$365 billion wiped off cryptocurrency market after Musk tweet

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Aaand...it'sgone
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Re: $365 billion wiped off cryptocurrency market after Musk tweet

Post by Aaand...it'sgone »

watchnerd wrote: Thu May 13, 2021 12:51 pm
Disclaimer:

Being a watch nerd, I have an Omega Speedmaster worth of Cardano. ;)

Other holdings are larger and smaller.
We talking 3570.50 amounts of Cardano or Snoopy 2015 amounts of Cardano? :mrgreen:

Disclaimer: own one Seiko 007 worth of Cardano.
SnowBog
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Re: $365 billion wiped off cryptocurrency market after Musk tweet

Post by SnowBog »

Ocean77 wrote: Thu May 13, 2021 7:18 pm
HootingSloth wrote: Thu May 13, 2021 4:17 pm
Ocean77 wrote: Thu May 13, 2021 2:48 pm
jjj_22 wrote: Thu May 13, 2021 2:26 pm
Ocean77 wrote: Thu May 13, 2021 2:17 pm That $365 Billion wasn't there to begin with. It's just a bunch of 0s and 1s on some people's hard disks.
The form something takes is irrelevant. Money in your bank account is just 0s and 1s on some bank's' computers. Equity shares you own are just 0s and 1s on some brokerage's/custodian's computers. It doesn't mean that those deposits or those shares don't have value or don't exist.
The difference is that equity shares represent ownership in a company. While with crypto and fiat currencies, there is nothing behind it. You have just the 0s and 1s.
Where do you think most of, for example, Microsoft's, Alphabet's, and Facebook's value comes from as a company?
Advertising. I wouldn't bet my retirement on that type of business (see what happened to newspapers). But still it is a legitimate business.
:shock:
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HomerJ
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Re: $365 billion wiped off cryptocurrency market after Musk tweet

Post by HomerJ »

Valuethinker wrote: Thu May 13, 2021 1:36 pm*Most* Americans like the thought of getting rich quick.

What about the British... Are they stupid enough to like the idea of getting rich quick too?

"After years of disappointment with get rich quick schemes, I know I'm gonna get rich with this scheme. And quick."
-Homer Simpson

That's funny, because he's stupid. And all the people on these threads are seriously acting just like a stupid cartoon character.
Last edited by HomerJ on Thu May 13, 2021 9:49 pm, edited 1 time in total.
A Goldman Sachs associate provided a variety of detailed explanations, but then offered a caveat, “If I’m being dead-### honest, though, nobody knows what’s really going on.”
HootingSloth
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Re: $365 billion wiped off cryptocurrency market after Musk tweet

Post by HootingSloth »

SnowBog wrote: Thu May 13, 2021 8:46 pm
Ocean77 wrote: Thu May 13, 2021 7:18 pm
HootingSloth wrote: Thu May 13, 2021 4:17 pm
Ocean77 wrote: Thu May 13, 2021 2:48 pm
jjj_22 wrote: Thu May 13, 2021 2:26 pm

The form something takes is irrelevant. Money in your bank account is just 0s and 1s on some bank's' computers. Equity shares you own are just 0s and 1s on some brokerage's/custodian's computers. It doesn't mean that those deposits or those shares don't have value or don't exist.
The difference is that equity shares represent ownership in a company. While with crypto and fiat currencies, there is nothing behind it. You have just the 0s and 1s.
Where do you think most of, for example, Microsoft's, Alphabet's, and Facebook's value comes from as a company?
Advertising. I wouldn't bet my retirement on that type of business (see what happened to newspapers). But still it is a legitimate business.
:shock:
:beer
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HomerJ
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Re: $365 billion wiped off cryptocurrency market after Musk tweet

Post by HomerJ »

txhill wrote: Thu May 13, 2021 7:21 pm Honestly the more Elon tweets about crypto, the better (if he won't refrain from tweeting about crypto entirely anyway). If he only tweets about crypto occasionally (like once a month), each of his tweets sends shockwaves throughout the system. At a daily clip, not so bad. And in fact more tweets just keep upping crypto's exposure to the public generally, which is good in the long run.
Unless it all crashes down, then exposure to the general public will just hurt more people.

I really don't think you consider the possibilities that this could DEVASTATE millions of people to make a hundred thousand rich.

But maybe it will all work out.
A Goldman Sachs associate provided a variety of detailed explanations, but then offered a caveat, “If I’m being dead-### honest, though, nobody knows what’s really going on.”
txhill
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Re: $365 billion wiped off cryptocurrency market after Musk tweet

Post by txhill »

HomerJ wrote: Thu May 13, 2021 9:47 pm
txhill wrote: Thu May 13, 2021 7:21 pm Honestly the more Elon tweets about crypto, the better (if he won't refrain from tweeting about crypto entirely anyway). If he only tweets about crypto occasionally (like once a month), each of his tweets sends shockwaves throughout the system. At a daily clip, not so bad. And in fact more tweets just keep upping crypto's exposure to the public generally, which is good in the long run.
Unless it all crashes down, then exposure to the general public will just hurt more people.

I really don't think you consider the possibilities that this could DEVASTATE millions of people to make a hundred thousand rich.

But maybe it will all work out.
I can’t help the folks who buy the truly speculative or scam coins. They’ll gamble and many of them will lose. But there are plenty of crypto tokens that can and will disrupt traditional finance—the same institutions that leech off of average people on the daily. Or will disrupt the use of gold as a store of value. Or will further the adoption of exciting new uses of digital value or virtual worlds. I think those will be net positives. You cannot stop all progress merely to protect a few who inevitably will speculate regardless of the situation. With that mindset we never would have had the internet take off the way it did, even though some folks got burned in the dot com boom and bust.
Astones
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Re: $365 billion wiped off cryptocurrency market after Musk tweet

Post by Astones »

txhill wrote: Thu May 13, 2021 10:04 pm I can’t help the folks who buy the truly speculative or scam coins. They’ll gamble and many of them will lose. But there are plenty of crypto tokens that can and will disrupt traditional finance—the same institutions that leech off of average people on the daily. Or will disrupt the use of gold as a store of value. Or will further the adoption of exciting new uses of digital value or virtual worlds. I think those will be net positives. You cannot stop all progress merely to protect a few who inevitably will speculate regardless of the situation. With that mindset we never would have had the internet take off the way it did, even though some folks got burned in the dot com boom and bust.
I believe it's the opposite. Bitcoins speculations are damaging progress, because they cast on the blockchain technology a dark light it does not deserve. People should be interested in the technology and also ignore the hype related to cryptocurrency as a financial asset, which will likely be disappointing in the long run.
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F150HD
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Re: $365 billion wiped off cryptocurrency market after Musk tweet

Post by F150HD »


Victim of 'Elon Musk' Bitcoin scam loses home deposit

https://www.bbc.com/news/uk-england-sussex-57102038.amp
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watchnerd
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Re: $365 billion wiped off cryptocurrency market after Musk tweet

Post by watchnerd »

finite_difference wrote: Thu May 13, 2021 7:33 pm

Where are you getting 2% crypto is market weight? I guess you don’t include RE in the “market”?
William Sharpe doesn't include non-securitized RE, either.

I'm using the same definition he does.

https://web.stanford.edu/~wfsharpe/RISMAT/RISMAT-7.pdf
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Marseille07
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Re: $365 billion wiped off cryptocurrency market after Musk tweet

Post by Marseille07 »

F150HD wrote: Thu May 13, 2021 10:12 pm
Victim of 'Elon Musk' Bitcoin scam loses home deposit

https://www.bbc.com/news/uk-england-sussex-57102038.amp
Whoa... :shock: this person lost a lot more too: https://www.businessinsider.com/man-los ... bbc-2021-3
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watchnerd
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Re: $365 billion wiped off cryptocurrency market after Musk tweet

Post by watchnerd »

Astones wrote: Thu May 13, 2021 10:11 pm I believe it's the opposite. Bitcoins speculations are damaging progress, because they cast on the blockchain technology a dark light it does not deserve. People should be interested in the technology and also ignore the hype related to cryptocurrency as a financial asset, which will likely be disappointing in the long run.
This boom / bust cycle is pretty common in post-Industrial economic history and, some have argued, necessary to drive capital into the kind of high risk efforts that break the status quo and create stair-step jumps at moments of technologic disruption.

