People posting anonymously on the internet as "Tyler Durden" generally shouldn't be taken seriously. I've criticized zero hedge as a garbage website that deals in conspiracy theory and nonsense before. There's nothing overly red flaggy about this particular post, but that's probably because it's largely plagiarized from an actual news organization instead of being a hot take from their conspiracy wing (original article: https://www.rt.com/business/424670-gold-turkey-repatriation-dollar/  You'll see they've made minimal changes to some sections, reordered a few more with minimal additions, and have largely lifted entire sections word for word, all without attribution. Classy.)  Even though this particular post doesn't go off the deep end of nonsense, the comment section underneath the article is a hotbed of conspiracy theory idiots filling up space with hot garbage. Zerohedge doesn't have this following by accident, it's a cultivated target audience, and that should be telling. And what it should be telling of is don't take this website seriously. It may present some facts here (because they stole them from real writers), but whatever conclusion it wants you to draw is filtered through a worldview that isn't connected to reality in any meaningful way.

I'm less interested in what zerohedge has to say than what you think of the gold repatriation, which you provided at the end. To me, it doesn't even seem like enough gold to do what Erdogan says is the purpose of it. Gonna break the dollar with $20ish billion in gold backing your currency? Good luck I guess?

I think people are a lot more agnostic than you recognize as far as BTC/BCH goes. There are hardcore ideologues on both sides that make up a core, and BTC certainly seems to be larger there, but all of these peripheral jumpers on the bandwagons don't care about the ideology, they're just chasing fast profits and lambo dreams. If,  and a big if currently, Bitcoin's network were to undergo stress and congestion similar to what it experienced in 2016 and parts of 2017 - sky high fees and a constant backlog of 300k unconfirmed transactions that made the network slow and unreliable (i.e. expensive to use in time and money) - and BCH was sitting there as a near clone but with higher capacity and none of these problems, I think a lot of people's resistance to its origin story get abandoned. The longer the unreliability of BTC's network drags on, the more people's weariness breaks down. I could people slowly importing their profit seeking and lambo dreams to the network that has the capacity to handle transactions fast and easy, and an eventual tipping point where the majority switches sides. A lot would have to happen though to reach that at the current state of things, and it's only Bitcoin's crown to lose. I don't think BCH is going to do anything to innovate ahead of BTC, it's simply going to be a case of stealing momentum if BTC ever drops the ball.

If the bolded bit above were true in any meaningful sense, we would know about it. Institutional investors have reporting requirements to their investors, and their holdings are heavily followed and reported on by the financial news media. If institutional investors were big into any crypto, we would already know about it. The fact that nobody can point to anything meaningful to me suggests this just isn't the case. It's actually far more likely that institutional investors aren't much interested in the underlying crypto assets anyway though, and are instead investing in the businesses that can make a profit off of crypto, like exchanges or financial services firms rooted in crypto. An asset that has value based on what everyone considers it be worth is far less compelling and far more risky than a business that actually offers a product or service and has a profit margin to investors, and we know fairly well who are the big backers and investors in crypto startups. That's where I see institutional money, not in the crypto assets themselves (for the most part).

Essentially, this is correct. Stability and predictability lead to economic growth. People want to slam governments like they want to control Bitcoin or want to outlaw it because they "hate it" or some other superficial and not insightful commentary they're haphazardly throwing at the government. In most cases, it doesn't make sense. In the US, for example, the government doesn't want to ban or outlaw crypto. They do want it to be safe for investors though and to be able to punish scammers and fraudulent actors. Because when investors are safe and there's less fraud, there's more financial innovation which is good for the economy and good for the country as a whole. The government doesn't want to ban anything that is going to contribute to economic prosperity, but everyone assumes (without any basis) that the government wants to stop bitcoin. This speaks more to their own anti-government biases than offering anything insightful about the state of crypto.

Right, I agree with this. I was just pointing out that the only reason Venezuela can use Bitcoin as a stable alternative is because it has fairly high liquidity worldwide (inside Venezuela might be another issue, as I reckon the government there would want to prevent Bitcoin transactions because they want people using the Bolivar), and because the wealth of the US and other developed nations creates a (somewhat) dependable value. Without the economic stability in the US and other developed nations providing a backstop of liquidity and financial security to btc, Venezuela wouldn't even have the option of using Bitcoin because if every other economy looked liked theirs, Bitcoin wouldn't have any value because everyone would be too concerned with trying to survive than with buying risky assets like Bitcoin to try and increase their wealth.

I wouldn't discount institutional investors slowly dipping their toes in the water, but I don't expect anything overly significant to change. You have to look at who comprises institutional investors, and it's a lot of pension funds and retirement account managers. These have to be conservative by nature, because they're protecting people's futures they saved their entire lives to build. Bitcoin is going to be outside of the investment mandate of virtually all ERISA and 401k account managers because it's far too risky for the investment profile of the assets their managing. That leaves some aggressive and speculative institutional managers, but I still wouldn't count on anything significant in the short term. While not a prediction, it wouldn't surprise me to find 10 years down the line that there has been no meaningful institutional involvement in Bitcoin outside of private equity firms that have a crypto focus.

