Coinbase Onramp Now Supports Buying Crypto With Apple Pay

[flmmkr]

From January 2022 to January 2023, BTC denominated prices doubled. A 100% inflation rate. That does not make bitcoin a good refuge from the 7 to 9% the USD was seeing.

There's a lot of misinformation in this thread about Bitcoin and crypto, in both directions.

When you talk about the price of Bitcoin doubling (fyi, Bitcon's price did not double from January 2022 to January 2023 like you said... it actually went down... I think you're thinking of January 2023 to January 2024, where it actually more than doubled) you would not talk about that in terms of inflation of a currency. If you want to compare it to something, you would instead compare it the price or value of another asset, like a stock. Take Nvidia for example. In that same period Nvidia's stock quadrupled. Is that 400% inflation? Absolutely not. It's gains.

In 2022, the block reward for Bitcoin was 6.25 BTC per block. That is ~328,500 BTC mined the entire year. From January 2022, there was a circulating supply of ~18,917,268 BTC. That's a 1.7% inflation rate for the entire year. The inflation rate is now less than half of that since the halving earlier this year reduced the block reward to 3.125 BTC per block, or ~164,250 BTC per year.

The greater than 9% inflation rate we saw in 2022 was for prices of goods and services that people experience in their living expenses. That has nothing to do with the inflation rate of a currency. The M2 money supply actually decreased during the same period, by $462 billion from $21.188 trillion to $20.726 trillion. Money supply/circulating currency increasing can cause inflation, it's not the only cause. Other factors play into inflation, including supply and demand. Likewise, just because you have a money supply decreasing doesn't mean you get deflation either. It's a complex system that is very difficult to understand, and even more difficult to predict.

So as someone else in this thread stated, yes you need to educate yourselves and learn more about what Bitcoin is, how it works, and what its use case is. You also need to learn more about economics so that you understand what inflation is and how that works as well, along with other aspects.

For those pro-Bitcoiners here, you also need to educate yourselves more. At least some of you. Bitcoin and crypto are not stocks or bonds... not even similar. They are a completely different asset class and are fundamentally different. You cannot value them the same way you value a company. Yes, the order books work the same, and both have a degree of speculation, especially now with such high PE ratios. However, that's pretty much where the similarities end. There are numerous ways to value Bitcoin and other cryptos, and some ways make more sense for some cryptos than others. It depends on the particular crypto's use case and tokenomics.

Discounting crypto as a scam or use case only for criminals is naive and lazy. The fact is that crypto is used less for illicit activities than the U.S. dollar. Should we stop using the U.S. dollar because of illicit activities? No. The key is to find ways to track and trace the illicit activity to stop the criminals. And that's exactly what companies like Chainalysis help law enforcement with.

I can literally keep going on and on, but I won't. Just wanted to log in briefly to respond and point out some incorrect information and set things straight.

 

[Analog Kid]

and winners rely on others losing.

This is really important for people to understand. Everyone puts their money in a jar. If someone takes out more than they put in, then someone gets less than they put in. There is absolutely no means for the "investor group" to earn a return as a whole. It's all a game of chicken.

 

[flmmkr]

This is really important for people to understand. Everyone puts their money in a jar. If someone takes out more than they put in, then someone gets less than they put in. There is absolutely no means for the "investor group" to earn a return as a whole. It's all a game of chicken.

Not when the jar is inflating (i.e. money printing with fiat).

That's what's really important to understand, because it's happening right now before our eyes, albeit in slow motion. Your money, and the value of it, is being inflated away. 25% of the U.S. money supply in circulation was created in one year. The U.S. dollar has lost 98% of its value since 1971, when gold was removed as the backing of the U.S. dollar. The U.S. debt is now over $36 trillion dollars. Interest on that debt is now the third largest expense of the U.S. government. The debt is projected to grow to at least $54 trillion inside of 10 years. That's another 50% increase in the debt in the next decade, and that's without any stimulus to deal with any economic events. Cutting the budget won't solve this problem. There isn't $2 trillion to cut. The only way out is to inflate away the debt by printing more U.S. dollars. That means the U.S. dollar value goes down. You need to find something opposite of that to hedge against it. That is one of the things Bitcoin was designed for and what it is.

There will only ever be 21 million BTC. That's less than 0.002625 BTC (or 262,500 satoshis worth about $250) per person right now. Get off zero while you can afford to.

