Bitcoin - World's 30th largest Currency

[sengsational]

Yeah, but you can wipe with a Beanie Baby.

 

[NYEXPAT]

The second half of this week presented some great arbitrage opportunities for the little guy, let's see how long it lasts!

 

[97guns]

Bitcoin knocking on the door of $19k

 

[Texas Proud]

Was I surprised... I was at the mall and saw an ATM looking machine that sold bitcoin!!!!

 

[Running_Man]

I use to also believe this about fiat government money (USD). Then someone reminded me that USDs are different. They do have inherent value. The government that backs them also has the ability to tax. The ability to tax is of very high value. To some degree, the ability to tax supports the value of fiat currency. Or at least it should work that way.

Now you have arrived at what I was stating at the start of this thread. In 2009 when bitcoin was invented there was 1.5 trillion of M1 for 14.964 Trillion of US GDP. 9.97 $’s of GDP for each US Dollar in M1

By the end of 2016 M1 had expanded, due to Central Bank propping of economy of 3.1 trillion, yet GDP only increased to 18.569 Trillion. 5.99 Dollars for each dollar of US GDP. This has only weakened further in 2017

So the value of the USD should have declined by 40% yet inflation has been virtually non-existent and the money is flowing not into goods purchased but stocks, bonds and things like bitcoin. Bitcoin is not a single outlying global lunacy but an unintended consequence of central bank inflation of the money supply. With the price increase in stocks and bonds - with the Fed a direct competitor of the individual bond holder, is it any wonder money would flow to other assets in an attempt to gain value?

Further if bitcoin, through this price increase that is ongoing, becomes a needed currency in the eyes of enough people, even if they are not the enlightened people on this forum; holding tight to their US dollar assets that are “safe”, the total value of bitcoin has to increase to the trillions of US dollars, because unlike Beanie Babies there are only so many bitcoins to go around. And as that value grows, the Fed becomes unable to do anything about bitcoin because the popping of that bubble will cause too large of a loss in value and create unpredictable results. There is 13 trillion of dollars that are effecting assets everywhere since 2009 by the monetization of debt by the Fed (2016 M1 X the 2009 GDP to M1 less 2016 GDP) and actual values are running past that mark (Russell 3000 is up over 11 trillion from 2009 - 2017 and the stock market is exploding now).

Is there any doubt as to why Japan is the biggest purchaser of bitcoin? Their Central bank buys nearly 100% of all government debt and works to keep interest rates under 0.1%.

Bitcoin is merely the currency canary in the coal mine. But bitcoin was and is never the problem the intentional explosion of money in the world in an attempt to prop up economies has created this, and just like the US housing pricing, when this asset bubble (stock, bonds, bitcoin etc) pops, everyone will look to the entity that creates the bubble to save them from it’s popping. At some point there is only so much gum a central banker can use to blow bubbles.

 

[CaliforniaMan]

One aspect of the bitcoin bubble that is never mentioned is the danger that it poses to the general economy. As more of the general public buy bitcoins with money they cannot afford to lose, the more a bitcoin bubble burst will hurt everyone, and not just for those who bought bitcoin. It has the potential to drag down the entire economy just as the mortgage crisis did, even for those who were not overextended on their mortgages. A bitcoin bubble popping may just be a joke for most of us now, but it has the potential, if this continues, of dragging us into a recession.

In addition bitcoin can never be a currency. For that to happen it would have to have a stable value. But when the value stabilizes, people will sell because they are it it for the price increase. When it stops increasing they will sell, and more will sell and the bubble will pop.

The question I have is how soon or late that will happen. The longer this goes on before the price reaches its limit, the worse it will be for the world economy. That nobody mentions this perplexes me.

 

[FUEGO]

The question I have is how soon or late that will happen. The longer this goes on before the price reaches its limit, the worse it will be for the world economy. That nobody mentions this perplexes me.

I'm not too worried yet. Total market cap of the top 100 cryptocurrencies is around $0.6T (with bitcoin about half that). And most of that $$ is recent gains from those holding bitcoins and gaining 10-20x their initial investment. Bubble popping will certainly have horrible localized impacts (all those folks that mortgaged their houses to buy a dozen bitcoins at $19000 each for example). But I think more muted impacts on a macro scale (people do dumb stuff all the time with leverage and then it blows up and they lose their house).

