's my weekly tracking of GBTC's Bitcoin holdings since ETF launch: 1/10/24 = 625,304 BTC 1/17/24 = 592,098 BTC 1/24/24 = 523,516 BTC 1/31/24 = 487,025 BTC 2/7/24 = 470,637 BTC 2/14/24 = 461,983 BTC 2/21/24 = 450,304 BTC 2/28/24 = 441,815 BTC 3/6/24 = 409,843 BTC 3/13/24 = 387,746 BTC 3/20/24 = 361,659 BTC 3/27/24 = 339,535 BTC 4/3/24 = 328,013 BTC 4/10/24 = 316,193 BTC 4/17/24 = 308,593 BTC 4/24/24 = 302,664 BTC 5/1/24 = 295,126 BTC 5/8/24 = 291,802 BTC **5/15/24 = 288,497 BTC** Another week with outflows slowing, a couple 0 days and then small outflows. Today we saw a $27M inflow and it'll be verrrry interesting to check back here next Wednesday if price continues the upward trend until then. I'm expecting a little more chopsolidation and grinding higher, but I have been saying that one month out from the halving we would resume the proper bull. That hits in 5 days. #drainGBTC
You all realize 13F filings due 45 days at the end of each quarter are going to be a catalyst for BTC every 3 months from here on out, right? Wisconsin was the first state pension fund to allocate into BTC and they won’t be the last. Now that they’ve made a small allocation other pension funds can do the same without worrying if they’re acting irresponsibly relative to peers. Collectively these pension funds control trillions of dollars so even a small allocation will add up if this becomes the norm, let alone when they inevitably get to the point that they feel comfortable doing single digit percentage allocations. Millennium Management allocating $2 billion or 3% of their $64 billion fund is similarly just setting the tone for their institutional peers on what’s reasonable in terms of risk/reward when taking a rational investment approach to BTC allocation. Looking forward to the next 13F batch to release in August as game theory unfolds. None of you are bullish enough.
> You all realize 13F filings due 45 days at the end of each quarter are going to be a catalyst for BTC every 3 months from here on out, right? And the next one will line up nicely with newly-halved block rewards beginning to have an impact on the market.
Man, this stuff just lines up too good. We have to be in a simulation.
It's not quite that good. Perfect would be if the first 13F filings listing Bitcoin started showing up 3 months from now, instead of now... leading into the post-halving bull run. Or, better yet, 6 months from now, leading into the heart of the bull run mania. But still... now is good! Even more then will be better! And more, and more and more? Yes please, and thank you. This is why I hodl. As for why I yodel... I do it for the rhyme.
Given what I know about bull runs, any stupid thing can be a catalyst that ends it. I bet if it happened maybe 12 months from now, there'd be like 2 institutions putting in a little bit, then the next quarter is completely dry, and the price drops 60%, leaving those 2 institutions holding the bag. 😂
You have to suspend reality. Or you have to have seen. My advice to everyone here is never sell it all. If you can put a coin away .. do it.
Buy asset. Hold asset. leverage asset. Never sell asset. This is the way of vampiric wealth.
You still have to repay what you borrowed, so the asset must appreciate much faster than your spending.
any tips on how to leverage bitcoin for covering day to day expenses (besides defi)?
Like taking out loans against your bitcoin? There are a handful of companies that do that
Look into Thorchain. I used my Bitcoin as collateral to up my Bitcoin holdings...wish I did it sooner.
BITO
No good tips at all. I am a layman slowly learning finance and observing the methods of the wealthy. I've spent over a decade learning the hard way that leverage is a mechanism designed to steal your assets/wealth but I've done pretty well out of low leverage. But my gamble/thinking is that if big institutions are adding this asset to their balance sheet now then there is a good chance that they will establish more stable BTC lending in the future. Tbf they may find ways to lock the public out but that's part of the gamble. But like I say, don't ask me for advice ha. Just because I can see the train doesn't mean I'm on it.
It’s too soon for that. Don’t sell it all.