 

[tobybrut]

It's amazing to me how many people try to argue that crypto and stocks are the same because they both go up and they both go down and you buy and sell each. Stocks represent ownership of an underlying asset, crypto does not. If I bought a share of Apple 20 years ago and still owned that share now, the underlying asset increased in value: Apple owns more real estate and structures, they own more patents and IP, they have greater brand value and a stronger ability to sell, they own media content and they own a massive supply chain and pipeline to deliver product. Yes there is fluctuation around the current enterprise value that reflects some speculation based on future performance, but it has an underlying, intrinsic value.

If I bought a bitcoin 20 years ago and still owned it now, it has no intrinsic value. It is only worth more today than it was then because the most recent person made an unsecured deposit of a larger amount. It is a pyramid scheme.

Gold is fetishized as an investment and its cost far exceeds its intrinsic value because of intensive marketing, a lack of understanding of how money and macro-economics work, and a general nostalgia for the olden days. Still, like real estate, gold does have an intrinsic value and is also scarce. It is, in itself, useful for many things that gold alone can be used for and there is a limited amount of it to be used for those purposes.

Crypto is not scarce as evidenced by the number new coins that keep getting sold all the freaking time. There is only one element in the periodic table with the atomic configuration of gold. There are many coins that are essentially the same nothingness with different names and there's no real barrier to creating another one and marketing it in competition to the existing set. Bitcoin is a brand name but the coin itself is nothing special beyond the brand loyalty it brings.

The halvenings are just more mysticism around a reduction in maintenance fees. Nobody expects an investment to double if the maintenance fees are cut incrementally. It's an opportunity for hype though and any impact that has on the price is more indication of its poor investment quality.

You, and much of the crypto community, are confusing inflation with the monetary base. The monetary base is a measure of how many units of a currency are in circulation. The monetary base of bitcoin increases with mining. Inflation is a measure of price stability which is not the same thing at all.

From January 2022 to January 2023, BTC denominated prices doubled. A 100% inflation rate. That does not make bitcoin a good refuge from the 7 to 9% the USD was seeing.

As far as restricting the monetary base, we learned some important lessons in the 1930s about the downsides of that strategy as well. If you're proposing a currency more restricted than gold, you'd expect Great-er Depressions to follow.

Investment companies hold crypto because their customers want them to. They make their profits whether their customers win or lose on the trades as long as they manage the assets. If governments, particularly large governments, begin holding crypto reserves then crypto prices will go up which is not the vindication you might think it is, it would simply amount to a massive transfer of wealth from taxpayers to individual crypto holders.

The way they move are the same, through bid prices and what people are willing to sell for. You cannot have a buy without a sell. In that way, every security and commodity is the same. That doesn’t mean crypto is a security. It is a commodity, much like gold is. People get their opinions on what they think a stock or bond or commodity is worth and they will put in a bid price (aka limit order) or market order for it. Those who sell do not sell until they think they can get the price they want to get. If there are no buyers or sellers, the stock price DOES NOT CHANGE and cannot change. I won’t throw in the issue of market makers who are forced to buy and sell securities for which they sponsor, but my point is not that crypto is just like a stock.

The point is all tradeable investments have their prices changed in exactly the same way. You name it, real estate, private trades, whatever. They all determine prices in exactly the same manner. The seller and buyer put out a price and they negotiate for the final selling price. Buyers and sellers via supply and demand determine the price. Intrinsic value may guide people to determine what they think something is worth, but that means nothing if no one is trading. In this respect, the way prices are determined is exactly the same between a stock and a crypto.

As for scarcity, that is true of many coins and tokens. Those will devalue just like currency does. The more of it there is, the less it’s worth. But not all crypto is like that. Ethereum was criticized for excessive creation of new ETH coins until the project introduced a burn wallet. At times, the supply of ETH was contracting. The grand daddy of them all is bitcoin, worth double what the rest of the crypto market is worth, which is a finite resource with a defined inflation level that is lower than that of gold. Prior to the halving, there were 900 bitcoin mined per day. After the halving there are only 450 coins a day that can possibly be mined. In slightly under four years, that rate will be cut down to 225 coins a day. The bitcoin algorithm says that there will never be more than 21 million bitcoin ever, of which it is estimated 6-7 million are lost forever in computers that ended up in junk yards or lost keys for a crypto wallet. That means there are probably no more than 14-15 million bitcoin that will ever be available for sale. This scarcity is why bitcoin is often called digital gold, though gold does not have a known maximum supply. You mentioned bitcoin prices doubled this year. That has nothing to do with inflation but rather there being more buyers than sellers.

