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Bitcoin The Almighty Buck

More Wall Street Pundits Caution Against Investing In Bitcoins (cnbc.com) 177

Peter Boockvar is the Chief Investment Officer of Bleakley Financial Group, a $3.5B wealth management firm -- and he predicts "an epic crash will hit the cryptocurrency market," according to CNBC. "He isn't sure if it'll come to a grinding halt or be a slow and steady drop -- but he says it's coming." "When something goes parabolic like this has, it typically ends up to where that parabola began," he said on CNBC's "Futures Now." Boockvar, a CNBC contributor, contends bitcoin is in danger of dropping 90 percent from current levels. He calls it a classic bubble. "I wouldn't be surprised if over the next year it's down to $1,000 to $3,000," he added. That's where bitcoin, the largest cryptocurrency player, was trading less than 12 months ago. Friday afternoon it was trading above $11,000.
Meanwhile, today the International Business Times chronicled the predictions of tech billionaire Mark Cuban. In June of last year as bitcoin was climbing toward the $3,000 threshold, Cuban cautioned potential investors about jumping in on the bandwagon... "[C]rypto is like gold. More religion than asset. Except of course gold makes nice jewelry." He told his followers at the time that he wasn't questioning the value of Bitcoin but was questioning the "valuation" and said , "I think it's in a bubble. I just don't know when or how much it corrects." Cuban suggested that when everyone is "bragging about how easy they are making [money]," that indicates there is a bubble happening...

Still, the Dallas Mavericks owner was open to the idea of using cryptocurrencies as a volatile investment vehicle. "If you're a true adventurer and you really want to throw the Hail Mary, you might take 10 percent and put it in Bitcoin or Ethereum," he said. Cuban also cautioned, "If you do that, you've got to pretend you've already lost your money"... Showing just have far Cuban has come on bitcoin and cryptocurrency, he announced earlier this week that his Dallas Mavericks will accept bitcoin and Ethereum as a method to pay for tickets starting next season. Even if the tech investor doesn't fully believe in cryptocurrency, he's clearly willing to try to profit off it...

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More Wall Street Pundits Caution Against Investing In Bitcoins

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  • ...they may be sane. They abide by buy low sell high. Bitcoin may never be stable enough to ever be a good idea.
    • They may be sane and indeed correct but I have trouble trusting financial advice from someone who does not know the difference between a parabola or an exponential. I expect the problem comes from the habitual use of too much hyperbola.
  • Uses of gold (Score:5, Interesting)

    by theweatherelectric ( 2007596 ) on Sunday January 21, 2018 @11:49PM (#55975649)

    Except of course gold makes nice jewelry.

    And gold also has uses [geology.com] in electronics, medicine, and aerospace applications.

    • by Anonymous Coward

      Goldschlager, like Jaegermeifter, is not medicine.

      • Says you. But I can vouch that it can cure all sorts of ailments. Especially consciousness.

        Much like bitcoins.

    • by Koby77 ( 992785 )
      Gold can be confiscated by the government as it crosses a boarder. Also, transferring $5mil in gold might be much more expensive due to security concerns, not to mention time-consuming depending on the distance. Bitcoin isn't perfect, but it does have a several advantages.
      • Re:Uses of gold (Score:5, Insightful)

        by sheramil ( 921315 ) on Monday January 22, 2018 @01:18AM (#55975889)

        Gold can be confiscated by the government as it crosses a boarder. Also, transferring $5mil in gold might be much more expensive due to security concerns, not to mention time-consuming depending on the distance. Bitcoin isn't perfect, but it does have a several advantages.

        Gold doesn't disappear when the exchange vanishes.

        • History had enough bank crashes where the gold in the bank vanished ...

          • If a bank has their safe deposit items "on the books", if they fail, everything in the safe deposit box can be taken. In fact, some banks explicitly have a warning or recommendation to not store coins in their vault, because of this.

            Of course, there is the fact that the government can ban ownership of gold at any time...

            Not to say that cryptocurrencies are the be-all and end-all, but gold isn't completely bulletproof either.

        • One doesn't need an exchange.

          I would say that cryptocurrencies and gold have advantages and disadvantages. Cryptocurrencies can be easily stolen by a compromised app, or lost forever if one loses their password to their wallet, or loses their wallet. If someone has backups of their wallet, has something like a TREZOR or other hardware based item, it can be said that their security is better than having physical precious metals.

