Tyler Winklevoss: BTC is not a hedge to pandemics

[Baofeng]

https://twitter.com/tylerwinklevoss/status/1239255301171314689

Do you agree on Tyler's view? personally, this is what we have seen obviously, when global markets are affected, every assets are going to be impacted as well, gold and oil for instance. And. this is new ground for bitcoin, we have never seen this before. The use case that we have witnessed is the Venezuela crisis, not a pandemic like this so I'm with agreement with him

[rdluffy]

I totally agree, people are saying BTC is supposing to perform well against this crisis, but it's a global crisis, related to health, why people should be worried about BTC and not with haleth / food / medical care / family / regular job?

It's weird how people act during crisis

[The Sceptical Chymist]

I agree with him as far as bitcoin not being immune to this crisis, which it obviously hasn't been.  I'm not sure what he means about bitcoin being a hedge against fiat, unless he means fiat's collapse--he certainly can't mean against inflation of fiat currencies, because bitcoin's volatility alone knocks that right out the window.

Anyway, everything is getting slammed right now and it'll probably get worse before it gets better.  But the optimist in me is happy that bitcoin didn't get pounded down into the triple digits (yet).  It's still higher than it was at the beginning of 2019, so that's not too bad.

[Lucius]

One need not be too wise to reach such a conclusion, it is enough to look at the actual data to see that for example gold is down around 6% in last 30 days, and that oil is first go down for 20%, and today 10% more.

It is all a market response to a completely unknown situation, and unfortunately a lot of people in this panic will lose their money, but there is no doubt that some will get rich after all. What really bothers me is that this pandemic will push the world into a new recession, because many countries were already in a technical recession before COVID-19, and this is just something that definitely confirms that a very difficult period in the coming years awaits us.

What matters in the whole story is that the economy collapses very easily, but it takes years to rebuild.

[DeathAngel]

The price will recover & everything will return to normal once this virus dies out & people stop panicking like school girls. I think for sure bitcoin will trade at around $10,000 by the close of 2020.

Now is the time to be buying, not selling.

[gentlemand]

Do you agree on Tyler's view?

Yes. Absolutely. And it's very much to his credit as the usual Twitter pumpers aren't being realists about this, or haven't taken the time to consider it.

Things will be back on track at some point and when the smoke has cleared conventional economics will be more zombified than anyone thought possible. That's when Bitcoin's qualities count. Until then it's getting pounded in the backside like everything else.

Even then this should be a reminder of what most Bitcoin owners REALLY think which is - gimme more dollarinis. If there's no dollars then they're outta here. That needs to change before it can ascend to a more viable level.

It doesn't matter what Bitcoin is capable of if the people buying and selling it don't care about it.

[o_e_l_e_o]

As others have said, bitcoin will recover, and when it does, it won't have taken negative interest rates and a couple of trillion dollars printed out of thin air in the name of "quantitative easing" to get there.

What really bothers me is that this pandemic will push the world into a new recession

Absolutely, and it is going to be horrific. Before 2008, the Fed's balance sheet was only around $800 billion, and interest rates were over 5%, which provided a lot of leeway for interest rates to be cut down to 0-0.5% and for the Fed to pump out almost $4 trillion in QE. The Fed had only just started to manage to reduce their balance sheet from 2008, and got it from $4.5 billion down to around $3.8 billion, before the overnight repo nonsense from the end of last year pushed it back up again. Now, in the space of a couple of weeks, they've cut interest rates twice back down to 0%, and they've committed to another $700 billion in QE, which will push their balance sheet back to an all time high of almost $5 trillion. The national debt and deficit are both rapidly increasing. The Fed have nowhere left to go other than negative interest rates and printing money even faster. The coming recession is going to be horrific, and USD is rapidly becoming worthless.

[avikz]

I don't consider bitcoin as a hedge for anything at all. It's great that Tyler has the guts to speak up truth in public forum, but bitcoin isn't a hedge for anything. It looks good as a parallel economy thriving within the internet ecosystem. It's a great asset for speculators to ride the wave and make money. But it's not a hedge in any way! For hedge, I would look for something more steady in pricing!

[mk4]

He's completely right. But not only that, even if we ever get a fiat collapse any time soon, I think bitcoin would also tank anyway. It's simply too early and liquidity is too low for people to actually sort of "trust" the asset. In the long-term future though? That's where I'm really really bullish.

