Bitcoin as a complement or alternative to gold in the PP

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Ugly_Bird
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Re: Bitcoin as a complement or alternative to gold in the PP

Post by Ugly_Bird » Sat Feb 27, 2021 11:39 am

vnatale wrote:
Sat Feb 27, 2021 11:23 am
you'd have had to achieved nearly 900% return on Bitcoin?
That's pretty humble for BTC. From recent trough at $3200 to recent high at $58000 or so it was about 1800%
And $58k most likely not the limit. After reaching the max it will crash again loosing 70-80%.
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Re: Bitcoin as a complement or alternative to gold in the PP

Post by vnatale » Sat Feb 27, 2021 11:44 am

Ugly_Bird wrote:
Sat Feb 27, 2021 11:39 am

vnatale wrote:
Sat Feb 27, 2021 11:23 am

you'd have had to achieved nearly 900% return on Bitcoin?

That's pretty humble for BTC. From recent trough at $3200 to recent high at $58000 or so it was about 1800%
And $58k most likely not the limit. After reaching the max it will crash again loosing 70-80%.


Then the return comes down to about 400%?

Then overall return is:

99% X 1% ~~ 1%
1% X 400% ~~ 4%

Therefore 5% overall.
Above provided by: Vinny, who always says: "I only regret that I have but one lap to give to my cats." AND "I'm a more-is-more person."
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Re: Bitcoin as a complement or alternative to gold in the PP

Post by Ugly_Bird » Sat Feb 27, 2021 11:46 am

bitcoininthevp wrote:
Sat Feb 27, 2021 6:04 am
I’ve read some studies showing a 1% allocation to Bitcoin and 99% to cash has had crazy good returns with great sharpe ratios.
90% bitcoin and 10% cash is better :-)
I decided to stick to 80%/10% works OK so far. Rebalanced at 54k recently, the next one should be at112k
It is important to be conservative than greedy :-)
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Re: Bitcoin as a complement or alternative to gold in the PP

Post by bitcoininthevp » Sat Feb 27, 2021 1:54 pm

10% yearly returns, with minimal drawdown. Here it is:

Image

from: https://twitter.com/100trillionUSD/stat ... 7935290369
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Re: Bitcoin as a complement or alternative to gold in the PP

Post by Smith1776 » Sat Feb 27, 2021 8:01 pm

C'mon, fellows! Join the 1% BTC crowd! O0
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Re: Bitcoin as a complement or alternative to gold in the PP

Post by whatchamacallit » Sat Feb 27, 2021 9:25 pm

"BTC is not bitcoin"?

It all looks like mania to me but Bitcoin SV looks undervalued against the other big coins available on RobinHood.

It is on sale for $180 right now, less than $60 above its March 2020 bottom.


Just glancing at March 2020 lows on RobinHood:

Bitcoin SV $122

Ethereum $108

Bitcoin cash $167

Bitcoin $4800
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Re: Bitcoin as a complement or alternative to gold in the PP

Post by bitcoininthevp » Mon Mar 01, 2021 9:22 am

"Bitcoin SV looks undervalued"

Nah, its just garbage. And its being delisted from exchanges, etc.

If you arent deep in the space and want to play, just buy bitcoin and enjoy the ride.
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Re: Bitcoin as a complement or alternative to gold in the PP

Post by dualstow » Mon Mar 01, 2021 9:56 am

I am curious enough to let the rest of my bitcoin ride in my vp.
As for pp: it’s true that, like gold, bitcoin is a non-productive asset. It’s volatile, and the pp likes volatile assets with a cash anchor. And, I think it’s a very real thing that btc inflows are hurting gold inflows.

Two thoughts:
A. If gold truly fell out of favor relative to the dollar, I could still find a way to sell it in China when I visit my inlaws. It will always be prized in China and India. Even where there is great interest in btc in China, it’s being squashed.

