Crypto Currency Thread (Vol.2)

[Condi]

dimots said:

Are you even living in the same reality as the rest of us? Billions being transferred to the blockchain every week.

Billions being transferred out then, else the price would be exponentially upwards which it isn't.

You forget, or ignore, that for every person buying there is a person selling.

[Condi]

greengreenwood7 said:

You really don't understand crypto / digital projects, or the links between say BTC and it's various proxies; Mentioned umpteen times in this thread Microstrategy, a 'proper' public company to name just one has moved from $250 a year ago to a high this year of $1900 and is now around the $16-1700 mark.

And you attribute that to their BTC holding? Why? It makes no sense at all. Why would you be paying a premium to hold Microstrategy against just buying the ETF, or BTC itself? Hell, if you thought it was just going up trade options, CFDs or leveraged products.

BTC is finance and trading for idiots and meme investors.

[RichTT]

Condi said:

And you attribute that to their BTC holding? Why? It makes no sense at all. Why would you be paying a premium to hold Microstrategy against just buying the ETF, or BTC itself? Hell, if you thought it was just going up trade options, CFDs or leveraged products.

BTC is finance and trading for idiots and meme investors.

Public companies and individual investors own 44.91% of MSTR. They are followed by other institutional investors, mutual funds, and insiders at 34.20%, 20.49%, and 0.39%, respectively.

There are many people, it would seem, that have a desire to have exposure to bitcoin that could not, or cannot hold that exposure directly (as a treasury asset) or in the ETF due to financial regulations or investment limitations. Ergo, if you want exposure to the volatility of bitcoin, you buy the proxy.

Saylor has been 100% transparent about the strategy that MSTR is applying to bitcoin, and others are following suit.

The most recent one:

https://www.cryptotimes.io/2024/04/09/metaplanet-s...

[Condi]

RichTT said:

Public companies and individual investors own 44.91% of MSTR. They are followed by other institutional investors, mutual funds, and insiders at 34.20%, 20.49%, and 0.39%, respectively.

There are many people, it would seem, that have a desire to have exposure to bitcoin that could not,

Uhuh.

And how many of those investors and mutual funds own it as part of a tracker fund or index? How can you be at all sure they're deciding to invest, rather than being forced to invest as part of an indexing strategy or product?

I would put a lot of money on it being the latter, and then as it's value increases they are forced to buy more to maintain the correct sector or index weighting, especially given the huge popularity of index trackers.

Thinking about my own S+S investments MSTR likely appears in about 4 or 5 funds which are either index trackers or sector specific funds. I've no particular desire to be exposed to BTC and made no decision to invest in MSTR and neither have the fund managers, but they will own it as part of an index.

[kestonian]

Condi said:

And you attribute that to their BTC holding? Why? It makes no sense at all. Why would you be paying a premium to hold Microstrategy against just buying the ETF, or BTC itself? Hell, if you thought it was just going up trade options, CFDs or leveraged products.

BTC is finance and trading for idiots and meme investors.

There’s many institutional, sophisticated investors who would take issue with being described as such and trade spot and derivatives actively through variety of structures.

[NickZ24]

greengreenwood7 said:

greengreenwood7 said:

@ Nick - not sure if yr comment was aimed in my direction?
If so, kind of missing my point - which is disruptive tech is where the big gains are able to be made ( and losses too)...not just in the early years, although that's when the upside growth is likely to be heaviest; But i was referring to the fact that even now big tech outperforms the rest of the market by a massive degree.
SO i was pointing out to Blown that one doesn't have to be on the train from the beginning, but just be on the right train.

sure the main group of solid Tech giants came up before the first dot com Bubble.
Crypto is kind of a shares copy, and as in the early days easy to trade, in the early 90 you could open a position on wheat for 100 bucks and make 10 000 with it. Or lose the 100 in 5 minutes. Option trades and futures were brand new in those days.

[dimots]

Ethereum ETFs approved.

[greengreenwood7]

@ condi - i don't know if you just scan read, or take snippets out of context. My reply was purely aimed at Blown comments that 'there's no money barring gambling to be made from crypto relted stuff unless one was in early'. But hey, since you like to nitpick/cherry pick:

Any passive investing by institution based trackers/funds into MSTR is either limited. they aren't listed ( yet) on the S&P, when that happens your argument might hold a BIT more water.
Umpteen companies and banks are holding mstr for their own purposes, ie/ bank of norway - let alone the 'normal' banks.

Why? as has been said by Rich, either due to regulations of them not being allowed to hold BTC direct/via etf, or because there's no mgmnt charges associated with investing in an etf or maybe because mstr have the ability to do a bit of ju-jitsu when it comes to buying more. Either way for the past 4+ years they've been a leveraged play on BTC....and yeah, folks that can buy options on mstr can and do, and have done quite nicely.

For someone that doesn't have any interest in the sector, you sure spend a lot of time in this thread......