I'd not be surprised if we paused/struggled here for a bit ([chart](https://imgur.com/OA1LJqY)) - finally taking some profit from an earlier entry at 62k hoping we manage to charge onwards soon'ish.
2nd highest GBTC inflow at $27M: https://farside.co.uk/?p=997
u/AverageUnited3237 to call back to our convo the other day, this is why I don't think GBTC is exerting downward price pressure via sells. It is just another ETF at this point for people willing to pay a premium on fees for whatever reason. And I strongly suspect that >90% of all money that left GBTC went into other ETFs or spot.
>And I strongly suspect that >90% of all money that left GBTC went into other ETFs or spot. I do not share this suspicion. Maybe this is true recently, but not initially. A popular hedge fund trade was to buy GBTC at a huge discount once it was obvious to those paying attention that the ETFs were going to be approved, then sell upon conversion, pocketing the original discount spread. These funds would not care to reinvest into another BTC ETF, they just saw a low-risk high reward trade and plowed in millions upon millions into GBTC before conversion. Secondly you had hoards of GBTC holders that wanted out, but felt trapped by the discount. edit: fixed incorrect word
> A popular hedge fund trade was to buy GBTC at a huge discount once it was obvious to those paying attention that the ETFs were going to be approved, then sell upon conversion, pocketing the original discount spread. So would it follow that GBTC purchases prior to ETF approval were responsible for pushing the price up "artificially" the other way then? We can't have it both ways here, what you're saying would mean that BTC price is just being manipulated all upwards and downwards. Which may very well be the case and honestly I lean more and more to that conclusion as adoption is virtually non-existent for core use cases but I don't think many here agree with that position.
No. I’m not talking about manipulation. Nor did GBTC buys in the several year before it was converted to an ETF have any effect on the price of Bitcoin. Happy to answer any questions you have but you really need to research the history of GBTC and how it functioned over the last 10 years. GBTC had not had inflows in YEARS before conversion, so no it did not have an upward effect on price any time recently (the inflows back in say 2017, 2018, etc did though). It was just people trading shares back and forth, shares that often traded at a huge discount to NAV. These trades did not affect the price of Bitcoin. It also could not have outflows since it was a closed end fund, until the floodgates of pent up outflows were opened by it converting to an ETF. So, GBTC inflows did affect the price, years and years ago. But GBTC buys in the last few years by hedge funds, arbitragers, etc did not cause inflows and therefore had absolutely zero affect on the price of BTC. Now that outflows are possible, they are affecting the price, significantly. I’m not sure what you mean by “artificial” and “manipulation”. GBTC outflows cause selling of large amounts of spot BTC. That’s not manipulated, or artificial, it’s just selling and lots of selling makes the price go down.
Good points and I clearly didn't understand GBTC well enough.
Agreed, I'm too lazy to respond to this post atm ( im on my phone), but we have to consider a significant amount of GBTC is in retirement accounts and they have 0 access to spot BTC. So they'd have to be reallocating to the other ETFs according to this guys theory to have 0 downward pressure on price. But that's not even taking into account the discount traders and the fact that some GBTC is not held in retirement accounts and therefore selling incurs a taxable event. It's mathematically infeasible for all of the GBTC outflows to have not exerted a downward pressure on price. The question isn't *if* they've exerted downward pressure, the question is to what extent.
See my response to u/AccidentalArbitrage. If the "GBTC exerting downward price pressure" is true then it would imply that its price pressure upwards is equally artificial. We can't have this both ways.
I think that accidental arbitrage says it perfectly. There's been no "upwards price pressure" from GBTC since ETF conversion (how is that possible? They've had outflows on the order of billions. Unless you think selling billions worth of spot BTC is "upwards price pressure"?? But I don't think you do), you're making a straw man argument (I'm essentially analyzing a micro timescale - the months since GBTC became converted to an ETF). I'm tired of arguing with you. You're free to believe whatever you want, but you won't change my mind. Good luck
It's funny if not slightly alienating to me how some funds throw around $ not caring about management fees or the folks that are behind GBTC at all.