B. Holding btc is one thing. Do you really want to rebalance out of other assets and into bitcoin? 1% is not a lot, but i can’t see myself selling assets to buy bitcoin because if it goes way down, I’d have to explore the reasons for its drop. The other assets always come back- know what I mean?
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Re: Bitcoin as a complement or alternative to gold in the PP

Post by Ugly_Bird » Mon Mar 01, 2021 10:10 am

dualstow wrote:
Mon Mar 01, 2021 9:56 am
And, I think it’s a very real thing that btc inflows are hurting gold inflows.
It is probably the case, but next time Bitcoin crashes 70-80% (and it will as the part of 4 year halving cycle) gold should catch up when it happens.
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Re: Bitcoin as a complement or alternative to gold in the PP

Post by dualstow » Mon Mar 01, 2021 10:22 am

vincent_c wrote:
Mon Mar 01, 2021 10:07 am
...
I'm having a hard time understanding why the hesitation in adopting btc exposure or at least understanding that at the right price it is an essential addition to the PP since I am a hardcore PPer.

The sentence above doesn’t make much sense to me. You could replace “btc” with “platinum” or “diamonds.” Maybe you meant to say despite the fact that you are a hardcore pp’er?
In any case, my problem is that i don’t have the slightest idea what the right price is.

The only reason something like Bitcoin SV is something you can ignore is because the market cap is still irrelevant, if it were relevant then the same things would apply to any asset that acts as a true store of value and that you should have a market cap weighted allocation.

I don’t even know what SV is, but the fact that b in the vp calls it “garbage” is enough to give me pause. That’s not to say it won’t skyrocket someday. I’m just not interested.

So maybe we should be debating whether it is still debatable whether btc is a 'true' store of value or if a lot of you still consider it a fad.
Hah. Well i think you’re very much in the minority. It is fully up for debate, and not because there is anything wrong with bitcoin. I think Satoshi is brilliant, the concept is brilliant, and I’m enjoying learning about it. But, gold has a few thousand years on it. Is it a fad? No one knows. It would be wrong to discount it. But it’s still young. I hope some digital coin succeeds, but ...
Put it this way. Your line above looks kind of like “Hinduism is the one true faith and I don’t understand why that’s still debatable.”
Ugly_Bird wrote:
Mon Mar 01, 2021 10:10 am
dualstow wrote:
Mon Mar 01, 2021 9:56 am
And, I think it’s a very real thing that btc inflows are hurting gold inflows.
It is probably the case, but next time Bitcoin crashes 70-80% (and it will as the part of 4 year halving cycle) gold should catch up when it happens.
could be / I hope so.
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Re: Bitcoin as a complement or alternative to gold in the PP

Post by Ugly_Bird » Mon Mar 01, 2021 10:29 am

dualstow wrote:
Mon Mar 01, 2021 10:22 am
could be / I hope so.
If Bitcoin is "digital gold" and it crashes, the direction the sell-off money would follow is obvious. Or ... maybe not :-)
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Re: Bitcoin as a complement or alternative to gold in the PP

Post by doodle » Mon Mar 01, 2021 10:49 am

dualstow wrote:
Mon Mar 01, 2021 10:22 am
Hah. Well i think you’re very much in the minority. It is fully up for debate, and not because there is anything wrong with bitcoin. I think Satoshi is brilliant, the concept is brilliant, and I’m enjoying learning about it. But, gold has a few thousand years on it. Is it a fad? No one knows. It would be wrong to discount it. But it’s still young. I hope some digital coin succeeds, but ...
Put it this way. Your line above looks kind of like “Hinduism is the one true faith and I don’t understand why that’s still debatable.”
Im not as impressed by it. While it is a creative use of blockchain technology, It is an unbelievably inefficient form of money. The energy usage per transaction is staggering and the network is unable to handle even a small transaction load. Ethereum and other coins are at least addressing these issues and as such are creating more viable options...Bitcoin strikes me as a dinosaur.
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Re: Bitcoin as a complement or alternative to gold in the PP

Post by Vil » Mon Mar 01, 2021 10:51 am

Toilet paper.jpg
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Currently unavailable, check here

When Bitcoin-printed toilet paper sold in India has ran out of stock, top is near (rule 2021:1 ;D )
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Re: Bitcoin as a complement or alternative to gold in the PP

Post by dualstow » Mon Mar 01, 2021 11:05 am

vincent_c wrote:
Mon Mar 01, 2021 10:49 am

In 2017, I started off asking all the questions you probably have now.