I agree with what you said about the mechanism that would lead to a bitcoin crash. Once this puppy stops going up, people will realize it's boring and won't make them 10x each year. It goes flat, maybe down some. It stays that way. Eventually people flood out of bitcoin once it loses its luster. Maybe it dives to a few hundred dollars per coin, maybe it stays in the thousands or at today's levels. No way to really know what it's worth.

There are a lot of technical hurdles it faces in the not so distant future. One is the ridiculous cost and delay in executing a transaction. Last I checked it was ~$16 to get a typical transaction posted within 30 minutes or so. Lightning Network will theoretically solve that bottleneck but who knows. All these miners are using up increasing shares of the world electricity supply and it's only going to increase as the difficulty of bitcoin mining increases (per the core code).

 

[Running_Man]

One aspect of the bitcoin bubble that is never mentioned is the danger that it poses to the general economy. As more of the general public buy bitcoins with money they cannot afford to lose, the more a bitcoin bubble burst will hurt everyone, and not just for those who bought bitcoin. It has the potential to drag down the entire economy just as the mortgage crisis did, even for those who were not overextended on their mortgages. A bitcoin bubble popping may just be a joke for most of us now, but it has the potential, if this continues, of dragging us into a recession.

In addition bitcoin can never be a currency. For that to happen it would have to have a stable value. But when the value stabilizes, people will sell because they are it it for the price increase. When it stops increasing they will sell, and more will sell and the bubble will pop.

The question I have is how soon or late that will happen. The longer this goes on before the price reaches its limit, the worse it will be for the world economy. That nobody mentions this perplexes me.

You have this exactly wrong, if bitcoin is going to be a currency, and if not bitcoin it will eventually be some other crypto currency that becomes an official currency on the internet through global consensus whether our forum likes it or not, the currency has to get into the trillions of US dollars to become valid. As the size increases it’s importance increases and the chances of it being overtaken decrease. It was 1% of the total US currency 6 months ago it is at 10% of total value of US currency today. At $190,000 per bitcoin it becomes equal in terms of the US dollar M1 currency.

People sell the bitcoin everyday, currently between 400,000 and 500,000 bitcoins change hands every day (7.6 Billion dollars per day). This is double the bitcoins transacted from a year ago with a 30X the value of total transactions in the past year, though the supply has increased only 3.75% in that time. At current valuation that is 3.5 trillion in annual transaction value. But what is being exchanged is one currency for another on an agreed upon value of bitcoin. Unlike the housing industry there is not debt attached to the bitcoin levered at 100% of the value, forcing the sale of an underlying asset.

As you can see plainly by actions of major banks in the past weeks, they are actually winding them into their realm as opposed to casting bitcoins out as dangerous.

 

[redduck]

=FUEGO;1980683
... Bubble popping will certainly have horrible localized impacts (all those folks that mortgaged their houses to buy a dozen bitcoins at $19000 each for exampletheir house).

Just askin': Anybody here know of anyone who has mortgaged their house to buy bitcoins?

 

[Running_Man]

Just askin': Anybody here know of anyone who has mortgaged their house to buy bitcoins?

I have asked over 100 people and not a single person I know has a bitcoin

 

[Texas Proud]

One aspect of the bitcoin bubble that is never mentioned is the danger that it poses to the general economy. As more of the general public buy bitcoins with money they cannot afford to lose, the more a bitcoin bubble burst will hurt everyone, and not just for those who bought bitcoin. It has the potential to drag down the entire economy just as the mortgage crisis did, even for those who were not overextended on their mortgages. A bitcoin bubble popping may just be a joke for most of us now, but it has the potential, if this continues, of dragging us into a recession.

In addition bitcoin can never be a currency. For that to happen it would have to have a stable value. But when the value stabilizes, people will sell because they are it it for the price increase. When it stops increasing they will sell, and more will sell and the bubble will pop.

The question I have is how soon or late that will happen. The longer this goes on before the price reaches its limit, the worse it will be for the world economy. That nobody mentions this perplexes me.

I do not think bitcoin is big enough to drag down the entire economy.... sure, it would hurt the people who invested, but I see no connection to the rest of the economy...