Not all crypto is the same just like all stocks are not the same. There are a lot of scams out there, and I’ve been scammed a few times myself with a couple of rug pulls. Scams aren’t unprecedented in the regular financial world either with names like Bernie Madoff and Michael Milken coming to mind. But if you stay with the blue chips cryptos, those are not going to scam anyone. They are more volatile than stocks in general, but even stocks have a statistic known as the beta coefficient, which is its volatility compared to the general market and therefore its risk. But as every investor knows, a higher beta coefficient also means the possibility of higher gains relative to the market.

 

[flmmkr]

Investment firms control what investments are available to them. Vanguard is an example of a holdout that refused the demands of its customers until its CEO departed. That’s when they caved.

You still cannot invest in spot Bitcoin ETFs through Vanguard. There's speculation they may allow it in 2025, but that has not been confirmed by Vanguard yet.

I agree with most everything else you said, though there are some technicalities are wrong. For example, the general consensus is that about 3.8 million BTC are lost. The gist of it is accurate though.

There are scams in crypto, just like in traditional finance, but crypto is not a scam.

 

[Analog Kid]

When you talk about the price of Bitcoin doubling (fyi, Bitcon's price did not double from January 2022 to January 2023 like you said... it actually went down... I think you're thinking of January 2023 to January 2024, where it actually more than doubled) you would not talk about that in terms of inflation of a currency. If you want to compare it to something, you would instead compare it the price or value of another asset, like a stock. Take Nvidia for example. In that same period Nvidia's stock quadrupled. Is that 400% inflation? Absolutely not. It's gains.

I didn't say the price of bitcoin doubled, I said bitcoin denominated prices doubled. In January 2023, it would take twice as many bitcoin to buy a US dollar, and US dollars is what you spend on stuff. So it cost twice as many bitcoin to buy stuff. Inflation was 100%

I don't compare it to an asset because it is not an asset. There is no underlying value to a bitcoin, it is only worth what it can be transacted for like a currency, but a currency that can only buy other currencies. Nvidia stock has an underlying asset, a fraction of a massive company with a ton of IP and other capital and future expected revenue. Bitcoin has none of that.

In 2022, the block reward for Bitcoin was 6.25 BTC per block. That is ~328,500 BTC mined the entire year. From January 2022, there was a circulating supply of ~18,917,268 BTC. That's a 1.7% inflation rate for the entire year. The inflation rate is now less than half of that since the halving earlier this year reduced the block reward to 3.125 BTC per block, or ~164,250 BTC per year.

That is not an inflation rate, that is a 1.7% rise in the monetary base. Inflation is about prices, not units of currency.

The greater than 9% inflation rate we saw in 2022 was for prices of goods and services that people experience in their living expenses. That has nothing to do with the inflation rate of a currency. The M2 money supply actually decreased during the same period, by $462 billion from $21.188 trillion to $20.726 trillion. Money supply/circulating currency increasing can cause inflation, it's not the only cause. Other factors play into inflation, including supply and demand. Likewise, just because you have a money supply decreasing doesn't mean you get deflation either. It's a complex system that is very difficult to understand, and even more difficult to predict.

A currency doesn't have an inflation rate. It has supply, and it has exchange rates to other currencies. The numbers you're talking don't correspond to M2 which includes loans denominated in the currency among other things, it corresponds to MB, the amount of currency in circulation and in vaults.

Prices have an inflation rate. Inflation is not how much money exists, it is how much money is needed to buy a constant (or substitutable) thing.

You are right that a growing supply of money does not mean prices inflate, nor does fixing a money supply prevent prices from changing. Which is why I clearly said:

The monetary base is a measure of how many units of a currency are in circulation. The monetary base of bitcoin increases with mining. Inflation is a measure of price stability which is not the same thing at all.

The crypto cult, through some combination of ignorance and a desire to benefit from that ignorance, try to conflate the rate of change of the currency supply with the rate of inflation and claim that crypto is a hedge against inflation. It is not. Crypto is far more volatile than most national currencies and thus prices denominated in crypto are far more volatile, which is the point I was making.

 

[Analog Kid]

Not when the jar is inflating (i.e. money printing with fiat).

