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Author Topic: Would people pour their cash into bitcoin given a stock market crash?  (Read 8668 times)
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June 20, 2014, 08:04:03 AM
 #101

I think it's more likely that the cash would pour into bitcoin then people pouring all their money into Bitcoin.  If things get that bad the average person will not have Bitcoin on the mine at all.  Most likely will be looking for the bear necessitates I suppose.

Can you please clarify your post? It sounds like that you said two opposite things in terms of what would happen in the event of a stock market crash.

He wanted to say : I think it's more likely that the cash would pour into (OTHER THING THAN BITCOIN=exemple food) then people pouring all their money into Bitcoin.  If things get that bad the average person will not have Bitcoin on the mine at all.  Most likely will be looking for the bear necessitates I suppose.

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June 21, 2014, 05:36:02 PM
 #102

I think it's more likely that the cash would pour into bitcoin then people pouring all their money into Bitcoin.  If things get that bad the average person will not have Bitcoin on the mine at all.  Most likely will be looking for the bear necessitates I suppose.

Can you please clarify your post? It sounds like that you said two opposite things in terms of what would happen in the event of a stock market crash.

He wanted to say : I think it's more likely that the cash would pour into (OTHER THING THAN BITCOIN=exemple food) then people pouring all their money into Bitcoin.  If things get that bad the average person will not have Bitcoin on the mine at all.  Most likely will be looking for the bear necessitates I suppose.

I guess that would be true. People would likely not wish to take additional risks when they just lot a lot from taking risks

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June 21, 2014, 06:11:17 PM
 #103

A market crash is a destruction of wealth.  In those times, most assets, especially volatile ones, will see a net outflow.

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June 21, 2014, 06:19:40 PM
 #104

A market crash is a destruction of wealth.  In those times, most assets, especially volatile ones, will see a net outflow.
I keep hearing that term "destruction of wealth" like it's a real thing. It's more like a realization of actual wealth.

Any significantly advanced cryptocurrency is indistinguishable from Ponzi Tulips.
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June 22, 2014, 01:37:27 PM
Last edit: June 22, 2014, 08:31:15 PM by STT
 #105

Deflation is not destruction anymore then creating inflation makes a nation richer.   IF you really believe that you should have framed picture of Bernake and greenspan on your desk because they believe its real, they are the saviours of country just by expanding the monetary base.


A stock market crash unwinds values, mostly its a reflection of slower growth and possible earnings returns in future.   Often you may find a company selling for 20 or 40 years earnings not because its expensive but they believe in just a few years the company might double its production so the real PE extrapolated out to five years might actually be 10PE.  
If that process of estimation is incorrect then share prices come down but the value was never destroyed nor was it there created already, its an investment with multiple outcomes


The answer to the OP is yes.   Share prices could over estimate company growth, bitcoin price could underestimate the worth of an online transaction system so on balance money could flow from one to the other.
Dollars themselves are the usual result of a share trade however with interest rates on trillions of debt nearing zero already, with the Federal reserve the main holder and returning that interest right back to government then dollar is easily overvalued possibly.   Again on balance we can expect over-valuation to unwind, the sum total could be crash and a boom for bitcoin - if its useful




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June 29, 2014, 12:30:44 AM
 #106

A market crash is a destruction of wealth.  In those times, most assets, especially volatile ones, will see a net outflow.
I keep hearing that term "destruction of wealth" like it's a real thing. It's more like a realization of actual wealth.
The actual amount of wealth is the amount that the market says it is. If the market is willing to pay $2.5 for a widget then the widget is worth $2.5 no matter what anyone else says it is worth

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June 29, 2014, 01:28:43 AM
 #107

A market crash is a destruction of wealth.  In those times, most assets, especially volatile ones, will see a net outflow.
I keep hearing that term "destruction of wealth" like it's a real thing. It's more like a realization of actual wealth.
The actual amount of wealth is the amount that the market says it is. If the market is willing to pay $2.5 for a widget then the widget is worth $2.5 no matter what anyone else says it is worth

If the production cost is higher than market price, then the widget will slowly disappear.
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June 30, 2014, 01:40:22 AM
 #108

A market crash is a destruction of wealth.  In those times, most assets, especially volatile ones, will see a net outflow.
I keep hearing that term "destruction of wealth" like it's a real thing. It's more like a realization of actual wealth.
Your actual wealth is the amount that the market says your assets are worth at any given time

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June 30, 2014, 04:09:38 AM
 #109

I believe we'd get some percentage of residual money from a stock market crash.

When the stock market goes down, there is a strengthening of the USD which economists call a "flight to quality."

Bitcoin is an alternative to the dollar.
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July 01, 2014, 01:17:01 AM
 #110

Strength of the dollar is a major thing to watch when predicting the prices of commodities.    I agree if stocks crash it usually means stronger dollar, that would also mean greater pressure on the price of Bitcoin.   If it just stays steady then value has risen, its rising with dollar so thats good but there is pressure on any commodity price when a currency is stronger, oil too usually.  