[BrewMaster]

What really bothers me is that this pandemic will push the world into a new recession,

i am not so sure about that. things remain bad as long as the virus is being spread at a fast speed. in a couple of months with increasing temperatures it will stop growing (it already did in China) and things could simply go back to normal.
a big reason for all these drops is the closed boarders and every business/company that shut down to go to quarantine. them coming back will put everything back in its previous stage.

[mk4]

i am not so sure about that. things remain bad as long as the virus is being spread at a fast speed. in a couple of months with increasing temperatures it will stop growing (it already did in China) and things could simply go back to normal.

Well, I completely hope so. Hopefully other countries like the U.S. and the Asian countries won't go the Italy route[1]. Yes I know that their granny/gramps population is high hence the high death toll, but still. I don't think we still have enough proof that the increased temperature was actually the cause of the "flattened curve" in China.

[1] https://qz.com/1819064/coronavirus-deaths-and-infections-globally-surpass-china/

[BrewMaster]

we still have enough proof that the increased temperature was actually the cause of the "flattened curve" in China.

it is not the main reason but it helps a lot. like any other similar virus (Flue, common cold,...) we don't see them regularly in the hotter seasons.

[fudster]

Tyler Winklevoss believe what he is saying like he wants us to sell at cheap price?    Not the kind of wisdom that will save someone from getting rekt. Despite them keeping their worthless EFT proposals there isn't a group of individuals who wants them shutup.

The media see this as pandemic yet HIV which were there for the longest time and have been killing lives were not consider pandemic. BS

[stompix]

Well, I completely hope so. Hopefully other countries like the U.S. and the Asian countries won't go the Italy route[1]. Yes I know that their granny/gramps population is high hence the high death toll, but still. I don't think we still have enough proof that the increased temperature was actually the cause of the "flattened curve" in China.

Yeah, a lot of theories and we won't probably know until the end...
Japan has an even older population than Italy and Tokyo was just as cold as Milan in February!
There are a lot of ifs and incomplete data we won't know it till summer kicks in or we're done with it.

What really bothers me is that this pandemic will push the world into a new recession, because many countries were already in a technical recession before COVID-19, and this is just something that definitely confirms that a very difficult period in the coming years awaits us.

What matters in the whole story is that the economy collapses very easily, but it takes years to rebuild.

Yes, this is the real problem and one you can't avoid by just not going out!
If the economy is down and jobs are lost, bitcoin or litecoin, that won't save your ass more than temporarily.
In the end, we use bitcoin for transfer of wealth, just like money, we buy stuff with bitcoins, the more stuff we have the more we buy and the more we use BTC

What if we don't have what to spend it on or we restrict what we buy, people that were selling some products even if only for BTC will be left with no buyers, they will shut down...

China is opening its factories back, good news.
Europe and the US are shutting down almost everything, who will buy all that stuff when everybody is just thinking of food?

I'm afraid this one will be worse than in 2007 if the trend is not inversed by the end of March.

[Broly46]

As others have said, bitcoin will recover, and when it does, it won't have taken negative interest rates and a couple of trillion dollars printed out of thin air in the name of "quantitative easing" to get there.

What really bothers me is that this pandemic will push the world into a new recession

Absolutely, and it is going to be horrific. Before 2008, the Fed's balance sheet was only around $800 billion, and interest rates were over 5%, which provided a lot of leeway for interest rates to be cut down to 0-0.5% and for the Fed to pump out almost $4 trillion in QE. The Fed had only just started to manage to reduce their balance sheet from 2008, and got it from $4.5 billion down to around $3.8 billion, before the overnight repo nonsense from the end of last year pushed it back up again. Now, in the space of a couple of weeks, they've cut interest rates twice back down to 0%, and they've committed to another $700 billion in QE, which will push their balance sheet back to an all time high of almost $5 trillion. The national debt and deficit are both rapidly increasing. The Fed have nowhere left to go other than negative interest rates and printing money even faster. The coming recession is going to be horrific, and USD is rapidly becoming worthless.

$800billions in 2008 and $5 trillions in 2020 in Fed balance sheet, I know people are yelling at me “house price are soaring through the roof, paycheck are still the same.” Is it going to be true? The last 10 years we have just seen gold price to soar less than 2x, yet property price in third world China soaring to record high, I think it’s safe to assume 4-5x soar rate, almost at tandem with what the Fed balance sheet has to said.