That's what's really important to understand, because it's happening right now before our eyes, albeit in slow motion. Your money, and the value of it, is being inflated away. 25% of the U.S. money supply in circulation was created in one year. The U.S. dollar has lost 98% of its value since 1971, when gold was removed as the backing of the U.S. dollar. The U.S. debt is now over $36 trillion dollars. Interest on that debt is now the third largest expense of the U.S. government. The debt is projected to grow to at least $54 trillion inside of 10 years. That's another 50% increase in the debt in the next decade, and that's without any stimulus to deal with any economic events. Cutting the budget won't solve this problem. There isn't $2 trillion to cut. The only way out is to inflate away the debt by printing more U.S. dollars. That means the U.S. dollar value goes down. You need to find something opposite of that to hedge against it. That is one of the things Bitcoin was designed for and what it is.

There will only ever be 21 million BTC. That's less than 0.002625 BTC (or 262,500 satoshis worth about $250) per person right now. Get off zero while you can afford to.

You were doing so well explaining the difference between currency supply and inflation, then you followed up with this...

Do you think inflation started when they took the dollar off the gold standard? Find an inflation calculator and play with some dates. Here's a fun one, look at the purchasing power of a 1940 dollar in 1928. The dollar could buy significantly more in 1940 because prices deflated. Can you think of anything else that happened between 1928 and 1940?

US debt, unlike crypto, is an actual investment. It is an expense to the government but it is a source of income to bond holders. A much more stable store of value than crypto.

You don't inflate away the debt, you grow the economy (measured in real, not nominal dollars) so the debt is an ever shrinking fraction of GDP.

A lot of things are growing faster than inflation. Wages for one. The stock market for another. Inflation protected treasuries. If you want to hedge against inflation, invest in something of value.

 

[Analog Kid]

The way they move are the same, through bid prices and what people are willing to sell for. You cannot have a buy without a sell. In that way, every security and commodity is the same. That doesn’t mean crypto is a security. It is a commodity, much like gold is. People get their opinions on what they think a stock or bond or commodity is worth and they will put in a bid price (aka limit order) or market order for it. Those who sell do not sell until they think they can get the price they want to get. If there are no buyers or sellers, the stock price DOES NOT CHANGE and cannot change. I won’t throw in the issue of market makers who are forced to buy and sell securities for which they sponsor, but my point is not that crypto is just like a stock.

The point is all tradeable investments have their prices changed in exactly the same way. You name it, real estate, private trades, whatever. They all determine prices in exactly the same manner. The seller and buyer put out a price and they negotiate for the final selling price. Buyers and sellers via supply and demand determine the price. Intrinsic value may guide people to determine what they think something is worth, but that means nothing if no one is trading. In this respect, the way prices are determined is exactly the same between a stock and a crypto.

The mechanics may look similar, but what is being bid on is very different. Bitcoin is not a commodity. Oil is a commodity, soy beans are a commodity. A commodity is something. Bitcoin is nothing. It has no inherent value except for what it can buy. It is a means of exchange. It is a currency with which to buy other currencies.

As for scarcity, that is true of many coins and tokens. Those will devalue just like currency does. The more of it there is, the less it’s worth. But not all crypto is like that. Ethereum was criticized for excessive creation of new ETH coins until the project introduced a burn wallet. At times, the supply of ETH was contracting. The grand daddy of them all is bitcoin, worth double what the rest of the crypto market is worth, which is a finite resource with a defined inflation level that is lower than that of gold. Prior to the halving, there were 900 bitcoin mined per day. After the halving there are only 450 coins a day that can possibly be mined. In slightly under four years, that rate will be cut down to 225 coins a day. The bitcoin algorithm says that there will never be more than 21 million bitcoin ever, of which it is estimated 6-7 million are lost forever in computers that ended up in junk yards or lost keys for a crypto wallet. That means there are probably no more than 14-15 million bitcoin that will ever be available for sale. This scarcity is why bitcoin is often called digital gold, though gold does not have a known maximum supply. You mentioned bitcoin prices doubled this year. That has nothing to do with inflation but rather there being more buyers than sellers.

Bitcoin is a brand it is not a thing. Look how easy it is for other currencies to launch and get attention and compete with bitcoin. There's nothing holding people to bitcoin, they could decide to sell their bitcoin at these newly inflated rates and buy AmazonCoin because Amazon gives a 5% discount for purchases made in the new coin. Or whatever. It's not a question of how many bit coin can be mined, it's a question of how many crypto coins are out there competing for mind share. They are all essentially identical and interchangeable.

