BTC's rise isn't all that out of line with any of those. I think you're seeing investors rush out of dollars and into anything that'll have hard value in the digital economy going forward. Inflation doesn't hit all markets evenly, so you may not see it in your paycheck yet (if you still have a paycheck) and areas without a lot of people seeing money come in won't have prices rise as much. But I think you should read this as a currency crisis for the dollar, not a bubble for Bitcoin.
I gave some examples of consumer goods inflating in my post - restaurant meals are up about 40%, housing up about 18%, groceries have also been up about 20% since the pandemic started. Also have friends that own or work in non-tech businesses (one owns a packaging factory, another sells hot tubs) that say that supply chains are in shambles and all of their producer prices are going up, significantly. You'll see that in consumer prices eventually, but it takes time to work its way through the economy.
If I had to speculate the current market froth has more to do with individuals access to leveraged investments via smartphone apps like Robinhood. The pandemic has turned them into a generation of gamblers. When you buy options from a market maker they hedge by purchasing the underlying. This has a positive feedback cycle effect causing them to purchase more and more to hedge. Look up a gamma squeeze.
https://realmoney.thestreet.com/investing/stocks/is-the-gamm...
Part of the reason we've had an insane housing market valuation growth over the last ~40 years is that cost of capital has gone down from ~15% to 2.5% over that time frame. If rates were near the historical average right now, you would see very different asset prices.
A few things have changed. One is in choice few major metros, like SF, city councils abjectly refuse to allow new construction taller than existing construction to the benefit of landowners. This artificial supply constraint is pretty much solely responsible for the massive increase in pricing in these metros.
The other thing that’s changed is minimum setback rules, minimum sizing rules, and various other council ordinances - in addition to what Americans consider a suitable home for their living situation. As such new homes are on average twice as big now as they were in the 1970s.
Make no mistake though the average price per square foot for a home in the United States has tracked inflation almost precisely for the last 50 years.
This is purely supply, demand and artificial constraints - not monetary policy. Compare to Tokyo where housing downtown is a few hundred thousand dollars. I suspect if interest rates were lower you’d see smaller houses, not cheaper ones - that’s what happened there!
[1] https://fee.org/articles/new-homes-today-have-twice-the-squa...
Inflation as a concept itself is much broader than this.
The comment you're replying to is referring to asset price inflation, which has been happening hardcore.
You seem to be saying since the Fed's stupid basket hasn't shot up in price (based on what they're saying), that inflation hasn't happened?
"Credit bubble? Yes, there can no longer be serious doubt about this: people bought Bitcoin with money that didn’t exist, pushing up the price of Bitcoin. A lot of people currently think they are richer than they are."
https://www.kalzumeus.com/2019/10/28/tether-and-bitfinex/
I'd be interested in reading a counter-take, most bitcoiners I know just look away.
The more macro stuff like worries about inflation due to the Fed printing $$$, easy money (0% interest rates), and yes, some FOMO speculation is increasing demand.
As far as I'm concerned this is working as intended. This is not the first boom / bust and this won't be the last.
e.g., https://twitter.com/whale_alert/status/1333809716301094912
I'm reminded of the example of the closing years of the Kuomintang in China, where they were suffering from massive hyperinflation. Small businesses and co-ops would bet temporary loans from the central government in its banknotes but immediately change it to silver if possible to do business with, so they wouldn't have to deal with the debasement of the real currency over the course of the year.
American institutions are definitely going in. It's a solid ponzi, why would they shun that one when they went in all the others?
Perhaps the market is expecting more money printing.
Bitcoin is a social phenomena - no government or company backs it. The only reason it has value is if people value it. Bitcoin promoters have convinced people it's a store of value, like gold except digital. As the Cult of Bitcoin spreads, it doesn't take that many new enthusiasts to push the price up, as unlike literally all other commodities on earth, the supply of bitcoin is truly constrained and there cannot be anymore made in response to demand above the normal rate of inflation.
This time, big money, institutions, and the very rich are coming in addition to the widespread purchase by retail. The price is going to rise a lot.
The Tether FUD is so dumb, but it's the last straw being grasped by perma-bears.