The SEC has not classified crypto as a security, it has only said that in certain cases, the way a crypto asset is distributed may implicate securities laws (mainly, for ICOs). The CFTC considers digital currencies as commodities under the Commodity Exchange Act, and has jurisdiction when it is used in a derivatives contract or when there is fraud in interstate commerce. The IRS classifies Bitcoin as property, but you may owe capital gains taxes as well as income taxes on taxable events.

More importantly, these definitions are not mutually exclusive, so just because one regulator claims jurisdiction over one aspect of crypto doesn't mean that it makes no sense for others to as well. It's not really all that complicated. Most of the things average people will do with Bitcoin won't involve any regulatory agency other than the IRS. You're likely not trading derivatives, not selling ICO securities, and probably shouldn't be doing anything that involves FinCEN. It's not as bad as you made it sound.

How do you explain popularity in the US then? The dollar by no means is a currency that nobody has confidence in. The whole world recognizes the value of the dollar. So that's clearly not driving interest in Bitcoin in the US. In fact, I think you have the correlation reversed- it's only because people in the US are economically confident enough to speculate on a risky asset like Bitcoin that Bitcoin has any value at all. If the economy was in shambles and people were struggling to survive, nobody would be wasting money on Bitcoin. It's only because the dollar has created widespread economic prosperity that people have enough money to take a flyer on a speculative asset in hopes of increasing their wealth.

Ironically, one of the best things to counter China's trade influence and abuses was TPP, which Trump unilaterally withdrew the US from. China has been a serial abuser of intellectual property rights for a long time, and a trade war was the absolute worst way to engage them on that. The US's recent indication it may rejoin TPP is a sign of just how bungled the decision to withdraw has been, as it's becoming increasingly clear that to even this administration you can't just fly by the seat of your pants and make rash economic policies without repercussions. TPP was about economically countering China by pulling regional economies into closer alliance with US economic interests.




By abandoning TPP, the US gave up on the IP reforms they were trying to push on China and that were included in the TPP agreement that was originally agreed to and that the remaining countries stripped from the agreement after the US left, perhaps at the behest of China but certainly to their direct benefit in any case.


So any attempt by Trump at this point to try and rejoin TPP can only be viewed as the complete failure of his current tariff-fueled recklessness and the fact that trade wars are, despite his insistence otherwise, are destructive and not easy to win.

Gold is only viewed as stable over very long periods of time and that's because it tends to track inflation, not really outperform it. Gold is a conservative investment in that in seeks to maintain the wealth you have, not grow it. The shorter your time horizon is though the more price variance there is, so in the short term there is the opportunity to make a return based on the volatility, but this is akin to speculating and it's guaranteed to pay off. In shorter periods, gold can be a fairly risky investment too because it does experience periods of high volatility and if you need to access the money in gold, there is a chance it will be worth a good deal less than what you initially paid for it.

Right, the Lutheran split was an ideological one, I'm not sure they were ever concerned with overtaking Catholicism so much as maintaining a pure ideology and abolishing what they viewed as corrupt practices the Catholic church had adopted (especially the selling of indulgences). Lutheranism may have started in Germany and Austria, but it has a pretty largish following in the US (at least judged by the not insignificant number of Lutheran Churches I see all the time, albeit this is anecdotal). I'd say Lutheranism has become a major subset of the Christian religion, with a congregation numbering over 80 million worldwide. As for the BCH folks, I can't say whether they're ideologically pure or had an ulterior motive that was based entirely on financial gain, or a combination of the two somewhere in the middle. I just find the cultism on both sides to be pretty striking and analogous to historical precedent. The difference here is that BCH does view BTC as an existential threat, and if BCH ever became large enough BTC would view it as one as well I'm sure. And because both sides view it as a zero sum game, both must demonize the other side and battle over the hearts and minds of crypto users.

These derivatives though weren't backed by the crypto itself, in that everything was cash-settled. Normally, if you're trading commodity futures and the contract you're holding expires below the contract price, you're legally obligated to take possession underlying commodity because you essentially have a contract that agreed to buy it at a specified price and at a specified time. The bitcoin futures are divorced from this in that they will only payout cash, not the underlying crypto asset, so all these futures are is a way for institutional money to also get in on the speculation but with the added feature of not actually participating in any of the supply and demand of the crypto. They're playing from the safety of regulated exchanges, which is one benefit though over crypto exchanges.

The "recovery" at this point looks really shallow. If you look at trading volumes, everything is fairly constant and the price is too. It looks like algos day trading back and forth to make a few pennies here and there flipping the same coins over and over again. Then there are a couple large strikes in volume that are singlehandedly responsible for the recent gains, all the while the price then trades in a new tight range. This looks like someone buying a bunch of coins while the algos continue to flip coins looking for their fee pennies on every trade. Essentially, it doesn't look like demand has changed, it just looks like one or a few whales took a big new stake. If it was widespread demand, the increase would be more gradual and sustained.