 

[wbeasley]

Not when the jar is inflating (i.e. money printing with fiat).

That's what's really important to understand, because it's happening right now before our eyes, albeit in slow motion. Your money, and the value of it, is being inflated away. 25% of the U.S. money supply in circulation was created in one year. The U.S. dollar has lost 98% of its value since 1971, when gold was removed as the backing of the U.S. dollar. The U.S. debt is now over $36 trillion dollars. Interest on that debt is now the third largest expense of the U.S. government. The debt is projected to grow to at least $54 trillion inside of 10 years. That's another 50% increase in the debt in the next decade, and that's without any stimulus to deal with any economic events. Cutting the budget won't solve this problem. There isn't $2 trillion to cut. The only way out is to inflate away the debt by printing more U.S. dollars. That means the U.S. dollar value goes down. You need to find something opposite of that to hedge against it. That is one of the things Bitcoin was designed for and what it is.

There will only ever be 21 million BTC. That's less than 0.002625 BTC (or 262,500 satoshis worth about $250) per person right now. Get off zero while you can afford to.

you didnt write that. you cut and pasted it...

BitCoin is not a hedge. It's a scam.
And that's why it is so heavily promoted.
You need to keep finding new investors (suckers) so others can reap a profit.

The US dollar buys more now than it did a decade ago...

 

[raghu8912]

Apple is too slow jumping on the crypto and AI bandwagon, bunch of dinosaurs in charge

agree, Crypto is the future, i don't use credit cards or Cash for buying anything. i use crypto for everything.

 

[raghu8912]

I’m seeing a lot of negative comments on crypto. For those who don’t know what they’re doing with crypto, don’t be in it, but it is fast becoming mainstream. If you stick with the blue chip coins or tokens, it is not gambling. It is gambling if you’re spending all of your money on meme coins, except maybe the OG meme, Dogecoin, which is fairly mature. With the advent of bitcoin and ethereum ETF’s, with more to come (probably Solana, Polygon, Cardano, Dogecoin, etc.), you’ll start to find a lot of your mutual funds are invested in crypto.

It’s good to learn more about crypto because it is about to boom with institutional investors flocking to it and including these investment options for their customers. Several large investment firms are now recommending their customers put at least 6% of their portfolios in crypto. There is a ton of money to be made. Consider this time frame to be the ground floor of crypto. An entire industry currently worth $3 trillion is expected to grow to $30 trillion by the end of the decade, matching that of gold.

can you please explain tome below.
any one can create a a crypto currency ?
if demand goes up price goes up ?
What am i investing in when i buy a crypto currency ?
i invest in a stock, price goes up as the company makes more money, i own a share in that company.
when i buy a crypto what do i own ?
is it similar to buying dollars and waiting for the price of dollar to go up ?

 

[tobybrut]

can you please explain tome below.
any one can create a a crypto currency ?

Yes, there are various sites where you can actually create your own token. I almost decided to create one on DEGEN, a layer 3 network off of Ethereum, but I decided I didn’t have time to maintain it. Note that tokens managed by individuals tend to be meme coins and are generally unsafe, so always invest in those expecting them to go to zero. If they take off, great, but don’t expect it since hitting the right meme coin is very tough. The solid crypto coins are generally sponsored by businesses. Always do your due diligence when investing in specific coins or tokens. For those who don’t know the difference between a coin and a token, a coin is the actual base network. Anything derived from a base network is a token, e.g. layer 2 or higher. For instance, Ethereum is a base network and is a coin. Polygon or Base are chains built directly on the Ethereum network and are layer 2. DEGEN is a network chain built on Base, hence is a layer 3 token.

Note that people interchangeably use the terms coin and token, but they aren’t always accurate about the usage. A layer one is a coin while layer 2 or above are tokens. But don’t be offended if someone calls a token a coin. I do it myself.

if demand goes up price goes up ?

Price changes happen just like it does with stocks, bonds, commodities, and every other investment vehicle you can think of. If there are more buyers than sellers, the price goes up. If there are more sellers than buyers, the price goes down.

What am i investing in when i buy a crypto currency ?