[halo34]

greengreenwood7 said:

@ condi - i don't know if you just scan read, or take snippets out of context. My reply was purely aimed at Blown comments that 'there's no money barring gambling to be made from crypto relted stuff unless one was in early'. But hey, since you like to nitpick/cherry pick:

Any passive investing by institution based trackers/funds into MSTR is either limited. they aren't listed ( yet) on the S&P, when that happens your argument might hold a BIT more water.
Umpteen companies and banks are holding mstr for their own purposes, ie/ bank of norway - let alone the 'normal' banks.

Why? as has been said by Rich, either due to regulations of them not being allowed to hold BTC direct/via etf, or because there's no mgmnt charges associated with investing in an etf or maybe because mstr have the ability to do a bit of ju-jitsu when it comes to buying more. Either way for the past 4+ years they've been a leveraged play on BTC....and yeah, folks that can buy options on mstr can and do, and have done quite nicely.

For someone that doesn't have any interest in the sector, you sure spend a lot of time in this thread......

Insulting too when it comes to it.

[Who_Goes_Blue]

I'm still yet to see a reasonable argument why crypto isn't just a Ponzi Scheme

[g4ry13]

Who_Goes_Blue said:

I'm still yet to see a reasonable argument why crypto isn't just a Ponzi Scheme

It is. But so is everything.

[OoopsVoss]

kestonian said:

There’s many institutional, sophisticated investors who would take issue with being described as such and trade spot and derivatives actively through variety of structures.

Do you understand market risk and delta flat products? Large financial institutions buying BTC are not taking a view, they are delta flat and renting capacity or access. There is a whole sphere of legislation that prevents it. Look at Volcker rule.

Non-financial institutions, smaller hedge funds etc can take a prop punt, but no one in the upper sphere will be taking a directional bet - because the risk limits their capacity to obtain leverage. There is no buying and selling in wholesale banking, its a rental business (capital and liquidity).

This isn't a comment on whether BTC is good or bad. If you want exposure, ETF providers can sell it to you or buy proxies such as MSTR - but Vanguard / Blackrock do nothing other than provide access.

[kestonian]

OoopsVoss said:

Do you understand market risk and delta flat products? Large financial institutions buying BTC are not taking a view, they are delta flat and renting capacity or access. There is a whole sphere of legislation that prevents it. Look at Volcker rule.

Non-financial institutions, smaller hedge funds etc can take a prop punt, but no one in the upper sphere will be taking a directional bet - because the risk limits their capacity to obtain leverage. There is no buying and selling in wholesale banking, its a rental business (capital and liquidity).

This isn't a comment on whether BTC is good or bad. If you want exposure, ETF providers can sell it to you or buy proxies such as MSTR - but Vanguard / Blackrock do nothing other than provide access.

There are plenty of tier one hedge funds trading spot and derivative crypto. Brevan Howard is one such example with Brevan Howard Digital. The latest public info I see on BHD is 1.7bn with 34.5% YTD.

The large CTAs added crypto to their main funds when CME futures became available in December 2017. Those CTAs were not delta hedged on their futures positions; they couldn’t trade the spot at the time as they couldn’t custody them and most likely didn’t have the mandate to trade spot crypto but their models liked the return profile of BTC so took on the risk in the only regulated product they could at the time.

(Corrected typo from 24.5% return YTD)

Edited by kestonian on Friday 24th May 22:49

Edited by kestonian on Friday 24th May 22:49

[OoopsVoss]

kestonian said:

There are plenty of tier one hedge funds trading spot and derivative crypto. Brevan Howard is one such example with Brevan Howard Digital. The latest public info I see on BHD is 1.7bn with 34.5% YTD.

The large CTAs added crypto to their main funds when CME futures became available in December 2017. Those CTAs were not delta hedged on their futures positions; they couldn’t trade the spot at the time as they couldn’t custody them and most likely didn’t have the mandate to trade spot crypto but their models liked the return profile of BTC so took on the risk in the only regulated product they could at the time.

(Corrected typo from 24.5% return YTD)

Edited by kestonian on Friday 24th May 22:49

Edited by kestonian on Friday 24th May 22:49

They can trade all day on leverage, Its what a hedge fund is.... But, the vol IS a consideration on how much leverage they can access. Its spicy risk, the Prime Brokers are not lunatics. Shadow banking does increase leverage, but last year we've seen SVB fk up liquidity management and Credit Suisse basically break post crisis regulatory norms. No Prime Broker is going to allow massive leverage build up without the ability to make margin calls. Its rental of resource. You can run gap risk, to the point of covering margin calls. It could be any asset (AAPL isn't great historically), but because "ETF" doesn't mean BTC fulfils its promise. Anyone who bought BTC and made a truckload, happy days - but it cannot reach its original design without a reckoning. Blackrock etc are taxing flow and sentiment, not validating BTC. That reckoning might never come, but its existential threat.

