How long before nation states buy bitcoin?

[WolfeTone]

does there come a point at which .gov droids won't dare touch it - as the backlash will be too much?

Exactly. See how the authorities ran a mile when they tried to cut the old age pension.
There comes a point, in an open free democratic society, where the authorities are bound to the demands of the population, not the other way round.

 

[DK123]

Re Bitcoin.Difficult to know!.They say that when you can spot a bandwagon it,s already too late! P. S.The also say that the four most dangerous words in investment are "This time its different".Ask Buffett perhaps?.

 

[Duke of Marmalade]

Yes, as of today. But you are not considering, or deliberately avoiding the other scenario.
Where the price of soap, increasing 8% a day (or month, or year) against the dollar, in line with (or close to) bitcoin also increasing 8% against the dollar every day, month or year.
If such a correlation were to occur, for an sustained (undefined) period, retailers and consumers will move to using bitcoin instead of the prevailing fiat currency to buying and selling soap.
This is not speculation, it is what would happen in such circumstances.

That you think such a scenario is seriously on the cards it explains you diving in at $60k.

 

[Duke of Marmalade]

Yes. Think about it, a substantial section of the population thinking in Bitcoin, how do the authorities stop the population "thinking bitcoin"?

Folk can think what they want even in China. Try thinking that Dunnes Stores has a bitcoin till.

 

[Duke of Marmalade]

Exactly. See how the authorities ran a mile when they tried to cut the old age pension.
There comes a point, in an open free democratic society, where the authorities are bound to the demands of the population, not the other way round.

Dream on. I can just picture the cultists burning down the central bank. Would make a great movie.
If Pascal banned BTC tomorrow how many cultists would turn up in Dame Street? But the fantasy is that there will come a time when they would turn up in their hordes, armed with pitch forks, digital ones of course.

 

[NoRegretsCoyote]

@NoRegretsCoyote : Just so that I fully understand this, the NTMA has never owned and can never own gold or gold ETFs or derivative products - as it's legally precluded from doing so?

My interpretation bof the NTMA's legal investment mandate is that it cannot own an asset like gold.

The Central Bank can and does own gold bars. AFAIK it pays the Bank of England a fee for doing so in its vault in London. I think this whole arrangement is silly, but that's for another thread.

 

[DazedInPontoon]

Dream on. I can just picture the cultists burning down the central bank. Would make a great movie.
If Pascal banned BTC tomorrow how many cultists would turn up in Dame Street? But the fantasy is that there will come a time when they would turn up in their hordes, armed with pitch forks, digital ones of course.

We won't burn anything, we'll just leave, either virtually or physically.

 

[WolfeTone]

That you think such a scenario is seriously on the cards it explains you diving in at $60k.

Are you trying to discreetly offer another price prediction? How have you fared in that regard until now?

Folk can think what they want even in China.

Yes they can, what is your point? That there are higher authorities geared towards snuffing out these thoughts?

I think that used to be the way alright, Divorce, Abortion, decriminalisation of homosexuality, same-sex marriage, Playboy magazine (imagine, in 1995, if the zealots had held the line in with the continued censorship of Playboy how they would have coped with the mass proliferation of internet pornography?)

Dream on. I can just picture the cultists burning down the central bank.

Who is talking about burning down central banks? Au contraire, it is your goodself that is talking up the ease at which central banks and government authorities can snuff out bitcoin.
If they cannot engineer a 2% inflation rate, which is their bread and butter , forgive me for being a bit skeptical of the high priest and priestess Powell and LaGarde being able to efficiently deal with much else, let alone bitcoin.

 

[WolfeTone]

If Pascal banned BTC tomorrow how many cultists would turn up in Dame Street?

Zero. I for one would just allow myself a giggle.

 

[Duke of Marmalade]

@WolfeTone Divorce, abortion, SSM, pornography. I’m in quite a daze. I was merely questioning the theory that the cult would become so predominant that the authorities would be powerless to stem the cultist tide. But I really shouldn’t rain on your parade, if that is your fantasy I shouldn’t begrudge you it.

 

[WolfeTone]

I’m in quite a daze. I was merely questioning the theory that the cult would become so predominant that the authorities would be powerless to stem the cultist tide.

Yes, if u are in a daze, take some time to think about it.

Was it the authorities that bestowed, by way of generous gift to the people, these rights and entitlements?

Or were the authorities simply acting at the behest of the people, a substantial section of the population, facing up to new realities?

