Bitcoin Price Hits All-Time High of $19,786, Topping 2017 Record

Re:Bitcoin Price Hits All-Time High of $19,786, Topping 2017... by paulpauper on Monday November 30, 2020 @12:21PM (#25256235)

It seems like a lot until you consider that it has been surpassed by many other investments in terms of gains such as Tesla, Paypal, Palantir stock and others. The days of Bitcoin going up 10-50x in a year are over, but still interesting to see what happens next. I think increasing regulation and the use of blacklists and 'coin tainting' erode whatever use bitcoin has though, as there will be no fungibility. This makes bitcoin worse than even cash in terms of being usable and censorship-resistant.

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Re:Bitcoin Price Hits All-Time High of $19,786, Topping 2017... by TuringNYC on Monday November 30, 2020 @12:24PM (#25256267)

Given that BTC isnt based on any NPV or earnings multiple or industrial use value but is rather based on scarcity value, I dont see why gaining 10-50x returns are any more or less likely than, say, losing 90% of the value.

Could anyone provide a more methodical way of thinking about this?

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Re:Bitcoin Price Hits All-Time High of $19,786, Topping 2017... by ISL on Monday November 30, 2020 @12:35PM (#25256405)

Not suggesting that this is correct in this case (edit: indeed, one can argue that it is not), but if you think of it as a store of value, whenever the USD money supply is increased (or people think it might be in the future), one might expect the fixed-quantity BTC to be exchangeable for more USD.

See: https://fred.stlouisfed.org/series/M1 .

Relative to the early days of Bitcoin, the room to fluctuate upward is much smaller than the room to fluctuate downward. Bitcoin's market cap is ~$200B, while M1 is ~$6000B. Back in the day, Bitcoin's market cap was a few million dollars or less. That said, BTC now has a powerful brand in the eyes of many possible buyers/holders, which makes a retreat all the way to zero far less likely.

I suspect that the only things that could kill BTC completely these days are a compromise of the hash algorithm, a coordinated effort against it by a consortium of governments that must include the US, or a devastating 51% attack by a consortium of miners. The third is perhaps least-likely, as the miners would stand to lose a lot if BTC imploded.

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Re:Bitcoin Price Hits All-Time High of $19,786, Topping 2017... by TuringNYC on Monday November 30, 2020 @12:42PM (#25256496)

Thanks! This is a great explanation. I imagine expending it from M1 to also include other major countries' money supply would be a good next step in the analysis.

Curious if you could recommend any good read on BTC upside potential given this framework -- for example, right now the M1:BTC ratio is 1:30, but what factors/behaviours would dictate that ratio to change? or is the idea that the ratio keeps constant with more inflation and thus pushes BTC higher?

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Re:Bitcoin Price Hits All-Time High of $19,786, Topping 2017... by safog on Monday November 30, 2020 @01:16PM (#25256964)

A govt ban on exchanges would do it as well, but the US response thankfully has been pretty moderate.

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Re:Bitcoin Price Hits All-Time High of $19,786, Topping 2017... by dudus on Monday November 30, 2020 @12:53PM (#25256658)

My thoughts exactly. It's about the same outcome you can expect as betting in Vegas.

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Re:Bitcoin Price Hits All-Time High of $19,786, Topping 2017... by fernandopj on Monday November 30, 2020 @12:26PM (#25256290)

Consider this: you only cited US stocks, that's not exactly open to the whole world. Bitcoin is much more accessible, (arguably) converts to local fiat faster than US$ -> local, and having gains of 100% or close to it in a span of a few months is nothing to laugh at.

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Re:Bitcoin Price Hits All-Time High of $19,786, Topping 2017... by gruez on Monday November 30, 2020 @12:46PM (#25256556)

To add to this, country with capital controls (eg. china) or with foreign currency controls (venezuela).

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Re:Bitcoin Price Hits All-Time High of $19,786, Topping 2017... by javert on Monday November 30, 2020 @01:02PM (#25256776)

> I think increasing regulation and the use of blacklists and 'coin tainting' erode whatever use bitcoin has though, as there will be no fungibility.

This has already happened. Bitcoin is a permissioned blockchain, now. It may be used by permission of the chainalysis industry and the regulators.

That's not to say bitcoin won't become a widely-used currency.

Maybe governments will allow bitcoin but ban all cryptocurrencies they can't track.

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Re:Bitcoin Price Hits All-Time High of $19,786, Topping 2017... by domatic1 on Monday November 30, 2020 @12:26PM (#25256286)

How so? Bitcoin is the best performance asset class.

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Re:Bitcoin Price Hits All-Time High of $19,786, Topping 2017... by arcticbull on Monday November 30, 2020 @12:50PM (#25256598)

Square outperformed Bitcoin by a wide margin trough to peak in 2020. Tesla vastly outperformed. Tesla is up 15X since the summer of 2019.

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Re:Bitcoin Price Hits All-Time High of $19,786, Topping 2017... by kainaloo on Monday November 30, 2020 @01:39PM (#25257268)

tesla or square is not an asset class

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Re:Bitcoin Price Hits All-Time High of $19,786, Topping 2017... by arcticbull on Monday November 30, 2020 @01:47PM (#25257355)

Bitcoin isn’t an asset class

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Re:Bitcoin Price Hits All-Time High of $19,786, Topping 2017... by kainaloo on Monday November 30, 2020 @01:51PM (#25257396)

Didnt say so but if we compare stocks to cryptos i think there is a clear winner

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Re:Bitcoin Price Hits All-Time High of $19,786, Topping 2017... by arcticbull on Monday November 30, 2020 @02:46PM (#25258051)

The parent specifically referred to Bitcoin. And I disagree. The founder shares of any big company have a par value of $0.0001 give or take so any company founders at for instance Uber would have seen the same gains or more.

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