Banking System Melting down While Bitcoin Melts up

techlead on 21/03/2023 - 10:40
Last edited 22/03/2023 - 12:51

I think we are starting to see the cryptocurrency market start to decouple from the traditional markets as people see how fragile the banking system is. Fiat currency (USD, AUD, CHF etc) are backed by nothing but trust, once that trust evaporates, like in the case of SVB, Signature Bank and now Credit Suisse, its back to the money printers to bail these institutions out. SVB in particular, bought "good quality" treasury bonds, yet they mistimed the market and the Feb screwed them over by hiking rates so quickly.

Its funny that in 2017, the Credit Suisse CEO said Bitcoin at $7000 was a "bubble" and now Credit Suisse has become Debit Suisse and Bitcoin is worth multiples of $7000.

It is very clear with the strength of Bitcoin recently that many people has now realized fiat currencies are not backed by anything and its worth gets diminished once the printer goes brrrrrrr. I'm very glad I've been aggressively buying my favorite crypto over these last couple of months. The new bull market is nearly upon us and Bitcoin and good quality alts will once again amazing people. As someone who as widely laughed at and ridiculed to daring to say Bitcoin will be $10k+ USD per coin one day back in 2013/2014, I have experienced these cycles before. As Bitcoin blasts through resistance levels on its way upwards, I'm very sure it will be more than $100k and then eventually more than $1 million per BTC.

I'm down to my last $AUD200k cash, rest of my net worth is all in crypto, I will probably stop buying now, just keep it as a buffer. I'm strapped onto this crypto rocket, who else is onboard?

PS: I'm not associated in any way to the YouTube channel called Techlead who famously adds "as a millionaire" to everything he says and allegedly ran a million dollar scam.

Financial Cryptocurrency

Comments

                • furakoph on 22/03/2023 - 20:45

                  @techlead: Currency trading is a whole another topic.

                  Nobody here is arguing that holding any sort of FIAT is going to beat shares, property or bitcoin in the past 10 years nor in the future 10 years.

                  But the only way to purchase those investments are through FIAT, that's how the world works.

                  • techlead on 22/03/2023 - 20:50

                    @furakoph: What I described with Argentina is not currency trading at all. It's currency hodling.

                    Well hopefully in the next 10 years, we can start to change that and start to purchase various things with crypto in addition to fiat currencies. The world is always changing.

                    For example, you can now pay your state taxes in Colorado in Bitcoin.

                    • furakoph on 22/03/2023 - 21:30

                      @techlead: You can say the same thing if you held a vast majority of cryptocurrencies though.

                      Cherry picking out countries that economy nosedived is not really an accurate representation of what's going on. Argentina is not even close a global currency. Nobody is saying currency HODLING is worth it, holding any currency long term is literally a stupid investment error due to inflation

                      For example, you can now pay your state taxes in Colorado in Bitcoin.

                      I think you are misunderstanding things. You're not paying taxes in bitcoin, you are still paying taxes in USD. The only difference is that the BTC is converted into USD and the value of those BTC is denominated in USD. It's just adding an unncessary middle man step.

                      And the only reason that the government can accept BTC is because government can sell btc to government regulated centralised exchanges, OTC desks and funds. And if they all suddenly decided to promote BTC 2.0 fork then original btc is useless and btc will go back to just being a dark web scam coin.

                      BTC has no power unlike USD. Exchanges cannot suddenly make up their own USD equivalent currency but they could easily just ban BTC and dump it all.

                      start to purchase various things with crypto in addition to fiat currencies.

                      Why purchase things with something that has no inherent value or anything backing it? BTC will always be denominated and converted into USD/FIAT otherwise it has no value. IT's just imaginary internet numbers that anybody can make on their own.

                      The USD is backed by trillions of government physical assets.

    • DingoBilly on 23/03/2023 - 09:26

      This is just false.

      At this stage it's just coinflips.

      Is it guaranteed you will make money if you just hold long enough? No - it's just as possible theres a massive hack or financial scandal involved with btc that tanks it all similar to many crypto chains already.

      Is it guaranteed to lose you money? Also no.

      Does anyone actually know what will happen? No.

      So the question is - does it actually have an inherent value and use? I'd argue no. In terms of crypto, there are much more useful and relevant chains out there. Btc has first mover advantage but it is extremely flawed.

      Why anyone would invest in something that is propped up by nothing is beyond me. You honestly would save a lot of time just going to a roulette table and throwing it all on black or red in terms of risk.

  • moneyhungry on 22/03/2023 - 17:10
    +2

    Judging by all these negative comments, bitcoin has a long way to go up.

    • techlead on 22/03/2023 - 17:50
      -1

      I hope so. I'm very sure it will be worth $1 mil per BTC one day.

      • moneyhungry on 22/03/2023 - 17:57

        Apparently will be in 90 days I hear.

        • techlead on 22/03/2023 - 18:04
          +1

          Yea, according to Venture capitalist Balaji Srinivasan.

          I doubt it, but wouldn't complain if it did go up to $1 mil in 90 days. Actually I would, I would complete that I didn't buy enough BTC. T_T

          • moneyhungry on 22/03/2023 - 18:18

            @techlead: You have your crypto in cold storage? Probably a good idea.

            • techlead on 22/03/2023 - 19:56

              @moneyhungry: I do, 90% of my crypto are on my Trezor and Ledger. I have 10% on Binance, I might withdraw that too, not going to sell anytime soon.

    • lostgoat on 22/03/2023 - 17:50

      Yeap if the Taxi Driver talking about it . Hedge or get out . Thanks to the FTX disaster they haven't been talking about it :)

      • techlead on 22/03/2023 - 18:07

        Yep, that's why I've been in a hole in the past few months buying. As Buffett says, buy when everyone is fearful and sell when everyone is greedy.