The "robber barons" of the late 1800s were regarded as fairly awful people who amassed great wealth via exploitive practices, yet were instrumental in the economic growth of the country at the time.
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txhill
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Re: $365 billion wiped off cryptocurrency market after Musk tweet

Post by txhill »

Marseille07 wrote: Thu May 13, 2021 10:19 pm
F150HD wrote: Thu May 13, 2021 10:12 pm
Victim of 'Elon Musk' Bitcoin scam loses home deposit

https://www.bbc.com/news/uk-england-sussex-57102038.amp
Whoa... :shock: this person lost a lot more too: https://www.businessinsider.com/man-los ... bbc-2021-3
The scams are horrible. Maybe scammers now have more effective tools than before—and arguably Twitter is more to blame than BTC—but they’ve always been around.
Janus887
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Re: $365 billion wiped off cryptocurrency market after Musk tweet

Post by Janus887 »

At some point people are going to realize Elon Musk has more in common with Don King, Vince McMahon and Donald Trump than he does with Nikola Tesla, Thomas Edison and Steve Jobs.
Nathan Drake
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Re: $365 billion wiped off cryptocurrency market after Musk tweet

Post by Nathan Drake »

txhill wrote: Thu May 13, 2021 10:04 pm
HomerJ wrote: Thu May 13, 2021 9:47 pm
txhill wrote: Thu May 13, 2021 7:21 pm Honestly the more Elon tweets about crypto, the better (if he won't refrain from tweeting about crypto entirely anyway). If he only tweets about crypto occasionally (like once a month), each of his tweets sends shockwaves throughout the system. At a daily clip, not so bad. And in fact more tweets just keep upping crypto's exposure to the public generally, which is good in the long run.
Unless it all crashes down, then exposure to the general public will just hurt more people.

I really don't think you consider the possibilities that this could DEVASTATE millions of people to make a hundred thousand rich.

But maybe it will all work out.
I can’t help the folks who buy the truly speculative or scam coins. They’ll gamble and many of them will lose. But there are plenty of crypto tokens that can and will disrupt traditional finance—the same institutions that leech off of average people on the daily. Or will disrupt the use of gold as a store of value. Or will further the adoption of exciting new uses of digital value or virtual worlds. I think those will be net positives. You cannot stop all progress merely to protect a few who inevitably will speculate regardless of the situation. With that mindset we never would have had the internet take off the way it did, even though some folks got burned in the dot com boom and bust.
I have not heard of a compelling argument that this is actually true.

I look at the things I use banking for, and none of them are high cost or slow to transact, and they have institutional backing and trust that you can't get with DeFi.

But I'd love to hear arguments for what I'm missing about crypto.
claypigeon
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Re: $365 billion wiped off cryptocurrency market after Musk tweet

Post by claypigeon »

Nathan Drake wrote: Thu May 13, 2021 11:29 pm
txhill wrote: Thu May 13, 2021 10:04 pm
HomerJ wrote: Thu May 13, 2021 9:47 pm
txhill wrote: Thu May 13, 2021 7:21 pm Honestly the more Elon tweets about crypto, the better (if he won't refrain from tweeting about crypto entirely anyway). If he only tweets about crypto occasionally (like once a month), each of his tweets sends shockwaves throughout the system. At a daily clip, not so bad. And in fact more tweets just keep upping crypto's exposure to the public generally, which is good in the long run.
Unless it all crashes down, then exposure to the general public will just hurt more people.

I really don't think you consider the possibilities that this could DEVASTATE millions of people to make a hundred thousand rich.

But maybe it will all work out.
I can’t help the folks who buy the truly speculative or scam coins. They’ll gamble and many of them will lose. But there are plenty of crypto tokens that can and will disrupt traditional finance—the same institutions that leech off of average people on the daily. Or will disrupt the use of gold as a store of value. Or will further the adoption of exciting new uses of digital value or virtual worlds. I think those will be net positives. You cannot stop all progress merely to protect a few who inevitably will speculate regardless of the situation. With that mindset we never would have had the internet take off the way it did, even though some folks got burned in the dot com boom and bust.
I have not heard of a compelling argument that this is actually true.

I look at the things I use banking for, and none of them are high cost or slow to transact, and they have institutional backing and trust that you can't get with DeFi.

But I'd love to hear arguments for what I'm missing about crypto.
Think about the unbanked and the massive potential smart contracts have. Or for those that do bank imagine if your savings account cut out the middleman and paid you 5-6% APR. that’s what we’re getting right now. Think about being able to receive your paycheck, pay your mortgage, pay your credit card, all through one app. Convenient and doable now to a point with the right set up. Now imagine if that same technology could hold all of your school records, credit history, tax return data, vaccine records. etc. and this was forever and permanent. You could apply for a new mortgage using this one blockchain. This could be the end of credit checks. The end of contacting your schools to get a piece of paper to obtain a license. The end of sourcing material from tons of different sources for one application. Blockchain can completely replace so many middlemen in today’s activities. More importantly it takes the human factor out of it / combats fraud. It’s about way more than being a currency
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HomerJ
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Re: $365 billion wiped off cryptocurrency market after Musk tweet

Post by HomerJ »

claypigeon wrote: Thu May 13, 2021 11:48 pmOr for those they do bank imagine if your savings account cut out the middleman and paid you 5-6% APR. that’s what we’re getting right now.
Please explain your thinking process here.

I can get 2%-3% loans from the bank.

How are they supposed to pay 5%-6% on savings accounts?

Why do you guys believe there are evil bankers somehow screwing the American public by letting them borrow money for houses and cars at 2%-3%?

How do you figure they should be paying 5%-6% to us and then loaning the same money out at 2%-3%? Can you explain your math here? Think it through slowly.
Think about being able to receive your paycheck, pay your mortgage, pay your credit card, all through one app.
I do this now. Have you really not used online banking yet?
A Goldman Sachs associate provided a variety of detailed explanations, but then offered a caveat, “If I’m being dead-### honest, though, nobody knows what’s really going on.”
Nathan Drake
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Re: $365 billion wiped off cryptocurrency market after Musk tweet

Post by Nathan Drake »

claypigeon wrote: Thu May 13, 2021 11:48 pm
Nathan Drake wrote: Thu May 13, 2021 11:29 pm
txhill wrote: Thu May 13, 2021 10:04 pm
HomerJ wrote: Thu May 13, 2021 9:47 pm
txhill wrote: Thu May 13, 2021 7:21 pm Honestly the more Elon tweets about crypto, the better (if he won't refrain from tweeting about crypto entirely anyway). If he only tweets about crypto occasionally (like once a month), each of his tweets sends shockwaves throughout the system. At a daily clip, not so bad. And in fact more tweets just keep upping crypto's exposure to the public generally, which is good in the long run.
Unless it all crashes down, then exposure to the general public will just hurt more people.

I really don't think you consider the possibilities that this could DEVASTATE millions of people to make a hundred thousand rich.

But maybe it will all work out.
I can’t help the folks who buy the truly speculative or scam coins. They’ll gamble and many of them will lose. But there are plenty of crypto tokens that can and will disrupt traditional finance—the same institutions that leech off of average people on the daily. Or will disrupt the use of gold as a store of value. Or will further the adoption of exciting new uses of digital value or virtual worlds. I think those will be net positives. You cannot stop all progress merely to protect a few who inevitably will speculate regardless of the situation. With that mindset we never would have had the internet take off the way it did, even though some folks got burned in the dot com boom and bust.
I have not heard of a compelling argument that this is actually true.

I look at the things I use banking for, and none of them are high cost or slow to transact, and they have institutional backing and trust that you can't get with DeFi.

But I'd love to hear arguments for what I'm missing about crypto.
Think about the unbanked and the massive potential smart contracts have. Or for those that do bank imagine if your savings account cut out the middleman and paid you 5-6% APR. that’s what we’re getting right now. Think about being able to receive your paycheck, pay your mortgage, pay your credit card, all through one app. Convenient and doable now to a point with the right set up. Now imagine if that same technology could hold all of your school records, credit history, tax return data, vaccine records. etc. and this was forever and permanent. You could apply for a new mortgage using this one blockchain. This could be the end of credit checks. The end of contacting your schools to get a piece of paper to obtain a license. The end of sourcing material from tons of different sources for one application. Blockchain can completely replace so many middlemen in today’s activities. More importantly it takes the human factor out of it / combats fraud. It’s about way more than being a currency
The technology is interesting, but why does that make it “investable?”

