# Is Bitcoin like gold?



## Sunny (24 Feb 2022)

So I think the argument that Bitcoin is like Gold is settled.....


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## tecate (24 Feb 2022)

Sunny said:


> So I think the argument that Bitcoin is like Gold is settled.....


Absolutely not. Your suggestion infers that correlation with the markets is permanent and not just a part of bitcoin's development.  @Brendan Burgess believed that he had 'settled' this argument in March 2020 - via this thread. Whilst bitcoin is at times correlated with the markets, what followed didn't settle matters as beyond the initial panic, btc bounced.

We know that there is continually a lot of leverage being used in this market - so that exaggerates swings. Algorithmic traders are following past patterns and treating it as a risk on asset. Fundamental investors believe it to be a risk off asset. In 2020, bitcoin eventually bounced - and whilst it remains to be seen if the immediate panic is over or not right now, its also starting to bounce right now also.


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## Sunny (24 Feb 2022)

Sure


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## DazedInPontoon (24 Feb 2022)

Did I miss something, or are we still over-reacting to short term (hourly in this case) volatility and ignoring the long term trend?


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## Sunny (24 Feb 2022)

DazedInPontoon said:


> Did I miss something, or are we still over-reacting to short term (hourly in this case) volatility and ignoring the long term trend?



Eh?? It has nothing to do with just today but today is another sign that bitcoin is perceived as nothing like gold. It is proving highly correlated to other risk assets in periods of rising inflation and geo political turmoil. Exactly when we were told bitcoin would come into its own. 

All we have seen is that bitcoin is nothing but a speculative asset with high volatility that will attract all sorts of people to try and make money in the short term. It is not a hedge instrument. It is not an defensive play for people concerned about inflation. It does not offer shelter in times of geo-political crisis. The idea that bitcoin is more than completely  speculative is not holding up....


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## DazedInPontoon (25 Feb 2022)

I disagree with most of that.


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## Paul O Mahoney (25 Feb 2022)

DazedInPontoon said:


> I disagree with most of that.


"Truth is like poetry , very few like each of them. "
It would be useful to explain your disagreements , just for balance ....


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## DublinHead54 (25 Feb 2022)

tecate said:


> Absolutely not. Your suggestion infers that correlation with the markets is permanent and not just a part of bitcoin's development.  @Brendan Burgess believed that he had 'settled' this argument in March 2020 - via this thread. Whilst bitcoin is at times correlated with the markets, what followed didn't settle matters as beyond the initial panic, btc bounced.
> 
> We know that there is continually a lot of leverage being used in this market - so that exaggerates swings. Algorithmic traders are following past patterns and treating it as a risk on asset. Fundamental investors believe it to be a risk off asset. In 2020, bitcoin eventually bounced - and whilst it remains to be seen if the immediate panic is over or not right now, its also starting to bounce right now also.



I would be interested to understand what metrics fundamental investors and yourself use to arrive at a conclusion that Bitcoin is a risk off asset? 

Typically in my experience in a risk-off environment investors are seeking low risk investments and hence a flight to quality (treasuries, cash, to a lesser extent gold etc) and investments that yield less. Bitcoin over its history thus far has proven to be volatile, and not exhibited itself as a risk-off asset in my opinion. 

Are there any metrics on bitcoin flows from exchange wallets to cold wallets over the last few days? That is probably a more telling metric than the actual price i.e. if people are moving more funds onto exchange wallets ready to buy etc. 

In my opinion Bitcoin isn't fully in sync with the market, so at this point any movements with outside events doesn't really prove anything. Pretty sure though the correlation with markets has been used as a pro Bitcoin argument here before, so interesting to see correlation discounted now.


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## Firefly (25 Feb 2022)

Dublinbay12 said:


> Bitcoin over its history thus far has proven to be volatile, and not exhibited itself as a risk-off asset in my opinion.


Ah but this is all part of Bitcoin's development, where swings in price are expected until the price settles down. Afterall, Bitcoin is only knocking around for 13 years or so. Have some patience sir


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## tecate (25 Feb 2022)

Dublinbay12 said:


> I would be interested to understand what metrics fundamental investors and yourself use to arrive at a conclusion that Bitcoin is a risk off asset?


You've referred to bitcoin being a store of value previously. What makes it a good store of value? Is it being used as a store of value by all its users? The point is that bitcoin may have all of the fundamental characteristics of what makes for a store of value and a risk-off asset. That doesn't mean to say that all user groups are treating it in that way at this time.