You are buying a digital coin or token that has a record on the blockchain of the coin you buy. For instance, if you buy one Ethereum coin, a transaction takes place and a record is saved to the blockchain. Your digital/crypto wallet holds that pointer to the blockchain’s record. That digital coin has value and can be sold. One thing people don’t quite understand is that all records are held on the blockchain. A wallet is merely a pointer to records on that blockchain. No coins are actually held in a wallet, so if you lose it, you haven’t actually lost anything if you still have the 12 or 24 word seed phrase used to create that wallet. Just like any other investment vehicle, a digital coin or token has value because people believe it has value and there is demand for it.

i invest in a stock, price goes up as the company makes more money, i own a share in that company.

The price of a stock does not go up if a company makes more money. Investors who see a company make more money will want to buy that stock and place orders for that stock. That is what makes the price go up, not the company making more money. The price of a stock is solely dependent on buyers and sellers. As I said above, if there are more buyers than sellers, the price goes up and vice versa. A company that makes more money is more attractive to investors. Because more investors are attracted, they buy more and that causes the price of the stock to rise.

when i buy a crypto what do i own ?

See my answer on what you are investing in when you buy a crypto.

is it similar to buying dollars and waiting for the price of dollar to go up ?

In the way that prices changes, yes. People trade in currencies all the time. People buy and sell dollars, hoping the value will go up compared to other currencies. With crypto, you are buying it in hopes it will appreciate in comparison with the currency of your home country.

 

[tobybrut]

You need to keep finding new investors (suckers) so others can reap a profit.

Hate to break it to you, but the stock market is a zero sum game and cannot rise without finding new investor money. Stocks do not mysteriously create money. It takes someone drawing money from some other source and buying that stock. Likewise, the stock market value contracts when someone sells a stock and withdraws it from the market. If you are in stocks, you are one of those “suckers” who bought in using money from outside the stock market.

 

[wbeasley]

Hate to break it to you, but the stock market is a zero sum game and cannot rise without finding new investor money. Stocks do not mysteriously create money. It takes someone drawing money from some other source and buying that stock. Likewise, the stock market value contracts when someone sells a stock and withdraws it from the market. If you are in stocks, you are one of those “suckers” who bought in using money from outside the stock market.

Stocks actually have companies doing stuff with the invested money to generate more hopefully.
Totally different game.

There are people who play the markets and bet on gains.

But the underlying product is vastly different from the crypto market which is always push push push for new blood to invest...

 

[wbeasley]

Anyone still buying NFTs?

Or squatting on prime real estate in the Metaverse?

IT has a lot to answer for parting fools from their money...

 

[Nugget]

Stocks do not mysteriously create money

You are technically correct because there's nothing at all "mysterious" about how dividends work. Stocks entitle their owner to a portion of the underlying company's growth in the form of asset expansion and/or dividend payments. That's "creating money" from the perspective of the shareholders.

 

[Analog Kid]

Hate to break it to you, but the stock market is a zero sum game and cannot rise without finding new investor money. Stocks do not mysteriously create money. It takes someone drawing money from some other source and buying that stock. Likewise, the stock market value contracts when someone sells a stock and withdraws it from the market. If you are in stocks, you are one of those “suckers” who bought in using money from outside the stock market.

Person A set forth such labors as taking loans, leveraging their credit cards, and investing their life savings for a sum total of $1 million US dollars to create a Company, and Person A looked upon the Company and saw that it was good. The Company brought forth Things whose value were in itself, and such Things fell upon the eyes of a Customer who valued the Thing more than Money and the evening and the morning brought a sale. Person A saw this sale and saw that it was good.

Through the sale of many Things, the Company became known and the Money covered the loans and debts and replenished the life savings until such time as Person A grew envious of their neighbor and wished for greater Money still. Person A divided the Company into 5 shares of which they kept one and sold 4 to the Investors for $8 million in total, for the Investors wished to partake of such magic as they saw Person A having worked alone. The $8 million did become Capital with which Person A could expand their business, improve their factories, raise their brand, and sell many Things into lands far and wide. And the Investors saw that it was good.

Person B saw the Money coming to the Company in such numbers as $1 million per year and wished it for himself alone. Person B spoke among the Investors and said unto them: “I offer onto you $2 million dollars for each share such that you may return to your homes and tend to your children and raise your gardens in the sun.” And the Investors and Person A sold their shares to Person B and saw that it was good.

For an era of 25 years, Person B reaped Money far exceeding their $20 million investment and bringing joy and fame and power to Person B, and Person B saw that it was good. Person B became renowned throughout the world, and drew the praise and attention of all the Peoples of the Earth and God became jealous and enraged. In God’s rage he raised the winds and the waters and the forces within the firmament and brought an end to the Company and no shares remained, and God saw that it was good. And the evening and the morning began the 26th year.