Remember, this is storing money, so they were not spending it anyhow... so even when they are poorer when it burst, they will still have a job etc. etc....

 

[NW-Bound]

Even when an asset class gets, say $100B knocked off its valuation, it is not really $100B worth of money lost. Only the late comers lose a lot of money.

People who got in early and paid dirt cheap for the same thing only lose their gain, as their initial principal is a lot smaller than the face value of their holding at the peak of the market.

A fire or a hurricane sweeping by an area destroys a lot of real assets by demolishing houses. In contrast, other asset valuations are often just numbers on paper.

 

[redduck]

I called Vanguard and asked them if I could buy BITcf (a bitcoin penny stock) through them as I didn't know the rules regarding buying a stock that was on the grey market. He looked it up, made an odd-sound gasp and said customers could buy grey-market stocks through Vanguard. Then, I guess he looked more closely and saw the stock was designated with a black flag. He said that means customers could not buy the stock through Vanguard because a black flag means "buyer beware." Nice to hear that Vanguard has standards (even if don't). I did explain to him that I had no intention of buying the stock in any case (almost completely true). This week the sucker rose Monday 4%; Tues. 16%; Wed. 19%; Thurs. 55%, before falling back on Friday when it disappointed by only rising 47%.
This bitcoin stuff sure is interesting.

 

[NW-Bound]

You made me curious. So, I logged on to my Schwab account to look.

Yes, there it is, First Bitcoin Capital Corp, BITCF, grey market. Last traded at $1.55. Most recent high was $3.15 in Aug 2017. Most recent low was $0.0018 (less than 0.2c) on Sep 2017. Schwab site shows nothing about this company, like market cap, etc... Of course there would be no earning.

I started a buy order entry to see if Schwab stopped me. Nope, it did not care. I could have clicked "submit", and my order would be pending for Monday.

Buy, buy, buy?

 

[redduck]

Courtesy of CNN Financial re: BITCF

Today’s Trading
Previous close1.55
Today’s open1.10Day’s range1.10 - 1.88
Volume2,120,573
Average volume (3 months)1,240,036
Market cap$472.7M
Data as of 3:58pm ET, 12/15/20

 

[NYEXPAT]

Courtesy of CNN Financial re: BITCF

Today’s Trading
Previous close1.55
Today’s open1.10Day’s range1.10 - 1.88
Volume2,120,573
Average volume (3 months)1,240,036
Market cap$472.7M
Data as of 3:58pm ET, 12/15/20

I do not understand what this company has to do with bitcoin?

From the companies own statements:

About First Bitcoin Capital Corp



First Bitcoin Capital Corp is engaged in developing digital currencies, proprietary Blockchain technologies, and the digital currency exchange- Bitcoin Exchange – Your Source For Secure Bitcoin Exchange. We see this step as a tremendous opportunity to create further shareholder value by leveraging management's experience in developing and managing complex Blockchain technologies, developing new types of digital assets. Being the first publicly-traded cryptocurrency and blockchain-centered company (with shares both traded in the US OTC Markets as well as crypto exchanges under the unified symbol BITCF) we want to provide our shareholders with diversified exposure to digital crypto currencies and blockchain technologies. At this time the Company owns and operates more than the following digital assets under development:

Bitcoin Exchange – Your Source For Secure Bitcoin Exchange cryptocurrency exchange, registered with FinCEN.

https://www.omniwallet.org/assets/details/309 Latest Active ICO for Loyalty (FLY)

www.altcoinmarketcap.com market capitalization for all cryptocurrencies with up and down voting by altcoin communities.

www.Alphabitcoinfund.com world's first crypto ETF.

Strain ID » Identify Your Strain cannabis strains genetic information depository on decentralized Blockchain.

iCoinNews real time cryptocurrency and Bitcoin news site.

Bitminer providing mining pool management services.

www.2016coin.org online daily election coverage and home page for $PRES, $HILL, $GARY& $BURN -commemorative presidential election coins.

BITCannPay » Payment Solutions Open Loop merchant services for dispensaries.