I should rephrase what I've been saying. I think that Bitcoin is a speculation that it will one day become a true store of value which means that you can either allocate to it when it gets there and at one point it will track the price of gold when they are equals in terms of liquidity. Or you can allocate to it now if you believe that it is inevitable.

Perhaps this does mean that it belongs in the VP until its price trades the same way as gold and then we can decide whether to swap over to BTC. But I'm arguing a market cap weighting allows you to be properly exposed on the way there.

Edit: I am not adding to my allocations at these levels although I am rebalancing and my cost basis is well below 18k. I do not recommend buying at current prices but I do recommend hedging against the risk that current prices are actually below the price that the market will fall to during the next bear market.
Ok, that makes a lot more sense to me. Yes, it's a speculation that could very well be an accepted asset someday.
doodle wrote: Im not as impressed by it. While it is a creative use of blockchain technology, It is an unbelievably inefficient form of money.
...

Janet Yellen agrees.
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Re: Bitcoin as a complement or alternative to gold in the PP

Post by bitcoininthevp » Mon Mar 01, 2021 11:46 am

I always like this path as a way to visualize Bitcoins monetization path.

Image

I think Bitcoin is perhaps a few notches up from when this was published a couple years ago.
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Re: Bitcoin as a complement or alternative to gold in the PP

Post by dualstow » Mon Mar 01, 2021 11:58 am

What a great chart!
vincent_c wrote:
Mon Mar 01, 2021 11:37 am
What are the metrics that you would look at to determine if btc is an accepted asset?

And what would have to happen to get it there or to prevent it from getting there?
I don't know about anyone else, but the number one thing I'm watching is to see how governments handle it.
It's encouraging to see companies investing in bitcoin. Daunting as an investor in the company -- I want them to focus on making stuff -- but encouraging for bitcoin.

Janet Yellen says bitcoin is horribly inefficient. That's cool, I agree. If government moves in the direction of a hands off approach, however, I would be more tempted to jump in for a substantial amount. Tax is ok. I just don't want to put money into something that they're going to quash.
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Re: Bitcoin as a complement or alternative to gold in the PP

Post by dualstow » Mon Mar 01, 2021 12:27 pm

vincent_c wrote:
Mon Mar 01, 2021 12:13 pm
I honestly think the direction is already super clear that the US is in support of BTC.
What's the evidence?
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Re: Bitcoin as a complement or alternative to gold in the PP

Post by bitcoininthevp » Mon Mar 01, 2021 12:37 pm

dualstow wrote:
Mon Mar 01, 2021 12:27 pm
vincent_c wrote:
Mon Mar 01, 2021 12:13 pm
I honestly think the direction is already super clear that the US is in support of BTC.
What's the evidence?
All major US government departments have reported on how Bitcoin should be treated (IRS, SEC, etc).

US Banks allowed to custody it.

Avanti got a bank license and will be part of the fed network of banks and they are a Bitcoin bank.

Coinbase is allowed to go public as a Bitcoin company.

Federal government has auctioned seized Bitcoin several times. (they dont auction off seized cocaine, for example)

That doesn’t mean US will alway look kindly on it. In fact, my thesis involves quite a showdown with Bitcoin and governments. After all, the whole point of Bitcoin is that it is anti-central bank. But I will take this calm before the storm in the meantime. Hopefully enough big businesses, HNWIs, politicians, etc get into bitcoin so the showdown isnt as bad as I think.
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Re: Bitcoin as a complement or alternative to gold in the PP

Post by bitcoininthevp » Mon Mar 01, 2021 12:39 pm

Here is a nice bitcoin log price chart to match up with the previous one.