And this, dear reader, is how many may invest in stocks and all make Money by the end with no losers among their numbers.

Can anyone tell me a similar tale involving crypto?

 

[flmmkr]

I didn't say the price of bitcoin doubled, I said bitcoin denominated prices doubled. In January 2023, it would take twice as many bitcoin to buy a US dollar, and US dollars is what you spend on stuff. So it cost twice as many bitcoin to buy stuff. Inflation was 100%

I don't compare it to an asset because it is not an asset. There is no underlying value to a bitcoin, it is only worth what it can be transacted for like a currency, but a currency that can only buy other currencies. Nvidia stock has an underlying asset, a fraction of a massive company with a ton of IP and other capital and future expected revenue. Bitcoin has none of that.



That is not an inflation rate, that is a 1.7% rise in the monetary base. Inflation is about prices, not units of currency.



A currency doesn't have an inflation rate. It has supply, and it has exchange rates to other currencies. The numbers you're talking don't correspond to M2 which includes loans denominated in the currency among other things, it corresponds to MB, the amount of currency in circulation and in vaults.

Prices have an inflation rate. Inflation is not how much money exists, it is how much money is needed to buy a constant (or substitutable) thing.

You are right that a growing supply of money does not mean prices inflate, nor does fixing a money supply prevent prices from changing. Which is why I clearly said:


The crypto cult, through some combination of ignorance and a desire to benefit from that ignorance, try to conflate the rate of change of the currency supply with the rate of inflation and claim that crypto is a hedge against inflation. It is not. Crypto is far more volatile than most national currencies and thus prices denominated in crypto are far more volatile, which is the point I was making.

So the BTC denominated prices doubled in 2022, so what? In 2023 they were cut in less than half. In 2024, they were cut in nearly half again. I can argue the exact opposite that if you put all your money in BTC at the beginning of 2023 you'd be much better off than if you left it in U.S. dollars.

BTC is an asset. There is underlying value in it. It's a secure network with an entire economy almost all its own. What is the underlying value of the U.S. dollar? Absolutely nothing. There's nothing behind it except for the word of a government that can just keep printing more and more as much as they want. It's losing value continuously, when there is an alternative that has a reducing inflation rate and just based on simple math will become more valuable over time in comparison to fiat.

A currency can be inflated, so you are wrong about that. Look it up yourself, as I don't have the time to.

M2 is the correct form of money supply to use, as it includes savings and other less liquid money. Again, look it up. If you still want to use M1, it looks just as bad, if not worse.

I never said inflation is how much money exists. That's money supply.

Yes, crypto is volatile. It's a whole new asset class and isn't mature yet. Volatility will likely decrease over time (and has) as adoption grows. With institutions, corporations, and nation states adopting it as a reserve asset and in their treasuries, adoption will likely continue to growing at a faster rate. Speculation, yes, but that's the direction it's now headed.

 

[flmmkr]

Bitcoin is a brand it is not a thing. Look how easy it is for other currencies to launch and get attention and compete with bitcoin. There's nothing holding people to bitcoin, they could decide to sell their bitcoin at these newly inflated rates and buy AmazonCoin because Amazon gives a 5% discount for purchases made in the new coin. Or whatever. It's not a question of how many bit coin can be mined, it's a question of how many crypto coins are out there competing for mind share. They are all essentially identical and interchangeable.

There's nothing competing with Bitcoin. Other cryptos have different use cases and functions than Bitcoin. There is nothing like Bitcoin that has the adoption of it, nor the market cap. The closest would be Bitcoin Cash or Litecoin, which will never gain the adoption or user base of Bitcoin. Again, you have to learn more about and understand the differences in their function, use case, and tokenomics.

 

[flmmkr]

you didnt write that. you cut and pasted it...

BitCoin is not a hedge. It's a scam.
And that's why it is so heavily promoted.
You need to keep finding new investors (suckers) so others can reap a profit.

The US dollar buys more now than it did a decade ago...

I copy-pasted nothing. If it was a scam why are institutions and countries now adopting it? Larry Fink even calls Bitcoin a flight to safety. The U.S. dollar most certainly does not buy more now than it did a decade ago. We did not go through deflation, and inflation was the highest in 40 years just a couple years ago.

 

[Analog Kid]

if there are more buyers than sellers, the price goes up and vice versa

There is always an equal number of buyers and sellers. Prices change depend on how the buyer or seller value a thing relative to how they value money.