Firefly said:


> Ah but this is all part of Bitcoin's development, where swings in price are expected until the price settles down. Afterall, Bitcoin is only knocking around for 13 years or so. Have some patience sir


Yes, of course Firefly- it's an old default position of yours. When the first 2 fax machines existed, would you have written off the innovation on the basis of not being able to fax anything to anyone? Would you have written off the internet in 1992? It appears that you would.

Are you claiming that over the course of the past five years, there has been no development in bitcoin and its ecosystem? Bitcoin started off the back of a message board on some hard to find crevice of the internet back in 2009. Have a look at your posts here from 2018. Either the complaints you've presented with no longer apply or they're significantly weaker than they were - due to bitcoin's ongoing development. With the above, you're directly calling out bitcoin's volatility...yet over the course of the past 5 years, bitcoin's volatility has reduced considerably. That's not hearsay - that's verifiable.

Similarly, the OP claimed a long time back that bitcoin would be usurped by another cryptocurrency on the basis of 4 shortcomings. To my point - in the meantime - bitcoin and its extended eco-system has resolved 3 of those shortcomings ( and the fourth is going to be viewed completely differently soon enough).

In this thread, we're told that bitcoin doesn't have any other use case aside from speculation. Yet, I just paid for breakfast using bitcoin. The other day, it emerged that El Salvador has secured commitments that account for half of its $1 billion dollar bitcoin-based bond - which will launch next month. That's an entirely new use case that has never been discussed here.

On Tuesday, the leading decentralised USD stablecoin project placed $1 billion of bitcoin in its reserve - underscoring bitcoin's ability to act as a reserve asset within the entire asset class.

I've always referred to bitcoin's digital gold role as developmental. I believe that it has made a good start on that and that it will continue to transition into that role ( because it has the fundamental characteristics of what makes for a decent store of value to underpin it ).


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## jim (25 Feb 2022)

tecate said:


> Yet, I just paid for breakfast using bitcoin


Why did you not just use cash or your debit card?


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## tecate (25 Feb 2022)

jim said:


> Why did you not just use cash or your debit card?



Because I have availability to BTC at all times - why shouldn't I use it if its convenient to do so? Furthermore, you may not experience this in Ireland but in Latin America, oftentimes you try to pay with card and you'll be presented with that option so long as you're prepared to pay 4-5% additional. So let me turn this around. In those circumstances would you pay the 4-5% additional or would you pay with bitcoin if you happened to have it available to you via a wallet on your phone?


Bear in mind that once again, I'm not suggesting that bitcoin is going to cannibalise day to day payments at the expense of fiat. I'm claiming that it should be an option in the same way as you decide to pay via cash/card. There has also been a chicken and egg scenario re. its use for this purpose. When there were two fax machines or two networked computers, fax and internet weren't a whole lot of good. If we get to a point where everyone has a digital wallet, then paying via bitcoin becomes a more realistic option. Whether you prefer to use it above other means at that point will be situational/specific to the users circumstances.

This is also another example where I'm calling BS on @Firefly 's summary dismissal of bitcoin's ongoing development. The ability to spend bitcoin on a day to day basis may still be limited but it's further on than it was when he first stated that it couldn't be used to buy anything back in 2018 ...and back then ( just as he is right now) he was also suggesting that it was unreasonable to consider that this might develop further (which it has in the interim through the fruition of Lightning Network ).


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## Firefly (25 Feb 2022)

tecate said:


> Yes, of course Firefly- it's an old default position of yours. When the first 2 fax machines existed, would you have written off the innovation on the basis of not being able to fax anything to anyone?


By all accounts the first commercialized version of the modern fax machine was invented by Xerox in 1964. I think they were "big" in the early 80s (16-18 years later?) .. I was too young then, so I'll take your word for it.  Bitcon is on the go 13 years now, but dismal uptake for all the hype. Are you expecting it to be "big" in the next 4-5 years? And by "big" I mean, you know, that many people all over the world will actually buy stuff with it? If not, when will it be "big"? The closest decade will suffice.



tecate said:


> Would you have written off the internet in 1992? It appears that you would.


Au contraire! Due to the rise of internet usage and IT more generally, I pursued IT (over finance) at 3rd level and have been working with ones & zeros since. In fact, the rise of the internet gave way to cloud services which is a nice little earner



tecate said:


> Yet, I just paid for breakfast using bitcoin.


Given, that you like to remind everyone that Bitcoin has appreciated 214% pa over the course of 13 years, I take it you think we're now at the top, otherwise that could turn out be a very expensive breakfast


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## tecate (25 Feb 2022)

Firefly said:


> By all accounts the first commercialized version of the modern fax machine was invented by Xerox in 1964. I think they were "big" in the early 80s (16-18 years later?) .. I was too young then, so I'll take your word for it.