        Everyone has been quite fearful these past couple of months.

        • thesilverstarman on 22/03/2023 - 18:20
          +2

          Buffett said that he wouldnt buy bitcoin, even if he could buy all of it for $25. He advises others to stay away.

          • lostgoat on 22/03/2023 - 18:26

            @thesilverstarman: Serioulsy Dude that not very smart We should know how liquid BTC is and it's an easy USD 1/2 tril hehe .
            If Buffet said that he is out of touch with the market place .

          • techlead on 22/03/2023 - 19:59

            @thesilverstarman: Buffett do not understand technology. I wouldn't even ask him which new phone to get let alone whether to invest in some emerging technology he has no idea about.

            How do you expect a 92 year old to understand new technology? The guy has reportedly never had a computer at his office. He has never used a stock ticker. He does NOT have a smartphone. He gets his secretary to print out his emails so he can read it. And you want his opinion on Bitcoin?!?

            His company website is stuck in Web 0.1 Beta, https://www.berkshirehathaway.com/ and you want to ask him about Web 3.0?

            • Autonomic on 24/03/2023 - 12:44
              +1

              @techlead: Ironically Crypto is technologically useless. 10 years now, trillions of dollars and no use case. Not even a potential use case.

              • techlead on 24/03/2023 - 13:12

                @Autonomic:

                Ironically Crypto is technologically useless

                Check your financial privilege. Not all countries have a relatively stable and reliable banking system and/or government. Bitcoin is very useful for people in Nigeria, Sudan, Ethopia, Lebanon, Venezuela, you can read more about this here https://bitcoinmagazine.com/culture/check-your-financial-pri….

                There are people outside of Western countries who also find Bitcoin and other cryptos useful, some even essential for various reasons such as but not limited to, undeveloped banking systems and oppressive regimes.

                So its not true that crypto has no use case.

                • Autonomic on 24/03/2023 - 17:12

                  @techlead:

                  Check your financial privilege. Not all countries have a relatively stable and reliable banking system and/or government.

                  Sorry, and BTC is at all stable? Seriously? If they have a phone they can buy USD. Your link is a lot of fluff with no actual evidence people are actually using BTC in those countries.

          • DingoBilly on 23/03/2023 - 09:29

            @thesilverstarman: Lol. No you can only use quotes to support crypto! You can't also use the quotes from same guy when it's against crypto! In that second scenario the guy is an idiot.

            The mental gymnastics on crypto fanatics is insane.

            • techlead on 24/03/2023 - 13:20

              @DingoBilly:

              Lol. No you can only use quotes to support crypto!

              What quote?

              The mental gymnastics on crypto fanatics is insane.

              Such as? Can you elaborate? I'm very interested to know. I enjoy reading comments from crypto critics more than advocates. Crypto critics usually fall into 3 camps:

              1. The idiots - just parroting other people's talking points without understanding what it means, eg Bitcoin is a fiat currency (Yes, someone said that), its value comes from thin air, it uses too much energy, its used by crmininals etc etc These people don't critically think, they just parrot anything negative other people say about crypto. No supporting evidence, just talking points that they themselves probably don't understand.

              2. The traditionalists - The system works fine so far, this new technology will never work because the world functions just fine now, there's no need for this. Like the author of this Newsweek article published in 1995 about the internet, https://www.newsweek.com/clifford-stoll-why-web-wont-be-nirv…. I think we can all agree it aged like milk.

              3. Legitimate critics but open minded - these are the people who remain unconvinced that crypto currencies is the future, but they are open minded. They support their arguments well with supporting evidence and present a very good alternative point of view. People like Molly White, fall in this category, https://substack.com/profile/6775195-molly-white. This article of hers is quite well written and supported with evidence, https://newsletter.mollywhite.net/p/no-bitcoin-isnt-pumping-….

              I love talking to people in category 3, I was one of them. From 2009 to 2013, I was in the category 3 camp.

              • DingoBilly on 25/03/2023 - 17:19

                @techlead: You quoted Warren Buffet saying "Invest when others are fearful" essentially, then also called him out for being an idiot when he also said to never invest in crypto.

                I'm a category 3 - I understand it, have invested, lost money, made a lot more money from NFTs and recognise its all just a scam. I've listened to podcasts about it, talked to people in the space and besides the edge cases of countries with unstable currencies, there is no benefit for crypto.

                Everything it's purporting to do can be done already in the traditional market. It's just unregulated so it's easier for people to manipulate people and make the same mistakes that led us to our current financial system. It's basically a speed run for why we have regulators in the first place because a deregulated market just leads to lots of scams, people with money manipulating it and general everyday people losing money to those bigger players.

  • baskinghobo on 22/03/2023 - 17:45

    Cash is backed by the government and partly the oil industry. Gold is backed by how useful it is. What is Bitcoin backed by beyond speculation? It's only gotten as popular as it has with large institutions because it is a lot less deregulated and easier to game the system as well as for money laundering purposes.

    • techlead on 22/03/2023 - 17:59

      Gold is backed by how useful it is

      This is a myth. Only 11% of gold is used in industries such as the medical, electronics, automotive, defense and aerospace industries. The majority of gold just sits in a vault. How "useful" is that?

      easier to game the system as well as for money laundering purposes.

      Its not useful to use Bitcoin for money laundering purpose because of how transparent it is, everything is on the blockchain. There are other privacy cryptos more suited for money laundering purposes. The point is though, money laundering existed before crypto and when something else comes along, they will use that too. Criminals are gonna crim, what can you do about it? More regulation in the crypto space wouldn't hurt I think.

      • baskinghobo on 22/03/2023 - 18:30
        +2

        11% is still better than 0%. And you're probably right about using BTC for money laundering purposes but crypto as a whole has still made it easier to launder money, especially for your average low level crim.