People trade in currencies all the time. People buy and sell dollars, hoping the value will go up compared to other currencies. With crypto, you are buying it in hopes it will appreciate in comparison with the currency of your home country.

People trade currencies so they can buy stuff. A worker at a US factory can't do much with a Swiss franc, so you need to trade francs for dollars to buy the factory output, then the factory pays the worker with dollars. The number of francs you need to trade for dollars is the exchange rate. Exchange rates change based on the relative demand for goods and services and debt of each country. If I wish to buy iPhones wholesale, or Azure server space, or US Treasuries, I need dollars. As demand for those things rise, either because the products and services are valued higher than their competitors or because risk/return on the debt is more favorable than other countries, then one must trade more francs for each dollar.

Yes, people can speculate in the currency market, but that's not what drives the market. The speculation is an anticipation of these larger moves and an attempt to profit from anticipating the move (having the dollars now when someone wants them in the future) in exchange for taking on risk (the world changes, maybe nobody will want them). That speculation is just foam on top of the larger market drivers for most currencies in normal times. The crypto market is all the speculation and risk with no underlying motivators. Again with minor exceptions, the only thing people can buy with crypto is other currencies there is no significant demand for crypto directly that would explain the fluctuations in its exchange rate.

The "hope" you refer to is the gambling bit. When investors buy a national currency, there's a little hope but mostly it's informed by knowledge of market forces.

 

[Lioness~]

I put in some moneye in crypto for quite some time ago, and at times I withdraw some.
But I don't invest more in it today.

For now I find equity funds and similar a better source to invest in.
The tax authorities keeps track on that, and it gives me less concerns and by so I have a lot more fun investing, knowing I am on the brighter side with things.

 

[flmmkr]

Stocks actually have companies doing stuff with the invested money to generate more hopefully.
Totally different game.

There are people who play the markets and bet on gains.

But the underlying product is vastly different from the crypto market which is always push push push for new blood to invest...

There are many many many crypto tokens that are pointless, however, there are many that also have uses and the investment in them is an investment into entire ecosystems, applications, and more. You are right that the underlying product is different, and that's why you can't valuate crypto in the same way as stocks.

 

[flmmkr]

Person A set forth such labors as taking loans, leveraging their credit cards, and investing their life savings for a sum total of $1 million US dollars to create a Company, and Person A looked upon the Company and saw that it was good. The Company brought forth Things whose value were in itself, and such Things fell upon the eyes of a Customer who valued the Thing more than Money and the evening and the morning brought a sale. Person A saw this sale and saw that it was good.

Through the sale of many Things, the Company became known and the Money covered the loans and debts and replenished the life savings until such time as Person A grew envious of their neighbor and wished for greater Money still. Person A divided the Company into 5 shares of which they kept one and sold 4 to the Investors for $8 million in total, for the Investors wished to partake of such magic as they saw Person A having worked alone. The $8 million did become Capital with which Person A could expand their business, improve their factories, raise their brand, and sell many Things into lands far and wide. And the Investors saw that it was good.

Person B saw the Money coming to the Company in such numbers as $1 million per year and wished it for himself alone. Person B spoke among the Investors and said unto them: “I offer onto you $2 million dollars for each share such that you may return to your homes and tend to your children and raise your gardens in the sun.” And the Investors and Person A sold their shares to Person B and saw that it was good.

For an era of 25 years, Person B reaped Money far exceeding their $20 million investment and bringing joy and fame and power to Person B, and Person B saw that it was good. Person B became renowned throughout the world, and drew the praise and attention of all the Peoples of the Earth and God became jealous and enraged. In God’s rage he raised the winds and the waters and the forces within the firmament and brought an end to the Company and no shares remained, and God saw that it was good. And the evening and the morning began the 26th year.

And this, dear reader, is how many may invest in stocks and all make Money by the end with no losers among their numbers.

Can anyone tell me a similar tale involving crypto?

Yes. Anyone who bought Bitcoin and held it long enough to see a gain in their investment. Just as with stocks, if you sell when the price is lower than when you bought it you have a loss. It's no different. Anyone can buy stock in a company and that company's stock can decline after the purchase of the stock. Hold it long enough and it could go back up, but also the company could go out of business and the stock becomes worthless. That's happened with plenty of companies in the past.

 

[onenorth]

Who pays for all of the energy consumed by crypto?