The Bitcoin threads could be interesting in the future

[WolfeTone]

Maybe time to bring the thread back on topic? That this thread could be 'interesting' in the future?

Bitcoin $18,073.22

The ECB is requesting approval to issue €750bn in economic 'aid' to Eurozone countries....it says, wait for it...that it cannot 'run out of money'. If there is a limitless supply of euro, then how do we measure the value of the €?

Why is the ECB answering questions about limitless money supplies?

 

[Firefly]

We have the good fortune that I'm not dyslexic or that statement could have well been rearranged.

 

[Firefly]

Maybe time to bring the thread back on topic? That this thread could be 'interesting' in the future?

Welcome back Wolfie

 

[WolfeTone]

Welcome back Wolfie

Thanks Firefly, but I haven't been away anytime lately.

 

[Leo]

Leo doesn't get that his question privileges have been taken away but I'm sure he'll figure it out at some stage. He contrives to suggest that i have not responded on said subject when I have. There's nothing more to say on the subject.

Luckily you don't run AAM, so that is not in your power.

Again, you're misrepresenting what's clearly laid out in the previous posts here. I have never suggested that you have not responded. You have done so many times, but all the time seeking to ignore the fundamental question.

Note that Leo isn't taking that wager in my post above.

Of course I'm not, it's clear to everyone that you continue to ask way more questions in order to avoid having to admit you are wrong. Asking more questions isn't an achievement or a measure of authority on any subject.

 

[Leo]

His behaviour must not have matched Leo's current standard then.

I've a lot of respect for Purple, and not just because he's prepared to back up his claims and answer straight questions. You could learn a lot from him.

 

[tecate]

Luckily you don't run AAM, so that is not in your power.

It's against the rules of AAM for me NOT to answer a question? That IS news!

Again, you're misrepresenting what's clearly laid out in the previous posts here. I have never suggested that you have not responded. You have done so many times, but all the time seeking to ignore the fundamental question.

That's a blatant lie. Time and time again you've said I have not answered! Now when its put up to you you're changing your story.

Of course I'm not, it's clear to everyone that you continue to ask way more questions in order to avoid having to admit you are wrong.

So your questions are more important than mine? The arrogance. And worse than that the suggestion to go with it. Here we have two reprobates talking about rudeness and respect. I have a strong interest in this topic and anything I've posted here is in reference to it. Who do you think you are to deem your questions acceptable and mine not? Double standards doesn't cover whats at play here.

Asking more questions isn't an achievement or a measure of authority on any subject.

I was pointing towards the blatant double standards just in case that could possibly have escaped you.

I've a lot of respect for Purple, and not just because he's prepared to back up his claims and answer straight questions. You could learn a lot from him.

I have no idea who Purple is but let me clarify something. If he stands behind you two in your shenanigans here I have the same amount of respect for him as I have for you two.

 

[Duke of Marmalade]

Maybe time to bring the thread back on topic? That this thread could be 'interesting' in the future?

Brave attempt

If there is a limitless supply of euro, then how do we measure the value of the €?

Try your local supermarket, or easier still Amazon. More on topic is how do we measure the value of bitcoin (I am being genuous here if that is a word).
Let's try the experts first:
Investopedia (actually John Kelleher) suggests 15% penetration of World medium of exchange and store of value which gives a figure of $514k per bitcoin (reminder with apologies, he argues it cannot achieve 15% store of value unless it achieves 15% medium of exchange)
Fidelity Digital Assets (actually Ria Bhutorria, courtesy @tecate ) is less definitive and gives a range of values:
1% of the flight from low yielding bonds -> increase of $27k on today's price i.e. $45k
5% share of Alternative Assets ->increase of $37k i.e. $55k
10% share of AA -> increase of $74k i.e. $92k
@WolfeTone $34.5k (methodology not revealed)
Founder of renowned consumer money site $0
Quite a range from the experts, you will admit. What does the market think?
End 2017 $20k
Start 2019 $3k
Start 2020 $10k
March 2020 $6k
Today $18k

 

[tecate]

More on topic is how do we measure the value of bitcoin

I would suggest that its entirely relevant for Wolfie to bring up rampant money printing and practices related to fiat money. It is very much relevant into what gives bitcoin value if you're using a eur/btc or usd/btc pairing in assessing value.