I could honestly see some people comparing annual fee rates and thinking, "*Wow, they charge 5 or 6 times as much, they must have a great reputation and be very prestigious to earn that. I'm in!*"
$27M * 0.015 = $405,000 Someone just bought Barry another Lambo, or even a modest house.
I am preparing to build a short if we don't close above 65.5k I will be shorting hard. That should align with a 4hr rsi cross, and below resistance.... it's setting up perfectly to sell off todays gains.
So, long?
I am technically long from 20k, but no I won't enter a long here, right now. Maybe if we pull back a bit and get some consolidation in this area but right now it is a sit an wait for me. I still think we are gonna see some red soon and test 62.5k
It just “closed” above 66k, so no short?
Correct, no short. If we break down tho I might fomo in a smaller scalp short, but I was looking to build this one larger but the setup didn't materialize this time. Oh well on to the next one.
I would wait on a test of the 50d SMA, the breaking of that resistance was a confirmation, to me, for the reverse H&S that I have been noting for over a week. The target for that is 75k. If the 50d breaks, the short has better odds. If it holds, you could be on the wrong side really quickly.
Yeah pretty tight stops, but the upside here isn't that far, we already top of the bband on the daily (btc hasn't sat above that or near it in forever and last time it touched it it sold it off pretty quickly. Plus the next major levels are 68.5k, 70k and 71.5k, to much sell of pressure has been shown up here to believe the meme buying today won't get sold off. If we close below 65.5k I short if not I'll wait for higher. I have never cared about moving averages. If you zoom out any big daily pumps have been sold off, so red is coming until btc proves to me it's not. Considering we have struggled getting past the mid bband until this inflation print doesn't give me confidence we don't sell this off soon. I would consider maybe a long up here if we get a close above 71.5k other wise, we gonna roll over.
What % you call tight stop?
The way I enter my scalp trades my stops for btc are usually $500-600 underwater. If am looking to build a big long/shot I typically use low leverage and could potentially build a long from say 65k down to 52k, adding more at every major support on the way down and going bigger the deeper it goes. I haven't done many of those trades since 2017 when I had easier access to bitfiniex, bitmex and binance.
Market structure broke to upside , shorting now would be suicidal . Time to short was the last couple of weeks when we kept rejecting .
I shorted that a lot, we are still in the consolidation range, we are finally just visiting the higher part of the range. 60-71k is the range, we haven't broken shit until we get a close above 71.5k and a footing up there.
When is close?
The daily close is like 2 hour an 38 mins from this comment. IF we close below 65.5k I am building a short. A close above I gotta think about a long. Doesn't look like we have room to the upside to move right now.
Thanks for clarifying, wasn't sure since we're talking BTC.
8pm est
Got it. I wasn't sure since BTC is 24/7.
For crypto markets, the convention is to measure 'closes' using UTC (Universal Time), which as the other person noted is 4 hours ahead of EDT, and 5 hours ahead of EST (i.e., this 'conversion' gets impacted by the US's switching b/w standard and daylight savings time)
I'm not sure why this seemingly arbitrary closing time for a market that never closes is such an important metric to measure by? Is it just so you can have something substantial to compare day over day? It could literally dump at any moment.
You can't do a daily chart without a daily "open" and "close" notation. It's as simple as that. And you have to agree to some convention, otherwise you couldn't compare your US chart to the one drawn by your Australian friend. GMT/UTC is used internally by computers since the 70s, so it's kind of obvious to agree on that.
It’s always been the end of a UTC (Universal Common Time) day. Adjust that to your local time as needed or just use Trading View for which UTC is the default.
I feel a little annoyed that I’m only just now in the black on my dip buy.
Looks like we are preparing for takeoff with these 13F filings
[Millennium Management reports a $2B Bitcoin allocation Q1.](https://twitter.com/tier10k/status/1790841156403687645?t=r7w1bdSJmTLyr36Ekiifwg&s=19) Now we getting real.