Ok, so you see my point? Why not be open to the fact that this can develop further rather than ridicule the notion? The examples are there already. That development is there where BTC is concerned also over the course of the past 5 years.



Firefly said:


> Bitcon is on the go 13 years now, but dismal uptake for all the hype. Are you expecting it to be "big" in the next 4-5 years? And by "big" I mean, you know, that many people all over the world will actually buy stuff with it? If not, when will it be "big"? The closest decade will suffice.


The very same point. Why the deadline? How long has AI been knocking about? You remember going back a couple of decades we were told that we'd have a crisis soon enough as there would be no work for us (due to automation)? That's still in play but it didn't happen back then.
Other than that, you say its not in use when I've given you examples of day to day use. As you've always done, you're also dismissing any and all other use cases beyond 'paying for stuff'. You can box yourself in by defining success/failure of bitcoin on that one metric - but don't expect others to do so.



Firefly said:


> Au contraire! Due to the rise of internet usage and IT more generally, I pursued IT (over finance) at 3rd level and have been working with ones & zeros since. In fact, the rise of the internet gave way to cloud services which is a nice little earner


On the one hand, delighted to hear that - but it makes it all the more baffling to try to understand your inability to appreciate that things can take time to unfold. If you work in that sector, then you'll already be aware of the history and it goes back forever and a day. You're talking about the nearest decade - how many decades did it take for the internet and associated technologies to develop? The other irony is that crypto, blockchain etc. is very closely related to that - it's an extension of it.
How long has EV tech been on the go?


The fact that you bemoan a perceived lack of progress adds more weight to Amara's Law:

*"We tend to overestimate the effect of a technology in the short run and underestimate the effect in the long run"*

And yet by a whole host of metrics, bitcoins developmental progress has been validated.




Firefly said:


> Given, that you like to remind everyone that Bitcoin has appreciated 214% pa over the course of 13 years, I take it you think we're now at the top, otherwise that could turn out be a very expensive breakfast



I don't give a fiddlers about that. It's something that is widely misunderstood. Unless I allocate all resources to bitcoin, then it doesn't make the slightest bit of difference whether I can buy a Ferrari with the equivalent 10 years from now. At the end of the day, I decide what level of exposure I have to bitcoin and digital assets - and I'm free to rebalance or adjust that as I go.

So that's not a head game for me. What would be a headgame for me is to be spoon fed all the merits and demerits and then to not be able to respond and update my thinking and position and at the very least avail of the smallest of positions in what is an asymmetric speculation on the maturity and success of bitcoin. That would haunt me until the end of days but then I'm in no way qualified what with the lack of an M.Sc. in Finance, being intellectually outflanked what with doing all my research whilst sitting on ceramic furnishings (allegedly).


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## Duke of Marmalade (25 Feb 2022)

There is a lot of talk of denying Russia access to the old world SWIFT money transmission system.  That would be useless as Russia would simply use bitcoin.  After all that was one of the main purposes of bitcoin, to be free of censorship/sanctions.


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## tecate (25 Feb 2022)

Duke of Marmalade said:


> There is a lot of talk of denying Russia access to the old world SWIFT money transmission system.  That would be useless as Russia would simply use bitcoin.  After all that was one of the main purposes of bitcoin, to be free of censorship/sanctions.



I certainly hope that they don't press the red button re. Russia/SWIFT. It's a high stakes game at that stage. It could lead to the yanks losing global reserve currency status and the influence that goes with that. It would also bring forward a major battle for bitcoin as it would make it the enemy and turn a largely positive outlook re. crypto/btc (with ongoing exceptions from time to time)  in the US into the opposite. Aside from causing trouble, they'll probably cosy up with the Chinese and start using the Digital Yuan in any event. The Chinese are already capitalising on the situation - facilitating the purchase of Russian commodities through Yuan.

It's no coincidence that only last week, Russia recognised bitcoin as a currency (albeit with some draconian conditions attached ....of course! ...it's Russia after all). However, Putin certainly doesn't have altruistic views re. what bitcoin can do for the world - so I'd sooner see this saga pass off without this coming into play. Why ask for a harder route if an easier route ahead is possible.

Anyway, it looks like Europe can't do without Russian gas/oil so I don't think it will come to this.

As regards the use of sanctions, by and large the only ones that suffer with sanctions are ordinary people. Its easier to carry out and doesn't provide complete visibility re. the effects but the idea is to make people so desperate that they rise up. Most of the time, it doesn't work but causes misery all the same.

