Everyone will cash out at $1000

[Peter Lambert]

I have seen several people here making a distinction between cashing out for fiat and using their bitcoins to purchase stuff. How are the two different? Either way you are giving up your bitcoins for something else you value.

[1715098544]

1715098544

[adamstgBit]

I have seen several people here making a distinction between cashing out for fiat and using their bitcoins to purchase stuff. How are the two different? Either way you are giving up your bitcoins for something else you value.

you don't pay capital gain tax if you spend

[hacknoid]

I have seen several people here making a distinction between cashing out for fiat and using their bitcoins to purchase stuff. How are the two different? Either way you are giving up your bitcoins for something else you value.

you don't pay capital gain tax if you spend

Also, spending coins will not (directly) drive the trading price .  Effectively they are staying in the bitcoin economy instead of being exchanged for fiat.

[johnyj]

The thing is, in order for bitcoin to reach values of $1000 (*), it will have to continue to grow beyond just a speculative investment.  At that point, when it grows past the magic number then it will start to become useful enough in its own right that the pressure to "cash out" will be diminished.  (If you can envision a future when you can buy all the stuff you need in bitcoins, then there is no need to "cash out" to fiat.)

The whole "everyone will cash out at $x" assumes that it has not achieved enough mainstream usefulness at that point.


(*) Maybe $1000 isn't the pivot point; maybe its higher.  There is no magic formula.  The point is that as it gains adoption, visibility and further usefulness, it will gain in value, the infrastructure becomes that much stronger, and the pressure to cash out diminishes.   If I wanted to cash out and buy something with the cash, it would be far easier to just spend the bitcoin directly (where possible).

Speculative demand is also a demand, and maybe the ultimate demand for rich people

Even in europe, you still need to exchange Euro to some local currency if you are in some countries like danmark/norway/sweden. I guess that bitcoin will not be able to purchase a lot of things at a lot of places in the foreseeable future, but exchanges and those payment services like bitpay would grow first to make it perfectly usable

And soon government will realize that if people pay with bitcoin, there is no way they can check the validity of income tax. In fact, this will impact the whole accounting and invoice system. Maybe they will request all the merchants to report their transaction id to tax authority, but that is much more difficult to audit than bank accounts. And, since the bitcoin price changes quickly, the tax payment actually involves an exchange risk

[b!z]

I have seen several people here making a distinction between cashing out for fiat and using their bitcoins to purchase stuff. How are the two different? Either way you are giving up your bitcoins for something else you value.

you don't pay capital gain tax if you spend

Also, spending coins will not (directly) drive the trading price .  Effectively they are staying in the bitcoin economy instead of being exchanged for fiat.

But they may be exchanged for fiat by the seller.

[vendetahome]

I think such a cash out strategy is more likely to happen in real life:

I spend $10000 and bought 100 coin at $100

If the exchange rate reaches $1000, I would sell 10 coins to ensure my ROI, and sell another 20 coins for some spending, and still hold 70 coins. Since I have already ROI, I don't have any risk, even the rest of the coins' value drop to zero

Same, if the exchange rate reaches $10,000, I would only need to sell 1 coin to ensure my ROI, and sell another 2 coins for some spending, I would hold 97 coins without any risk

So, the higher the exchange rate is, the lower the sell presure will be

Im not sure because part of the coins you sell will want the buyer sell as well to get his own ROI

[johnyj]

I think such a cash out strategy is more likely to happen in real life:

I spend $10000 and bought 100 coin at $100

If the exchange rate reaches $1000, I would sell 10 coins to ensure my ROI, and sell another 20 coins for some spending, and still hold 70 coins. Since I have already ROI, I don't have any risk, even the rest of the coins' value drop to zero

Same, if the exchange rate reaches $10,000, I would only need to sell 1 coin to ensure my ROI, and sell another 2 coins for some spending, I would hold 97 coins without any risk

So, the higher the exchange rate is, the lower the sell presure will be

Im not sure because part of the coins you sell will want the buyer sell as well to get his own ROI

