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Author Topic: Gold collapsing. Bitcoin UP.  (Read 1803526 times)
vuduchyld
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October 08, 2014, 12:35:30 PM
 #13521

...
For example in a true sound money system that lacks CB bailouts the total M2-to-RealGDP ratio would probably be much lower than today due to lower leverage and significantly lower fractionalization by whatever banks exist then.


Well, they used M2, not M3 or some other bigger measure... It's probably not unreasonable to count M2 as the target, since that comprises what we really think of as core money; ie, what's in our bank accounts. The weird leveraged stuff doesn't come into play until higher-order aggregates.

And note that the fact that banks create most of the bank-account money through fractional reserve doesn't matter for the validly of using M2 as bitcoin's target... M2 is effectively the sum of the real base *money*; ie, balances of the thing we use directly as the unit of account/exchange. In a bitcoin world, we would still need exactly these balances in bitcoin.

My quick and dirty valuation of BTC in 2020 is also based on M2.  Not completely incomprehensible that BTC could be 5% of M2 by 2020, or $2300 or so per BTC.
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There are several different types of Bitcoin clients. Header-only clients like MultiBit trust that the majority of mining power is honest for the purposes of enforcing network rules such as the 21 million BTC limit. Full clients do not trust miners in this way.
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October 08, 2014, 12:47:37 PM
 #13522

My quick and dirty valuation of BTC in 2020 is also based on M2.  Not completely incomprehensible that BTC could be 5% of M2 by 2020, or $2300 or so per BTC.

When BTC starts taking bigger chunks out of fiat currencies, gold and bonds, you'll see quite a bit more than $2300 in 2020...
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October 08, 2014, 01:27:52 PM
 #13523

My quick and dirty valuation of BTC in 2020 is also based on M2.  Not completely incomprehensible that BTC could be 5% of M2 by 2020, or $2300 or so per BTC.

This would imply that you're also predicting a significant change in bitcoin's historical growth rate starting now.  What would make you believe that growth would be vastly slower moving forward?


Run Bitcoin Unlimited (www.bitcoinunlimited.info)
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October 08, 2014, 01:29:06 PM
 #13524

the great thing about the Blockchain.info investment is that of all the wallets and exchanges out there, blockchain.info adheres most closely to the founding principles of Satoshi and Bitcoin. headed by Roger Ver, you just know that blockchain.info will never do anything to compromise the original Bitcoin vision; that of privacy (tumbling), personal handling of keys, safety, and great development.
They still haven't fixed the address reuse problem in the wallets, going on 3 years now.
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October 08, 2014, 01:30:18 PM
 #13525

My quick and dirty valuation of BTC in 2020 is also based on M2.  Not completely incomprehensible that BTC could be 5% of M2 by 2020, or $2300 or so per BTC.

This would imply that you're also predicting a significant change in bitcoin's historical growth rate starting now.  What would make you believe that growth would be vastly slower moving forward?



Nice chart, Peter.
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October 08, 2014, 01:34:39 PM
 #13526

the great thing about the Blockchain.info investment is that of all the wallets and exchanges out there, blockchain.info adheres most closely to the founding principles of Satoshi and Bitcoin. headed by Roger Ver, you just know that blockchain.info will never do anything to compromise the original Bitcoin vision; that of privacy (tumbling), personal handling of keys, safety, and great development.
They still haven't fixed the address reuse problem in the wallets, going on 3 years now.

Probably from lack of funding. I bet they'll be much more responsive now.

It's very important for the community to have a Web served client based wallet like this available for the masses. They've been around forever and i do trust Roger to uphold most of the original principles surrounding Bitcoin,  however you want to define those.
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October 08, 2014, 02:13:03 PM
 #13527


I love Bitcoin, but it seems they might love it even more than I do.  Wow.  

Edit: market cap potential of $75 trillion?  I think the S&P 500 passed $15 trillion last year, which would still put it at probably less than $17 trillion in cap. 

$4,291,060 per coin

and they call me bullish

 Grin Grin Grin Shocked

I think they are not bullish enough. My long term prediction is that all government currencies will be swallowed by bitcoin as none will be able to compete. The dollar and all others will go the way of the Zimbabwe dollar.


Heh. Yeah, weird when a price-per-bitcoin target in a research report about bitcoin-vs-gold gets people in *this* thread to say "uhhh....that's just too bullish". Myself included.
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October 08, 2014, 03:33:45 PM
 #13528

Bigger traders see pattern change for bitcoin also apparently


https://twitter.com/alaidi


In 2008 everything went down together if I recall right and at the time people said it was a sign of price inaccuracy or quite simply panic, forced selling.   There were some bargains at that time from that phenomena. in retrospect

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October 08, 2014, 03:53:15 PM
 #13529

My quick and dirty valuation of BTC in 2020 is also based on M2.  Not completely incomprehensible that BTC could be 5% of M2 by 2020, or $2300 or so per BTC.