Maybe the Europeans should have used bitcoin a couple of years back when the US prevented them from choosing their own trading partners, Duke?


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## tecate (25 Feb 2022)

mollser said:


> Hope. Faith.  Belief. Math. There is actually nothing else.


I've fixed that for you.  'In God We Trust' money has the exclusive rights on hopium/faith/belief. 


mollser said:


> At least gold makes pretty things.


There are plenty of shiny rocks that equally can be used to make ornate jewellery. It's golds store of value traits that give it its value. 



mollser said:


> Timing is also key....



Insofar as you'll end up buying bitcoin at the price you deserve? I guess you're right.


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## DublinHead54 (26 Feb 2022)

tecate said:


> You've referred to bitcoin being a store of value previously. What makes it a good store of value? Is it being used as a store of value by all its users? The point is that bitcoin may have all of the fundamental characteristics of what makes for a store of value and a risk-off asset. That doesn't mean to say that all user groups are treating it in that way at this time.



You didn't answer my question. A store of value doesn't equal a risk off asset, my statements previously were bitcoin is a risky investment asset. I don't know why you needed to deflect instead of just answering the question. I'm honestly trying to learn how you view and value it given our differing opinions.


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## DublinHead54 (26 Feb 2022)

At the end of the day all of this 'give it time' rhetoric is just opinion and can't be proven.

Bitcoin is not an effective currency today because of its volatility. A main trait of a currency is that it has a steady value. I know my $100 today will be worth $100 tomorrow and in these increments of time inflation isn't a factor. With Bitcoin I don't know what my $100 will be worth tomorrow. 

As goods are still purchased in fiat, bitcoin also is impacted by inflation. 

Logically why would anyone take that risk on their day to day purchases.


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## Brendan Burgess (26 Feb 2022)

Folks - I don't really want to close this thread.

But please all read the Posting Guidelines again. 

Even if you think that the other person is an idiot, don't call him one. Just respond to the post or ignore it.

Brendan


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## tecate (26 Feb 2022)

Dublinbay12 said:


> A store of value doesn't equal a risk off asset,



I'm here to learn and I want to better understand this. So just so that I have this straight - you are saying that bitcoin is not a currency and you believe it to be a very bad store of value? Is that your thinking?



Dublinbay12 said:


> I don't know why you needed to deflect instead of just answering the question.


Now now! It's been pointed out to you that personal commentary is not appreciated. This afterall is a discussion - not of me or you - but of the subject. 



Dublinbay12 said:


> I'm honestly trying to learn how you view and value it given our differing opinions.


That honesty is shining through - I commend your thirst for learning. It's truly a sight to behold. 



Dublinbay12 said:


> At the end of the day all of this 'give it time' rhetoric is just opinion and can't be proven.


Uff! so close. You had me at 'honestly' ...and yet despite my yearning to agree with you, I'm very much struggling here. So we daren't observe how things develop? Oh dear. I mean if you're holding a gun to my head, I guess I better offer an opinion? But it appears my opinions are rhetoric. Riddle me this:

- Are your opinions rhetoric?
- Are @Brendan Burgess , @Duke of Marmalade 's opinions 'rhetoric' when they say that bitcoin is going to zero come what may and that there isn't even a zero % chance of there being any other outcome? I'm honestly trying to learn how you view and value that - given our long standing differing opinions. Perhaps they form opinions that 'can' be proven in this instance? Is that your understanding? 
By contrast little old me offering to see how it turns out has been found guilty of presenting with an incredibly indecisive opinion that apparently...can't be proven!? Well I never! I'm learning so much already.

Just on a related point, in the past I've been guilty of suggesting we should park certain aspects of the subject up or 'wait and see'. Some folks don't get the social cues but it's a polite way of saying we've expressed our opinions and so we don't need to restate them and leave it there. I mention that as it seems to have upset you in the past.

And just for the record vis-a-vis my overall opinion...as I've stated many times at this point, I'm quite happy to accept that bitcoin could crash and burn and never be heard of again. Whilst that's not my current thinking in terms of a likely outcome, I consider it prudent to acknowledge unlikely outcomes. I also believe it useful to continually review and reserve the right to change my opinion as and when the facts change. 



Dublinbay12 said:


> Bitcoin is not an effective currency today because of its volatility. A main trait of a currency is that it has a steady value. I know my $100 today will be worth $100 tomorrow and in these increments of time inflation isn't a factor. With Bitcoin I don't know what my $100 will be worth tomorrow.