I am dubious of Lee's claim as well, but your logic doesn't pan out. The last day to file is April 17, that doesn't mean everyone pays on April 17. People are paying taxes as they file which is all throughout February, March and April. The timing lines up with the deepest parts of the downtrend. (Also, I wouldn't call what has happened in the last week a "super bull run." More like a correction upward, a sudden jerk up that hasn't proven it will sustain or wasn't caused by one big buyer.) More importantly, if you were expecting the selling pressure to lift April 17, the only way to profit off it would be to get ahead of it, which means you have to start trading a couple weeks ahead of your predicted date. Everything you said only provides further anecdotal evidence for Lee's claim, which I still remain skeptical of because there's no hard evidence for it, only loose correlations.

None of these explains why Bitcoin can't be a bubble.

1. Legal exchange facility. What does this even mean? It's either an incomplete thought, or perhaps a misnomer of something that may actually exist, but either those words don't disprove the Bitcoin bubble claim.

2. Popularity. Something being popular doesn't mean it's not a bubble. In fact, it's more likely that because something increases in popularity quickly it is a bubble. Bitcoin certainly fits this as people rush in trying to make easy money. Bitcoin's popularity is owed to the mania around people trying to get rich quick. That's prime bubble territory. Nobody can be certain right now that Bitcoin's popularity isn't a fad. You're speculating it's not, which is why buying Bitcoin is more speculating than investing.

3. Demand from commercial structures. Lol, please. There's virtually no commercial demand for a Bitcoin as an alternative to the dollar. Institutionally, something like Ripple is far more likely to eventually be used than Bitcoin for business purposes in the financial sector. That's not to say there won't eventually be commercial demand, but there certainly isn't now and therefore certainly no proof this isn't a bubble.

4. Limited supply. Plenty of things have a limited supply, but if they suddenly shot up in price because of mass delusional mania, they would be a bubble too. Limited supply doesn't mean something isn't a bubble.

5. Preservation of wealth in troubled economies. "In troubled economies" is the operative phrase here. As long as there is a stable world economic system, Bitcoin may have utility for certain emerging economies with weak and undependable local currencies. But if the US itself suffers a massive economic meltdown, Bitcoin dies in the crib because nobody is going to hold or seek a purely speculative asset when everything is falling apart. But the speculation that Bitcoin may eventually have utility in such a limited scope for emerging economies certainly doesn't prove it's not a bubble.

This isn't true. Bitcoin has no yield. It doesn't produce income and doesn't pay dividends, therefore there is no "yield." There are plenty of investments that are high risk that provide no yield, so Bitcoin isn't the only one. But more importantly, just because something does pay a big yield doesn't mean it's a good investment. A high yield is just one sign of a risky investment and an indication that the yield probably cannot continue for long. Yield is a function of payout over price, so when the price drops the yield rises. But there's usually a reason the price drops to increase the yield, and it's usually because the business is doing poorly and will soon has to cut the dividend (i.e. the yield), so investing in things based solely on yield is a bad idea.

All the alts trade in a pretty tight correlation with Bitcoin, so that's not at all surprising that they would be rising at the same time. That's not by virtue of them having any utility or inherent value, just the fact that all alts are pretty much denominated in bitcoin, so when btc rises, all the alts rise as a function of that and the opposite is true when btc is falling. As for the price rise, it wasn't a sustained rise at all. It was just one massive buying action that pushed prices up and then they stayed there. Nothing has changed except someone with a lot of money decided to acquire a bunch of btc and all other buying/selling action has remained constant around that outlier.

Any very serious worldwide instability will crash crypto prices to zero or near zero. This goes for a geopolitical crisis like a large scale war or an economic crisis like a severe global depression. Crypto is valuable right now because there is global stability and people have the confidence to speculate on crypto in an effort to try and increase their wealth. This is only possible because of economic confidence. In both the conditions I listed above, economic confidence disappears and people flee risky assets for safer ones. Crypto is among the most risky assets, and it will crash with severe economic uncertainty because it's useless in times of crisis.

People have been utterly ruined in their expectations of what a normal return on investment is. 100% returns are not normal. If you're chasing returns like that, you're not really investing, you're gambling. Alt coins are even worse than Bitcoin, which is a speculative gamble to begin with. Crypto is not a normal investment. The risk people take on by buying it is far higher than anyone realizes.

I don't know why except that the IRS classifies Bitcoin as property and not as a currency. In some regards that makes sense. Bitcoin is intended to be a currency, but almost nobody actually uses it as one. It's predominantly used as a speculation vehicle or gambling instrument. I'm. It entirely sure how forex taxes work. I guess I would have assumed you have to pay taxes on gains in USD, but if you were to receive a bunch of euros, you would have to pay tax on the US dollar equivalent as income. If that's true, that's essentially how the IRS treats Bitcoin.