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Old 01-06-2022, 10:33 AM   #21
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I bought some Ether just on a whim. I am down about 16% in about 2 1/2 months. I'm glad it wasn't much! I expect that the volatility will be high, but in the long run it will rise. I just hope I am still around then!
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The Cryptocurrency Thread 2
Old 01-06-2022, 11:42 AM   #22
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The Cryptocurrency Thread 2

I’d be interested in Ether, except I can’t get past the fact that its supply is not fixed, like Bitcoin. How do others resolve this for themselves? Also, there is a major transition in the Ethereum network coming up this year that I haven’t studied so don’t understand yet.
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Old 01-06-2022, 02:54 PM   #23
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I’d be interested in Ether, except I can’t get past the fact that its supply is not fixed, like Bitcoin. How do others resolve this for themselves? Also, there is a major transition in the Ethereum network coming up this year that I haven’t studied so don’t understand yet.
ETH is currently deflationary. Absent other market forces this is a good development.
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Old 01-06-2022, 03:06 PM   #24
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ETH is currently deflationary. Absent other market forces this is a good development.
Would you please explain the link ..
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Old 01-06-2022, 03:16 PM   #25
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I was wondering about the ‘hard cap’ I kept hearing bitcoin has and the why or how that cap was created. I found that while it seems to be a fairly significant parameter in the system it actually could be changed if there was consensus to increase that cap.

The article is linked below and explained in the last segment of the piece.

It sounds like this is not a ‘hard cap’ but a ‘currently agreed up limit’. If so, doesn’t that somewhat diminish it’s correlation to a truly physical asset like gold?

https://river.com/learn/can-bitcoins...on-be-changed/
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Old 01-06-2022, 04:28 PM   #26
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crypto 20 is the only index fund I know of but not available to US citizens

https://invictuscapital.com/en/crypto20
This is exactly what I'd be interested in if it were available in the US. Do you (or anyone else who's reading this thread) know why something like this passive crypto index fund isn't available in the US?
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Old 01-06-2022, 05:41 PM   #27
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This is exactly what I'd be interested in if it were available in the US. Do you (or anyone else who's reading this thread) know why something like this passive crypto index fund isn't available in the US?


Invictus do not want to deal with Us regulation right now even though the fund has been running successfully for four years. A US citizen can not officially register but as the C20 token is traded on several small exchanges it is still possible to buy it as an individual. But you have to be a bit of a crypto nerd to work out all the steps and they are switching from the Ethereum network to Polygon that would need a sell and rebuy for US folk. So not exactly an easy buy.

The main difficulty is that US regulation has not clarified what is a security vs property etc so these fund companies are waiting.

I do currently own some C20
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Old 01-06-2022, 05:44 PM   #28
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The most accessible crypto funds in the US are from Grayscale. I own

GBTC
ETHE

In my TDAmeritrade account. Currently at a discount but with 2% annual fees.
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Old 01-06-2022, 05:50 PM   #29
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I was wondering about the ‘hard cap’ I kept hearing bitcoin has and the why or how that cap was created. I found that while it seems to be a fairly significant parameter in the system it actually could be changed if there was consensus to increase that cap.

The article is linked below and explained in the last segment of the piece.

It sounds like this is not a ‘hard cap’ but a ‘currently agreed up limit’. If so, doesn’t that somewhat diminish it’s correlation to a truly physical asset like gold?

https://river.com/learn/can-bitcoins...on-be-changed/


Bitcoin can be ‘cloned’ via a hard fork and have an alternative set of software code but it will no longer be Bitcoin. It will have another name eg BitcoinCash and will have to build its own market share.

Think of it as staff leaving one company to set up another competitor because they think they know better.

Bitcoin has a theoretical 21 million coin limit. But 90% are already mined. It will take 100+ years to get to the last one and millions have already been lost so 15 mill max is more realistic now
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Old 01-06-2022, 06:46 PM   #30
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I was wondering about the ‘hard cap’ I kept hearing bitcoin has and the why or how that cap was created. I found that while it seems to be a fairly significant parameter in the system it actually could be changed if there was consensus to increase that cap.

The article is linked below and explained in the last segment of the piece.

It sounds like this is not a ‘hard cap’ but a ‘currently agreed up limit’. If so, doesn’t that somewhat diminish it’s correlation to a truly physical asset like gold?

https://river.com/learn/can-bitcoins...on-be-changed/


Why would there ever be a consensus to destroy the very quality that investors use it for?
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Old 01-06-2022, 07:27 PM   #31
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My GBTC story.



6/9/2017 Bought 2 shares @ $480.00/share
11/27/2017 Sold 1 share @ $1,341.00/share


Decided to hold on and play with the house money to see if bitcoin went to the moon or back to zero. GBTC since then split to 91 shares and I bought 9 more at $31.94/share to even the share total at 100.

As of today it's worth $3,194.00 and up just over 300%. It WAS over 400% until the latest retreat. Anyway, now that I'm playing with house money it will be fun to watch where it goes. I hear Grayscale will convert it to an ETF when it's possible and that should be good for the fund value.
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Old 01-06-2022, 08:07 PM   #32
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Why would there ever be a consensus to destroy the very quality that investors use it for?


That point was made in the story and I do understand why it isn’t likely to happen. The response from 3d makes sense as well. A cloned or hard fork isn’t exactly the same as bitcoin.