        And I take back what I said. BTC's value is based on speculation but also scarcity. It might be a good hedge against money printing but it is a terrible hedge against inflation because when $!@# hits the fan it is the first thing people cash out so it will be interesting to see how it develops in the future but I don't have much hope in it as it uses too much electricity and imo will be replaced by a better coin that actually serves some purpose i.e. ETH and smart contracts

        • techlead on 22/03/2023 - 20:16

          It's so true, Bitcoin has been a god-send for the unbanked and countries less privileged than us. Authoritarian countries etc.

          • furakoph on 23/03/2023 - 16:32
            +1

            @techlead: Why BTC though? Slow, expensive and outdated.
            I can’t see how a poor African guy trying to send $2 to buy a house is going to pay the $5 in gas fees…And who wants a volatile currency that can dump 15% in a day.

            Honestly it would be much better to use USD stablecoins on a cheap network or L2.

            But you see how this is just basically a centralised USD on the blockchain? Like the whole decentralised unbanked narrative will never work. Crypto will always heavily depend on a centralised system at its entry and exit points. And if that were ever to change, the price of crypto will dump heavily.

            If the government bans cryptocurrencies then all the funds and regulated centralised exchanges responsible for 99% of BTC price will have to exit the market.

  • Maxxjet on 22/03/2023 - 17:55
    +3

    " …to see the cryptocurrency market start to decouple from the traditional markets …." with due respect, you didn't come up with this observation and narrative yourself, did you? This is what the people creating bull trap wanted you to believe? They use every opportunity to promot the idea anything un-ctypto is on the death spiral, slowly or othewise. I am no crypto denier but I just don't see the crypto palying an oversized role in wealth storage to the point to replace traditional banking and finanace system. For one, when the tradtional banks fall like SVB, Signature Bank or CS, the government using taxpayer's money came to the rescue so at least retail depositors are not out of money, but that is not the case for Luna/UST, Celsius and FTX.

  • tessel on 22/03/2023 - 18:45
    +3

    What is Bitcoin or any crypto backed by? The same. Hopes and dreams.

    • Nom on 22/03/2023 - 18:57

      And ?

      You forgot to add the conclusion.

      Are you suggesting that no backing means you can't make any money ?

    • techlead on 22/03/2023 - 20:15

      And? Your point is?

      Property prices are backed by the Australian dream. So what about it?

      • furakoph on 22/03/2023 - 21:41
        +4

        Property is backed by physical land, bricks and mortar.

        Housing is a basic necessicty, internet coins that anyone can mint in 5 minutes is not backed by anything but literally hopes and dreams of crypto moonshills.

        • Nom on 23/03/2023 - 12:55
          +1

          Yes, these are basic facts.

          What is your point ? Are you suggesting that no backing means you can't make any money ?

          • furakoph on 23/03/2023 - 16:10

            @Nom: No I’m just saying there is no price floor and Bitcoin can dump extremely hard like we have seen multiple times.

            The price is purely driven by market sentiment and it can shift and change. You can’t ever replace a prime piece of real estate in Sydney CBD.

        • techlead on 23/03/2023 - 13:41

          Yes, true, how much of it is backed by physical land, bricks, mortar and cash flow from rent (if investment), these are all fundamental components.

          What I said before is that property prices in Australia and most of the world is no longer based on fundamentals, gambling/speculation has pushed valuations well past that point (that's the hopes and dreams part I'm referring to).

          Housing is a basic necessicty,

          I totally agree, property should be for housing only, take gambling/speculation out of it. If we change the rules to reflect that principle, that property is for housing only, you will see the current prices fall off a cliff. One way to take gambling/speculation out of property is to implement an increasing tiered deposit requirement scheme, 20% deposit for your first property, 65% deposit for your second property and 90% deposit for your third and all subsequent properties. No forced sales, if you currently have 10 properties, that's grandfathered in, but if you want to buy the 11th property, 90% deposit required.

          What do you think will happen to property prices when that's implemented?

          • furakoph on 23/03/2023 - 16:18

            @techlead: Why can’t we also use housing as an investment vehicle though? I mean the Australian property market generates tons of taxes for the government (stamp duty, CGT, GST, income and company taxes) and supports the most number of jobs than any other sector (think construction, tradies, lawyers, REA, PM, accountants, valuers, quantity surveyors, architects, town planners, engineers etc).

            It is not even remotely close how much more actual productivity and economic stimulus property investing provides compared to Bitcoin investing.

            It is in Australia’s best economic interest to have a thriving property market with lots of investors and buyers.

            I’m not sure how lowering the LVR takes the gambling/speculation out of it? If you buy an investment leveraged or not, there is always an element of speculation.

            If you really don’t want landlords/investors probably just play around with stamp duty and negative gearing.

            • techlead on 24/03/2023 - 11:14

              @furakoph:

              Why can’t we also use housing as an investment vehicle though?

              Because once you introduce greed/gambling/speculation into anything, its price will fluctuate and go insane. It will no longer be based on fundamentals, as we have seen at the moment. This is why we have so many issues with housing. Housing is essential, we all need shelter, hence we shouldn't be gambling/speculating with housing.

              I mean the Australian property market generates tons of taxes for the government (stamp duty, CGT, GST, income and company taxes)

              There are much better ways to raise taxes, relying on property for taxes is a recipe for disaster. Look at Hong Kong, they depend on tax income from property more than us, look at the state of their property market. This short documentary is really eye opening, https://www.youtube.com/watch?v=hLrFyjGZ9NU. It shows you the shocking state of the property market in Hong Kong. Then compare and contrast that with Singapore.

              I’m not sure how lowering the LVR takes the gambling/speculation out of it? If you buy an investment leveraged or not, there is always an element of speculation.