Oy veh! The volatility - right, got it! So the $100 worth of btc of yours? Will you be divesting that toot suite what with bitcoin being a lousy currency and lousy store of value?



Dublinbay12 said:


> As goods are still purchased in fiat, bitcoin also is impacted by inflation.


 It's uncanny you should bring this up. I was only saying to Ana Mercedes at lunch that I could have sworn the pupusas were 36,000 satoshis each on Thursday and there she was charging me 38,250 satoshis. That pesky inflation!


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## Duke of Marmalade (26 Feb 2022)

@tecate
Another interesting link from you, this time Bloomberg.
I am a tad shocked that Bloomberg seem here to be openly promoting bitcoin.
Yep I note the point about volatility down from 8x Nasdaq to 3x but we should note that Nasdaq vol is a large multiple of that between leading fiats.
I note that there are now 17,000 crypto assets, doubled in a year.  I recall you hauling me over the coals for saying there were 7,000, perhaps I was ahead of the time.
But I was really stumped by this Bito fella and that annoyed me, as at this stage I felt I was on top of the subject.  Can you help me understand what the 10% cost of carry on Bito means?


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## tecate (26 Feb 2022)

Duke of Marmalade said:


> Yep I note the point about volatility down from 8x Nasdaq to 3x but we should note that Nasdaq vol is a large multiple of that between leading fiats.


At the end of the day, it evidences a trend towards reduced volatility - even if you challenge the degree of that reduction.



Duke of Marmalade said:


> I note that there are now 17,000 crypto assets, doubled in a year.  I recall you hauling me over the coals for saying there were 7,000, perhaps I was ahead of the time.


I do find myself in the dock a lot lately although on this occasion, I'd like to register a guilty plea. I'm angling for a suspended sentence though Duke as at the time, the suggestion seemed to be that these were challengers to bitcoin. Only a handful of projects are aimed at the same use case as bitcoin. To my knowledge, they existed already back in 2017 and although they've lingered they're floundering. 
Since back then, we've seen an exponential increase in projects related to DeFi, NFTs, Metaverse, Gaming, etc.



Duke of Marmalade said:


> But I was really stumped by this Bito fella and that annoyed me, as at this stage I felt I was on top of the subject.  Can you help me understand what the 10% cash and carry on Bito means?


I've mentioned before that I have little knowledge when it comes to derivative products so apologies in advance - I can only impart the limited understanding of this that I have. 

BITO is the Bitcoin exchange traded futures product that was approved some months back. For an age, the sector has been crying out for the SEC to approve an ETF - as it enables market access to a whole host of investors who are not comfortable in dealing with bitcoin directly either due to concerns re. bitcoin storage or regulatory/compliance concerns. What had been asked for was  a spot based product. What Goldman Gary at the SEC approved was a futures product.

There's been a lot of criticism of that decision. The remit of the SEC is (allegedly) to protect the little guy. So in this instance, the little guy is being disadvantaged at a cost of 10% and upwards. If contracts have to be 'rolled over' i.e. someone buys a futures contract - its duration is 1 month - they want to continue to maintain a position - so they have to keep buying new contracts. There's an expectation that more often than not, futures contracts will be in 'contango' i.e. that there will be a premium to be paid in moving from one contract to another with the later contract having a higher price. 

I've no doubt that I'm not explaining that away clearly/correctly. But if you'd like to figure it out for yourself, you might find this further info useful ( / link2 / link3 ). Otherwise, if there's anyone here that has day to day experience with cash & carry trades relative to any futures product (bitcoin-related or otherwise), I'm sure they could shed more light on it.


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## Duke of Marmalade (26 Feb 2022)

tecate said:


> At the end of the day, it evidences a trend towards reduced volatility - even if you challenge the degree of that reduction.
> 
> 
> I do find myself in the dock a lot lately although on this occasion, I'd like to register a guilty plea. I'm angling for a suspended sentence though Duke as at the time, the suggestion seemed to be that these were challengers to bitcoin. Only a handful of projects are aimed at the same use case as bitcoin. To my knowledge, they existed already back in 2017 and although they've lingered they're floundering.
> ...


Ok, I think I get it.  Good links (esp. link2 who obviously is not a cultist).
Another idiot boy question for either you or others.  Is BITO ETF price determined by supply and demand for it or is it calculated on  a look through NAV basis?


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## DublinHead54 (27 Feb 2022)

tecate said:


> I'm here to learn and I want to better understand this. So just so that I have this straight - you are saying that bitcoin is not a currency and you believe it to be a very bad store of value? Is that your thinking?
> 
> 
> Now now! It's been pointed out to you that personal commentary is not appreciated. This afterall is a discussion - not of me or you - but of the subject.
> ...