          Maybe a feature to be added would be the ability to recover a wallet from multi

        • Also, people can't just invent a new form of gold with new features and security, thereby making gold obsolete.
      • by AHuxley ( 892839 )
        A thought experiment on selling gold when needed in the future under very different regulations in a fictitious nation that has new tax rules.
        What to do with gold? Hold the gold until needed, selling domestically for cash sounds great.
        Who is going to give a good cash payment for that gold even with full ID and paperwork?
        Do they have to report that payment for gold to the gov?
        Steep new tax considerations could be in place after selling the gold?
        A short holiday to a more normal nation might allow bit
    • Re:Uses of gold (Score:4, Interesting)

      by religionofpeas ( 4511805 ) on Monday January 22, 2018 @04:10AM (#55976359)

      Industrial use of gold only account for 10% of the mined gold. The rest is hoarded in the form of coins, jewelry and bullion bars. The small amount of industrial use does not explain why it's being sold at such a large premium over production cost.

      • Gold recycling is huge. CPUs, motherboards, anything either made of gold or gold plated gets stripped clean in a chemical solution (aqua regia) only later to be re-solidfied and melted down into pure gold and resold.

        There's a reason all that e-waste gets shipped overseas. The labor is cheap enough to where it's worth-while to go through all the trouble.

    • Invest in Gold plated bullets, dual use, for when Global Markets crash
    • https://www.zerohedge.com/news... [zerohedge.com]

      Yeah. Gold is "like a religion" they say. Hah!

  • by perpenso ( 1613749 ) on Sunday January 21, 2018 @11:58PM (#55975677)
    If I remember a recent Ars Technica article correctly, bitcoin has had 4 exponential spikes in prices similar to the current one. After each there was about a 75% drop in price. The last one was in 2014, up to $1,100, then down to $250-300 and staying there for years until the current spike to $19,000 occurred.

    But now we have a new variable. Those past spikes were when bitcoin owners were largely geek speculators who were also true believers in bitcoin. This current spike coincided with wall street speculators getting involved and soon followed by speculators from the general public. These "newcomers" may not be as forgiving as the preceding "true believers".

    That said, don't conflate blockchain and bitcoin. Blockchain technology is likely to be part of our future. Bitcoin is just one user of blockchain technology, it may or may not be part of our future. "Not" is a serious possibility given that bitcoin has deviated from its design and its assumptions about its blockchain security are no longer valid. Its security required a global distributed community of miners who are regular individuals using their own computers and this has not been true for years. Bitcoin is plausibly vulnerable to mining cartels and government intervention due to the current state of affairs where we have a relatively small number of miners using expensive specialized ASIC hardware that is geographically located in a single country and reliant upon inexpensive government supplied electricity. Are cartels or the government likely to subvert the bitcoin blockchain? Probably not, but it remains plausible, and bitcoin security is based on the assumption that such things are not even remotely plausible.

    Bitcoin is entirely replaceable by a another coin with better security, new features and/or better performance. Before anyone makes a "network effect" argument, keep in mind that a network effect needs high switching costs to be effective. There is little to no switching cost to move from bitcoin to a different coin.
    • Can you create an algorithm that is sufficiently hard so that coins don't flood the market but sufficiently energy efficient that we don't roast ourselves to death from greenhouse gasses mining computer money? I am opposed to crypto from a purely environmental standpoint, I think there are better things humanity could be spending its limited resources on than a bunch of calculations that prove you did a bunch of calculations.
      • by Anonymous Coward

        Can you create an algorithm that is sufficiently hard so that coins don't flood the market but sufficiently energy efficient that we don't roast ourselves to death from greenhouse gasses mining computer money? I am opposed to crypto from a purely environmental standpoint, I think there are better things humanity could be spending its limited resources on than a bunch of calculations that prove you did a bunch of calculations.

        It's already here and has been around for years. Take a look at Peercoin [peercoin.net]

      • Do we even need to? Cryptocurrency has proven itself pretty useless when it comes to both storing wealth and making day to day transactions.
    • People keep saying blockchain is the future... and I just don't get it. It's a way of preventing forking, so great to prevent double-spending. But, and maybe this is me being dense, absent (a) a lack of a central authority and (b) a need to have one and only one block of data being definitive, I don't understand why we care. Transacting in currency/preventing double spending seems to suffer from (b) but not (a), and almost everything else seems to be immune to (b), and probably (a) as well.