It’s the mother of all Ponzi schemes, clearly, and is definitely going to implode in the next big pullback.
Why is this relevant when you can withdraw tethers for USD at any participating exchange? Or are you saying that None of the exchanges that support tether (eg. bitfinex) has never fulfilled a withdraw?
>It’s the mother of all Ponzi schemes, clearly, and is definitely going to implode in the next big pullback.
Sounds like a great way to make a lot of money. Tether is currently trading 1:1 with USD (yes, even at exchanges that offer real USD). It should be easy to short-sell a bunch of tether, and buy it back when in collapses. And unlike short-selling stocks, your downside should be relatively low as tethers can't realistically go above their current price.
> Sounds like a great way to make a lot of money. Tether is currently trading 1:1 with USD (yes, even at exchanges that offer real USD). It should be easy to short-sell a bunch of tether, and buy it back when in collapses. And unlike short-selling stocks, your downside should be relatively low as tethers can't realistically go above their current price.
All crypto exchanges are rigged casinos. The only way to win is not to play.
Tether absolutely swings up and down depending on how many people are fleeing into or out of cryptos at any given moment. We’ve seen like +5-7% and -20%. That’s enough to blow away any leveraged position.
Finally, of course, you neglect counterparty risk. I have to put up collateral on this short which any of these exchanges could simply run for the hills with, as they do, regularly. Seriously, who lets you short Tether except for Bitfinex - and what will they pay you out in, more Tether? They don’t have a bank account. That’s why they invented Tether.
Because if you're worried that they don't have enough real us dollars to back the USDTs that they've printed, being able to directly redeem USDT for USD isn't really going to make a difference.
>All crypto exchanges are rigged casinos. The only way to win is not to play.
That seems like an overly broad statement to make, especially there are a few exchanges that try to be as by-the-books as possible.
>Tether absolutely swings up and down depending on how many people are fleeing into or out of cryptos at any given moment. We’ve seen like +5-7% and -20%. That’s enough to blow away any leveraged position.
Or just don't leverage to the max? Short-selling $1000 worth of USDT with $1000 of USD in reserve and 3x leverage should allow you to withstand most shocks without being forced to liquidate.
>Seriously, who lets you short Tether except for Bitfinex
Kraken, for one.
>and what will they pay you out in, more Tether? They don’t have a bank account. That’s why they invented Tether.
Again, this goes back to my first comment. Are you claiming that bitfinex isn't processing fiat withdraws (eg. wire/ACH transfer to a real bank)?
The quintessential part is this: The New York attorney general’s filing refutes the extreme version of those doubts — Tether mostly had the dollars — but it is nonetheless a wild ride that alleges that Tether’s backing might not be as good as it claims.
https://www.theblockcrypto.com/post/48857/former-head-of-cir...
I worked with Dan, I worked at Circle, we redeemed / minted billions and billions with Tether.
This is a classic strategy employed by scammers to legitimize a scam. You pick a prominent individual and you make the fraud work for them, so they can tell other people it’s legit.
Their last auditor quit, half way through the audit. No audit, no legitimacy, period.
If your claim is that you redeemed billions of dollars in tethers for fiat USD then that’s newsworthy.
Even if that were the case though, it does nothing to prove that Tether is able to cover its commitments. Especially not with the additional $16B USD on the books.
Don’t carry water for these scammers they literally don’t have a bank account and admitted in court [1] much of their reserves are IOUs and crypto. Audit or gtfo (to tether inc not you).
[1] https://www.google.com/amp/s/www.theblockcrypto.com/amp/dail...
Am I saying crypto has no value at all and never will? No- but it's stupid that the "drive" for people to create new cryptos and hold current crypto is to uh.. make money off of it vs a currency like USD? That's stupid as hell.
Crypto that is not pegged to something like USD is made for gambling and to make the rich richer. If I were to "gamble" $1000 in crypto the last few years sure, maybe I make 50-100k. Whoopdydoo. Yeah that's great but it's not like mega life altering. Rich people can be like "Oh I'm going to throw $1 million into this.. oh look, I just made $50-100 million, now I can take this and buy a bunch of new businesses or buy my new mega mansion somewhere!". It's just sickening, honestly.
Envy is the thief of joy