Tecate,

Can't you just answer the questions? Or at least say you're not going to answer the question?

You've just spent two posts trying to change the subject.


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## Duke of Marmalade (27 Feb 2022)

Duke of Marmalade said:


> Ok, I think I get it.  Good links (esp. link2 who obviously is not a cultist).
> Another idiot boy question for either you or others.  Is BITO ETF price determined by supply and demand for it or is it calculated on  a look through NAV basis?


I looked up the prospectus.  It is market priced though it publishes a NAV and the market price seems to very closely match the NAV.  There is also a remarkably low bid offer spread of 0.04%. Incidentally down 40% since launch 3 months ago.
A very clear prospectus which would make you run a mile from it.  It mentions the possibility of going to zero at least 3 times.  And then there is this new on on me, the possibility of an “air drop” of bitcoin; I thought the supply was limited.  But what particularly caught my eye was the following:


			
				“Bito prospectus” said:
			
		

> A significant portion of bitcoin is held by a small number of holders sometimes referred to as “whales”. These holders have the ability to manipulate the price of bitcoin. Unlike the exchanges for more tradi- tional assets, such as equity securities and futures con- tracts, bitcoin and bitcoin trading venues are largely unregulated. As a result of the lack of regulation, individu- als or groups may engage in fraud or market manipulation (including using social media to promote bitcoin in a way that artificially increases the price of bitcoin).


So Professor Roubini does a line in writing prospecti.


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## tecate (27 Feb 2022)

Duke of Marmalade said:


> It mentions the possibility of going to zero at least 3 times.


Drama queen much, Duke? Check the literature that comes with  medical devices and drugs in the US (and likely elsewhere) - warning of the risk of death...and yet we're talking about medicines taken by millions of people....go figure.




Duke of Marmalade said:


> And then there is this new on on me, the possibility of an “air drop” of bitcoin



See above.



Duke of Marmalade said:


> So Professor Roubini does a line in writing prospecti.


meaning?


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## Duke of Marmalade (27 Feb 2022)

tecate said:


> Drama queen much, Duke? Check the literature that comes with medical devices and drugs in the US (and likely elsewhere) - warning of the risk of death...and yet we're talking about medicines taken by millions of people....go figure.


I have never seen in any investment prospectus the risk of going to zero.


tecate said:


> meaning?


The bit that I quoted from the prospectus was pure Roubini (whales etc.) and I thought he was exaggerating a bit.


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## tecate (27 Feb 2022)

And yet you're not disputing that FDA regulated medicines consumed by millions oftentimes contain warnings of a risk of death from taking them. Who are you trying to convince with this stuff Duke?


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## Duke of Marmalade (27 Feb 2022)

tecate said:


> And yet you're not disputing that FDA regulated medicines consumed by millions oftentimes contain warnings of a risk of death from taking them. Who are you trying to convince with this stuff Duke?


Pull in your horns my dear @tecate 
I am learning.
Positive for the cult was that I am really surprised that Bloomberg seem to be endorsing bitcoin.  Also the SEC even countenancing an ETF based on bitcoin albeit on its futures is equally surprising.
So there, I acknowledge that things have moved on for the cult since 2018.
But can you acknowledge that the warnings, presumably required by the SEC, of going to zero and of whales manipulating the price and using social media to pump and dump is also strong support for the Nobel/Roubini school of thought?


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## tecate (27 Feb 2022)

Duke of Marmalade said:


> But can you acknowledge that the warnings, presumably required by the SEC, of going to zero and of whales manipulating the price and using social media to pump and dump is also strong support for the Nobel/Roubini school of thought?


I can acknowledge that this stuff originates from the country that brought us 'caution: coffee may be hot' warnings.
Taking them one by one...
Clearly neither SEC or Proshares believe that bitcoin is going to zero. There isn't any way they would approve that ETF if they thought otherwise and Proshares - and the other couple of entities that launched bitcoin-based futures products similarly wouldn't bring the product to market if they thought bitcoin going to zero was a likely outcome.

Market manipulation: Is considerably less of an issue than it was in the past. If you have a tiny nascent market that can be moved by a whale, its obvious someone will try to manipulate it. But try to manipulate a $ trillion dollar market.
Re. pump and dump claims - see above.
Meanwhile, there are a whole heap of examples of wrongdoing in these categories in conventional markets.