What does the market think?
End 2017 $20k
Start 2019 $3k
Start 2020 $10k
March 2020 $6k
Today $18k

You will notice you're picking out extreme price points for effect, your Dukeness. Bitcoin is in a price discovery phase and will continue in that process for a number of years ahead. Graph the price over that period and draw a line through the mean and you will see that bitcoin has been on a consistent uptrend.

 

[Duke of Marmalade]

I would suggest that its entirely relevant for Wolfie to bring up rampant money printing and practices related to fiat money. It is very much relevant into what gives bitcoin value if you're using a eur/btc or usd/btc pairing in assessing value.


You will notice you're picking out extreme price points for effect, your Dukeness. Bitcoin is in a price discovery phase and will continue in that process for a number of years ahead. Graph the price over that period and draw a line through the mean and you will see that bitcoin has been on a consistent uptrend.

@tecate easy on the knee jerk defensive reaction. I did answer Wolfie's question. Thanks for the reference to Mr Roubini. As a Twitter follower he sent me an email today speaking just like Wolfie about unprecedented debt levels. It is scary I'll admit. It is almost surprising that bitcoin in these very propitious circumstances (for him/her) is a mere fraction of the experts' range of values.

 

[WolfeTone]

Brave attempt

(had to try something )

More on topic is how do we measure the value of bitcoin (I am being genuous here if that is a word)

Yes, it is more on topic but you must admit it has had a fair amount of scrutinising to this point, albeit with unsettled outcomes.
I think it is reasonable to ponder the other side of the equation of the value question, particularly in the face of public declarations by the head of the ECB that the money supply is limitless.
Surely the question of value applies to € as much as it applies to BTC?

Quite a range from the experts, you will admit.

Absolutely, and again only goes to emphasis that value is subjective. The price attributable to that value is in the eye of the participating buyers and sellers and prospective buyers and sellers, aka the market.
Your own BOHA valuation is priced at zero, or next to zero (with an apparent range these days up to €3,000? )

@WolfeTone $34.5k (methodology not revealed)

Not true, I set out my methodology in an earlier post. Somewhat crude, 2% of a €36trn money supply / max 21m bitcoin in circulation = €34,265.

 

[Duke of Marmalade]

I think it is reasonable to ponder the other side of the equation of the value question, particularly in the face of public declarations by the head of the ECB that the money supply is limitless.
Surely the question of value applies to € as much as it applies to BTC?

Of course it is a valid question. My answer was not meant to be trite. The main central banks have announced their inflation targets and I can live with those. My day to day experience is indeed that inflation has been very subdued but I do share a worry that with the unprecedented money printing they may lose the plot, but I have to trust them. A digital entry with no backing might seem like salvation to some, it will never be for me, gold before that for sure.

Not true, I set out my methodology in an earlier post. Somewhat crude, 2% of a €36trn money supply / max 21m bitcoin in circulation = €34,265.

Apologies Crude yes, but on a par with the methodologies of Investopedia and Fidelity Digital Assets.

 

[WolfeTone]

Quite a range from the experts, you will admit

There is a real-life observable market that we are familiar with in the Betfair US Presidential election.
This is a market that you have touted as being efficient and I would tend to agree given the volume of trade.

The market currently sits at a buy/sell 1.05/1.06 for Biden to be next President.
As this is gambling on short-term, immediate outcomes, it is highly speculative. That said, there are a number of observable factors (most obvious, the election count) that are priced in to market that make the outcome a near certainty.

This makes 1.05 great value? Yet I am hesitant given the risk of 100% sudden and immediate loss on the other side of the equation. So therefore, it is poor value?
Which is it?

Another observable factor is that outside the 1.05/1.06 level, there are considerable sums of money on a wide range of prices.

If this is an efficient market, how can the market participants offer such a broad range of prices?

 

[Duke of Marmalade]

There is a real-life observable market that we are familiar with in the Betfair US Presidential election.
This is a market that you have touted as being efficient and I would tend to agree given the volume of trade.

The market currently sits at a buy/sell 1.05/1.06 for Biden to be next President.
As this is gambling on short-term, immediate outcomes, it is highly speculative. That said, there are a number of observable factors (most obvious, the election count) that are priced in to market that make the outcome a near certainty.