List of most Omni protocol coins issued on the Bitcoin Blockchain and owned by the Company: OmnExplorer.info - Address Lookup

Second Omni wallet owned by CoinQX reflecting our airline mileage tokens issued: OmnExplorer.info - Address Lookup

Third (managed) Omni wallet including assets owned and/or managed by COINQX: OmnExplorer.info - Address Lookup

 

[Jerry1]

I do not understand what this company has to do with bitcoin?

From the companies own statements:

About First Bitcoin Capital Corp



First Bitcoin Capital Corp is engaged in developing digital currencies, proprietary Blockchain technologies, and the digital currency exchange- Bitcoin Exchange – Your Source For Secure Bitcoin Exchange. We see this step as a tremendous opportunity to create further shareholder value by leveraging management's experience in developing and managing complex Blockchain technologies, developing new types of digital assets. Being the first publicly-traded cryptocurrency and blockchain-centered company (with shares both traded in the US OTC Markets as well as crypto exchanges under the unified symbol BITCF) we want to provide our shareholders with diversified exposure to digital crypto currencies and blockchain technologies. At this time the Company owns and operates more than the following digital assets under development:

I'm not sure what it has to do with Bitcoin specifically, but it is a company that is more in line with my thinking. I most likely missed the boat on Bitcoin. However, if this is the next "thing", then there should be many down stream impacts where money can be made. Having a company that has expertise and is looking at this holistically, may be one way to play this. Of course, I know nothing about this particular company, but I will try to do some research on it and, much like Bitcoin was early on, the stock is cheap enough that a few hundred shares is like gambling. I'm not a high roller, but heck, I like to gamble.

 

[FUEGO]

Courtesy of CNN Financial re: BITCF

Today’s Trading
Previous close1.55
Today’s open1.10Day’s range1.10 - 1.88
Volume2,120,573
Average volume (3 months)1,240,036
Market cap$472.7M
Data as of 3:58pm ET, 12/15/20

Re: BITCF - pretty sure it's a joke on all of us. Replace the F with an H and you'll see what it's going to make everyone who pays the current price.

 

[NYEXPAT]

I'm not sure what it has to do with Bitcoin specifically, but it is a company that is more in line with my thinking. I most likely missed the boat on Bitcoin. However, if this is the next "thing", then there should be many down stream impacts where money can be made. Having a company that has expertise and is looking at this holistically, may be one way to play this. Of course, I know nothing about this particular company, but I will try to do some research on it and, much like Bitcoin was early on, the stock is cheap enough that a few hundred shares is like gambling. I'm not a high roller, but heck, I like to gamble.

Started in 1989 as a small Canadian mining company trading on the Toronto exchange (tell you anything). Go for it, but if I wanted cheap I would put my money in Ripple. If I wanted stock I would look at John McAfee's new company.

Really interesting to me is the proposed deal with Hernando de Soto and Overstock.com to use blockchain to create a worldwide property registry.

Besides being one of the worlds great economists, He is one of our great FIRE examples!

 

[redduck]

I do not understand what this company has to do with bitcoin?

From the companies own statements:

About First Bitcoin Capital Corp

First Bitcoin Capital Corp is engaged in developing digital currencies, proprietary Blockchain technologies, and the digital currency exchange-

Other than it's name, I'm not sure it has anything to do with bitcoin. I just picture two or three guys sitting around figuring how to make big, easy and money and coming up with the name BITcoin Capital and using the word "developing" as often as they could.

This whole thing sounds so much like the Dot.com era. Lots of those companies had nothing to sell but the dot.com after their names. And, that was enough. The same thing happened in the South Sea Bubble era. But, what this really sounds like (to me) was:

 

[redduck]

The Mississippi Company Adds Fuel to the Fire

Not long after the emergence of the SSC, another British company, the Mississippi Company, established itself in France. The company was the brainchild of an exiled Brit named John Law. His idea wasn't so much based in trade, but in switching the monetary system from gold and silver into a paper currency system. The Mississippi Company caught the attention of all the continental traders and gave them a space to put their hard-earned dollars. Soon the worth of the Mississippi Company's stock was worth 80 times more than all the gold and silver in France. Law also began collecting defunct companies to add to his massive conglomerate.
This success on the continent stirred British pride, and, believing that British companies could not fail, British investors were desperate to invest their money. They were blind to many indications that the SSC was run too poorly to break even (whole shipments of wool were misdirected and left decaying in foreign ports), and people wanted to buy even more stocks. The South Sea Company and others made a point of giving people what they wanted. The demand for investments caused IPOs to sprout out of everything, including companies that promised to reclaim sunshine from vegetables and to build floating mansions to extend Britain's landmass. They all sold like mad.