My only point is that there’s really no limit. Only an agreement on not changing the variable in the source code and an agreement regarding the sanctity of it’s name. It’s really an agreement of worth between large numbers of people. It’s another example of the type of agreement described in Sapiens: A Brief History of Humankind. ‘Money’ is what we agree it is. Whether that’s seashells, beads, gold coins, paper bills, or digits in a computer.
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Old 01-06-2022, 08:09 PM   #33
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ETH is currently deflationary. Absent other market forces this is a good development.
The London upgrade to Ethereum introduced a burn mechanism. Basically ETH is created by the folks who mine it to validate transactions and the burn takes coins out of circulation. You can see the coin supply over time here: https://etherscan.io/chart/ethersupplygrowth

That article indicated that we saw a couple deflationary weeks. Now that I look at the whole curve it looks like it's still slightly inflationary, though you can see the knee in the curve.

From my understanding the next big change to ETH will cause it to go from proof of work to proof of stake and will then become a true deflationary coin.

Here is a good description of PoW and PoS. Ms. Alden isn't terse, but she's wicked smart and worth reading.
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Old 01-06-2022, 11:56 PM   #34
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That point was made in the story and I do understand why it isn’t likely to happen. The response from 3d makes sense as well. A cloned or hard fork isn’t exactly the same as bitcoin.

My only point is that there’s really no limit.


If you have to hard fork to change the code it is no longer Bitcoin.

If a path is 1 mile long and someone forks and creates a 2 mile path to the same destination you do not complain that the original path has no distance limit. The fork is really a different thing.

Anyone buying Bitcoin on sale? Or just scared where it is heading like me.
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Old 01-07-2022, 07:29 AM   #35
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[mod edit]

anywho, towards the end of 2021 i started DCA into crypto. as of right now, it's about 1% of my total portfolio.

a lot of people may be distracted by all the meme coins getting created and dismiss the entire thing as speculative, but there is real value being created.

here's a simple example. binance and crypto.com have their own coin. seems silly. but is it really? for them, is it better for people to buy shares of their company on a stock exchange, or is it better to buy their coin? value of shares go up and down just like the value of a coin.

NFTs are getting bad rap right now because people are paying obscene amounts of money for pictures of cats and dogs. but the underlying technology has real value, being able to prove ownership. this can replace legal documents.

all of this can go to nothing, so in a sense, it is speculation. but we can't deny that there's also real innovation happening here.
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Old 01-07-2022, 07:38 AM   #36
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What would be the difference between "bitcoin ETF" vs actually having bitcoins?
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Same as gold vs a gold ETF. You do not have personal control over your bitcoin and you pay a fee for someone else to look after it for you
Not quite, because a gold ETF has a deposit of real gold. ETFs are not allowed to hold Bitcoin, so instead they hold Bitcoin futures.

Futures have an expiration date, so when that date arrives, the Bitcoin ETF needs to sell it's existing holdings and buy new Bitcoin futures. There can be costs involved which are not incurred by Bitcoin holders or other ETFs.

BITO was the first Bitcoin futures ETF, launched just months ago. Investors poured a billion into it, and mostly ignored the 2 similar ETFs that followed.
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Old 01-07-2022, 07:45 AM   #37
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I invested a small percent in Bitcoin and Ethereum last year. Crypto's volatility has allowed it to sometimes earn 4x, with the risk it could drop -80% or more. So on average that did seem like a better than normal odds to beat the stock market.

But notice how BTC followed the Mar 2020 crash, and in general follows events that impact the U.S. stock market. So if the stock market is in trouble, so is Bitcoin.

I've sold all my crypto because I think it's a risky year for the stock market, and therefore for crypto. Inflation and valuations are high, and the Fed seems to change tactics monthly. It's never a guarantee one way or the other, but if it's a riskier year for the stock market, I'd rather not ride a multiple of that risk downwards. So I'm going to wait for lower valuations and risk and then buy back into BTC and ETH.

(I've also closed my leveraged S&P 500 positions and reduced my holdings in various aggressive growth stocks. But I still retain a high allocation to equities - I'm not avoiding the market, just avoiding higher risk).
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Old 01-07-2022, 08:15 AM   #38
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The London upgrade to Ethereum introduced a burn mechanism. Basically ETH is created by the folks who mine it to validate transactions and the burn takes coins out of circulation. You can see the coin supply over time here: https://etherscan.io/chart/ethersupplygrowth

That article indicated that we saw a couple deflationary weeks. Now that I look at the whole curve it looks like it's still slightly inflationary, though you can see the knee in the curve.

From my understanding the next big change to ETH will cause it to go from proof of work to proof of stake and will then become a true deflationary coin.

Here is a good description of PoW and PoS. Ms. Alden isn't terse, but she's wicked smart and worth reading.


Thank you, especially for the Alden article. Do you ever get the feeling that the best minds one has ever encountered are working in the crypto space? I am impressed again and again. I am not that smart but my judgement has served me reasonably well, and this essay makes me want to hold off on ETH until after this transition to POS is more complete.
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Old 01-07-2022, 10:27 AM   #39
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Crypto Currencies in the last 2 months have lost 1/3 or 1 trillion in value, this is 5% of US GDP. If the US stock market were to merely fall back to the historical valuation of stock market to GDP it would need to fall 60% to 1920 which would be still 3X over the 2009 valuation and equal to the 2020 valuation. Companies falling the fastest right now are the companies with the highest sales to stock price ratings as interest rates rise.

Be interesting to see how Crypto will fare in that environment, were it to occur. I will still hold a minimum of 5% of my portfolio in Bitcoin/ETH going forward.
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Old 01-07-2022, 11:30 AM   #40
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Not quite, because a gold ETF has a deposit of real gold. ETFs are not allowed to hold Bitcoin, so instead they hold Bitcoin futures.

Bitcoin ETF’s do not hold futures. They hold Bitcoin.

The US does not have a Bitcoin ETF. Other countries do.

The US has GBTC which is a close end fund that holds Bitcoin.
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