Seems like to make something like that work, you’d need some universal banking standard adopted by all major institutions.

I think it helps improve the process, but I also think it’s a little bit of a fairy tale that it will dramatically improve the way the current system operates. Costs seem to be fairly low already.
claypigeon
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Re: $365 billion wiped off cryptocurrency market after Musk tweet

Post by claypigeon »

Nathan Drake wrote: Fri May 14, 2021 12:05 am
claypigeon wrote: Thu May 13, 2021 11:48 pm
Nathan Drake wrote: Thu May 13, 2021 11:29 pm
txhill wrote: Thu May 13, 2021 10:04 pm
HomerJ wrote: Thu May 13, 2021 9:47 pm

Unless it all crashes down, then exposure to the general public will just hurt more people.

I really don't think you consider the possibilities that this could DEVASTATE millions of people to make a hundred thousand rich.

But maybe it will all work out.
I can’t help the folks who buy the truly speculative or scam coins. They’ll gamble and many of them will lose. But there are plenty of crypto tokens that can and will disrupt traditional finance—the same institutions that leech off of average people on the daily. Or will disrupt the use of gold as a store of value. Or will further the adoption of exciting new uses of digital value or virtual worlds. I think those will be net positives. You cannot stop all progress merely to protect a few who inevitably will speculate regardless of the situation. With that mindset we never would have had the internet take off the way it did, even though some folks got burned in the dot com boom and bust.
I have not heard of a compelling argument that this is actually true.

I look at the things I use banking for, and none of them are high cost or slow to transact, and they have institutional backing and trust that you can't get with DeFi.

But I'd love to hear arguments for what I'm missing about crypto.
Think about the unbanked and the massive potential smart contracts have. Or for those that do bank imagine if your savings account cut out the middleman and paid you 5-6% APR. that’s what we’re getting right now. Think about being able to receive your paycheck, pay your mortgage, pay your credit card, all through one app. Convenient and doable now to a point with the right set up. Now imagine if that same technology could hold all of your school records, credit history, tax return data, vaccine records. etc. and this was forever and permanent. You could apply for a new mortgage using this one blockchain. This could be the end of credit checks. The end of contacting your schools to get a piece of paper to obtain a license. The end of sourcing material from tons of different sources for one application. Blockchain can completely replace so many middlemen in today’s activities. More importantly it takes the human factor out of it / combats fraud. It’s about way more than being a currency
The technology is interesting, but why does that make it “investable?”

Seems like to make something like that work, you’d need some universal banking standard adopted by all major institutions.

I think it helps improve the process, but I also think it’s a little bit of a fairy tale that it will dramatically improve the way the current system operates. Costs seem to be fairly low already.
Ah, but that’s the point. This gets rid of institutions as we know them. Each blockchain had its own universal standard which is one reason I think one will win out (and why it won’t be Bitcoin and imo won’t be ethereum until they fix the scalability issue and transaction fees). There will still be infrastructure needs but much less costly than having a brick and mortar bank and will approach the cost of electricity over time (with proof of stake being a million times more efficient than Bitcoin).

I think these are investable given the income production. These systems rely on everyone to validate the transactions. As such there is an incentive to “stake” or help validate a transaction. With ethereum 2.0 this APR is predicted to go to 25% after the switch. I’ve even seen companies argue 75%. That’s not sustainable IMO and will drop once the transactions frees and scalability is addressed. And you need 32 ethereum that you promise not to withdraw to do this. That’s a decent investment for most people and is a huge barrier to entry but that’s a lot of interest. Other proof of stake coins offer in the 5-6% APR risk free where you can withdraw the money at any time. Others offer more APR but carry some risk ie lending your coins. Point being, there is income production and this isn’t just stuffing cash under your mattress.

I’ll still take my small cap tilt / all value portfolio’s returns over this for my retirement planning but would love for this to become stable enough I could send my emergency fund and run my checking account through there
claypigeon
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Re: $365 billion wiped off cryptocurrency market after Musk tweet

Post by claypigeon »

Nathan Drake wrote: Fri May 14, 2021 12:05 am
claypigeon wrote: Thu May 13, 2021 11:48 pm
Nathan Drake wrote: Thu May 13, 2021 11:29 pm
txhill wrote: Thu May 13, 2021 10:04 pm
HomerJ wrote: Thu May 13, 2021 9:47 pm

Unless it all crashes down, then exposure to the general public will just hurt more people.

I really don't think you consider the possibilities that this could DEVASTATE millions of people to make a hundred thousand rich.

But maybe it will all work out.
I can’t help the folks who buy the truly speculative or scam coins. They’ll gamble and many of them will lose. But there are plenty of crypto tokens that can and will disrupt traditional finance—the same institutions that leech off of average people on the daily. Or will disrupt the use of gold as a store of value. Or will further the adoption of exciting new uses of digital value or virtual worlds. I think those will be net positives. You cannot stop all progress merely to protect a few who inevitably will speculate regardless of the situation. With that mindset we never would have had the internet take off the way it did, even though some folks got burned in the dot com boom and bust.
I have not heard of a compelling argument that this is actually true.

I look at the things I use banking for, and none of them are high cost or slow to transact, and they have institutional backing and trust that you can't get with DeFi.

But I'd love to hear arguments for what I'm missing about crypto.
Think about the unbanked and the massive potential smart contracts have. Or for those that do bank imagine if your savings account cut out the middleman and paid you 5-6% APR. that’s what we’re getting right now. Think about being able to receive your paycheck, pay your mortgage, pay your credit card, all through one app. Convenient and doable now to a point with the right set up. Now imagine if that same technology could hold all of your school records, credit history, tax return data, vaccine records. etc. and this was forever and permanent. You could apply for a new mortgage using this one blockchain. This could be the end of credit checks. The end of contacting your schools to get a piece of paper to obtain a license. The end of sourcing material from tons of different sources for one application. Blockchain can completely replace so many middlemen in today’s activities. More importantly it takes the human factor out of it / combats fraud. It’s about way more than being a currency
The technology is interesting, but why does that make it “investable?”

Seems like to make something like that work, you’d need some universal banking standard adopted by all major institutions.

I think it helps improve the process, but I also think it’s a little bit of a fairy tale that it will dramatically improve the way the current system operates. Costs seem to be fairly low already.
Ah, but that’s the point. This gets rid of institutions as we know them. Each blockchain had its own universal standard which is one reason I think one will win out (and why it won’t be Bitcoin and imo won’t be ethereum until they fix the scalability issue and transaction fees). There will still be infrastructure needs but much less costly than having a brick and mortar bank and will approach the cost of electricity over time (with proof of stake being a million times more efficient than Bitcoin).

I think these are investable given the income production. These systems rely on everyone to validate the transactions. As such there is an incentive to “stake” or help validate a transaction. With ethereum 2.0 this APR is predicted to go to 25% after the switch. I’ve even seen companies argue 75%. That’s not sustainable IMO and will drop once the transactions frees and scalability is addressed. And you need 32 ethereum that you promise not to withdraw to do this. That’s a decent investment for most people and is a huge barrier to entry but that’s a lot of interest. Other proof of stake coins offer in the 5-6% APR risk free where you can withdraw the money at any time. Others offer more APR but carry some risk ie lending your coins. Point being, there is income production and this isn’t just stuffing cash under your mattress.

I’ll still take my small cap tilt / all value portfolio’s returns over this for my retirement planning but would love for this to become stable enough I could send my emergency fund and run my checking account through there
Monsterflockster
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Re: $365 billion wiped off cryptocurrency market after Musk tweet

Post by Monsterflockster »

watchnerd wrote: Thu May 13, 2021 5:08 am
Tesla CEO Elon Musk tweeted that the electric vehicle maker would suspend car purchases using bitcoin, citing environmental concerns.
As much as $365.85 billion was wiped off the entire cryptocurrency market though it did pare some losses. Bitcoin, ether and XRP were all sharply lower.
Musk said Tesla will not be selling any bitcoin and intends to use it for transactions “as soon as mining transitions to more sustainable energy.”
At around 6:06 a.m. Singapore time on Thursday when Musk made the announcement, the value of the whole cryptocurrency market stood at around $2.43 trillion, according to data from Coinmarketcap.com.