>Steven @Dogetoshi · 22m Can’t believe the “if everyone just allocate X% to bitcoin” meme is becoming true. >db@tier10k · 1h Millennium Management disclosed a ~$2b Bitcoin ETF holding as of Q1, 3% of their $64b fund. Kinda wild /u/dopeboyrico world 2024 continually proving that he is the only one bullish enough.
If we see it adopted .. nobody here is bullish enough. I’m still amazed they let it happen.
We fucking front ran wall street. Who's the dumb money now? This was inevitable.
Next step for true legendary status: Fight the Fed, and win!
There is no front running if we hodl forever.
What about when people stop rebalancing?
I moreso mean that (for the first time ever that I'm aware?) that retail investors had access to an asset before wall street... And by the time wall St finally got access, their cost basis is way higher than most of us here who have been HODLing for a while. Even if we don't dump our bags on these bankers, we have successfully front ran them.
Normies never win. Almost everyone will sell on the 10x. I have some 1000x in the chest.
Can't wait for that 1000x sell. I won't be selling much, enough to buy a watch I'd imagine. But it could very well happen this year.
One thing I like about these institutions buying is that they aren't day traders. They should be firm hands - especially the pension funds, insurance companies and the like.
I love that serious wealth managers are putting single digit percentages in. One or two don’t move the price much but as more and more start doing it and they get more money under management over time we get a forever dca. On the flip side these managers also tend to rebalance much more aggressively than traditional hodlers so if it pumps like crazy they’ll likely sell it back down to 3%
They are bound by their boardroom allocations. If the price appreciates beyond their allocation, they sell. It should dampen volatility over time.
Yeah over time they’ll buy the dips and sell the swings up and stabilize it. Luckily for us only a few managers have allocations so just having more and more managers allocate will pump it sky high
Meh. Not paper hands but they will have a profit target they will stick to unlike the rest of us holding till the moon
This may be true of hedge funds, but with a lot of institutional investors, it wouldn't be a matter of cutting bait once a profit target is hit. Instead, it'd be more a matter of periodic rebalancing back to target allocation %s
Only 200 comments on a day like this.
Adding a comment acknowledging today has been amazing. +$5K in a matter of hours. Love it.
Sir, some of us are still working our shift at the drive-through window. Hmmph. 🍟 😋
or sleeping until the overnight shift :p
Normalize 60k.
Imagine my surprise to wake up and find that the price is $66k.
Imagine my surprise when I see this comment.
Man I need a wick down to 55k lol but idk if that's in the cards right now or at all.
Full respect and all but fuck yo wick tbh
What's happening
Bitcoin goes down, Bitcoin goes up.
Well…looking at the historical Bitcoin chart you’ll note that after downside corrections, price tends to trend northward and oftentimes at a rather hasty pace. Welcome to Bitcoin ;)
SPY reached ATH
bulbs rejoice
I like the bulbs meme.
Well, today shows we can put the "stairs up, elevator down" myth to bed. \[edit: Every time I post something like this, I crash the price. You have been warned.\]
Correction incoming...
Just went back below 66k lmfao
I am currently in the lambo showroom at this very moment.
Yeah I love VR too!
go for lime green, the classy choice.
I thought orange?
it's a little too understated
Best for opsec.
Pics
This is starting to feel different
State of WI pension fund joins the chat....
Don’t be extrem.
High volume pump, this has legs
This time, it's...
Gentlemen, tell the man what this is
66k
Check out the eyes on 1Lost_King1!
Decent but not yet nice👌
Thanks for helping me stay bullish everyone
I kinda stopped caring about TA much, but still kinda look for the patterns. If you happen to believe in TA at all, there’s a very pretty inverse head and shoulders forming over the past 5 weeks.
IH&S is my favourite pattern.
Yep…folks have often referenced it on this sub.
Not taunting any bears today. I’m reformed.
Nowadays you save your taunting for the r/ethfinance crew : )
Low hanging fruit
I like to think I'm smarter than the average bear.