              Leverage increases the risk. If a property falls 18% - 20%, that's a 100% loss, taking stamp duty into account. I've never been in negative equity for Bitcoin, because Bitcoin has never gone to zero. Your leverage supercharges your gains and loss, don't forget the flip side, that's what people always conveniently forgets and thinks "Property always goes up".

              If you really don’t want landlords/investors probably just play around with stamp duty and negative gearing.

              Not sure what that means. :S

              • furakoph on 24/03/2023 - 19:34

                @techlead:

                This is why we have so many issues with housing. Housing is essential, we all need shelter, hence we shouldn't be gambling/speculating with housing.

                Even if you are buying your PPOR, that is still an investment/speculation. PPOR is the best investment you can ever have since it is completely tax free.

                Because once you introduce greed/gambling/speculation into anything, its price will fluctuate and go insane.

                Property prices don't go insane anywhere close to what other assets like crypto or shares can do.

                There are much better ways to raise taxes,

                Name them? You can't just replace a sector that is worth 4 times our GDP whether it is good or not. The millions of jobs, largest direct GDP contributor and tens of billions of dollars in taxes is irreplaceable imo.

                https://www.propertycouncil.com.au/Web/Content/Media_Release…

                Sure there are other ways to collect more taxes (from corps and billionaires) but those won't help with jobs.

                Leverage increases the risk. If a property falls 18% - 20%, that's a 100% loss, taking stamp duty into account.

                But leverage has nothing to do with gambling or not..many people would say btc is gambling even if you don't use leverage. It increases risk for sure but it doesn't determine what is a gamble/speculation.

                Not sure what that means. :S

                If you want to penalise property investors, I think it is better to increase taxes for investors rather than require them to have lower LVR. If people wanna take on the risk they can do it but they gotta pay more taxes upfront which at least helps the country's budget.

        • michaelTito on 24/03/2023 - 23:01

          didnt you know you can live in blockchain? noob

  • TEER3X on 22/03/2023 - 20:57
    +2

    What is the future use case for Bitcoin?

    • furakoph on 22/03/2023 - 21:43
      +6

      Actually zero.

      BTC is actually useless except for as a speculative investment.

      There are far better alternatives now if you want a digital currency, smart contracts or various dapps.

      • techlead on 23/03/2023 - 22:13

        I expect BTC to behave more like gold as adoption increases and more regulation is introduced. More companies would buy it as their reserve asset.

        • furakoph on 24/03/2023 - 19:44

          I mean gold is a physical asset that has been used as a form of currency for thousands of years and a proven hedge against inflation.

          BTC being 'digital' gold feels a lot more risky as it's not backed by anything. BTC price is heavily correlated with the economy and stock market, price action last year proves it can't be used as a hedge against inflation.

  • PopCounty on 23/03/2023 - 00:23
    +1

    Well, I have gone sometimes to casino and have always lost. Bought lottery tickets and same result.

    So I started my journey with crypto without any expectations. Invested amount I could afford to lose. Started purchasing by reading chart about top cryptos. Played a lot around ETH and at once paid $900 USD as Tx fees for a transaction worth of $1400. Missed two chances to sell. If had sold, I would be nearly 50 times better than what I am now.

    Overall, got half money back and what is left is based on profits and half principle.

    In my 6-7 years of crypto, what I have gained is the personal instinct about crypto. I mean I don’t regret when I miss(ed) to sell. Nor get excited when it’s 10x of original investment. But a belief that if the cycle goes like this, I can make better decisions at about right time. And that to me is worth taking risk. Of course, I study the predictions of pundits. But ignore and treat it still as gambling.

    To anyone who’s on fence to whether invest or not. Make your own decisions. One thing for sure, if this new era continues to stay, would you still be on fence 20 years down the line?

  • goingDHfast on 23/03/2023 - 02:50

    Nice post OP, you must be happy with the BTC price action this week!

    Two questions, who are your most respected charting/TA experts and at what price/time do you expect the new bull cycle to peak? Ok third question, at what price are you planning to start selling down/converting back to fiat ;-)

    • techlead on 23/03/2023 - 22:12

      who are your most respected charting/TA experts

      I don't have one, I watch the major YouTube crypto channels and what I can find about TA on the internet. It's not an exact science, we are all guessing, no one can reliably predict the future, however, TA does help with the timing.

      price/time do you expect the new bull cycle to peak?

      No idea, however, if previous cycle is anything to go by, it should revolve around the 2024 Bitcoin halvening in 346 days 7 hours and counting, https://www.nicehash.com/countdown/BTC-halving-2024-05-10-12…. I would expect the bull cycle peak to be in 2025, no idea what price. During the 2017 bull cycle, I predicted a peak of $10k USD (actual was $19900), in the last peak, I said $100k (actual was $69k), so you can see I don't have a good track record. Anyone who gives you a prediction, like $1 mil in 90 days, is just guessing.

      at what price are you planning to start selling down/converting back to fiat

      Again, don't know a particular price level, but learning from the previous cycle, especially the last one, I will start selling a lot sooner during the bull on the way up, and I will sell a lot more aggressively. In the 10 years I've been in crypto, I have not been able to time the top or the bottom, not even once, so I'm not going to try anymore.

  • umoddbro on 23/03/2023 - 02:58
    +3

    OP you sound like you have a gambling addiction…. You said you cashed out 8 mill after tax yet you're all in on crypto but the 200k… If that doesn't scream problem gambler I don't know what does. You can look at all the charts you want but crypto will always be a speculative trade (I don't even want to call it an investment)… I hope this is a troll post if not I wish you the best of luck.

    • techlead on 23/03/2023 - 22:05
      +2

      Funny you say that, to me any kind of investing is gambling.