Around 8:45 a.m., the market capitalization had dropped to around $2.06 trillion, wiping off around $365.85 billion. The market has pared some losses. Since Musk’s tweet, the cryptocurrency market had seen $165.75 billion wiped off its value at around 9:22 a.m. Singapore time.
https://www.cnbc.com/2021/05/13/bitcoin ... rypto.html

On an intellectual level, what an interesting time in financial history this is.

On a personal level, I'm glad I'm holding crypto at market weight (~2%).
So like... lots and lots of people see a tweet or a joke on SNL and get spooked and push the buy or sell button?
NiceUnparticularMan
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Re: $365 billion wiped off cryptocurrency market after Musk tweet

Post by NiceUnparticularMan »

HomerJ wrote: Thu May 13, 2021 11:53 pm
claypigeon wrote: Thu May 13, 2021 11:48 pmOr for those they do bank imagine if your savings account cut out the middleman and paid you 5-6% APR. that’s what we’re getting right now.
Please explain your thinking process here.

I can get 2%-3% loans from the bank.

How are they supposed to pay 5%-6% on savings accounts?

Why do you guys believe there are evil bankers somehow screwing the American public by letting them borrow money for houses and cars at 2%-3%?

How do you figure they should be paying 5%-6% to us and then loaning the same money out at 2%-3%? Can you explain your math here? Think it through slowly.
Think about being able to receive your paycheck, pay your mortgage, pay your credit card, all through one app.
I do this now. Have you really not used online banking yet?
Yeah, that line about 5-6% APRs on a savings account immediately struck me as very problematic.

There is zero economic reason why someone should give you a 5-6% return on money you give them and can demand back at any time with no risk of loss of principal value. The fact no such thing exists in the current financial markets is not because "middlemen" are taking a huge margin for themselves, it is that no one who could actually make such promises would possibly want to be borrowing money from you on such terms. And in fact if any given borrowers are offering you such a rate, you should suspect it is very likely there a large risk that if you ask for all your money back one day, they will not in fact have it to give to you. Because if they were truly a low-risk borrower who could easily return your principal on demand, they would find many lenders willing to offer them loans at way less than 5-6%.

Generally, conventional banks do make money on the margin by borrowing at low rates from savers and then lending at higher rates, but those are NOT risk-free loans they are making! And in fact, they are really relying on the aggregate behavior of their savers not adding up to too many withdrawals at once. But, when enough of their savers lose confidence in the bank's loans, boom, you have a bank run, and the whole thing fails.

Long story short, I am very concerned if that is the sort of reasoning people are using to justify using crypto as "savings accounts". The idea any borrowers would credibly be offering risk-free, fully and unconditionally callable loans, at 5-6% rates makes no sense at all.
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Re: $365 billion wiped off cryptocurrency market after Musk tweet

Post by watchnerd »

NiceUnparticularMan wrote: Fri May 14, 2021 9:25 am
There is zero economic reason why someone should give you a 5-6% return on money you give them and can demand back at any time with no risk of loss of principal value.
Defi accounts are non-custodial.

If someone hacks your account and takes your money, or you goof up and lose your keys, they claim no responsibility.

Even if they're not loaning it out in risky ventures, the non-custodial nature of the accounts themselves mean there is less overhead cost.
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Re: $365 billion wiped off cryptocurrency market after Musk tweet

Post by NiceUnparticularMan »

watchnerd wrote: Fri May 14, 2021 9:39 am
NiceUnparticularMan wrote: Fri May 14, 2021 9:25 am
There is zero economic reason why someone should give you a 5-6% return on money you give them and can demand back at any time with no risk of loss of principal value.
Defi accounts are non-custodial.

If someone hacks your account and takes your money, or you goof up and lose your keys, they claim no responsibility.

Even if they're not loaning it out in risky ventures, the non-custodial nature of the accounts themselves mean there is less overhead cost.
I doubt that theft-protection is more than a tiny cost factor.

Again, the point I am making is why on earth would anyone who could actually credibly borrow on such terms--risk-free (in the sense of borrower risk, not theft risk), fully callable on demand--ever agree to pay you such a high rate? It makes zero sense for such a borrower to offer you such rates, given such a borrower's alternatives in the financial markets.

And just the idea that they don't have to pay for theft protection is not close to a sufficient explanation for why they are offering you such high rates.
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Re: $365 billion wiped off cryptocurrency market after Musk tweet

Post by watchnerd »

NiceUnparticularMan wrote: Fri May 14, 2021 9:56 am
And just the idea that they don't have to pay for theft protection is not close to a sufficient explanation for why they are offering you such high rates.
Nor was I implying it was.

My point was that in addition to whatever risk there is in the loans, the accounts are also non-custodial.
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Re: $365 billion wiped off cryptocurrency market after Musk tweet

Post by NiceUnparticularMan »

watchnerd wrote: Fri May 14, 2021 10:17 am
NiceUnparticularMan wrote: Fri May 14, 2021 9:56 am
And just the idea that they don't have to pay for theft protection is not close to a sufficient explanation for why they are offering you such high rates.
Nor was I implying it was.

My point was that in addition to whatever risk there is in the loans, the accounts are also non-custodial.
Oh, OK, got you.
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Re: $365 billion wiped off cryptocurrency market after Musk tweet

Post by EnjoyIt »

NiceUnparticularMan wrote: Fri May 14, 2021 9:25 am
HomerJ wrote: Thu May 13, 2021 11:53 pm
claypigeon wrote: Thu May 13, 2021 11:48 pmOr for those they do bank imagine if your savings account cut out the middleman and paid you 5-6% APR. that’s what we’re getting right now.
Please explain your thinking process here.

I can get 2%-3% loans from the bank.

How are they supposed to pay 5%-6% on savings accounts?

Why do you guys believe there are evil bankers somehow screwing the American public by letting them borrow money for houses and cars at 2%-3%?

How do you figure they should be paying 5%-6% to us and then loaning the same money out at 2%-3%? Can you explain your math here? Think it through slowly.
Think about being able to receive your paycheck, pay your mortgage, pay your credit card, all through one app.
I do this now. Have you really not used online banking yet?
Yeah, that line about 5-6% APRs on a savings account immediately struck me as very problematic.

There is zero economic reason why someone should give you a 5-6% return on money you give them and can demand back at any time with no risk of loss of principal value. The fact no such thing exists in the current financial markets is not because "middlemen" are taking a huge margin for themselves, it is that no one who could actually make such promises would possibly want to be borrowing money from you on such terms. And in fact if any given borrowers are offering you such a rate, you should suspect it is very likely there a large risk that if you ask for all your money back one day, they will not in fact have it to give to you. Because if they were truly a low-risk borrower who could easily return your principal on demand, they would find many lenders willing to offer them loans at way less than 5-6%.

Generally, conventional banks do make money on the margin by borrowing at low rates from savers and then lending at higher rates, but those are NOT risk-free loans they are making! And in fact, they are really relying on the aggregate behavior of their savers not adding up to too many withdrawals at once. But, when enough of their savers lose confidence in the bank's loans, boom, you have a bank run, and the whole thing fails.

Long story short, I am very concerned if that is the sort of reasoning people are using to justify using crypto as "savings accounts". The idea any borrowers would credibly be offering risk-free, fully and unconditionally callable loans, at 5-6% rates makes no sense at all.
This point has been brought up multiple times on these crypto threads and either glossed over by the crypto fans, or they invent some unlikely scenario of people in horrible financial situations who can’t get regular loans somehow have thousands in crypto which they can use as collateral. A very unlikely narrative.
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Re: $365 billion wiped off cryptocurrency market after Musk tweet

Post by watchnerd »

EnjoyIt wrote: Fri May 14, 2021 11:06 am

This point has been brought up multiple times on these crypto threads and either glossed over by the crypto fans, or they invent some unlikely scenario of people in horrible financial situations who can’t get regular loans somehow have thousands in crypto which they can use as collateral. A very unlikely narrative.
I suspect most of it is funding crypto leverage.

It will be interesting to see how this gets affected by the entry of hedge funds into the betting pool, as they can borrow massively at rock bottom rates.

But...

We do have to take interest rates in different countries into account to be really thorough about it.

I don't know how that APY translates, for example to Indian Rupees, going through whatever the BTC/ETH conversion rate is applicable and then comparing it to loan rates in India.