This would imply that you're also predicting a significant change in bitcoin's historical growth rate starting now.  What would make you believe that growth would be vastly slower moving forward?



Well, note that I said valuation, not price.

Predicting BTC price is virtually impossible, IMO.  I'd suspect that the value of BTC will continue to rise.  In my opinion (just one guy), the proper valuation metric might very well be what percentage of global M2 takes place in the form of BTC transactions (and also what percentage of global M2 is held in BTC as a store of value).

The price will continue to cross back and forth over that line at unpredictable intervals, kind of like this (pic is irrelevant, other that the fact that it's a graphic representation of what I'm talking about)



I suspect that, yes, the historical growth rate will change.  Two years ago, BTC was around $15.  Now it's around $350.  Will it continue to grow at a rate of 23x every 2 years?  I don't think we'll see:

2016: 8050
2018: 185,150
2020: 4,258,250 (at which point, BTC would, as pointed out above, equal total global M2)

So I guess that unless one subscribes to the Pantera document, growth in PRICE will slow moving forward.

That said, I'm a believer.  I love the protocol, the team, the adaptability.  Definitely NOT trying to start a fight about it.  If one buys BTC today at $350 and sells it at $2300 in 6 years, that is a fabulous return.  There will also be long periods where BTC is far, far above that value metric.  If the M2 metric says BTC is worth $2300, there is no reason to think that the price couldn't be 5x or 10x (or more) because markets, being forward-looking, might well price in future M2 transaction and store-of-value gains.
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October 08, 2014, 04:17:22 PM
 #13530

My quick and dirty valuation of BTC in 2020 is also based on M2.  Not completely incomprehensible that BTC could be 5% of M2 by 2020, or $2300 or so per BTC.

When BTC starts taking bigger chunks out of fiat currencies, gold and bonds, you'll see quite a bit more than $2300 in 2020...

Agreed. I predict bitcoin will continue to swallow and make other government currencies irrelevant. They will go the way of the Zimbabwe dollar.
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October 08, 2014, 04:17:58 PM
 #13531

I expect bitcoin to turn around here some time and make new lows.. although I don't want this.. seems to be what the 1h candles are saying.. lets see how it plays out.
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October 08, 2014, 04:27:18 PM
 #13532

My quick and dirty valuation of BTC in 2020 is also based on M2.  Not completely incomprehensible that BTC could be 5% of M2 by 2020, or $2300 or so per BTC.

This would imply that you're also predicting a significant change in bitcoin's historical growth rate starting now.  What would make you believe that growth would be vastly slower moving forward?



Well, note that I said valuation, not price.

Predicting BTC price is virtually impossible, IMO.  I'd suspect that the value of BTC will continue to rise.  In my opinion (just one guy), the proper valuation metric might very well be what percentage of global M2 takes place in the form of BTC transactions (and also what percentage of global M2 is held in BTC as a store of value).

The price will continue to cross back and forth over that line at unpredictable intervals, kind of like this (pic is irrelevant, other that the fact that it's a graphic representation of what I'm talking about)



I suspect that, yes, the historical growth rate will change.  Two years ago, BTC was around $15.  Now it's around $350.  Will it continue to grow at a rate of 23x every 2 years?  I don't think we'll see:

2016: 8050
2018: 185,150
2020: 4,258,250 (at which point, BTC would, as pointed out above, equal total global M2)

So I guess that unless one subscribes to the Pantera document, growth in PRICE will slow moving forward.

That said, I'm a believer.  I love the protocol, the team, the adaptability.  Definitely NOT trying to start a fight about it.  If one buys BTC today at $350 and sells it at $2300 in 6 years, that is a fabulous return.  There will also be long periods where BTC is far, far above that value metric.  If the M2 metric says BTC is worth $2300, there is no reason to think that the price couldn't be 5x or 10x (or more) because markets, being forward-looking, might well price in future M2 transaction and store-of-value gains.

As mentioned in another thread :


I don't know how anyone could think this, this seems so counterintuitive to me...

It ignores EVERY technology adoption curve out there.

As sgbett pointed out. It also ignores greed which is the biggest fuel for BTC's price rises.

This would suggest that as adoption grows and more people are acquainted with Bitcoin's value proposition the pool of potential adopter shrinks.

As far as I can understand it this is not how network effects behave. At least not until we have reached a halfway point in adoption where Bitcoin has become so widely spread there are fewer people not using/invested in it than there are Bitcoiners.