Read more: Market Crashes: The South Sea Bubble https://www.investopedia.com/features/crashes/crashes3.asp#ixzz51XVggDsU
Follow us: Investopedia on Facebook

 

[Running_Man]

BITCF - is like an index fund of cryptocurrencies.

They are a miner of bitcoin and several other crypto currencies, are creating software to sit on top of cryptocurrencies in order to allow transactions to occur and hold all their cash in various cryptocurrencies. It is not a bitcoin play as much as a company play that they will be able to use the technology. So far in the first nine months they made about 2 cents per share in earnings from cryptocurrencies. One could assume since they held $800,000 in crypto currencies they would have a gain of about 1.6 million in the fourth quarter so far about 5 cents per share. So at 7 cents yearly earnings it is selling for about a 250PE. A vary expensive way of getting exposure to the entire cryptocurrency universe and hoping their products become a standard to use.

Keep in mind that the originator of bitcoin envisioned taking until 2035 for bitcoin to be fully capable of being utilized. There is plenty of time for crashes and comebacks.

 

[Running_Man]

The Mississippi Company Adds Fuel to the Fire

Not long after the emergence of the SSC, another British company, the Mississippi Company, established itself in France. The company was the brainchild of an exiled Brit named John Law. His idea wasn't so much based in trade, but in switching the monetary system from gold and silver into a paper currency system. The Mississippi Company caught the attention of all the continental traders and gave them a space to put their hard-earned dollars. Soon the worth of the Mississippi Company's stock was worth 80 times more than all the gold and silver in France. Law also began collecting defunct companies to add to his massive conglomerate.
This success on the continent stirred British pride, and, believing that British companies could not fail, British investors were desperate to invest their money. They were blind to many indications that the SSC was run too poorly to break even (whole shipments of wool were misdirected and left decaying in foreign ports), and people wanted to buy even more stocks. The South Sea Company and others made a point of giving people what they wanted. The demand for investments caused IPOs to sprout out of everything, including companies that promised to reclaim sunshine from vegetables and to build floating mansions to extend Britain's landmass. They all sold like mad.


Read more: Market Crashes: The South Sea Bubble https://www.investopedia.com/features/crashes/crashes3.asp#ixzz51XVggDsU
Follow us: Investopedia on Facebook

John Law’s idea, which I presume are posted here to mock trading in speculative instruments, were to create capital stock markets, paper currency and a central bank that could control the money supply instead of gold and silver being the sole instrument of currency, at the direction of the nation’s (France) control. Previously nations had used gold, silver and debt to finance governments and process debt.

After issuing the shares, he used the money to offer low interest loans to industry to build in France in an attempt to prop up the economy. All of his ideas would today be called Central Bank standard moves. But alas at that time the shares could be redemeed at face value for coin, something current central bankers have been clever to prevent, but France did not have enough gold and silver to buy the shares back, and the first stock market fiasco was born.

John law was exiled and lived a life in poverty thereafter a shunned man. However this was the start of government controlled stock markets and central banks which had previously been private affairs and led directly to our present system which is so prized.

 

[redduck]

John Law’s idea, which I presume are posted here to mock trading in speculative instruments....

No, not to mock at all. I don't know enough about this topic (I'm not even sure what exactly the topic is) to even consider mocking. I just thought I saw similarities in the manias.

 

[Jerry1]

A vary expensive way of getting exposure to the entire cryptocurrency universe and hoping their products become a standard to use.

But if even one of their products become a standard to use, wouldn't it actually be a very cheap way of getting exposure?

I'm not talking about doing/buying something crazy, but if there really is "the next thing" happening, I want to try to get in on it. I'm not going to squander a life's savings on it, but when I here/see people say that "if you'd have bought Amazon" or whatever in the beginning, a $1,000 would be $1M today, I want to be on the lookout for the next Amazon. Some people had the foresight to see these new things. How did they do that? Dumb luck?