Gold collapsing. Bitcoin UP.

[tvbcof]

People who understand the financial system didnt sell any.. and there are alot of those. They would be the elite.

Do you think it is unwise to crystallize a portion of your gains, thereby diversifying your portfolio while de-risking in case bitcoin does fail?  

It's my impression that even the most bullish here have diversified to some extent.  Otherwise you quickly end up with a portfolio >90% in bitcoin.  

I actually agree that a few special people won't diversify at all.  But these are the exception, not the rule.  Kudos to them if it works out flawlessly.  

One of the biggest driving forces for me to diversify is that it looks like the Bitcoin Foundation and CFR are well on their way to perverting Bitcoin into something I don't even care about.  Of course I'm going to hold on to enough of them to ride along on any valuations success that that eventuality might provoke.  As for being an interesting and valuable technological and social instrument, however, it looks like Southpark "and, it's gone" thing might end up being quite fitting.

[Melbustus]

People who understand the financial system didnt sell any.. and there are alot of those. They would be the elite.

Do you think it is unwise to crystallize a portion of your gains, thereby diversifying your portfolio while de-risking in case bitcoin does fail?  

It's my impression that even the most bullish here have diversified to some extent.  Otherwise you quickly end up with a portfolio >90% in bitcoin.  

I actually agree that a few special people won't diversify at all.  But these are the exception, not the rule.  Kudos to them if it works out flawlessly.  

One of the biggest driving forces for me to diversify is that it looks like the Bitcoin Foundation and CFR are well on their way to perverting Bitcoin into something I don't even care about.  Of course I'm going to hold on to enough of them to ride along on any valuations success that that eventuality might provoke.  As for being an interesting and valuable technological and social instrument, however, it looks like Southpark "and, it's gone" thing might end up being quite fitting.

What's "CFR"?

[sidhujag]

People who understand the financial system didnt sell any.. and there are alot of those. They would be the elite.

Do you think it is unwise to crystallize a portion of your gains, thereby diversifying your portfolio while de-risking in case bitcoin does fail?  

It's my impression that even the most bullish here have diversified to some extent.  Otherwise you quickly end up with a portfolio >90% in bitcoin.  

I actually agree that a few special people won't diversify at all.  But these are the exception, not the rule.  Kudos to them if it works out flawlessly.  

true and I guess looking at it this wat then really the price rose too fast for large scale accumulation for many people.. So now would be a perfect time to simply buy it all up aslong as that worthless papwr is still worth something.

[billyjoeallen]

One of the biggest driving forces for me to diversify is that it looks like the Bitcoin Foundation and CFR are well on their way to perverting Bitcoin into something I don't even care about.  Of course I'm going to hold on to enough of them to ride along on any valuations success that that eventuality might provoke.  As for being an interesting and valuable technological and social instrument, however, it looks like Southpark "and, it's gone" thing might end up being quite fitting.

The Bitcoin Foundation isn't Bitcoin. If they get co-opted by the CFR/illuminati builderberger/rothchild/New World Order or whoever, they just cease to represent us. Nobody, no matter how powerful, can alter or repeal the laws of economics. These guys are considering bailing in Bitcoin because their own ship is sinking and they know it.

[Melbustus]

What's "CFR"?

http://www.cfr.org/

Oh. Sheesh. Cuz Gavin is giving a talk. I see.

[Peter R]

...The other issue is that the global elite don't really care about us one way or the other.  They do what's in their own perceived best interests, and if Bitcoin becomes the best of their available options, they'll take it.

Exactly.  

The power brokers of the world do not behave like your jealous friend from high-school.  If bitcoin will help them, then they will use it--if it makes you wealthy in the process, so be it.

[chessnut]

...The other issue is that the global elite don't really care about us one way or the other.  They do what's in their own perceived best interests, and if Bitcoin becomes the best of their available options, they'll take it.

Exactly.  

The power brokers of the world do not behave like your jealous friend from high-school.  If bitcoin will help them, then they will use it--if it makes you wealthy in the process, so be it.

I would generally agree, but I dont believe for a second that the big bankers are an elite race. They can make mis-judgements, bad assumptions, and they do. The wealthiest are not so because they are smart, they are wealthy because they are bastards.
There must be some bankers that see the value of bitcoin but certainly there must be some dinosaurs up there that will not have a word of it. I think a lot of banks have missed out. too bad for them they cant bend the rules this time.