I had the nutty professor on my twitter feed for quite some time but when it became obvious that he would latch on to anything (and I mean anything) negative re. bitcoin - regardless of the source or any basis to the claim - I took him off about a year ago. There's a world of difference between the nutty professor's claim (bitcoin is definitely going to zero) and the 'coffee  may be hot' level legal mumbo jumbo.


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## Duke of Marmalade (27 Feb 2022)

Warnings about "unique" risk including the *possibility* of going to zero, beware of whales, social media being used to manipulate the price, fraud higher than usual, mostly traded on unregulated platforms etc. show that bitcoin is still far from being house trained but I agree that it is making its presence around the house felt.


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## tecate (27 Feb 2022)

It's a "coffee may be hot" level disclaimer, Duke. In any event, I think its a bit rich for you to try and make this molehill into a mountain when neither yourself nor @Brendan Burgess will acknowledge that there's a non-negligible possibility that bitcoin continues to progress from here.


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## DazedInPontoon (27 Feb 2022)

Duke of Marmalade said:


> Warnings about "unique" risk including the *possibility* of going to zero, beware of whales, social media being used to manipulate the price, fraud higher than usual, mostly traded on unregulated platforms etc. show that bitcoin is still far from being house trained but I agree that it is making its presence around the house felt.


Those are the possibilities of a free market.


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## Duke of Marmalade (27 Feb 2022)

DazedInPontoon said:


> Those are the possibilities of a free market.


Well yes, even a government bond can go to zero.  The point is that the SEC have required this possibility to be included in the Bito prospectus; I have not seen it any conventional prospectus.
@Brendan Burgess _Boss _the following bitcoin risk warning from the SEC should almost be a Key Post.  Anyone promoting bitcoin should point out these risks.


			
				Bito prospectus said:
			
		

> Bitcoin Risk – Bitcoin is a relatively new innovation and the market for bitcoin is subject to rapid price swings, changes and uncertainty. The further development of the Bitcoin Network and the acceptance and use of bitcoin are subject to a variety of factors that are difficult to evaluate. The slowing, stopping or reversing of the development of the Bitcoin Network or the acceptance of bitcoin may adversely affect the price of bitcoin. Bitcoin is subject to the risk of fraud, theft, manipulation or security failures, operational or other problems that impact bitcoin trading venues. Additionally, if one or a coordinated group of miners were to gain control of 51% of the Bitcoin Network, they would have the ability to manipulate transactions, halt payments and fraudulently obtain bitcoin. A significant portion of bitcoin is held by a small number of holders sometimes referred to as “whales”. These holders have the ability to manipulate the price of bitcoin. Unlike the exchanges for more traditional assets, such as equity securities and futures contracts, bitcoin and bitcoin trading venues are largely unregulated. As a result of the lack of regulation, individuals or groups may engage in fraud or market manipulation (including using social media to promote bitcoin in a way that artificially increases the price of bitcoin). Investors may be more exposed to the risk of theft, fraud and market manipulation than when investing in more traditional asset classes. Over the past several years, a number of bitcoin trading venues have been closed due to fraud, failure or security breaches. Investors in bitcoin may have little or no recourse should such theft, fraud or manipulation occur and could suffer significant losses. Legal or regulatory changes may negatively impact the operation of the Bitcoin Network or restrict the use of bitcoin. The realization of any of these risks could result in a decline in the acceptance of bitcoin and consequently a reduction in the value of bitcoin, bitcoin futures, and the Fund. Finally, the creation of a “fork” (as described above) or a substantial giveaway of bitcoin (sometimes referred to as an “air drop”) may result in significant and unexpected declines in the value of bitcoin, bitcoin futures, and the Fund


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## tecate (27 Feb 2022)

Duke of Marmalade said:


> The point is that the SEC have required this possibility to be included in the Bito prospectus; I have not seen it in any conventional prospectus.


Right so. I'll just leave this here...






						SEC.gov | SEC Charges Exchange-Traded Product and Its General Partner With Disclosure Failures
					






					www.sec.gov
				




Looks like the promoters of conventional market products can't be trusted.



Duke of Marmalade said:


> @Brendan Burgess _Boss _the following bitcoin risk warning from the SEC should almost be a Key Post.  Anyone promoting bitcoin should point out these risks.



I think that would be entirely appropriate...so long as the post/thread is renamed 'Caution: Coffee is hot, these pílls may kill you and other similar musings'.


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## DublinHead54 (27 Feb 2022)

Given there has been an argument put forward that Bitcoin is at the beginning of it's adoption curve and only a decade old. Then it shouldn't be hard to also accept that the market infrastructure is currently less secure/risky than traditional financial markets. Of course it's evolving but it's still a ways off and why regulation will be good for a efficient market.