Although, admittedly, this is probably more of an academic exercise than a real world situation.
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Re: $365 billion wiped off cryptocurrency market after Musk tweet

Post by Texanbybirth »

watchnerd wrote: Fri May 14, 2021 1:23 pm
EnjoyIt wrote: Fri May 14, 2021 11:06 am

This point has been brought up multiple times on these crypto threads and either glossed over by the crypto fans, or they invent some unlikely scenario of people in horrible financial situations who can’t get regular loans somehow have thousands in crypto which they can use as collateral. A very unlikely narrative.
I suspect most of it is funding crypto leverage.

It will be interesting to see how this gets affected by the entry of hedge funds into the betting pool, as they can borrow massively at rock bottom rates.

But...

We do have to take interest rates in different countries into account to be really thorough about it.

I don't know how that APY translates, for example to Indian Rupees, going through whatever the BTC/ETH conversion rate is applicable and then comparing it to loan rates in India.

Although, admittedly, this is probably more of an academic exercise than a real world situation.
You can at least make a pretty good bet that if you've thought about it, then a quant at a hedge fund or investment bank has already come up with the valuation model, algorithm, and API to at least check it out.
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Re: $365 billion wiped off cryptocurrency market after Musk tweet

Post by Freefun »

decapod10 wrote: Thu May 13, 2021 4:28 pm
watchnerd wrote: Thu May 13, 2021 12:53 pm
claypigeon wrote: Thu May 13, 2021 12:50 pm Crypto is not an “indexable” security as is, at least for us boglehead / buy and hold folks.
Can you elaborate?

Yes, there isn't an easily purchasable TSM for crypto, but I just DIYed my own index.
There is actually a DeFi index called Defi Pulse Index (DPI), but it's all Ethereum tokens. I think it would be difficult to create a cross-chain index I think.

https://www.indexcoop.com/dpi

It violates your "must be available on Coinbase" rule though, lol. Also I don't know how capital gains are handled if they are buying/selling within the index.

UNI, AAVE, MKR, COMP, SNX are the 5 biggest holdings.
If someone wants a range of crypto investments, there’s the BITQ ETF.
Remember when you wanted what you currently have?
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Re: $365 billion wiped off cryptocurrency market after Musk tweet

Post by decapod10 »

EnjoyIt wrote: Fri May 14, 2021 11:06 am
NiceUnparticularMan wrote: Fri May 14, 2021 9:25 am
HomerJ wrote: Thu May 13, 2021 11:53 pm
claypigeon wrote: Thu May 13, 2021 11:48 pmOr for those they do bank imagine if your savings account cut out the middleman and paid you 5-6% APR. that’s what we’re getting right now.
Please explain your thinking process here.

I can get 2%-3% loans from the bank.

How are they supposed to pay 5%-6% on savings accounts?

Why do you guys believe there are evil bankers somehow screwing the American public by letting them borrow money for houses and cars at 2%-3%?

How do you figure they should be paying 5%-6% to us and then loaning the same money out at 2%-3%? Can you explain your math here? Think it through slowly.
Think about being able to receive your paycheck, pay your mortgage, pay your credit card, all through one app.
I do this now. Have you really not used online banking yet?
Yeah, that line about 5-6% APRs on a savings account immediately struck me as very problematic.

There is zero economic reason why someone should give you a 5-6% return on money you give them and can demand back at any time with no risk of loss of principal value. The fact no such thing exists in the current financial markets is not because "middlemen" are taking a huge margin for themselves, it is that no one who could actually make such promises would possibly want to be borrowing money from you on such terms. And in fact if any given borrowers are offering you such a rate, you should suspect it is very likely there a large risk that if you ask for all your money back one day, they will not in fact have it to give to you. Because if they were truly a low-risk borrower who could easily return your principal on demand, they would find many lenders willing to offer them loans at way less than 5-6%.

Generally, conventional banks do make money on the margin by borrowing at low rates from savers and then lending at higher rates, but those are NOT risk-free loans they are making! And in fact, they are really relying on the aggregate behavior of their savers not adding up to too many withdrawals at once. But, when enough of their savers lose confidence in the bank's loans, boom, you have a bank run, and the whole thing fails.

Long story short, I am very concerned if that is the sort of reasoning people are using to justify using crypto as "savings accounts". The idea any borrowers would credibly be offering risk-free, fully and unconditionally callable loans, at 5-6% rates makes no sense at all.
This point has been brought up multiple times on these crypto threads and either glossed over by the crypto fans, or they invent some unlikely scenario of people in horrible financial situations who can’t get regular loans somehow have thousands in crypto which they can use as collateral. A very unlikely narrative.
I think it is an important thing to know, and agree that it shouldn't be glossed over. People need to understand how risky this is and what the potential fallout could be like. But for some people who truly believe in the tech like me, that stuff doesn't matter if you are holding for the long term, so I hold ETH. If it crashes, it crashes, I will continue to hold as long as I can see the future potential, and I do think that the potential is immense (as is the downside of course). Ultimately I believe in buying and holding in things you believe in. I don't believe in timing markets or calling bubbles, crypto included.

I do not participate in AAVE etc at this time due to the concerns stated, and I would rather buy ETH or things like DOT, MATIC, etc (though I don't own at this time) which are more about the crypto infrastructure, or I would prefer to stake my coins.
Last edited by decapod10 on Fri May 14, 2021 1:44 pm, edited 1 time in total.
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Re: $365 billion wiped off cryptocurrency market after Musk tweet

Post by watchnerd »

Texanbybirth wrote: Fri May 14, 2021 1:34 pm
You can at least make a pretty good bet that if you've thought about it, then a quant at a hedge fund or investment bank has already come up with the valuation model, algorithm, and API to at least check it out.
Oh, I'm sure.

I also think a lot of old school crypto investors are going to find that their predictable boom / bust cycles with "Alt Season" are going to start looking different now that more and more of the big money quants are getting into the game.

I think a lot of old school crypto traders who have a "system" may find the system breaking down and the old exploits no longer working as well.
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Re: $365 billion wiped off cryptocurrency market after Musk tweet

Post by watchnerd »

Freefun wrote: Fri May 14, 2021 1:36 pm

If someone wants a range of crypto investments, there’s the BITQ ETF.
But it's not directly investing in crypto assets.

"The Bitwise ETF, by index rule, has an 85% weight in companies that derive at least 75% of their revenue from “directly servicing cryptocurrency markets,” or have more than 75% of liquid crypto assets on their balance sheet. The fund’s remaining 15% weight is equally assigned to firms for whom crypto is only part of their business, such as Square (ticker: SQ), or has over $100 million in crypto assets, such as Tesla (ticker: TSLA)."

If we ever get a real BTC or ETH ETF, I would expect these things to get hurt badly.

Why would anybody buy MicroStrategy if they can get a direct BTC ETF?
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Re: $365 billion wiped off cryptocurrency market after Musk tweet

Post by nisiprius »

And today: Dogecoin Soars 31.7% as Elon Musk Hints at “Efficiency” Improvements
Elon Musk tweeted that he was working with Dogecoin’s developers “to improve system transaction efficiency” last night. Not long after, the meme currency started rallying.
I think this guy is manipulating the market and using nudge-nudge-wink-wink flimsy pretexts.

Sold $172 billion of bitcoin just to demonstrate liquidity. Pretends he never knew that bitcoin uses a lot of electricity.

Puts on eyeglasses and plays "Lloyd Osterhag" on a comedy show so that he can tank the price of Dogecoin by having "Osterhag" call Dogecoin "a hustle," and then pumps the price days later with vague remarks by "Musk" about "Working with Doge devs to improve system transaction efficiency. Potentially promising.”

And I think people are buying Dogecoin for no other reason than a belief that Musk is manipulating the market--but thinking they can channel his thoughts, guess what Musk really means by what he says, and go along for the ride.

Which is OK--no, I'll be honest, I don't think it's OK--but it is definitely not anything "inspired by Jack Bogle."
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Re: $365 billion wiped off cryptocurrency market after Musk tweet

Post by Texanbybirth »

watchnerd wrote: Fri May 14, 2021 1:39 pm
Texanbybirth wrote: Fri May 14, 2021 1:34 pm
You can at least make a pretty good bet that if you've thought about it, then a quant at a hedge fund or investment bank has already come up with the valuation model, algorithm, and API to at least check it out.
Oh, I'm sure.