It seems so blatently obvious to me that the potential for a massive bubble increases every time Bitcoin becomes exposed to a more important percentage of the population and turns the eyes of bigger and bigger fiat whales.

"I believe this will be the ultimate fate of Bitcoin, to be the "high-powered money" that serves as a reserve currency for banks that issue their own digital cash." Hal Finney, Dec. 2010
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October 08, 2014, 04:33:09 PM
 #13533

Sorry for the brief/quick reply.  Just wanted to say that:
1) We probably agree on more than we disagree on.
2)  I'm actually happy with the thought of a 8-10x return in 5-6 years...I mean, I'd be happier with more, but my expectation isn't for much more than that.
3)  One thing to consider is that we might be HIGHER in price than the current BTC intrinsic value based on percentage of total M2 usage right now.  That's OK.  Again, in forward-looking markets, we are actually buying future "earnings" or in this case, value.

I hope you are right.
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October 08, 2014, 05:51:16 PM
 #13534

ok, i'm going to have to refine my conspiracy theory on the BearWhale.  he is a distraction.  i now think the main benefactor of a manufactured selloff was economic actor Pantera Capital.

let me further say, this type of analysis is purely in fun and based on anecdotes. i am not accusing them of anything and will be happy to be corrected.  if i'm right, i don't necessarily have anything against them for manipulating the market like i'm theorizing.  i just find this one of the more interesting events in Bitcoin history and find it fun to theorize how and why it happened:

developments since the selloff that have occurred after my original theory about it being a non-economic actor:

1.  Dan Moorehead @dan_pantera, the day after the selloff, comes out with a detailed series of tweets focusing attention on the movements of address 159SCycgn8weAy2XGUEhD6V1RTFni7E3iq convincing me that the 30K dumper was indeed a whale who simply capitulated to the selloff pressure:

https://twitter.com/dan_pantera

2.  Pantera Capital, 2 days after the selloff, issues not only one but two uber bullish reports on Bitcoin.  its Bitcoin vs Gold report unapologetically and unabashedly forecasting $4.3M/BTC.  they don't normally publish this frequently:

https://cdn.panteracapital.com/wp-content/uploads/Bitcoin-vs-Gold.pdf

https://cdn.panteracapital.com/wp-content/uploads/Pantera-Bitcoin-Letter-September-2014.pdf

associated data and assumptions:

1.  @PanteraCapital & @RonGlantz popped up as my Twitter followers since spring/summer and i know they follow this thread.  here's the tinfoil stuff and it's truly not meant to feed my ego but since June, i've had the funny feeling that very often when i would put up a bullish post, it was immediately met with a selloff.  it got so bad that @kLee1977 told me "you bring bad luck!" to which i replied:

"@kLee1977 actually, u know wht? i bet those ask wall manipulators key off bulltards like me. long term tho, i'd bet on me Wink"

https://twitter.com/cypherdoc2/status/510080984243765248

2.  the day of the selloff, Oct 5, i sent this tweet to @PanteraCapital @BitstampUSD @damijanmerlak & @nejc_kodric:

"hey @PanteraCapital. u guys r invested in @BitstampUSD. y don't u ask @damijanmerlak & @nejc_kodric whats goin on with the huge wall?"

https://twitter.com/cypherdoc2/status/518969201814683648

never got a response from any of them.  i would have expected at least a denial.

3.  i think since June, Pantera used it's known considerable BTC resources obtained in the early days of Bitcoin, to sell/short down the market with a bot and occasional 1000 BTC chunks, keying off known bulls like myself to knock the market down with the goal of causing a whale or whales to finally capitulate, at which time they'd buy back the sold coins or cover shorted coins back at a cheaper price, at what turned out to be in this case @$300.  i doubt they had a specific price point; they were simply hunting for a large selloff source from a weak whale.

4.  a large economic actor like Pantera could afford to hire forum and Reddit trolls to help talk down the price.  no matter what anyone says, this type of trolling is effective in destroying confidence.  it is also well known that when there are big price moves either way ppl come to these meeting places to find out what's going on.  the fact that Severro, antibitcoinconsortium, falllling, etc. have all abruptly disappeared since Sunday indicate to me they were on hire by someone with substantial resources to manipulate the market.

5.  Pantera Capital is the major investor in Bitstamp and clearly has a close relationship with its founders.  only they would have the resources and confidence to leave large amounts of BTC and fiat on an unregulated exchange awaiting opportunities, manufactured or otherwise, considering what happened to mtgox clients.  

now it's time for them to talk the price up with bullish reports.

i welcome any thoughts or criticisms.

edit:  i just found out that the premier forum troll, falllling, registered his acct on 5/27/14, just before the peak in price in June.  that even more suspicious.

also, the Bitcoin vs Gold report was a republishing from late last year.  but it is now dated Oct 7, 2014.  why republish it at all unless you're trying to drive the price?
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October 08, 2014, 06:00:16 PM
 #13535

That ... actually makes sense.
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October 08, 2014, 06:05:43 PM
 #13536

...
i welcome any thoughts or criticisms.