The prospect of Pascal banning bitcoin (and this is no slant on Pascal) is close on par with the Archbishop of Dublin calling for the reintroduction of the ban on the sale of Playboy in 2021.
In other words, if central banks and governments want to stop increasing numbers "thinking bitcoin", my view is that they should have done it around 5yrs ago, or more.

You think otherwise, you think it will be easy for them to crush bitcoin. I do not.

 

[tecate]

xRe Bitcoin.Difficult to know!.They say that when you can spot a bandwagon it,s already too late! P. S.The also say that the four most dangerous words in investment are "This time its different".Ask Buffett perhaps?.

Warren Buffett - the oracle of value investing - has to be respected...no doubt. However, you need to bear in mind that by his own admission, he's been slow to understand and recognise the potential in technology-based plays. As a classic example, you should note that Berkshire only took a position for the first time in one of the FAANG stocks in 2016! He's come out and said that he got this wrong. He missed out on a whole wave of innovation as a consequence.

As regards thinking you're too late, there's some merit to that argument. However, if we consider Amazon, over a period of 12 years, many investors felt they had missed out. Yet, the stock on average - increased by 175% per year. I think that we're still in the early days of blockchain/crypto/bitcoin. However, it does run on cycles and we're in the bull market phase of this current cycle. That said, if you allocate on the basis of no more than a couple of percent - and if you were to start to put that together by dollar cost averaging over a long timeframe, then you're going to get exposure to this asymmetric risk without the chance that it will destroy your portfolio.

Over the course of four years of discussion on here, bitcoin/crypto has been likened to what happened in the dot com boom/bust. I certainly think that most crypto projects will vapourise - just like a plethora of startups did back then. However, just like the FAANGs emerged from that time, there will be category winners in crypto likewise. The example has been given as a negative but what came out of the dotcom boom changed life for everyone on the planet forever - and created tech giants. Again, should people not have had a small degree of exposure back then - and should they not right now when it comes to bitcoin/crypto?

I'll leave you with this...

Amazon has had similar 50% plus corrections yet from year 13 until year 24, it increased 62x in value.

 

[Duke of Marmalade]

So Wolfie that’s your credo. Bitcoin is in there with divorce, abortion and pornography blazing the trail for human freedom. And I thought @tecate was a cultist!

 

[WolfeTone]

@Duke of Marmalade , I think you have awoken out of your daze now?

It has become apparent to you now that if a substantial section of the population have a vested interest in bitcoin, then the CB's and governments can try to ban, disrupt, interfere all they want, it is not going to be easy to 'smash' bitcoin.

 

[Duke of Marmalade]

For how many people in Ireland today is bitcoin their transactional currency of choice? I would say precisely zero. The current price of bitcoin will be justified long term if around 10% of the world’s population used bitcoin as their transactional currency, per JK.
I agree that if 10% of folk used bitcoin as their transactional currency, possibly including some cabinet ministers, it would be politically difficult to stamp out. It will never happen, never mind never be allowed to happen. But there I go raining on the cultist fantasy.

 

[WolfeTone]

It will never happen

If it is never to happen, then there is never a need for governments and cb's to stamp out bitcoin.

But I am open to the possibilty that it may happen, not that it will happen or will not happen.

never be allowed to happen

which, quite spectacularly at this stage, misses the point once more about where authority actually derives from. In your own words;

I agree that if 10% of folk used bitcoin as their transactional currency, possibly including some cabinet ministers, it would be politically difficult to stamp out.

 

[Duke of Marmalade]

If it is never to happen, then there is never a need for governments and cb's to stamp out bitcoin.

But I am open to the possibilty that it may happen, not that it will happen or will not happen.



which, quite spectacularly at this stage, misses the point once more about where authority actually derives from. In your own words;

I was conceding that at 10% adoption it would be politically difficult to ban. I therefore opined that the monetary authorities would ensure that such a situation would not arise, by stepping in much earlier; that is their mandate to preserve monetary stability. To date they have not seen the need to take that step although it has been mooted, but as that Dallas chap observed adoption as a currency is negligible, so they see no reason to interfere with the casino. Do I have to draw diagrams?

 

[WolfeTone]

but as that Dallas chap observed adoption as a currency is negligible, so they see no reason to interfere

Yes, so all of the bluster to date about central banks stamping out bitcoin have been just that, bluster.

Only if there is consequential adoption of bitcoin as a MoE will CB's and governments feel compelled to intervene.