I also think a lot of old school crypto investors are going to find that their predictable boom / bust cycles with "Alt Season" are going to start looking different now that more and more of the big money quants are getting into the game.

I think a lot of old school crypto traders who have a "system" may find the system breaking down and the old exploits no longer working as well.
I agree with you, though I'm not sure on the timing. As in, how many more cycles will the old methods work.

(I'm a tech nerd who loves to read about this kind of stuff. It kinda stinks to wade through all the posts of people talking about how much $$$ they make off of "crypto". Blockchain technology has what I consider positive implications for my industry: an old-school niche of the investment/finance space.)
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Re: $365 billion wiped off cryptocurrency market after Musk tweet

Post by nisiprius »

Freefun wrote: Fri May 14, 2021 1:36 pmIf someone wants a range of crypto investments, there’s the BITQ ETF.
As the name says, the Bitwise Crypto Industry Innovators ETF, BITQ, is not an investment in cryptocurrencies. It's an investment in the stocks of companies that are in the cryptocurrency business.

Their factsheet doesn't say "invest in cryptocurrency," it says "Invest in the companies driving the new crypto economy," specifically "bitcoin and crypto trading venues, crypto mining and mining equipment firms, and service providers."

If you think "a rising tide lifts all boats," compare the past behavior of GDX, which is an index ETF that invests in stocks of companies in the gold business, with GLD, which is an exchange-traded product that tracks the price of gold itself. It's not so much that GDX underperformed GLD as that there was little similarity between the two.

Source

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Last edited by nisiprius on Fri May 14, 2021 2:18 pm, edited 4 times in total.
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Re: $365 billion wiped off cryptocurrency market after Musk tweet

Post by decapod10 »

nisiprius wrote: Fri May 14, 2021 1:47 pm And today: Dogecoin Soars 31.7% as Elon Musk Hints at “Efficiency” Improvements
Elon Musk tweeted that he was working with Dogecoin’s developers “to improve system transaction efficiency” last night. Not long after, the meme currency started rallying.
I think this guy is manipulating the market and using nudge-nudge-wink-wink flimsy pretexts.

Sold $172 billion of bitcoin just to demonstrate liquidity. Pretends he never knew that bitcoin uses a lot of electricity.

Puts on eyeglasses and plays "Lloyd Osterhag" on a comedy show so that he can tank the price of Dogecoin by having "Osterhag" call Dogecoin "a hustle," and then pumps the price days later with vague remarks by "Musk" about "Working with Doge devs to improve system transaction efficiency. Potentially promising.”

And I think people are buying Dogecoin for no other reason than a belief that Musk is manipulating the market--but thinking they can channel his thoughts, guess what Musk really means by what he says, and go along for the ride.

Which is OK--no, I'll be honest, I don't think it's OK--but it is definitely not anything "inspired by Jack Bogle."
Elon doesn't really know much about crypto, and his "working with Dogecoin developers to improve efficiency" doesn't make a lot of sense. I'm not even sure if there are any Dogecoin developers, the creator of Dogecoin isn't even associated with the project as far as I know. Look how much time and effort it is taking for Ethereum to switch to Proof of Stake with a full team of developers and several years of development, Elon thinks he's just going to fix Dogecoin in a few months?
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Re: $365 billion wiped off cryptocurrency market after Musk tweet

Post by SteadyOne »

decapod10 wrote: Fri May 14, 2021 2:09 pm
nisiprius wrote: Fri May 14, 2021 1:47 pm And today: Dogecoin Soars 31.7% as Elon Musk Hints at “Efficiency” Improvements
Elon Musk tweeted that he was working with Dogecoin’s developers “to improve system transaction efficiency” last night. Not long after, the meme currency started rallying.
I think this guy is manipulating the market and using nudge-nudge-wink-wink flimsy pretexts.

Sold $172 billion of bitcoin just to demonstrate liquidity. Pretends he never knew that bitcoin uses a lot of electricity.

Puts on eyeglasses and plays "Lloyd Osterhag" on a comedy show so that he can tank the price of Dogecoin by having "Osterhag" call Dogecoin "a hustle," and then pumps the price days later with vague remarks by "Musk" about "Working with Doge devs to improve system transaction efficiency. Potentially promising.”

And I think people are buying Dogecoin for no other reason than a belief that Musk is manipulating the market--but thinking they can channel his thoughts, guess what Musk really means by what he says, and go along for the ride.

Which is OK--no, I'll be honest, I don't think it's OK--but it is definitely not anything "inspired by Jack Bogle."
Elon doesn't really know much about crypto, and his "working with Dogecoin developers to improve efficiency" doesn't make a lot of sense. I'm not even sure if there are any Dogecoin developers, the creator of Dogecoin isn't even associated with the project as far as I know. Look how much time and effort it is taking for Ethereum to switch to Proof of Stake with a full team of developers and several years of development, Elon thinks he's just going to fix Dogecoin in a few months?
If Elon himself does not really know about crypto, then who does? The whole thing seems to me as pump and dump scheme at the enormous scale
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Re: $365 billion wiped off cryptocurrency market after Musk tweet

Post by starboi »

nisiprius wrote: Fri May 14, 2021 1:47 pm And today: Dogecoin Soars 31.7% as Elon Musk Hints at “Efficiency” Improvements
Elon Musk tweeted that he was working with Dogecoin’s developers “to improve system transaction efficiency” last night. Not long after, the meme currency started rallying.
I think this guy is manipulating the market and using nudge-nudge-wink-wink flimsy pretexts.

Sold $172 billion of bitcoin just to demonstrate liquidity. Pretends he never knew that bitcoin uses a lot of electricity.

Puts on eyeglasses and plays "Lloyd Osterhag" on a comedy show so that he can tank the price of Dogecoin by having "Osterhag" call Dogecoin "a hustle," and then pumps the price days later with vague remarks by "Musk" about "Working with Doge devs to improve system transaction efficiency. Potentially promising.”

And I think people are buying Dogecoin for no other reason than a belief that Musk is manipulating the market--but thinking they can channel his thoughts, guess what Musk really means by what he says, and go along for the ride.

Which is OK--no, I'll be honest, I don't think it's OK--but it is definitely not anything "inspired by Jack Bogle."
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Re: $365 billion wiped off cryptocurrency market after Musk tweet

Post by decapod10 »

SteadyOne wrote: Fri May 14, 2021 2:16 pm
decapod10 wrote: Fri May 14, 2021 2:09 pm
nisiprius wrote: Fri May 14, 2021 1:47 pm And today: Dogecoin Soars 31.7% as Elon Musk Hints at “Efficiency” Improvements
Elon Musk tweeted that he was working with Dogecoin’s developers “to improve system transaction efficiency” last night. Not long after, the meme currency started rallying.
I think this guy is manipulating the market and using nudge-nudge-wink-wink flimsy pretexts.

Sold $172 billion of bitcoin just to demonstrate liquidity. Pretends he never knew that bitcoin uses a lot of electricity.

Puts on eyeglasses and plays "Lloyd Osterhag" on a comedy show so that he can tank the price of Dogecoin by having "Osterhag" call Dogecoin "a hustle," and then pumps the price days later with vague remarks by "Musk" about "Working with Doge devs to improve system transaction efficiency. Potentially promising.”

And I think people are buying Dogecoin for no other reason than a belief that Musk is manipulating the market--but thinking they can channel his thoughts, guess what Musk really means by what he says, and go along for the ride.

Which is OK--no, I'll be honest, I don't think it's OK--but it is definitely not anything "inspired by Jack Bogle."
Elon doesn't really know much about crypto, and his "working with Dogecoin developers to improve efficiency" doesn't make a lot of sense. I'm not even sure if there are any Dogecoin developers, the creator of Dogecoin isn't even associated with the project as far as I know. Look how much time and effort it is taking for Ethereum to switch to Proof of Stake with a full team of developers and several years of development, Elon thinks he's just going to fix Dogecoin in a few months?
If Elon himself does not really know about crypto, then who does? The whole thing seems to me as pump and dump scheme at the enormous scale
Why should Elon know anything about crypto? He has not created any crypto. He's not really a "cryptonative" by any means. He's a rich guy who makes electric cars and rockets but it doesn't really mean that he knows anything about crypto. But people listen to him for whatever reason.