Thats not bad because an economy benefits from lower prices.  If oil rises too much it starts to effect business cost and profitability/viability.   So at the moment I think bitcoin would act like a commodity in that respect.    The bigger deal is will dollars always rise on this sell off or fear type move in markets and its likely not going to always be this way.
   When gov was threatening not to pay its debt, the price and value of that debt rose which is stupid but its from the same effect which is most trade is settled in dollars (including bitcoin)



Quote
If the production cost is higher than market price, then the widget will slowly disappear.
Comes back to supply and demand.    The widget might have competitive alternatives but its either a needed item or not, if in demand it'll then rise in price till above production cost




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July 01, 2014, 04:19:50 AM
 #111

I believe we'd get some percentage of residual money from a stock market crash.

When the stock market goes down, there is a strengthening of the USD which economists call a "flight to quality."

Bitcoin is an alternative to the dollar.
I would say that bitcoin is more of a competitor to the dollar. If the dollar rallies due to the flight to quality (safety) then competitors would fall

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July 02, 2014, 03:12:57 AM
 #112

Dollar index has fallen from 120 in year 2000 to below 80 now.   If it keeps falling like it has, that would seem to favour alternatives.   Thats a rate of 1.9% deprecation compounded so what is bitcoins annual inflation.  I know in theory its capped one day but now




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July 02, 2014, 03:48:36 AM
 #113

A stock market crash right now wouldn't affect too much bitcoin. There's still not enough infrastructure/awareness to allow stock traders to quickly move to cryptos.
However, if it happens in a year or so, the scenario might be completely different and cause a major buy in into btc.
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July 02, 2014, 04:49:50 AM
 #114

If there was a crash like 2008.  I'd buy stocks hand over fist.   Easy money.


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July 02, 2014, 05:38:55 AM
 #115

A stock market crash right now wouldn't affect too much bitcoin. There's still not enough infrastructure/awareness to allow stock traders to quickly move to cryptos.
However, if it happens in a year or so, the scenario might be completely different and cause a major buy in into btc.

Yes, there needs to be an easy way to sell stocks and buy bitcoin (or a proxy thereof) on the same platform.  If/when a bitcoin ETF becomes tradable, it will then be possible for average investors to buy into bitcoin easily.
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July 02, 2014, 06:02:54 AM
 #116

If there was a crash like 2008.  I'd buy stocks hand over fist.   Easy money.

You mean short the stocks hand over fist then buy the stocks back at a giant discount and keep the spare profits
Easy money
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July 02, 2014, 06:12:09 AM
 #117

If there was a crash like 2008.  I'd buy stocks hand over fist.   Easy money.

You mean short the stocks hand over fist then buy the stocks back at a giant discount and keep the spare profits
Easy money

Yeah that too.    Grin

I love shorting.   I made a lot shorting TSLA,  AMZN,  TWTR from feb to april.   Now I'm long on those plus DDD.  And recently made killing on GPRO

But its really hard to see the trend though and you need balls of steel to be the contrarian
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July 02, 2014, 06:15:10 AM
 #118

If there was a crash like 2008.  I'd buy stocks hand over fist.   Easy money.

You mean short the stocks hand over fist then buy the stocks back at a giant discount and keep the spare profits
Easy money

Yeah that too.    Grin

I love shorting.   I made a lot shorting TSLA,  AMZN,  TWTR from feb to april.   Now I'm long on those plus DDD.  And recently made killing on GPRO

But its really hard to see the trend though and you need balls of steel to be the contrarian

True enough it is quite the thrill and also the one that is a bit crazy to use the shorts ^_^
It might work though but its easier to say buy low sell high than it is to say
Sell high short till it gets low then buy low and Hold till its High or their is a nice stable dividend to rely on instead of a share price appreciation.

Then again short and simple is sweet no need to add the rest Smiley

Sell High Buy Low and Short if Overvalued
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July 02, 2014, 06:04:50 PM
 #119

Either bitcoin itself or an IMF crypto is likely to be used for international settlements and primary reserves 5 to 10 years from now.  It would be foolish to create a novel crypto, with an untested codebase and protocol, and place it in such a central role in the global economy.  Therefore, I expect bitcoin to fulfill that role.
but what about other promising altcoins? VeriCoin, Monero or DarkCoin or NXT? I put my money proportionally into 9 cryptos, instead of all into BTC. What if BTC plummets to $150??
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July 03, 2014, 04:17:55 AM
 #120

Either bitcoin itself or an IMF crypto is likely to be used for international settlements and primary reserves 5 to 10 years from now.  It would be foolish to create a novel crypto, with an untested codebase and protocol, and place it in such a central role in the global economy.  Therefore, I expect bitcoin to fulfill that role.
but what about other promising altcoins? VeriCoin, Monero or DarkCoin or NXT? I put my money proportionally into 9 cryptos, instead of all into BTC. What if BTC plummets to $150??
In general all of the crypto coins trade at a steady rate per BTC. In other words, when priced in fiat when BTC goes up all the other cryptos go up by the same amount.

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