[Erdogan]

Do you really think they would make us the new 1% elites? Just so that they can move to a system after the big crash?

In my discussion with my friends and family about bitcoin, I regularly hear "it's not fair that early adopters are making so much money!  The powers-that-be won't let it continue."  

Beyond the "what-is-a-fair-reward-for-risk" debate, I also question how much money earlier adopters are actually making.  In fact, unless you are extremely risky with your investments, I think what I'll refer to as your "lifetime wealth" is unlikely to increase by more than a single order of magnitude even if bitcoin hits $100,000 per coin.

Consider Bob who invested $5000 in bitcoin in December 2012 at $14 giving him 360 BTC.  At the time, bitcoin seemed very high-risk (a lot has changed that we tend to forget), so this was a large risk-adjusted investment for someone who was likely quite young.  

Bob sees the price hit $28 in February, and thinks "sweet, I'll sell half my coins to re-coup my initial investment!!  Life is good and bitcoin ROCKS!!!"

Now Bob has 180 BTC.

But the price is climbing....and climbing....Bob is annoyed that he sold 180 BTC at $25 because the price is now $100.  He has an epiphany that bitcoin will never crash again--it's on its way to becoming a new world currency.  So he holds all the way up to $266 and is euphoric!

And then BOOM.  The market crashes.  His illusions are shattered and, with one eye on the 2011 crash chart, he sells another half of his coins at $100.  Now he has 90 BTC ($9,000) and has re-couped his initial investment plus $9000.    

It all happened so fast, that first bubble, he thinks.  Bob cracks out Excel and comes up with a plan: divest 15% each time bitcoin doubles in price.  This way, he still wins even if bitcoin one day fails (and he can sleep at night) and he wins-big if it succeeds:  

If bitcoin hits $100,000 per coin, Bob has extracted $780,000 in cash and has about 18 bitcoins left (1.8 million dollars).

This is hardly "elite."  

This non-elitist misunderstood two things about the buy and hold strategy.
It is not buy and hold, it is buy and hold.

[rpietila]

This non-elitist misunderstood two things about the buy and hold strategy.
It is not buy and hold, it is buy and hold.

Considering that bitcoin's market penetration limit is 5 billion users and target is 2 billion, and that we are at 0.002 billion now, we are still quite young. I am currently employing an analyst to chart Bitcoin's market penetration and holding profile for the whole of its history, and from the top of my head I could say that in 12/2012 Bitcoin had 0.0002 billion (200,000) users. Not many of the central concepts like the theory of SSS (which Peter referred to) or the theory of HODL (that you referred to) were simply not there.

In absence of almost any coherent economics/investment theory, many early adopters made what now seem colossal blunders, squandering away their inheritance and not even ensuring their financial future in return. But we should not blame them - in the worst case they can start over and still be early adopters.

It is much easier to start with Bitcoin now than at any point before. There is a solid theoretical background outlining a compelling scenario of Bitcoin doing away with the fiat system, and you can make a highly asymmetric bet on it by buying a few (or even a fraction of a) bitcoin(s) to participate. In the hypothetical worst case you can only lose it all, in the best case you can easily calculate how much you will make, if only you have the storage arrangements up to date, and the divestation plan which you can and will stick to.

[chessnut]

The average millionaire has 3 Million dollars approximately. there are 12 million millionaires in the world.
=> 12,000,000,000x3,000,000=36,000,000,000,000

there are 1500 billionaires, worth a net of 5.4 trillion.

Here we have around 41 trillion dollars in the hands of investors.

If each of these investors put 1% Bitcoin into their portfolio, the market cap of bitcoin would be 400 billion.

and that doesn't yet fairly represent commercial demand.....

[Erdogan]

This non-elitist misunderstood two things about the buy and hold strategy.
It is not buy and hold, it is buy and hold.

[...] from the top of my head I could say that in 12/2012 Bitcoin had 0.0002 billion (200,000) users. Not many of the central concepts like the theory of SSS (which Peter referred to) or the theory of HODL (that you referred to) were simply not there.
[...]

HODL not there? I think not not.

[rpietila]

It's a different thing to cry hold and do hold.