      Do you think the people with 37 or 200 properties are not gambling addicts? The difference is I don't play with leverage, I ain't borrowing 80% from the bank to buy my crypto. To me all these property investors leveraging to their eyeballs and paying interest only are bigger gambling addicts than me. Like this guy:

      https://www.news.com.au/finance/real-estate/buying/man-with-…

      You are calling me a gambling addict, when there are so many people who borrow 80% or even 95% paying interest only to invest in property?!?! WOW

      I have zero debt, I buy my crypto with cash, no bank approval required.

      Any kind of investment is a speculative trade. Given the events of the last few weeks, even depositing money in a bank is not safe, even that is somewhat speculative. For a few days, SVB customers faced the real possibility of losing their deposits over the FDIC insurance amount of $250k USD.

  • Oofy Doofy on 23/03/2023 - 03:45
    +2

    Just for fun, can you please add "as a millionaire" with every reply you make in this thread?

    • techlead on 23/03/2023 - 22:16

      Haha, as a millionaire.

      I always found that to be a little bit cringy about that guy. I do watch his videos from time to time, as a millionaire and billionaire hopeful. :)

  • Kiro on 23/03/2023 - 07:09
    +1

    who else is onboard?

    i was on board back when there was a deal for free crypto ($28) for completing a questionnaire, i decided to invest a little bit more and made approx 25% what i put in but cashed out.

    was fun, learnt a lot although crypto is very volatile.

    • techlead on 23/03/2023 - 22:21
      +1

      Funny you mention that.

      The first bitcoin faucet was called "The Bitcoin Faucet" developed by Gavin Andresen in 2010. It originally gave out five bitcoins ($138500 USD) per person and you only had to solve a simple Captcha to get it. I remember going to it and scoffing saying, "Bitcoin is such a scam, they are giving it away!"

      You can read more about it here, https://freebitco.in/site/faucet/ and it even has a screenshot of it. It sure brings back memories, I'm kicking myself for not milking that faucet as much as I can.

      • Kiro on 24/03/2023 - 07:01

        yes, well back then it wasnt worth that price but in yeah i did recall receiving an email to invest in something new….. bitcoin but yeah alas i didnt.

  • pos on 23/03/2023 - 10:18
    +1

    I would like to point out here that crypto is itself a 'fiat' currency, as it is not backed by a physical commodity. Whoops!

    • techlead on 23/03/2023 - 22:27

      Do you understand what it means to be a "fiat" currency? It doesn't mean "not backed by a physical commodity".

      "Fiat" means by decree. Like the Australian government saying/decreeing that this red plastic sheet, https://banknotes.rba.gov.au/australias-banknotes/banknotes-…, is worth $20 Australian buckaroo dollars and no one else can disagree. Hence that makes the Australian dollar a "fiat" currency.

      Bitcoin's value on the other hand, is determined by the market, there's no authority which can decree its value, hence crypto (apart from stablecoins) are NOT "fiat" currency/commodities. Just like property in Australia are not "fiat" commodities, because no one decrees its value, its determined by the market.

      Hope you are glad you learnt something new today. You are welcome!

      • pos on 24/03/2023 - 09:24

        From Wikipedia:
        "Fiat money is a type of currency that is not backed by a commodity, such as gold or silver. It is typically designated by the issuing government to be legal tender."

        • quanticism on 25/03/2023 - 00:15

          The key difference is the involvement of some central authority that can decree it to be legal tender and control the supply of it. Most crypto are the opposite.

          • pos on 25/03/2023 - 21:54

            @quanticism: Typically, yes, but not necessarily. So, absolutely crypto can itself be fiat.

  • JSONBourne on 23/03/2023 - 10:45

    MFW when USDC briefly decouples because it has its holdings in a….. traditional bank? (SVB). Clearly not as decentralised as people thought!

    • techlead on 23/03/2023 - 22:29

      Stablecoins are a whole different story.

      The reason why USDC depegged was because part of their reserves, the actual USD was deposited in SVB, and if they are forced to take a haircut (any amount above $250k USD), then USDC tokens will no longer be backed 1 to 1 with actual USD, hence the depegging. When the US Fed bailed the depositors of SVB out, USDC pegged right back up to $1 USD again.

      • JSONBourne on 24/03/2023 - 09:44

        For sure, but if there is a bank run or a global financial meltdown, USDC is clearly not safe. It is not a decentralised asset.

  • lostgoat on 23/03/2023 - 10:50

    All I really give a `^ about is if I want to cash out I can at whatever the market price is , People that say BTC has no value are clueless.
    I'd advise people to play around with it on a small scale if you have no knowledge . There are some magical plays on the blockchain that will never be publish and it doesn't matter if the crypto goes up or down .

  • serpserpserp on 23/03/2023 - 11:57
    +3

    Everyone who bought crypto early: "it's a viable investment class"

    Everyone else: "I lost heaps of money with crypto" or "I came out about even" (in reality, they lost money).

    OP talks about switching to "preservation" assets in a couple of years while writing an essay saying that crypto is going to be more rock solid than historical currencies. So if you are so bullish on its future and it becoming more stable, why would he switch asset classes? Because in 2/3 years time it will still be unregulated, volatile af , and who knows what its value will be.
    There is also potential that in times of financial market destabilization that big PE and other investors put the money into cross crypto to pump a quick return. If the banks settle down and confidence is fully restored it'll be interesting to see if BTC falls off a cliff again.

    • techlead on 23/03/2023 - 13:32

      Everyone who bought crypto early: "it's a viable investment class"
      Everyone else: "I lost heaps of money with crypto" or "I came out about even" (in reality, they lost money).

      If people don't sell, they haven't "lost" anything. Back in 2013, immediately after I bought 2BTC for $800USD each, I was down 60-70%, but I didn't sell. I still hold those 2 BTC, so in reality, I didn't lose any money at all despite being down 60-70% at one point.