The SEC is not discriminating against Bitcoin, they are reporting facts. they are doing what they always do....protect the consumer. 

I'm pretty sure this isn't the first time the SEC has issued a risk warning!


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## DazedInPontoon (27 Feb 2022)

The TLDR is mostly just three points, which any of us here who have discussed bitcoin with people have probably already said ourselves many times:

1) Bitcoin is traded in a free market. The nanny state won't regulate it for you.
2) Not your keys not your coins.
3) Cryptocurrency is fairly new and experimental, there may be unknown unknowns.


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## Duke of Marmalade (27 Feb 2022)

I will concede one thing. The SEC are not making the BOHA argument.  That's fair enough.  They don't set values.  They accept that the market does that. To say they have doubts about the market in bitcoin would be an understatement of monumental proportions.
I have always admitted my own humble capabilities in this regard though it seems to my nigh eve perspective to definitely be a BOHA.  But I have relied on Nobels/Roubini/Buffet to guide me, just as I haven't a clue about vaccines but trust the experts.  I will now regard Nobels/Roubini/Buffet/SEC as  my guide.  I must admit "air drop" was new to me, you live and learn.

@tecate Shoot the messenger is a sad reaction.  I think @Dublinbay12 expected more.


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## tecate (27 Feb 2022)

Duke of Marmalade said:


> @tecate Shoot the messenger is a sad reaction.


You've lost me Duke. What messenger have I 'shot'?


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## Duke of Marmalade (27 Feb 2022)

tecate said:


> You've lost me Duke. What messenger have I 'shot'?


Ok, sort of apologies.  I thought your rather irrelevant post was an attack on the SEC.  It seems you were merely pointing out that there are other bad guys out there besides the 17,000 cults.  But maybe I am still misreading the point of the link.


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## tecate (27 Feb 2022)

Duke of Marmalade said:


> Ok, sort of apologies.  I thought your rather irrelevant post was an attack on the SEC.  It seems you were merely pointing out that there are other bad guys out there besides the 17,000 cults.  But maybe I am still misreading the point of the link.


You said that you hadn't seen this level of disclaimer in the Prospectuses of conventional products. The link identifies a warning issued by the SEC to a company behind an oil futures product - on the basis of them not having a disclaimer highlighting not only the possibility that it could got to zero - but that it could go into negative territory as oil futures did in 2020.


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## DazedInPontoon (27 Feb 2022)

tecate said:


> oil....it could go into negative territory as oil futures did in 2020.


You must be mistaken, due to the iNtRiNsIc vAlUe of oil this is impossible.


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## Duke of Marmalade (27 Feb 2022)

tecate said:


> You said that you hadn't seen this level of disclaimer in the Prospectuses of conventional products. The link identifies a warning issued by the SEC to a company behind an oil futures product - on the basis of them not having a disclaimer highlighting not only the possibility that it could got to zero - but that it could go into negative territory as oil futures did in 2020.


So I don’t see your point.  I thought you were arguing that the warning that BTC could go to zero was equivalent to warning that aspirin could kill you.  Your link seems to suggest that when they require a warning that BTC could go to zero, they mean it, it is not a mere platitude.


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## tecate (27 Feb 2022)

DazedInPontoon said:


> You must be mistaken, due to the iNtRiNsIc vAlUe of oil this is impossible.


Clearly I am - and the reason I must be is that I have not seen pages upon pages of moral outrage at the thought of oils  iNtRiNsIc vAlUe going on vacation in 2020. I thought maybe it was at a conference in El Salvador or it could have gotten covid and was laid up for a few weeks - but if everyone was ok with oil back then, I suppose it was there the whole time and I was just confused...


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## tecate (27 Feb 2022)

Duke of Marmalade said:


> So I don’t see your point.  I thought you were arguing that the warning that BTC could go to zero was equivalent to warning that aspirin could kill you.  Your link seems to suggest that when they require a warning that BTC could go to zero, they mean it, it is not a mere platitude,



You've suggested that the SEC is more concerned about the disclaimers that accompany btc-related derivative products more-so than conventional derivative products. As per the link, that's not the case. Other than that, you're bigging up something that's not the big deal you're making of it. That is my point Duke.


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## tecate (28 Feb 2022)

The OP declared the matter of bitcoin acting as a hedge or digital gold 'settled' last Thursday. As all hell has broken loose in the World over the course of the past week, bitcoin has outperformed gold.

It has in no way matured as an asset but by the same token, it certainly can't be written off in this way any time soon, either.


__ https://twitter.com/i/web/status/1498802074963820544


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