What kind of asset is Bitcoin / Crypto?

Originally, it was created to be a way to transact, a currency. Over the years, as bitcoin has grown in value and tx fees have risen, it has transitioned more as a hedge to one’s own currency, similar to how gold works. A store of value. Particularly when China’s and South American currency fell, bitcoin rose. People looked for a “safer” currency (ha).

Recently, we saw a spike in bitcoin’s value, $7.5k to $10k, now to $9k. The rise I would argue was caused by the Chinese panic due to coronavirus. Chinese investors knew this would severely lower GDP in coming quarters and the value of their investments/currency drop.

However the recent trend (-10% this week) has me puzzled. I would think bitcoin would have a very small negative beta to major markets (meaning when major markets rise, it slightly drops). However as major markets fell 5%+ this week, crypto did more than that. I would have expected the Italian panic to cause bitcoin to rise.

As gold and other commodities have risen, I would have expected similar for crypto, a neutral currency.

What are your thoughts on Crypto and how it reacts to the market? At this point I thought it was a store of value, closely related to commodities.

To be clear, I own no crypto at the moment. However, I am wiring later this week to buy some. Not for speculative purposes though

bitcoin (like gold) often acts as a safe haven/store of wealth... but when people are selling stocks/real estate/etc they often take gold down too (like today).

there is close to a 0% chance that bitcoin outperforms gold over the next 50 years so why hold it as a "store of wealth"?

my theory on this week's move is that crypto investors are realizing that when governments create and/or react to pandemics, the ability to do anything with a series of numbers on a screen is less important than being able to access food/water/etc.

Bitcoin is used for nothing but the majority of dirty money it’s a joke the fees that are charged are ridiculous no sane person would pay 250 dollars to sell 9500 dollars it’s all dirty money

Originally Posted by pilebuck13

Bitcoin is used for nothing but the majority of dirty money it’s a joke the fees that are charged are ridiculous no sane person would pay 250 dollars to sell 9500 dollars it’s all dirty money

Touché

Originally Posted by pilebuck13

Bitcoin is used for nothing but the majority of dirty money it’s a joke the fees that are charged are ridiculous no sane person would pay 250 dollars to sell 9500 dollars it’s all dirty money

I'm guessing you tried to move 5 figures and now know it wasn't cheap.

Been there.

well the point of bitcoin was never to cash it out into a fiat currency... so you are missing the point....

Originally Posted by ChocMilk23

well the point of bitcoin was never to cash it out into a fiat currency... so you are missing the point....

And? What really can you buy with it? Gift cards? shit offline? Gold? Silver? Where you are priced about 10 percent over spot as it is look it will never be used cash will always be king even if you can use it for a larger percent your paying a tax so what’s the difference it’s shut down for anything meaningful

Only thing it's good for is getting money in or out of books. Other than that it is useless to me. 99 percent of Americans don't use it and most don't even know what it is. It has absolutely no use unless you are doing illegal bussiness.

Originally Posted by themike78

Only thing it's good for is getting money in or out of books. Other than that it is useless to me. 99 percent of Americans don't use it and most don't even know what it is. It has absolutely no use unless you are doing illegal bussiness.

you mean people don't want to wait in a checkout line for 1/2 hour for 6 confirmations?

there's no way it could be used as a widespread currency, handling that many transactions would be impossible

Lot of good points made.

Originally Posted by eaglesfan371

Lot of good points made.

the ones that really got clobbered are the alt-coins... stuff like xrp down over 90% from the highs... at least bitcoin has "some" value, whether it's $9 or $90,000 is hard to say, but i think almost all of these other cryptos will just drift down to 0

Originally Posted by themike78

Only thing it's good for is getting money in or out of books. Other than that it is useless to me. 99 percent of Americans don't use it and most don't even know what it is. It has absolutely no use unless you are doing illegal bussiness.

well said

I'm in the minority. I use bitcoin for almost all of what I do except to buy gas. Bitpay puts a hold on the card to buy gas.

I have to admit I was wrong about bitcoin 7 years ago. I didn't think it had much of a future but it has stuck around and been the best investment on earth the past 10 years.

I could be wrong again this time but for some weird reason there seems to be a big novelty value to it among rich people. I suspect its because the supply is so limited and you can use it to purchase some things.

Let me explain. A year ago bitcoin was around 3k and Jack Dorsey goes on Rogan and talks bullish about buying bitcoin himself and it shot up double/triple/quadruple(at some point) over spring and summer after that podcast. He has a big stake in the cash app and has bragged about buying 10k bitcoin a week on the app.

Where I am going with this is, this fuckin guy started twitter!! He has a shit ton of cash flowing to him and he wants to spend some on bitcoin?!?!...... why even bother if you re him?? Hes loaded with money. He's also a tech guy too. I think rich people could really drive this price up more to insane levels......