But I guess we are both advocating the same thing, making a plan (to own bitcoins after some years) and sticking to it. 

[sidhujag]

The average millionaire has 3 Million dollars approximately. there are 12 million millionaires in the world.
=> 12,000,000,000x3,000,000=36,000,000,000,000

there are 1500 billionaires, worth a net of 5.4 trillion.

Here we have around 41 trillion dollars in the hands of investors.

If each of these investors put 1% Bitcoin into their portfolio, the market cap of bitcoin would be 400 billion.

and that doesn't yet fairly represent commercial demand.....

There was an interesting thread a little whileback that tried to correlate percentage of world population using bitcoin vs price and marketcap and it summed up basically meaning that 1BTC would mean you are in the 1% elite level since there are only 21 million coins total.

I can't find the thread but it was pretty interesting stuff on this subject.

Basically if there are 12 million millionaires in the world and there are only about 12 million bitcoins available for everyone to buy (not 21 million), then each coin should be worth about $1 million on average..

[Peter R]

...The other issue is that the global elite don't really care about us one way or the other.  They do what's in their own perceived best interests, and if Bitcoin becomes the best of their available options, they'll take it.

Exactly.  

The power brokers of the world do not behave like your jealous friend from high-school.  If bitcoin will help them, then they will use it--if it makes you wealthy in the process, so be it.

I would generally agree, but I dont believe for a second that the big bankers are an elite race. They can make mis-judgements, bad assumptions, and they do.

Nor do most people.  In fact, one could argue that "elite" has become a pejorative to described the wealthy, powerful, and privileged class.  

The wealthiest are not so because they are smart, they are wealthy because they are bastards.

I think this statement is false: there are bastards in all walks of life.

It's my belief that the majority of humans simply want to pursue happiness and their enlightened self-interest, in a peaceful manner.  Most evil comes from a broken "system," rather than from people themselves.
  

[cypherdoc]

Mark Cuban:

http://www.streetinsider.com/Forex/Long+Bitcoin+and+Short+Gold%3F+Mark+Cuban+Likes+the+Trade+Idea/9123025.html

[Dragonkiller]

Mark Cuban:

http://www.streetinsider.com/Forex/Long+Bitcoin+and+Short+Gold%3F+Mark+Cuban+Likes+the+Trade+Idea/9123025.html

I think it will be a good year for both bitcoin and gold.

[molecular]

Mark Cuban:

http://www.streetinsider.com/Forex/Long+Bitcoin+and+Short+Gold%3F+Mark+Cuban+Likes+the+Trade+Idea/9123025.html

I think it will be a good year for both bitcoin and gold.

That's what I thought in 2011, 2012 and 2013.

[Dragonkiller]

Mark Cuban:

http://www.streetinsider.com/Forex/Long+Bitcoin+and+Short+Gold%3F+Mark+Cuban+Likes+the+Trade+Idea/9123025.html

I think it will be a good year for both bitcoin and gold.

That's what I thought in 2011, 2012 and 2013.

And in 2014?

[Adrian-x]

Mark Cuban:

http://www.streetinsider.com/Forex/Long+Bitcoin+and+Short+Gold%3F+Mark+Cuban+Likes+the+Trade+Idea/9123025.html

I think it will be a good year for both bitcoin and gold.

That's what I thought in 2011, 2012 and 2013.

And in 2014?

" Billionaire Mark Cuban has a currency trade idea for 2014 -Long Bitcoin and Short Gold."
 molecular has held the idea consistently since 2011 (although he did short XBT and buy alpaca sock - and has refused to sell)
I'm sure molecular will hold in 2014 too.

[vokain]

Mark Cuban:

http://www.streetinsider.com/Forex/Long+Bitcoin+and+Short+Gold%3F+Mark+Cuban+Likes+the+Trade+Idea/9123025.html

I think it will be a good year for both bitcoin and gold.

That's what I thought in 2011, 2012 and 2013.

And in 2014?

" Billionaire Mark Cuban has a currency trade idea for 2014 -Long Bitcoin and Short Gold."
 molecular has held the idea consistently since 2011 (although he did short XBT and buy alpaca sock - and has refused to sell)
I'm sure molecular will hold in 2014 too.

hoo-hoo-hoo-hoosiers