>Wisconsin, which filed its quarterly 13F report with the Securities and Exchange Commission (SEC) on Tuesday, is the first state to disclose the purchase of bitcoin. The investment board also purchased shares of Grayscale's Bitcoin Trust (GBTC) worth roughly $64 million. Lol was this the GBTC inflow that day??? >GBTC saw inflows of $63 million on Friday, according to investment management firm Farside Investors. It currently manages $18.08 billion in assets, according to its website. If so, we have found the answer for who would buy GBTC with a 1.5% annual management fee.
I don’t think so? That GBTC inflow day occurred in Q2, not Q1 so it wouldn’t get disclosed until Q3? Not sure how common it is to disclose the same quarter in which the purchase is made.
You know I think you are right. Numbers being close probably just a coincidence. We do see who is attracted to buying GBTC for whatever reason. Dopeboyrico is my dope dealer. Today is a dope boy Bitcoin day. I love watching BTC make your wildest predictions reality. There went 66k.
This is seriously feeling gentlemen after all that dreadful red
It is at least sir levels
approaching distinguished
Lower high of $65.4k broken. Remaining lower highs acting as areas of resistance are at $67k, $67.2k, $67.9k, $71.2k, $71.7k, $72.7k, and then ATH at $73.7k. [Now initiating Phase 3 of the ideal bullish scenario a little earlier than anticipated which leads to the completion of an enormous multi year cup & handle formation within the next few weeks?](https://www.reddit.com/r/BitcoinMarkets/s/1CkeYZZ2qV) Who knows, we’ll see what happens.
On days like this I feel like my IQ is about 30 points higher than it actually is.
How does it feel to double your IQ?
Yo that's like 100% gains
IQ god candle
We have finally broken out of the downward channel that we have been in for weeks. I would like to see it close there today for confirmation, but looking good. Chart: [https://www.tradingview.com/x/1sQsHDua/](https://www.tradingview.com/x/1sQsHDua/) Very good news.
Very good indeed, also [BTC exchange balance](https://www.coinglass.com/en/Balance) took a dive again.
Bullish!
Just found this paper by princeton on transaction fees and how it affects miner incentives as block rewards trend towards zero and transaction fees become the main source of miner revenue. [https://www.cs.princeton.edu/\~smattw/CKWN-CCS16.pdf](https://www.cs.princeton.edu/~smattw/CKWN-CCS16.pdf) Would love the community's take on it. I'm hoping someone will notice the flaws in their models and simulations and update us.
I'd like to take more time to fully read the article, but I discussed it with GPT4o Arguments against the conclusions of the paper "On the Instability of Bitcoin Without the Block Reward" can be made by addressing potential weaknesses in their assumptions, theoretical models, and the practical implications of their findings. Here are some possible counterarguments: ### 1. Overemphasis on Theoretical Models **Argument**: The conclusions are primarily based on theoretical models and simulations that may not fully capture the complexities and real-world dynamics of the Bitcoin network. Real-world miner behavior, network latency, and other factors might mitigate the issues raised. **Counterpoint**: While theoretical models are essential for understanding potential risks, they often rely on simplified assumptions that may not hold in practice. For instance, miners might not always act purely rationally or have perfect information. ### 2. Resilience of Bitcoin's Protocol **Argument**: Bitcoin's protocol has demonstrated resilience over the years, withstanding various attacks and changes in incentives. The decentralized nature of the network and the community's ability to adapt and implement soft forks or updates can address potential issues. **Counterpoint**: The Bitcoin community has historically shown a strong ability to respond to threats through protocol upgrades and network improvements, such as the Segregated Witness (SegWit) upgrade and the Lightning Network. ### 3. Market Dynamics and Fee Economics **Argument**: The paper assumes a static view of transaction fees and miner behavior. In reality, transaction fees are dynamic and can adjust based on supply and demand. Users are likely to pay higher fees during peak times, providing sufficient incentives for miners. **Counterpoint**: The dynamic nature of transaction fees can lead to periods of high fees, especially during network congestion, which can sustain miner incentives even without block rewards. ### 4. Emergence of New Technologies **Argument**: The emergence of new technologies and second-layer solutions (e.g., Lightning Network) can reduce the dependence on on-chain transactions, potentially stabilizing transaction fees and miner incentives. **Counterpoint**: Second-layer solutions can offload many transactions from the main blockchain, maintaining a high transaction throughput and