Invest in genuine tinfoil (hard to get because gubermint).  The state-approved aluminum foil doesn't work worth shit.

  ~A Friend.
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October 08, 2014, 06:13:00 PM
 #13537

ok, i'm going to have to refine my conspiracy theory on the BearWhale.  he is a distraction.  i now think the main benefactor of a manufactured selloff was economic actor Pantera Capital.

...

Super duper speculation.  Congratulations.  You win jimbobway's award for most speculative post for identifying the BearWhale! ;-)

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October 08, 2014, 06:13:24 PM
 #13538

ok, i'm going to have to refine my conspiracy theory on the BearWhale.  he is a distraction.  i now think the main benefactor of a manufactured selloff was economic actor Pantera Capital.

So crazy that it might actually be true.
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October 08, 2014, 06:40:28 PM
 #13539

3.  i think since June, Pantera used it's known considerable BTC resources obtained in the early days of Bitcoin, to sell/short down the market with a bot and occasional 1000 BTC chunks, keying off known bulls like myself to knock the market down with the goal of causing a whale or whales to finally capitulate, at which time they'd buy back the sold coins or cover shorted coins back at a cheaper price, at what turned out to be in this case @$300.  i doubt they had a specific price point; they were simply hunting for a large selloff source from a weak whale.

4.  a large economic actor like Pantera could afford to hire forum and Reddit trolls to help talk down the price.  no matter what anyone says, this type of trolling is effective in destroying confidence.  it is also well known that when there are big price moves either way ppl come to these meeting places to find out what's going on.  the fact that Severro, antibitcoinconsortium, falllling, etc. have all abruptly disappeared since Sunday indicate to me they were on hire by someone with substantial resources to manipulate the market.

5.  Pantera Capital is the major investor in Bitstamp and clearly has a close relationship with its founders.  only they would have the resources and confidence to leave large amounts of BTC and fiat on an unregulated exchange awaiting opportunities, manufactured or otherwise, considering what happened to mtgox clients.  

now it's time for them to talk the price up with bullish reports.

i welcome any thoughts or criticisms.
How could they guarantee a positive ROI, and by that I mean how sure could they be that paying the hired trolls and selling off on the exchange would result in them holding more bitcoins than before?

I suppose they'd be in a position to know of anyone else had substantial USD reserves on Bitstamp who could buy the coins in front of them.
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October 08, 2014, 06:51:56 PM
 #13540

3.  i think since June, Pantera used it's known considerable BTC resources obtained in the early days of Bitcoin, to sell/short down the market with a bot and occasional 1000 BTC chunks, keying off known bulls like myself to knock the market down with the goal of causing a whale or whales to finally capitulate, at which time they'd buy back the sold coins or cover shorted coins back at a cheaper price, at what turned out to be in this case @$300.  i doubt they had a specific price point; they were simply hunting for a large selloff source from a weak whale.

4.  a large economic actor like Pantera could afford to hire forum and Reddit trolls to help talk down the price.  no matter what anyone says, this type of trolling is effective in destroying confidence.  it is also well known that when there are big price moves either way ppl come to these meeting places to find out what's going on.  the fact that Severro, antibitcoinconsortium, falllling, etc. have all abruptly disappeared since Sunday indicate to me they were on hire by someone with substantial resources to manipulate the market.

5.  Pantera Capital is the major investor in Bitstamp and clearly has a close relationship with its founders.  only they would have the resources and confidence to leave large amounts of BTC and fiat on an unregulated exchange awaiting opportunities, manufactured or otherwise, considering what happened to mtgox clients.  

now it's time for them to talk the price up with bullish reports.

i welcome any thoughts or criticisms.
How could they guarantee a positive ROI, and by that I mean how sure could they be that paying the hired trolls and selling off on the exchange would result in them holding more bitcoins than before?

I suppose they'd be in a position to know of anyone else had substantial USD reserves on Bitstamp who could buy the coins in front of them.

of course this is all conjecture but who would be in a better position to attempt something like this?  yes, it is risky, but that is how major gains are made.  and they've been around for a long time so we know they have lots of BTC.

one of the big questions flying around during the selloff was who would keep all this fiat on Bitstamp to buy the wall?  i think it's a good question and can only be answered by assuming a related entity like Pantera.
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