But as stated before, in my opinion, bitcoin will only ever be adopted as a MoE when the prevailing economic circumstances make it more beneficial to retailers and consumers to use it rather than the existing fiat currency. Those circumstances, generally speaking, will involve a sustained period of instability in the existing currency, combined with a significant section of the population already holding bitcoin.
For example, imagine if somewhere like Greece decides they are out the euro, in turn, causing a chain of events, unintended, that destabilises the euro.
Or, as the repercussions of Brexit take hold, other European countries follow UK and exit it out of the EU heralding a chain of events, unintended, that destabilises the political and economic environs of Europe.
You may consider such circumstances as highly unlikely or will never happen, or more apt from your outlook, will "never be allowed to happen".
Im a bit more circumspect, and my outlook is that no-one knows what will happen, other than anything can happen.

As it stands, as bitcoin price climbs higher and higher, it is signifies to me increasing interest in bitcoin. More and more people holding bitcoin. But as you say, if it is not in use as MoE then CB's need not fuss themselves over this.
But if a sustained period of instability and volatility were to emerge in the CB issued currency, then retailers and consumers will move to use alternative means to exchange goods and services if it is in their clear interest to do so. At which point, it may be too late for CB's and governments to intervene.

It may never happen. Cb's and governments may restore European and global economies and monetary systems to rude health and momentum for bitcoin may diminish.
On the other hand, Europe of all places is, historically speaking, synonymous with instability.
I just think at this stage it is wise to hold some bitcoin, for whatever happens.

 

[Duke of Marmalade]

@WolfeTone At last you have seen the point I was making. You have in turn described circumstances where bitcoin would usurp fiat as the currency of choice for the woman on the 46a. It would need a realistic prospect of such an outcome to justify its $60k price tag and what's more I can't really see what has happened in the last 12 months to increase the chances of such scenarios 10 fold. Note that gold is the same price today as 12 months ago and surely gold would also benefit from the fiat meltdown you await.
@tecate I don't know whether you bet horses. But take High Definition. It is currently priced at 4.1 on Betfair to win the Epson Derby. Now High Definition is a very good Store of Value whilst that speculation persists, it can be traded every minute of the day. However, come the first week in June we will know whether that speculation was justified and its SoV will either multiply and crystallise or vanish.
In a similar way the bitcoin price is a speculation that one day it will be a meaningful medium of exchange (John Kelleher, see below). It therefore has/IS SoV material whilst the speculation is alive. Unlike the derby we do not have a definite time limit for knowing whether the speculation was justified. But, and this is the John Kelleher point, it can only be a SoV if it achieves meaningful utility as a MoE or if it maintains speculation that this might occur. It can never be a SoV in its own right absent of being a meaningful utility or the speculative possibility of becoming such.

I think at this stage I should remind folk of the words of my oft cited John Kelleher.

One of the biggest issues is Bitcoin's status as a store of value. Bitcoin's utility as a store of value is dependent on its utility as a medium of exchange. We base this in turn on the assumption that for something to be used as a store of value it needs to have some intrinsic value, and if Bitcoin does not achieve success as a medium of exchange, it will have no practical utility and thus no intrinsic value and won't be appealing as a store of value.

The bold highlighting is mine. Please note that JK is a huge fan of bitcoin and does think it will make it as an MoE. In fact he predicts a price of $514k based on his estimated adoption rate.

 

[WolfeTone]

Note that gold is the same price today as 12 months ago and surely gold would also benefit from the fiat meltdown you await.

Gold has been around for thousands of years. My mother has known about gold since she was about 6yrs old. She understands the concept of it holding value since she was about 6yrs old.
Bitcoin has been around for 11yrs or so. My mother knows about bitcoin since about 3-5yrs ago. My mother still has no idea what bitcoin is.
Gold is a price corrupted manipulated market.

Gold price manipulation is real

"I think it’s the largest fine that’s ever been paid for spoofing and market manipulation in this particular order and really sets a massive precedent,” Rhind said.

Regulatory changes are likely [but not certain] to follow after this case, Rhind added.

“Hopefully it doesn’t happen again. $920 million is not a small amount, even for a bank of the size of JPMorgan. I’m sure you will see wholesale changes made on the compliance side and all sorts of other controls put in place to make sure that this doesn’t happen again,” he said.

I can't really see what has happened in the last 12 months to increase the chances of such scenarios 10 fold

More and more people are holding bitcoin (signaled by its increasing price) as they begin to understand what it is, or are at least trying to understand what it is. However, Bitcoin remains very much on the periphery of the day-to-day lives of the men and women on the 46A. It is much more prevalent with people working in the financial and tech sectors, but even there I suspect it is still a minority concept?
How long before that prevalence expands into wider general acceptance across the public at large?
It may never happen, but if it does, $60,000 will be bargain basement.