      Also, doesn't this also apply for other asset classes too, like shares and property. Everyone who purchased property in the last 1-2 years is in the red for sure, due to stamp duty and other costs.

      OP talks about switching to "preservation" assets in a couple of years while writing an essay saying that crypto is going to be more rock solid than historical currencies. So if you are so bullish on its future and it becoming more stable, why would he switch asset classes? Because in 2/3 years time it will still be unregulated, volatile af , and who knows what its value will be.

      It's more about timing the market and trying to smooth out the roller coaster. I still think crypto is superior, but I'm just considering diversifying into preservation assets. Put it this way, if I have just $10k, I'd put everything I can into crypto, its a no brainer. But if I have say $10-100 mil in crypto, which is closer to how much my actual portfolio is worth now, I'd like to put some into preservation assets. I have to admit, despite being in multiple cycles, its not a good feeling to lose millions overnight, which is what happened to me in 2022.

      Regulation on crypto is increasing, we've come a long way since 2013, in 2-3 years it can all change again.

      Volatile af - volatility for Bitcoin has descreased significantly, consistent with an emerging asset gaining maturity. I expect volatility to reduce further.

      If the banks settle down and confidence is fully restored it'll be interesting to see if BTC falls off a cliff again.

      Bitcoin was born after the GFC in 2008. At which period since 2008 till now has confidence been fully restored in the banks? Which cliff are you referring to? Bitcoin has fallen off many cliff, but the point is, it has climbed out of every cliff and went higher and higher.

      • serpserpserp on 23/03/2023 - 13:51

        Cliff wise, Nov -21 is probably the one everyone refers to. Still nowhere near recovering.

        • techlead on 23/03/2023 - 13:59
          +1

          So the last cliff, let's have a look in the next 2-3 years.

          Past performance is not indicative of future performance, but let's take a trip down memory lane and look back on some of Bitcoin's biggest cliffs.

          Cliff 1 2011 $32 $0.01 99.97% - Imagine catching the bottom of this cliff. :O Unfortunately I still thought Bitcoin was a scam back then.
          Cliff 2 2015 $1000 $180 82.00%
          Cliff 3 2017 $19900 $3200 83.92%
          Cliff 4 2021 $63000 $29000 53.97%
          Cliff 5 2022 $69000 $16800 75.65%

          Time will tell if Bitcoin will recover from the latest cliff. Do you see a pattern though? Except for Cliff 5, the bottom never breaches the previous low. I think with the introduction of leveraged instruments and pure fraud and mismanagement (allegedly Celsius and FTX) the bottom was artificially pushed lower because of forced liquidations. That's my opinion. The market will tell us the answer in time.

          • serpserpserp on 25/03/2023 - 15:42

            @techlead: You just said past performance is not indicative of future performance, then you tell me I should believe in a pattern?

            Also how do you know that BTC isn't actually just a large channel for washing money and unregulated payments?

      • geshc on 23/03/2023 - 22:34

        But if I have say $10-100 mil in crypto, which is closer to how much my actual portfolio is worth now.

        Wow, you have $100 million just from crypto? That's amazing man. What are your thoughts on taking out bank loans for crypto? You seem quite knowledgeable on how to make money

  • foolsgold on 23/03/2023 - 13:08
    +1

    I've never had 200k cash. So I'm just down.

  • andyholloway on 23/03/2023 - 13:31

    In your previous AMA you mentioned Celsius and Blockfi etc. Did you get your coins off these exchanges before they disappeared? Do you hold all your coins in your own wallets these days? That do you think about Celsius and other centralised interest earning platforms these days?

    • techlead on 23/03/2023 - 13:36

      Yes, I did have money on Celsius, Blockfi and FTX, but I managed to get all my funds out. It was a close shave, all my fault, I lost sight of the golden rule of crypto, NOT your keys, NOT your crypto. 90% of my crypto is now on my Trezor and Ledger.

      I have 10% on Binance, but I'm considering withdrawing even that too, not planning sell anytime soon.

      I've now given up on centralized interest earning platforms, apart from Binance. I do have onchain interest earning instruments, like ADA and staking ETH.

      • lostgoat on 23/03/2023 - 16:14

        I'm curious what do you think is the best inheritance procedure. Right now if I drop dead and no one knows the keys as well and those that are not locked away. I'm thinking something that ends with final steps in a safety deposit box . As you know billions are lost forever out there in cyber space .

        • techlead on 23/03/2023 - 21:39

          This is where you need to think of creative ways to ensure these things do not happen.

          This is a general issue across the board, even property is at risk. Look at this story:
          https://www.dailymail.co.uk/news/article-8081641/Bill-Gertos…

          TLDR: Owner of the property dies, family is unaware of the property. A squatter comes and fixes the place up, rents it out, pays all bills for 12 years, then goes to the Supreme court to have the property changed to his name and he won the case.

          Back to crypto, millions of BTC has already been lost forever in addition to Satoshi's stake. It is estimated that 3-4 million BTC is now lost.

          I'm thinking something that ends with final steps in a safety deposit box

          You need to think digital. I'm not going to reveal my entire set up, but it involves a dead man switch, which means I need to do something every X period of time, if I don't, it triggers a series of events which will give enough information to my wife to be able to restore all of my crypto wallets and have access to all my crypto. In addition, there's also a dead man switch on that, so if my wife takes no action in X period of time, then it triggers another series of events which will give another person the information. There's a few layers of this to ensure that my crypto is accessible to my family. This is so that if something happens to us both, the crypto can still be recovered.

          I've thought of this. At its peak, my portfolio was worth more than $50 mil, you gotta think about things like this with that kind of money.