Image

Its all made up, but what if...?
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Re: Bitcoin as a complement or alternative to gold in the PP

Post by Ugly_Bird » Mon Mar 01, 2021 12:53 pm

dualstow wrote:
Mon Mar 01, 2021 11:58 am
I just don't want to put money into something that they're going to quash.
And there is a good chance they will. If they cannot control it they destroy it... or at least try.
Remember how gold was ones confiscated? :-)
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Re: Bitcoin as a complement or alternative to gold in the PP

Post by bitcoininthevp » Mon Mar 01, 2021 1:05 pm

vincent_c wrote:
Mon Mar 01, 2021 12:57 pm
The only thing I think is a problem is that you can't place capital controls on bitcoin.
Well, Bitcoin is an inflation-resistant, censorship-resistant, seizure-resistant, pseudonymous digital asset.

And governments like inflating, censorship, taxation, and privacy intrusion.
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Re: Bitcoin as a complement or alternative to gold in the PP

Post by dualstow » Mon Mar 01, 2021 1:42 pm

Ugly_Bird wrote:
Mon Mar 01, 2021 12:53 pm
dualstow wrote:
Mon Mar 01, 2021 11:58 am
I just don't want to put money into something that they're going to quash.
And there is a good chance they will. If they cannot control it they destroy it... or at least try.
Remember how gold was ones confiscated? :-)
i’m not quite that old. O0
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Re: Bitcoin as a complement or alternative to gold in the PP

Post by dualstow » Mon Mar 01, 2021 1:45 pm

bitcoininthevp wrote:
Mon Mar 01, 2021 12:37 pm
dualstow wrote:
Mon Mar 01, 2021 12:27 pm
vincent_c wrote:
Mon Mar 01, 2021 12:13 pm
I honestly think the direction is already super clear that the US is in support of BTC.
What's the evidence?
All major US government departments have reported on how Bitcoin should be treated (IRS, SEC, etc).

US Banks allowed to custody it.

Avanti got a bank license and will be part of the fed network of banks and they are a Bitcoin bank.

Coinbase is allowed to go public as a Bitcoin company.

Federal government has auctioned seized Bitcoin several times. (they dont auction off seized cocaine, for example)

That doesn’t mean US will alway look kindly on it. In fact, my thesis involves quite a showdown with Bitcoin and governments. After all, the whole point of Bitcoin is that it is anti-central bank. But I will take this calm before the storm in the meantime. Hopefully enough big businesses, HNWIs, politicians, etc get into bitcoin so the showdown isnt as bad as I think.
All important milestones, I agree.
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Re: Bitcoin as a complement or alternative to gold in the PP

Post by Xan » Mon Mar 01, 2021 1:52 pm

bitcoininthevp wrote:
Mon Mar 01, 2021 1:05 pm
Well, Bitcoin is an inflation-resistant, censorship-resistant, seizure-resistant, pseudonymous digital asset.

And governments like inflating, censorship, taxation, and privacy intrusion.
Emphasis mine.

Pseudonymity is a major step backwards, is it not? Gold is anonymous. Cash (physical) is anonymous. What if every dollar bill had on it some identifier that was unique to you, and which once linked to you, permanently identified every transaction you had ever performed? Suppose the government proposed putting that in every dollar bill. There would be an uproar. It would never fly.

I'm not convinced that Bitcoin isn't a plot by governments to get "money" itself to report everything everybody does. I don't understand why anybody thinks this pseduonymity is a good thing.
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Re: Bitcoin as a complement or alternative to gold in the PP

Post by Ugly_Bird » Mon Mar 01, 2021 2:01 pm

dualstow wrote:
Mon Mar 01, 2021 1:42 pm
Ugly_Bird wrote:
Mon Mar 01, 2021 12:53 pm
dualstow wrote:
Mon Mar 01, 2021 11:58 am
I just don't want to put money into something that they're going to quash.
And there is a good chance they will. If they cannot control it they destroy it... or at least try.
Remember how gold was ones confiscated? :-)
i’m not quite that old. O0
Neither am I. But HBPP book mentions that in the chapter about gold :-)
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