This makes 1.05 great value? Yet I am hesitant given the risk of 100% sudden and immediate loss on the other side of the equation. So therefore, it is poor value?
Which is it?

Another observable factor is that outside the 1.05/1.06 level, there are considerable sums of money on a wide range of prices.

If this is an efficient market, how can the market participants offer such a broad range of prices?

First the easy one. The broad range are just the chancers, hoping to pick up suckers.
On the second issue is risk aversion. I personally think Biden is at worst 1.01, why don't I jump at 1.05. Let's say 10k (subject to you lending me 10k) at 1.05. Almost certain to win 500 but even the remote chance of losing 10k scares me off. Is this relevant to the bitcoin discusion?

 

[WolfeTone]

Almost certain to win 500 but even the remote chance of losing 10k scares me off. Is this relevant to the bitcoin discusion?

So the prospect of losing €10k outweighs the gain of winning a near certain €500.
So it is fair to say that you do not consider 1.05 to be good value given the risk/reward?
Even though you think Biden, at worst is worth 1.01.

Can you explain that rationale? It is relevant to determining value.

 

[DazedInPontoon]

...
Quite a range from the experts, you will admit. What does the market think?
End 2017 $20k
Start 2019 $3k
Start 2020 $10k
March 2020 $6k
Today $18k

I'll just smooth out the volatility noise and add

900 day SMA ~8k
600 day SMA ~9k
300 day SMA ~10k

 

[Duke of Marmalade]

So the prospect of losing €10k outweighs the gain of winning a near certain €500.
So it is fair to say that you do not consider 1.05 to be good value given the risk/reward?
Even though you think Biden, at worst is worth 1.01.

Can you explain that rationale? It is relevant to determining value.

Simple it is utility theory
If I lose 10k I am near suicide, probably evaluate it as a loss of 100k
If I win 500 that is how I rate it
Utility theory my dear Wolfie

 

[Duke of Marmalade]

I'll just smooth out the volatility noise and add

900 day SMA ~8k
600 day SMA ~9k
300 day SMA ~10k

I was merely pointing out that nobody has a clue how to value BTC. The experts have an incredible range as do the markets as do the punters on AAM from various polls.

 

[WolfeTone]

Simple it is utility theory
If I lose 10k I am near suicide, probably evaluate it as a loss of 100k
If I win 500 that is how I rate it
Utility theory my dear Wolfie

Ok, but there must be a point along your utility curve where the risk/reward ratio meets?
The minimum bet on Betfair is €2. I'm going to suggest that you could cope with a €2 loss, however the prospect of winning €0.10c may not be worth the utility of battery energy expended on your phone to place such a bet?

Somewhere along the utility curve there is a point where the risk/reward of a stake of an amount between €2 and €10,000, the price of 1.05 offers value?
If there is no point, then 1.05 does not offer you value and instead the price that you would back or lay a bet is outside the efficient market price, currently 1.05/1.06.

The methodology to determine that price, given all the information available to you is yours alone.

The 1.05/1.06 price range has attracted so far about 19% of the entire €880m market, the vast bulk of it in recent days. This is an efficient market, so clearly 1.05/1.06 represents value on either side of the bet at some utility point between €2 and €10,000? Whether you back or lay?

 

[Duke of Marmalade]

Ok, but there must be a point along your utility curve where the risk/reward ratio meets?
The minimum bet on Betfair is €2. I'm going to suggest that you could cope with a €2 loss, however the prospect of winning €0.10c may not be worth the utility of battery energy expended on your phone to place such a bet?

Somewhere along the utility curve there is a point where the risk/reward of a stake of an amount between €2 and €10,000, the price of 1.05 offers value?
If there is no point, then 1.05 does not offer you value and instead the price that you would back or lay a bet is outside the efficient market price, currently 1.05/1.06.

The methodology to determine that price, given all the information available to you is yours alone.

The 1.05/1.06 price range has attracted so far about 19% of the entire €880m market, the vast bulk of it in recent days. This is an efficient market, so clearly 1.05/1.06 represents value on either side of the bet at some utility point between €2 and €10,000? Whether you back or lay?

Excellent point Wolfie, I surely must put something on Biden at a near certain 1.05.