[kestonian]

OoopsVoss said:

They can trade all day on leverage, Its what a hedge fund is.... But, the vol IS a consideration on how much leverage they can access. Its spicy risk, the Prime Brokers are not lunatics. Shadow banking does increase leverage, but last year we've seen SVB fk up liquidity management and Credit Suisse basically break post crisis regulatory norms. No Prime Broker is going to allow massive leverage build up without the ability to make margin calls. Its rental of resource. You can run gap risk, to the point of covering margin calls. It could be any asset (AAPL isn't great historically), but because "ETF" doesn't mean BTC fulfils its promise. Anyone who bought BTC and made a truckload, happy days - but it cannot reach its original design without a reckoning. Blackrock etc are taxing flow and sentiment, not validating BTC. That reckoning might never come, but its existential threat.

You make good points but that’s not the point I’m addressing. The point I’m addressing is that it’s only an arena for degenerate gamblers who make money through pure luck. That’s wrong. There are sophisticated investors taking calculated risk in pursuit of returns, with multiple different outlooks, products and methods.

On the (exchange traded) futures a number of large PBs did not offer leverage in the early days by requiring 100% margin, as opposed to the CME requirement which is around 20% if memory serves and ran tight risk limits for the clients.

The frustrating part is that the man on the street who typically doesn’t understand leverage or risk management could easily get 20x leverage and blow themselves up all too easily but that’s another debate entirely.

[NickZ24]

Who_Goes_Blue said:

I'm still yet to see a reasonable argument why crypto isn't just a Ponzi Scheme

Trust is the reason.
The more erratic a state does its financial affairs, like printing x amount of new money the more trust is transferred to Crypto, mostly to front-liner Bitcoin.

Most alt coins are built to make the builder rich, ETH is a good example, quite clever how easy you can create a token, then earn when the token is passed on. The fee called fittingly gas. With ETH new form of mining its environmentally friendlier, but also more centralized. We'll see how that plays out.

Another coin sticks out: Litecoin, a easier to mine coin and up to date, what you cannot say for most. Conveniently priced fees, plus a speedy arrival are especially attractive. 3 minutes to arrive and 2 cents to send 100 000USD is reported.

[Simpo Two]

NickZ24 said:

Who_Goes_Blue said:

I'm still yet to see a reasonable argument why crypto isn't just a Ponzi Scheme

Trust is the reason.
The more erratic a state does its financial affairs, like printing x amount of new money the more trust is transferred to Crypto, mostly to front-liner Bitcoin.

I agree a lot of investment depends on trust, well-placed or otherwise. So if somebody is worried about more banknotes being made, why would they be less worried about an imaginary concept being made in nowhere?

[NickZ24]

Simpo Two said:

I agree a lot of investment depends on trust, well-placed or otherwise. So if somebody is worried about more banknotes being made, why would they be less worried about an imaginary concept being made in nowhere?

I doubt that Warren Buffet understand 100% of a state finance.
Less understanding have those financial wizards elections put into power.
Western European countries seem to have a liking to elect the most ignorant finance-ministers.
The president of San Salvador has a pretty good understanding though, don't spend more than you have is his lema.

The US$ is in a unique situation. It's the official currency of 11 countries, so logically the US needs to print just to replace their bills. And the US$ is trading currencies for 70 to 80 % of the world's trades.

Bitcoin is not made nowhere, it's backed by calculations and the mining made it to what it is now. A store of value. I think it's a safe bet to say Bitcoin won't go below 20.000. An emerald is truest to its value, Diamonds have issues with lab grown competition. Gold is heavy.

The biggest question is what will haṕpen to the internet when the Ukraine/Nato and Russia go nuclear. You need the internet to sell and read out the value out of nowhere as you put it.  

[BandOfBrothers]

NickZ24 said:

Who_Goes_Blue said:

I'm still yet to see a reasonable argument why crypto isn't just a Ponzi Scheme

Trust is the reason.
The more erratic a state does its financial affairs, like printing x amount of new money the more trust is transferred to Crypto, mostly to front-liner Bitcoin.

Most alt coins are built to make the builder rich, ETH is a good example, quite clever how easy you can create a token, then earn when the token is passed on. The fee called fittingly gas. With ETH new form of mining its environmentally friendlier, but also more centralized. We'll see how that plays out.

Another coin sticks out: Litecoin, a easier to mine coin and up to date, what you cannot say for most. Conveniently priced fees, plus a speedy arrival are especially attractive. 3 minutes to arrive and 2 cents to send 100 000USD is reported.

But the key is: who controls it?

No one sensible would ever invest or transfer a lot of money in a specific crypto if there's a chance that the founder/pre miner(s) could materially impact its value at the drop of a hat, which to my understanding is true of every crypto except BTC, and even then that's only because BTC's founder has disappeared.

[NickZ24]

BandOfBrothers said:

But the key is: who controls it?

Depends which coin.