Vitalik Buterin knows about crypto, Charles Hockinson knows about crypto, CZ knows about crypto. Even Mark Cuban knows more about crypto than Elon does, but Cuban isn't really a hardcore crypto person either.
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Re: $365 billion wiped off cryptocurrency market after Musk tweet

Post by aristotelian »

watchnerd wrote: Fri May 14, 2021 1:41 pm But it's not directly investing in crypto assets.

"The Bitwise ETF, by index rule, has an 85% weight in companies that derive at least 75% of their revenue from “directly servicing cryptocurrency markets,” or have more than 75% of liquid crypto assets on their balance sheet. The fund’s remaining 15% weight is equally assigned to firms for whom crypto is only part of their business, such as Square (ticker: SQ), or has over $100 million in crypto assets, such as Tesla (ticker: TSLA)."

If we ever get a real BTC or ETH ETF, I would expect these things to get hurt badly.

Why would anybody buy MicroStrategy if they can get a direct BTC ETF?
You don't need a reason. As long as the assets have value, shares of the stock should have value. I do not need to own BRK to own US dollars, but Buffet's cash pile is part of the company's value.
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Re: $365 billion wiped off cryptocurrency market after Musk tweet

Post by HootingSloth »

starboi wrote: Fri May 14, 2021 2:24 pm
nisiprius wrote: Fri May 14, 2021 1:47 pm And today: Dogecoin Soars 31.7% as Elon Musk Hints at “Efficiency” Improvements
Elon Musk tweeted that he was working with Dogecoin’s developers “to improve system transaction efficiency” last night. Not long after, the meme currency started rallying.
I think this guy is manipulating the market and using nudge-nudge-wink-wink flimsy pretexts.

Sold $172 billion of bitcoin just to demonstrate liquidity. Pretends he never knew that bitcoin uses a lot of electricity.

Puts on eyeglasses and plays "Lloyd Osterhag" on a comedy show so that he can tank the price of Dogecoin by having "Osterhag" call Dogecoin "a hustle," and then pumps the price days later with vague remarks by "Musk" about "Working with Doge devs to improve system transaction efficiency. Potentially promising.”

And I think people are buying Dogecoin for no other reason than a belief that Musk is manipulating the market--but thinking they can channel his thoughts, guess what Musk really means by what he says, and go along for the ride.

Which is OK--no, I'll be honest, I don't think it's OK--but it is definitely not anything "inspired by Jack Bogle."
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One possible reason that Elon has switched to tweeting about cryptocurrencies is that the SEC has said that Bitcoin and Ether are not securities, and has left others in a legal gray area for now that may make it harder for them to bring a securities fraud enforcement action. The SEC was able to reign in his tweets about Tesla, but may find it harder to do so here, at least for now.
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Re: $365 billion wiped off cryptocurrency market after Musk tweet

Post by F150HD »

Marseille07 wrote: Thu May 13, 2021 10:19 pm
F150HD wrote: Thu May 13, 2021 10:12 pm
Victim of 'Elon Musk' Bitcoin scam loses home deposit

https://www.bbc.com/news/uk-england-sussex-57102038.amp
Whoa... :shock: this person lost a lot more too: https://www.businessinsider.com/man-los ... bbc-2021-3
:shock: wow
Janus887 wrote: Thu May 13, 2021 10:52 pm At some point people are going to realize Elon Musk has more in common with Don King, Vince McMahon and Donald Trump than he does with Nikola Tesla, Thomas Edison and Steve Jobs.
seems very manipulative. You have to wonder if at some point....this breaks and the SEC (or similar entity) gets involved in some weird way. This is just developing that kind of flavor (to me anyway).
Last edited by F150HD on Fri May 14, 2021 3:05 pm, edited 3 times in total.
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Re: $365 billion wiped off cryptocurrency market after Musk tweet

Post by OohLaLa »

HootingSloth wrote: Fri May 14, 2021 2:54 pm One possible reason that Elon has switched to tweeting about cryptocurrencies is that the SEC has said that Bitcoin and Ether are not securities, and has left others in a legal gray area for now that may make it harder for them to bring a securities fraud enforcement action. The SEC was able to reign in his tweets about Tesla, but may find it harder to do so here, at least for now.
He should still check himself before he wrecks himself, because he had Tesla buy BTC and put it on the books. Tweeting whatever he wants about BTC wouldn't be a problem for him, otherwise. In Tesla's case, manipulating BTC can = manipulating TSLA.

I am not a regulator or lawyer, but the SEC would still need to be able to somehow prove intent and effect, though, which is why I don't think they can do much, with what was tweeted so far.
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Re: $365 billion wiped off cryptocurrency market after Musk tweet

Post by HootingSloth »

OohLaLa wrote: Fri May 14, 2021 3:03 pm
HootingSloth wrote: Fri May 14, 2021 2:54 pm One possible reason that Elon has switched to tweeting about cryptocurrencies is that the SEC has said that Bitcoin and Ether are not securities, and has left others in a legal gray area for now that may make it harder for them to bring a securities fraud enforcement action. The SEC was able to reign in his tweets about Tesla, but may find it harder to do so here, at least for now.
He should still check himself before he wrecks himself, because he had Tesla buy BTC and put it on the books. Tweeting whatever he wants about BTC wouldn't be a problem for him, otherwise. In Tesla's case, manipulating BTC can = manipulating TSLA.

I am not a regulator or lawyer, but the SEC would still need to be able to somehow prove intent and effect, though, which is why I don't think they can do much, with what was tweeted so far.
I don't follow his Twitter feed, so I could be mistaken, but from what I have seen his manipulative tweets tend to be more focused on Dogecoin than Bitcoin, and I don't think Tesla holds Dogecoin.
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Re: $365 billion wiped off cryptocurrency market after Musk tweet

Post by watchnerd »

decapod10 wrote: Fri May 14, 2021 2:29 pm

Why should Elon know anything about crypto? He has not created any crypto. He's not really a "cryptonative" by any means. He's a rich guy who makes electric cars and rockets but it doesn't really mean that he knows anything about crypto. But people listen to him for whatever reason.
Because he's the CEO of a publicly traded corporation with $1B+ of Bitcoin on its balance sheet and he has a fiduciary responsibility to Tesla shareholders.
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Re: $365 billion wiped off cryptocurrency market after Musk tweet

Post by decapod10 »

watchnerd wrote: Fri May 14, 2021 3:07 pm
decapod10 wrote: Fri May 14, 2021 2:29 pm

Why should Elon know anything about crypto? He has not created any crypto. He's not really a "cryptonative" by any means. He's a rich guy who makes electric cars and rockets but it doesn't really mean that he knows anything about crypto. But people listen to him for whatever reason.
Because he's the CEO of a publicly traded corporation with $1B+ of Bitcoin on its balance sheet and he has a fiduciary responsibility to Tesla shareholders.
Lol, I should rephrase that. He should know about crypto, but there is nothing about his background that makes him particularly knowledgable about crypto.
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Re: $365 billion wiped off cryptocurrency market after Musk tweet

Post by watchnerd »

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Re: $365 billion wiped off cryptocurrency market after Musk tweet

Post by HootingSloth »

decapod10 wrote: Fri May 14, 2021 3:12 pm
watchnerd wrote: Fri May 14, 2021 3:07 pm
decapod10 wrote: Fri May 14, 2021 2:29 pm

Why should Elon know anything about crypto? He has not created any crypto. He's not really a "cryptonative" by any means. He's a rich guy who makes electric cars and rockets but it doesn't really mean that he knows anything about crypto. But people listen to him for whatever reason.
Because he's the CEO of a publicly traded corporation with $1B+ of Bitcoin on its balance sheet and he has a fiduciary responsibility to Tesla shareholders.
Lol, I should rephrase that. He should know about crypto, but there is nothing about his background that makes him particularly knowledgable about crypto.
That gave me a bit of a chuckle too. Watchnerd is, of course, correct about the "should" part, but the idea that Elon actually cares about his fiduciary duty to his shareholders doesn't seem very realistic based on his behavior (predating any of the crypto stuff), so I think the point that nobody should be listening to him stands.
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Re: $365 billion wiped off cryptocurrency market after Musk tweet

Post by EnjoyIt »

decapod10 wrote: Fri May 14, 2021 1:38 pm
EnjoyIt wrote: Fri May 14, 2021 11:06 am
NiceUnparticularMan wrote: Fri May 14, 2021 9:25 am
HomerJ wrote: Thu May 13, 2021 11:53 pm
claypigeon wrote: Thu May 13, 2021 11:48 pmOr for those they do bank imagine if your savings account cut out the middleman and paid you 5-6% APR. that’s what we’re getting right now.
Please explain your thinking process here.