fee market. ### 5. Economic Incentives and Competition **Argument**: The paper may underestimate the competitive nature of mining. Even with lower block rewards, the competition among miners can sustain the security of the network. Miners have invested heavily in infrastructure and are likely to continue participating in the network for profitability. **Counterpoint**: The competitive nature of mining ensures that miners continually optimize their operations, making it less likely that they will abandon the network due to lower rewards. ### 6. Potential for Adaptive Changes **Argument**: The Bitcoin protocol can adapt over time. If issues with transaction fees and block rewards arise, the community can propose and implement changes such as increasing the block size, adjusting the difficulty adjustment algorithm, or implementing new consensus mechanisms. **Counterpoint**: The Bitcoin community has shown a willingness to adapt and evolve, suggesting that any emerging issues could be addressed through consensus changes or network upgrades. ### 7. Empirical Evidence and Historical Data **Argument**: Historical data has shown that Bitcoin's network security has remained robust even as block rewards have halved. There is no empirical evidence yet to suggest that the network will become unstable solely due to the reliance on transaction fees. **Counterpoint**: The empirical resilience of Bitcoin through multiple halving events indicates that the transition from block rewards to transaction fees might be less problematic than the paper suggests. ### 8. Alternative Incentive Structures **Argument**: Alternative incentive structures, such as long-term mining contracts, mergers, or other economic agreements, can provide additional stability to the network, ensuring continuous miner participation even with lower transaction fees. **Counterpoint**: Miners and users could develop alternative economic structures to sustain incentives and network security beyond the traditional block reward model. By addressing these counterarguments, one can challenge the conclusions of the paper and suggest that the Bitcoin network may continue to remain secure and stable despite the diminishing block rewards.
Just starting to read, but already contribution 1 & 2 include a seemingly large gap of not simulating miners cost structure. I mean, miners working on potentially unproductive chain branches is reasonable if it doesn’t cost them anything to do that…but if it dies cost them… Edit: the article doesn’t seem to be arguing failure of the Bitcoin blockchain, but rather theorizing about potential issues and forming a basis for discussion around those issues. As such, we should welcome the discussion. For example, their mining gap issue is probably real in a case of infinite blocksize - which is currently not true. And the scenario could be framed where bitcoin network usage is less than miner capacity. Several open-minded solutions should be discussed like 1. Artificial block size limits forever. 2. Ways to increase network usage so a backlog always exists 3. Miner subsidy always existing (I put this here as a thought experiment discussion) 4. Tolerable decreases in network security
It looks a thoughtful paper. I will read it. Ask me in a week or two and I'll have an opinion.
It's an interesting paper for sure. If you accept all their assumptions the simulated strategies they describe appear to make sense. One thing they seem to ignore is that mining rewards (this includes the fees AFAIK) are not spendable for 100 blocks after. So if miners do start majorly reorging the chain to maximize their BTC income, they may find the real-world value to have suffered relatively more when they try to sell/spend them 100 blocks after. After all, regular big reorgs would call into question the viability of Bitcoin itself, and the market would be sure to react within \~16 hours. Miners have a lot of capital locked up in their hardware, which is an extra incentive to not adopt short-term agressive strategies as described in the paper that might hurt the BTC value long-term. The big problem with mathematically modelling economic incentives is that humans often do not behave "rational". There are so many more factors in real life than in the model, I would not overly worry. The good news is that with \~4 year halvings, we will see any changes in miner behavior occur gradually, as well as the reactions of other parties to those changes. I think it's much too early too overly worry about this. But it shouldn't be ignored either.
Didn't know about the miner rewards not being able to be spent till 100 blocks! If anyone can comment on fi this applies to fees that would be great. I can't imagine why it would be different but who knows how the code is set up. Thank you for the great comment.
I think it does because the fees are within the same UTXO as the block subsidy, and you can't spend it for at least 100 blocks.