[Broly46]

Tyler Winklevoss believe what he is saying like he wants us to sell at cheap price?    Not the kind of wisdom that will save someone from getting rekt. Despite them keeping their worthless EFT proposals there isn't a group of individuals who wants them shutup.

The media see this as pandemic yet HIV which were there for the longest time and have been killing lives were not consider pandemic. BS

Dafuq this guy has been buying the BTC since forever and fortunate enough to buy in bulk from unsuspecting seller, I think he is not even mind a -50% dip in price, but for the rest of us, we can’t even afford a -10% dump.

[Artemis3]

He's completely right. But not only that, even if we ever get a fiat collapse any time soon, I think bitcoin would also tank anyway. It's simply too early and liquidity is too low for people to actually sort of "trust" the asset. In the long-term future though? That's where I'm really really bullish.

No, i don't think any fiat can pull bitcoin with it. That's the whole point.

For example if the USD fails, bitcoin price expressed in USD will go crazy up, then you can no longer reliable measure bitcoin performance using USD, you will need to switch to whatever fiat survives, or something different like gold.

Indeed if one of the major fiat fails, i think it might pull the other fiats, but not bitcoin, not too much anyway.

Bitcoin has performed quite well under the circumstances, and anyone with bitcoin should simply wait to the crisis to go over. Those without bitcoin, should take this opportunity to buy more, before their fiat money collapses. Even if it never collapses, bitcoin will recover to about where it was before the virus, eventually so its simply a matter of time.

People don't lose anything, unless they are playing at margin trading and did the wrong move. Margin trading is always very risky anyway.

Since Wuhan is already declaring end of virus, sooner than later China will restart production, and what you perceive as bear might suddendly turn bullish, if only to race buying cheap (anything) while it lasts...

This thing i'm sure: Even after an economy collapse, bitcoin will be there. But your fiat might now. Are you willing to take the risk? Yes the problem is that you have yet to experience a hyperinflation, you think it might never happen to you, your coin is just too strong to fail...

Bitcoin fluctuates, but its true and honest, while fiat and pegged coins (ie. "stable") are time bombs waiting to happen. IF it happens, you won't have time to flee into bitcoin, it would be too late.

So if bitcoin is no hedge, fiat is even less of a hedge, and stable coins are much worse. This is like a bank before a bankrun, all the trust you place in your bank won't save you if it does happen.

Winklevoss bros. are free to do and say whatever, they already made their money in the previous crisis. Did they miss this one? I think anyway paying attention acted in January when it was beginning, before it spread to the world.

[squatter]

https://twitter.com/tylerwinklevoss/status/1239255301171314689

Do you agree on Tyler's view?

Yes. The markets are expecting the pandemic to hinder growth and cause recession. That creates unfavorable investment conditions for stocks, commodities, and other investment assets. Investors are reducing market exposure and looking to government bonds and cash as a hedge.

That will always be the case, until there is a significant loss of confidence within fiat money systems. If major fiat currencies began to default and collapse, that would drive people en masse towards alternative forms of money that hedge against that risk. Gold or Bitcoin could be viable alternatives in that situation. In conventional economic crises, that won't happen.

[hatshepsut93]

Well, he's obviously right that Bitcoin isn't a hedge against pandemics, I doubt anyone will argue with that today. But is Bitcoin a hedge again "fiat regimes"? This idea never been truly tested, I wouldn't count Zimbabwe or Venezuela as a proof, those are tiny local crises. If something like that happened with the west, and it caused similar economic crash as we are experience now, then maybe Bitcoin would react just like it reacts now. People don't want to hold something highly speculative and volatile during hard times.

[squatter]

Well, he's obviously right that Bitcoin isn't a hedge against pandemics, I doubt anyone will argue with that today. But is Bitcoin a hedge again "fiat regimes"? This idea never been truly tested, I wouldn't count Zimbabwe or Venezuela as a proof, those are tiny local crises. If something like that happened with the west, and it caused similar economic crash as we are experience now, then maybe Bitcoin would react just like it reacts now.

Maybe we shouldn't say it is a hedge against fiat regimes, but rather that it was designed to be. That sort of widespread trust in money can't be built overnight -- it's based on both network effect and being time tested.

If the US dollar collapsed tomorrow, I don't think the world would flock to Bitcoin. 20 or 30 years from now, my answer may be different.