I can get 2%-3% loans from the bank.

How are they supposed to pay 5%-6% on savings accounts?

Why do you guys believe there are evil bankers somehow screwing the American public by letting them borrow money for houses and cars at 2%-3%?

How do you figure they should be paying 5%-6% to us and then loaning the same money out at 2%-3%? Can you explain your math here? Think it through slowly.
Think about being able to receive your paycheck, pay your mortgage, pay your credit card, all through one app.
I do this now. Have you really not used online banking yet?
Yeah, that line about 5-6% APRs on a savings account immediately struck me as very problematic.

There is zero economic reason why someone should give you a 5-6% return on money you give them and can demand back at any time with no risk of loss of principal value. The fact no such thing exists in the current financial markets is not because "middlemen" are taking a huge margin for themselves, it is that no one who could actually make such promises would possibly want to be borrowing money from you on such terms. And in fact if any given borrowers are offering you such a rate, you should suspect it is very likely there a large risk that if you ask for all your money back one day, they will not in fact have it to give to you. Because if they were truly a low-risk borrower who could easily return your principal on demand, they would find many lenders willing to offer them loans at way less than 5-6%.

Generally, conventional banks do make money on the margin by borrowing at low rates from savers and then lending at higher rates, but those are NOT risk-free loans they are making! And in fact, they are really relying on the aggregate behavior of their savers not adding up to too many withdrawals at once. But, when enough of their savers lose confidence in the bank's loans, boom, you have a bank run, and the whole thing fails.

Long story short, I am very concerned if that is the sort of reasoning people are using to justify using crypto as "savings accounts". The idea any borrowers would credibly be offering risk-free, fully and unconditionally callable loans, at 5-6% rates makes no sense at all.
This point has been brought up multiple times on these crypto threads and either glossed over by the crypto fans, or they invent some unlikely scenario of people in horrible financial situations who can’t get regular loans somehow have thousands in crypto which they can use as collateral. A very unlikely narrative.
I think it is an important thing to know, and agree that it shouldn't be glossed over. People need to understand how risky this is and what the potential fallout could be like. But for some people who truly believe in the tech like me, that stuff doesn't matter if you are holding for the long term, so I hold ETH. If it crashes, it crashes, I will continue to hold as long as I can see the future potential, and I do think that the potential is immense (as is the downside of course). Ultimately I believe in buying and holding in things you believe in. I don't believe in timing markets or calling bubbles, crypto included.

I do not participate in AAVE etc at this time due to the concerns stated, and I would rather buy ETH or things like DOT, MATIC, etc (though I don't own at this time) which are more about the crypto infrastructure, or I would prefer to stake my coins.
I can fully appreciate that sentiment in believing in what ETH has to offer and investing in it long term.

Please correct me if I’m wrong, but it appears that majority of what ETH offers are ways to manipulate one’s crypto currencies. Staking, lending, even used to create tokens to track equities. It’s all a way for internal manipulation. Finding a use for said currencies. Is that really what the world wants and needs outside of the crypto community? Will more people utilize these services in the future? Who the heck knows.

In my personal very small world, I do not know a single person who utilizes these services other than staking.
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Re: $365 billion wiped off cryptocurrency market after Musk tweet

Post by decapod10 »

EnjoyIt wrote: Fri May 14, 2021 3:23 pm
decapod10 wrote: Fri May 14, 2021 1:38 pm
EnjoyIt wrote: Fri May 14, 2021 11:06 am
NiceUnparticularMan wrote: Fri May 14, 2021 9:25 am
HomerJ wrote: Thu May 13, 2021 11:53 pm

Please explain your thinking process here.

I can get 2%-3% loans from the bank.

How are they supposed to pay 5%-6% on savings accounts?

Why do you guys believe there are evil bankers somehow screwing the American public by letting them borrow money for houses and cars at 2%-3%?

How do you figure they should be paying 5%-6% to us and then loaning the same money out at 2%-3%? Can you explain your math here? Think it through slowly.



I do this now. Have you really not used online banking yet?
Yeah, that line about 5-6% APRs on a savings account immediately struck me as very problematic.

There is zero economic reason why someone should give you a 5-6% return on money you give them and can demand back at any time with no risk of loss of principal value. The fact no such thing exists in the current financial markets is not because "middlemen" are taking a huge margin for themselves, it is that no one who could actually make such promises would possibly want to be borrowing money from you on such terms. And in fact if any given borrowers are offering you such a rate, you should suspect it is very likely there a large risk that if you ask for all your money back one day, they will not in fact have it to give to you. Because if they were truly a low-risk borrower who could easily return your principal on demand, they would find many lenders willing to offer them loans at way less than 5-6%.

Generally, conventional banks do make money on the margin by borrowing at low rates from savers and then lending at higher rates, but those are NOT risk-free loans they are making! And in fact, they are really relying on the aggregate behavior of their savers not adding up to too many withdrawals at once. But, when enough of their savers lose confidence in the bank's loans, boom, you have a bank run, and the whole thing fails.

Long story short, I am very concerned if that is the sort of reasoning people are using to justify using crypto as "savings accounts". The idea any borrowers would credibly be offering risk-free, fully and unconditionally callable loans, at 5-6% rates makes no sense at all.
This point has been brought up multiple times on these crypto threads and either glossed over by the crypto fans, or they invent some unlikely scenario of people in horrible financial situations who can’t get regular loans somehow have thousands in crypto which they can use as collateral. A very unlikely narrative.
I think it is an important thing to know, and agree that it shouldn't be glossed over. People need to understand how risky this is and what the potential fallout could be like. But for some people who truly believe in the tech like me, that stuff doesn't matter if you are holding for the long term, so I hold ETH. If it crashes, it crashes, I will continue to hold as long as I can see the future potential, and I do think that the potential is immense (as is the downside of course). Ultimately I believe in buying and holding in things you believe in. I don't believe in timing markets or calling bubbles, crypto included.

I do not participate in AAVE etc at this time due to the concerns stated, and I would rather buy ETH or things like DOT, MATIC, etc (though I don't own at this time) which are more about the crypto infrastructure, or I would prefer to stake my coins.
I can fully appreciate that sentiment in believing in what ETH has to offer and investing in it long term.

Please correct me if I’m wrong, but it appears that majority of what ETH offers are ways to manipulate one’s crypto currencies. Staking, lending, even used to create tokens to track equities. It’s all a way for internal manipulation. Finding a use for said currencies. Is that really what the world wants and needs outside of the crypto community? Will more people utilize these services in the future? Who the heck knows.

In my personal very small world, I do not know a single person who utilizes these services other than staking.
Yes, currently the large majority of Ethereum is used for DeFi, which is basically lending/borrowing/exchanging of various crypto. This is not particularly compelling to the average person in my mind unless the popularity of crypto becomes huge that it defacto becomes "real finance".

There are other uses of Ethereum that it is currently used for. NFTs, games probably the other big ones, but DeFi is by far the largest.

I think if the current applications of Ethereum is all it has to offer, then yeah it will be a failure. I'm betting of course that in the future there is much more in store for blockchain (if not Ethereum than some other chain). The current DeFi is a proof of concept in my view about the things that can be done with it, not the end goal. I've used a lot of the current applications of Ethereum, I used it almost every day for several months while I was trading NFTs. I can see the building blocks that it has, what improvements are coming down the road. I've seen what brilliant minds in the past have done with tech, and I'm willing to bet that those people will break this thing open. But ultimately, I admit it is only a bet, but a bet that I'm comfortable making at this point. I also don't routinely recommend it to people who ask if they should invest because it is risky, but I'm willing to educate based on what I know and correct arguments I believe are false.

Edit to add: Somewhat of a tangent, staking I don't really consider investing really. By staking and creating a node, I'm providing a service to users of Ethereum network by making my computer available to process their transactions, and I get paid in Ether in return. I have to provide my computer, internet access, and the electricity. I have to make sure that the node is functional. And I get compensated in return.
Last edited by decapod10 on Fri May 14, 2021 3:50 pm, edited 1 time in total.
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