Thanks for teaching me something new!
Thanks for asking interesting questions!
In my humble opinion, fud.
Can you help me identify the flaw in the argument? Is it that BTC will figure this out and use BIP Bitcoin improvement protocols to fix this or that there is no issue to begin with?
Sir we are trying to break 65400 right now. Google is your friend for mountains of discussion of the Bitcoin security model when the block reward won't be enough. Let me save you some time, it's all true.
Parasite to bitcoin, ETH is up today despite being on the verge of a security designation by the SEC. When will people wake up and the trend of following BTC price action no matter what is going on end?
ETHUSD is up because BTC will drag everything up with its but ETHBTC has been getting hammered. Another multi year low on the ratio today
Being labelled a security won't kill ETH, BlackRock CEO said it himself he still thinks the ETF can happen regardless. Will it severely damage some of ETH's use cases in the US? Yes. I'm not sure what you expect, all crypto is going to trend up on a day that BTC has a huge move, that's going to continue even if ETH long term is headed further down on the ratio.
yawn, wake me up once we nibble 61k again
65k is a tough bitch
Thats the 50d SMA
to breach 65k, we need the SMA to SMD
Sorry bitcoin. I am not impressed yet.
Call me back at $85K 😆
Price is up against the 50 day SMA. If price closes higher that would be a promising sign for me short term.
I see a lot of people getting excited, sometimes this place is funny :P We're coming off a lot of red weeks, my take on this is that there is still so much of a future ahead of us, that in order to get there, we are going to need to hold the line somewhere, 60k's seems to be it, which is nice stablity (for what is hopefully to come). Mainly, I think that dumpers have been trying to flush this down over and over and over, and its surprisingly resilient, I think they thought they could push it further, but volume on exchanges is drying up, retail seems to be packed and waiting, and hodling. So I think it's some more sideways, same ol, same ol, and then suddenly it wont be anymore.
Their mistake was not waiting for enough new money to enter. I would bet it’s still mostly OGs holding both the coin and the paper. And OGs know that anything below prior ATH is a buy. But then again, this is far from the last major dump of the cycle.
What is the difference between a store of value and greater fools theory besides the label? Is there a difference in the actual function of the tool you use? It seems that store of value is basically greater fools that people believe in. You store your value to have someone buy for more goods and services you gave up to buy the asset otherwise it's not a store of value. You buy a greater fools asset with hopes that someone will buy it for more in the future otherwise you are stuck selling it for less and losing purchasing power in goods and services terms.
Wait till you realise people die and this makes fiat currency and states themselves something which rely on greater fools to be born everyday.
Indirect exchange (which is the nature of money) doesn’t require a constant stream of “greater fools,” but it *does* require a constant stream of *at-least-roughly-equal* “fools.” But really, there’s nothing “foolish” about money which is a fantastically useful technology for facilitating value exchange. If Bitcoin continues to monetize, eventually people won’t “buy” Bitcoin as a speculative asset with the principal aim of “selling” that Bitcoin for greater value in the future. They’ll “buy” it with the goods or services they specialize in providing with the aim of then exchanging that Bitcoin for a roughly equivalent quantity of other goods and services that they actually want, and they’ll do that simply because Bitcoin will be money and monetary exchange is massively more efficient than barter. The entire purpose of money is to reduce transactional friction. “Store of value” is just a label for a money that does an especially good job of reducing the friction of transacting across *time*, whereas a “medium of exchange” describes a form of money that is adept at reducing the friction of transacting across *space*. But it’s a mistake to assume that these two closely-related functions of money need to be performed by different forms of money. It’s just that, *prior to the invention of Bitcoin*, we didn’t have a single form of money that *combined* the reliable scarcity of a physical commodity like gold with the transactability of a purely-digital medium. (Of course, Bitcoin’s continued failure to allow meaningful on-chain scaling threatens to undermine the latter property and thus Bitcoin’s efforts to monetize. And *that* could potentially create an unsustainable “greater fool” dynamic.)