          • Nom on 24/03/2023 - 12:14

            @techlead:

            At its peak, my portfolio was worth more than $50 mil, you gotta think about things like this with that kind of money.

            Once you get anywhere close to this sort of figure, why persist with Crypto at all ? I'm surprised you didn't cash out long before $50m - this is more than enough to support your entire family for generations to come.

            Were you trying to get even more ? Or just didn't get around to it before the drop ?

      • Farrba on 24/03/2023 - 09:53

        you said you put 500k in defi, how did it go?

        am guessing these are tokens not listed in any major exchanges?

        • techlead on 24/03/2023 - 10:11

          Defi is going great, I have way more than $500k in Defi now. I consider onchain staking to be defi eg, staking ADA and ETH.

          The tokens are listed, for example, Uniswap, sushiswap, pancakeswap, BSW etc. Defi, doesn't mean the tokens are not listed on major centralised exchanges. Defi means they have a decentralised ecosystem, it doesn't mean they tokens are not listed on major exchanges.

  • Dack Smith on 23/03/2023 - 17:08

    Bitcoin and cryptocurrencies are the cure to the banking system at large.

    This is a good time to buy in

    The stock market and financial banking systems aren’t very trustworthy at all

  • seabombs on 23/03/2023 - 20:15

    Swap "crypto" for "baseball cards". Or "cabbage patch kids". Or any other functionally worthless but otherwise desirable collectible.

    All the arguments and philosophizing make the same amount of sense.

    • techlead on 23/03/2023 - 21:44

      Swap "crypto" for "baseball cards". Or "cabbage patch kids".

      This talking point has already been raised in many previous cycle. Come back when your baseball card cannot be counterfeitted, so there's a very easy and quick way to verify authenticity and it comes with a reliable, censorship resistant and permissionless network where no court, bandit, criminal or anyone else can take it from you without your permission (apart from the $10 wrench hack).

      Let me know when your "baseball card" or "Cabbage patch kids" have these features, I will consider buying one.

  • bathuu on 23/03/2023 - 21:54

    BTC Dead cat bounce? or off to $1mil as others claim.

    • techlead on 23/03/2023 - 21:57

      Truthfully, BTC will reach $1 mil one day, but it will not be a straight path. There will be many cliffs along the way.

      This is just like me saying BTC will reach $10k USD one day back in 2013 when BTC was below $1000USD. Not many people believed me, they thought I was crazy.

      I don't have a crystal ball unfortunately, just like back in 2013, I couldn't say when BTC will reach $10k USD, I just know that it will.

      • liongalahad on 24/03/2023 - 10:18
        +1

        The level of delusion is astounding. Never stop believing mate 💪🏻

        • techlead on 24/03/2023 - 10:23

          I can say the same for property shills. The delusion is strong in that group even in the face of hard evidence to the contrary.

          The level of delusion is astounding. Never stop believing mate 💪🏻

          Heard this all before. I will never stop believing, don't worry mate. :)

          • liongalahad on 24/03/2023 - 11:10

            @techlead: At least property gives back rent and is tied to a tangible good. Can go up and down but people will always need a home where to live in so property may go up and down but it won't disappear.

            Gold is a scarce material with unique properties. It can go up an d down but unless an easily accessible billion ton gold mine is discovered somewhere, of unless someone finds a way to create it in a lab (alchemists been trying it since a millennium ago), it will go up and down but won't disappear.

            Crypto has no intrinsic value. It's just something people give value based on thin air. People don't need it to survive. And even though blockchain is a fascinating concept and all, you can create another coin on another blockchian whenever you want. So yeah BTC may go to $1M as you say, or could go to $0 and be erased from history. You don't know which way it will go, other than a leap of faith (you "just know it will go up").

            • techlead on 24/03/2023 - 11:28
              -1

              @liongalahad:

              At least property gives back rent and is tied to a tangible good.

              This is a fallacy. I know from property investing friends, rent from their property investments don't cover all the costs, maintenance, council fees, strata, water bills, mortgage payments etc, so they need put in extra money to prop up their property investments. So its cashflow negative for them.
              How would being "tangible", make it better? Can rubbing some bricks and touching grass help you pay the mortgage?

              Crypto has no intrinsic value. It's just something people give value based on thin air.

              Bitcoin's value comes from being a decentralised, reliable, censorship resistant and permissionless network. Other cryptos may serve other purposes which will give it value, such as smart contracts.

              People don't need it to survive

              Check your financial privilege, whilst this is true, I agree for people in Australia and other Western countries, we don't need Bitcoin to survive, but in other countries, it has been a godsend - https://bitcoinmagazine.com/culture/check-your-financial-pri…

              And even though blockchain is a fascinating concept and all, you can create another coin on another blockchian whenever you want.

              Already debunked and demonstrated in the market. There's hundreds if not thousands of Bitcoin clones now. But while you can fork the coin, you cannot fork trust, community and developers, if they don't follow up to the new fork, these clones are worthless.

              You don't know which way it will go, other than a leap of faith (you "just know it will go up").

              I was like this in 2013, it was definitely a gamble back then. But now I'm very sure crypto is going to be as impactful as the internet.

              • serpserpserp on 25/03/2023 - 15:49

                @techlead:

                This is a fallacy

                No it isn't. I know property investing friends that only positively gear properties. Are they all 20km within a major capital city CBD? No, but they are out there, they are riskier because of the types of neighborhood or tenant, but still, they have been making positive cash flow out of it to slowly build up equity for the next property.

    • bathuu on 23/04/2023 - 13:52

      Deadcat bounce confirmed?

      • techlead on 23/04/2023 - 15:33
        +1

        Pretty early to tell.

        For a dead cat bounce to be confirmed, Bitcoin will need to take out the local bottom, which is $16.7k USD. Looking at the chart from Dec 2022, it is quite bullish, a series of higher lows, $20k, $21k, $24k and $27k (these are all levels at which Bitcoin bounced) and higher highs. It recently just kissed $31k USD.