I don't get what you mean

Anyway, before price reach 10K, it will first reach 1K, so it is possible that everyone have reached their ROI and sold part of their coins already. If they are not enough patient, they might already sold 50% of coins when they see a double of the exchange rate. But I suppose that those short term speculators have a much higher risk, short term wise the bitcoin's value can be very volatile, better to do long term investment

[Peter Lambert]

Anyway, before price reach 10K, it will first reach 1K, so it is possible that everyone have reached their ROI and sold part of their coins already. If they are not enough patient, they might already sold 50% of coins when they see a double of the exchange rate. But I suppose that those short term speculators have a much higher risk, short term wise the bitcoin's value can be very volatile, better to do long term investment

No, only the people who bought in early will have gotten their money back at 1000, all the people they sold to will try to sell out at 10000.

[BitChick]

Anyway, before price reach 10K, it will first reach 1K, so it is possible that everyone have reached their ROI and sold part of their coins already. If they are not enough patient, they might already sold 50% of coins when they see a double of the exchange rate. But I suppose that those short term speculators have a much higher risk, short term wise the bitcoin's value can be very volatile, better to do long term investment

No, only the people who bought in early will have gotten their money back at 1000, all the people they sold to will try to sell out at 10000.

I think many early investors will be smart enough to always hold a few just in case the price skyrockets to crazy amounts.  I know that I will sell some of our small stash as it rises, especially if it gets to $1000,  but I plan on holding several for the long haul.

Also, it may get to the point where we never really need to sell them if they become more widely used.  That will be the best case scenario really.

[TooCasual]

999 ftw

TC

[johnyj]

Anyway, before price reach 10K, it will first reach 1K, so it is possible that everyone have reached their ROI and sold part of their coins already. If they are not enough patient, they might already sold 50% of coins when they see a double of the exchange rate. But I suppose that those short term speculators have a much higher risk, short term wise the bitcoin's value can be very volatile, better to do long term investment

No, only the people who bought in early will have gotten their money back at 1000, all the people they sold to will try to sell out at 10000.

Exactly, but that speed is not sustainable in a very short time. It is much easier to be sustainable long term wise because of continuous shrink of coin supply and increase in population/productivity

If exchange rate rise 10% per year and you sell 10% of your coins, means your remaining coins will have same amount of purchasing power each year after you sold coins. This is very sustainable because the total coin supply will still shrink due to reward halving every 4 years, just a little bit increase in user/productivity will ensure its long term sustainability. This applies to any price any time

However, if exchange rate rise 100% per year and you sell 50% of your holdings, the number of coins supplied on market will get more and more each year, and increase the sell pressure significantly. Of course the speed of increase will be lower and lower since eventually the new coin supply will stop

And, if exchange rate rise 100% per year but you sell only 10% of your holdings, the number of coins supplied on market will still keep shrinking thus make it more and more difficult to get coins, so that 100% price appreciation might be able to hold due to low sell pressure

[xxjs]

Just wanted to say that when you sell a part of your coins for the same fiat amount that you bought it, your remaining coins are not risk free. The have a value, and you can still loose that value.

It is an irrational rule of thumb, just like the invest only what you can loose shit, and the go safe when you are old feces.

[RationalSpeculator]

Just wanted to say that when you sell a part of your coins for the same fiat amount that you bought it, your remaining coins are not risk free. The have a value, and you can still loose that value.

It is an irrational rule of thumb, just like the invest only what you can loose shit, and the go safe when you are old feces.

+1!!! 

[phoenix1]

Oh .... silly me, I  thought it was all about belief in a new currency, not 'cashing out' for 'dirty fiat' profits. Must have red the label wrong

[xxjs]

Oh .... silly me, I  thought it was all about belief in a new currency, not 'cashing out' for 'dirty fiat' profits. Must have red the label wrong

Don't know who you are talking to or whether the sarcasm tag was missing, but yes, "cash out" (ref title ) is not precise enough when we talk about different moneys, "dollar out" is more specific, or rather, "I moved my assets into USD, it feels safe now".

[xxjs]

sarcasm:
I transformed my bitcoins to a dollar denominated credit in a big bank, now i feel really safe.