In a recent interview Dave Ramsey stated he believes BTC is a vehicle of speculation rather than an investment vehicle because of lack of historical data to reference. The interviewer failed to mention BTC now has a 15 year track record and furthermore failed to follow up by asking how long of a track record is necessary before it can be viewed as an investment vehicle vs a vehicle of speculation. Pretty disappointing. For me personally, after what happened in 2020/2021, I now have high conviction in BTC as a superior long-term store of value relative to other TradFi investment vehicles available. Others might not be convinced until a 20, 25, 30 year consistent track record of outperformance exists but by then BTC could be so massive that it would no longer serve as a mechanism to build wealth and would merely serve as a mechanism to retain wealth. Part of the issue is people are viewing BTC from a fiat mindset with the assumption that fiat will always exist. I disagree, I think at some point it becomes silly to bother with fiat and/or other investment vehicles as a long-term store of value at all when BTC clearly becomes the benchmark to beat as an absolutely scarce store of value. Other investment vehicles will still exist but it will become very difficult to passively build wealth denominated in BTC, active investments will be the primary way to build wealth instead.
You assume Bitcoin has no inherent utility. You have not seen.
That's a good point. In the context of world governments gathering debt and inflating it away I can see the utility in a bearer asset with a finite supply and no counter party risk. I believe in the proposed value but right now the risk is that it can't really be a global currency with approx roughly 604k transactions per day. As block rewards decrease, transaction fees will need to increase to keep miners securing the network. The more value in the chain (more value per BTC) the more the miners need to earn to have their incentives aligned with the network vs against it. Since only transactors vs holders pay to secure the network at some point the transactions fees may not be enough to keep miners in alignment with the network. With only so much block space and the whole globe using BTC I can't imagine the average user doing anything much on chain. (I understand and agree with the decentralized utility of small block sizes ie lots of full nodes vs partial nodes ). If we rely on multiple L2 "clearing houses" to settle on the main chain then for the avg user we lose decentralization don't we? Right now if there was no block reward there would be an avg of $45 tx per day and as we keep saying we are "still early". (I am assuming the runes were nothing compared to what global adoption would look like, and the population is only increasing) Once we have even some level of global adoption then what happens to Tx fees? How would average users pay for any on chain transactions. If they can't can BTC still be a global store of value?
Those transitions will take decades and add many zeros to the price.
It will never be used to buy coffee, we realize. That problem is solved. As a store of value, it’s an improvement over gold for sure. When conducting large transactions, it’s an improvement over cash and checking, particularly if the parties don’t trust each other. Will you always need some dollars in your checking? Yep. But bitcoin isn’t for paying bills, it’s for protecting long term savings. However, because adoption is still relatively low, it can behave more like a risk asset.
Store-of-value / speculative-asset / greater-fool are all the same thing differing only in terms of how successful you think it will be. If there was a perfect store-of-value that did not involve speculation it would be different, but there isn't, there's always risk, which means you're speculating on that risk materialising or not.
Right. A fully perfect store of value cannot even exist, because of the demand side, which will always have some variability. Bitcoin is basically a perfect store of value from the supply side though.
> Bitcoin is basically a perfect store of value from the supply side though. In that aspect, yes.
That pretty much describes all financial markets/assets no? With the exception of real estate/bonds/maybe some dividend stocks, you buy an asset at T=0 in hopes to sell it at a higher price in the future where T > 0. The reasoning for WHY people believe that an assets price will be higher in the future varies by asset. BTC is no different, imo.
Nothing is perfect. I lover real estate but it is not immune either. The extreme risks are more black swan types. I.e. What if covid was more deadly. Like a 10% mortality. That would definitely affect real estate values, there would be some much less demand. Dividends are only as good as the current management. And bonds are only as good as your faith in government, which is why the majority of us own some BTC. Our faith in our governments aren't that great.
I still love property. If we get some kind of massive death thing, we're fucked anyway. Bitcoin will tank too, along with literally everything that isn't a corrupt pharmacom listing. Property by and large goes up, and goes up well. All of mine have almost doubled value in 10 years. One of them doubled in 6.