        This pull back is very very welcomed, as the last time I bought Bitcoin was back in mid-March at around $20k USD, since then I haven't been able to buy because it pumped so much.

        I doubt this is a dead cat bounce. Bitcoin can drop further, but will not break structure and fall below $16.7k USD any time soon, unless some external shock happens.

        I may very well be wrong, but I reckon, Bitcoin will bounce around making higher lows and higher highs before a decisive break up to $35 - 40k to kick off the bull run.

        • bathuu on 24/04/2023 - 22:48

          I am looking at btc coming to $10k this time. But we dont have a crystal ball, so lets just wait and see.

          • techlead on 25/04/2023 - 21:27

            @bathuu: I'm ready, I have an order at $10K BTC. I hope it gets filled.

  • [Deactivated] on 24/03/2023 - 01:16

    Bitcoin most certainly is a pump and dump scheme, at first anyone would have assumed satoshi was some philanthropist helping the world, but I think deep down there's a sinister reason bitcoin exists(excluding decentralised systems)clearly the name satoshi must've been a group of syndicates hoping to create a pump and dump system that holds out.

    Why? Well the amount of bandwagon bitcoin has gotten (has made Andrew Tate's man journey derail)was through more of pumping and dumping deprecated assets.

    The mining aspect was bound to be doomed as time went on, but overall bitcoins just a portfolio of invisible assets lingering in cyberspace.

    • techlead on 24/03/2023 - 10:18

      It would be quite interesting to see if we will ever get the answer to who Satoshi is/was. One person or a group of them.

      a pump and dump system that holds out

      Isn't that a good thing? That's like saying, creating a ponzi scheme that works. By definition pump and dump systems and ponzi schemes do not work.

      Why? Well the amount of bandwagon bitcoin has gotten (has made Andrew Tate's man journey derail)

      No idea how this has anything to do with Andrew Tate

      The mining aspect was bound to be doomed as time went on

      That suggests it has already been doomed? What do you mean by that? Bitcoin mining is going stronger than ever, the Bitcoin difficulty level is at its highest ever, indicating the hashpower people are dedicated to mining Bitcoin is at its highest levels ever. In what way is it "doomed"?

      • [Deactivated] on 24/03/2023 - 17:41

        André tats Ponzi scheme as you put it, worked on the same principle, get as many people in and have a closed operations in some isolated country, the same could be said about bitcoin allow people to mine such invisible asset and allow it to sky rocket, however both outcomes require human initiative just like the 2008 GFC.

        Could you imagine all those ideas brewing once the button was called to dump all those valued customers down the drain for a quote&quote "Ponzi scheme" straight from the start.

        However you look at it
        banking systems run on the same principle of regulated systems as would bitcoins hashing system that's encrypted hashed algorithm but to what degree who knows given each institution has its priorities.

        Overall bitcoin was designed to destabilise not incentives, if we compare that to silicon bank we can assume the CEO got out quick and liquefied their investment way before customers knew.

        And I'm certain as we speak bitcoins only floating because of insatiable desire to keep it alive.

        • serpserpserp on 25/03/2023 - 15:52

          we compare that to silicon bank we can assume the CEO got out quick and liquefied their investment way before customers knew.

          You clearly have no idea what happened there. Perhaps go read about it and not in some cookers Reddit thread.

          • [Deactivated] on 26/03/2023 - 07:59

            @serpserpserp: Do enlighten me.

            • Nom on 26/03/2023 - 08:42

              @[Deactivated]: There was a bank run where a large number of customers tried to withdraw.
              The bank had a bunch of their capital tied up in long term bonds - so they couldn't provide the money when the customers asked for it.

              That's all - they couldn't sell the bonds because they're worth less than they paid for them (due to the rate hikes) and they couldn't just wait for the bonds to mature because the customers were asking for their money.
              So they were screwed.

              There's nothing nefarious, it was just a simple bank run.

              • [Deactivated] on 26/03/2023 - 13:58

                @Nom: Who was the mastermind that bailed early behind gearing peoples money to bonds that were generating poor returns at low interest assuming the value was safe.

                • Nom on 26/03/2023 - 14:41
                  +1

                  @[Deactivated]: Every single bank does this - banks only exist as a business because they can invest your capital.

                  Usually it's not an issue because they would just sell the bonds on the open market if they really needed the capital ASAP … but this time, because the interest rates had gone up so much over such a short period, the bonds were worth less in the open market (it's hard to sell a bond returning 2% when the buyer could just buy a 5% bond instead…)

                  This is all just normal banking operation, it's why the government guarantees exist for your bank balances, and why when a bank fails they get bought by a larger institution (who can fill the bank run without selling the bonds at a loss - they then just wait until the bonds mature and everything is fine).

                  • [Deactivated] on 26/03/2023 - 23:19

                    @Nom: Not on 250,000 and above that's the primary reason people bailed, and other governed institutions in grained with higher capital protect those above 250.000, but did the CEO inform those people?

                    And should I enform you to buy bitcoin now that the mining booms almost dead, I mean it's just a portfolio of assets right what could go wrong.

                    • Nom on 27/03/2023 - 00:30

                      @[Deactivated]:

                      Not on 250,000 and above that's the primary reason people bailed, and other governed institutions in grained with higher capital protect those above 250.000,

                      In fact the Fed stepped in and guaranteed everyone's deposits in full. Which they had to do to keep the trust level high - otherwise the same thing could happen to other banks if the customers get the jitters.
                      The whole bank has now been sold to a larger institution, and nobody has lost anything.

                      but did the CEO inform those people?

                      The CEO ? What does he have to do with any of this ?

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