      I figure if I

      • by roca ( 43122 )

        Bitcoin's proof-of-work is not the only way to implement a blockchain. Real-life applications don't want PoW (and it's an environmental disaster), but you can do interesting blockchain things without it using known identities.

        • I've seen some "proof of burn" ideas ,but I'm not sure how else to replace PoW. Any other papers you can show me. Also, what can I do on a blockchain I cannot do without one, other than preventing double spending without a central authority?

      • People keep saying blockchain is the future... and I just don't get it. It's a way of preventing forking, so great to prevent double-spending. But, and maybe this is me being dense, absent (a) a lack of a central authority and (b) a need to have one and only one block of data being definitive, I don't understand why we care. Transacting in currency/preventing double spending seems to suffer from (b) but not (a), and almost everything else seems to be immune to (b), and probably (a) as well. I figure if I keep asking, someone will give me the right metaphor, and I can finally grok why blockchain.

        A lack of central authority means redundancy of data, avoiding a single point of failure. To borrow from Torvalds who had borrowed form someone earlier: Don't backup data, upload their important data to the internet and let the rest of the world mirror it. It also allows peer-to-peer transactions, middlemen not necessarily necessary.
        One definitive block defining ownership of a thing, its not just about coins, its about anything that can be owned. Note that one definitive block avoids the problem of differe

    • by dj245 ( 732906 )

      That said, don't conflate blockchain and bitcoin. Blockchain technology is likely to be part of our future. Bitcoin is just one user of blockchain technology, it may or may not be part of our future. "Not" is a serious possibility given that bitcoin has deviated from its design and its assumptions about its blockchain security are no longer valid. Its security required a global distributed community of miners who are regular individuals using their own computers and this has not been true for years. Bitcoin is plausibly vulnerable to mining cartels and government intervention due to the current state of affairs where we have a relatively small number of miners using expensive specialized ASIC hardware that is geographically located in a single country and reliant upon inexpensive government supplied electricity. Are cartels or the government likely to subvert the bitcoin blockchain? Probably not, but it remains plausible, and bitcoin security is based on the assumption that such things are not even remotely plausible. Bitcoin is entirely replaceable by a another coin with better security, new features and/or better performance. Before anyone makes a "network effect" argument, keep in mind that a network effect needs high switching costs to be effective. There is little to no switching cost to move from bitcoin to a different coin.

      Why will blockchain be a part of the future? The future is very difficult to predict with regards to technology. Blockchain is essentially a football stadium filled with accountants keeping ledger books. Someone goes up to a microphone and announces a transaction, everyone records the transaction in the ledger (if the transaction checks out). And everyone's ledger book essentially must hold all the transactions which have ever happened.

      This is far too much redundancy for most applications, and the dat

  • Could you short them in the usual way, betting that the price will drop against a current owner?
    • by Koby77 ( 992785 )
      Yes you can. Simply find an owner, and come up with an agreement where they will give you some bitcoin now, and then you will give it back to them at some point in the future. (Naked shorting may face certain complications, however.)
  • by Anonymous Coward

    Sadly, they are driving up the cost of high-end video cards...

    • Sure. But if crypto-currencies collapse, you're gonna be up to your neck in cheap high-end video cards, right?

  • by Hrrrg ( 565259 ) on Monday January 22, 2018 @12:12AM (#55975721)

    The valuation of bitcoin surged on the assumption that it will become a major currency. However, it's hard to see how bitcoin is going to be good for much of anything. Transactions are too expensive and too slow for it to become a regular currency. Early on, people believed it was an anonymous form of payment - but in fact every transaction is public. It was also supposed to be a democratic currency, but that promise has failed as well because now a few big players hold most of the bitcoins. By all reports, it wastes a tremendous amount of electricity and contributes to global warming.

    To quote one economist, "It's not a currency until people are paid with it." I don't see it ever getting there, especially with governments against it. And if it isn't destined to become a currency, then it it is destined to crash, maybe even disappear.

    • There are actually plenty of jobs that are payed with crypto currencies.
      I was on a web site with job listings a few weeks ago ... but did not bookmark it. I guess you find it easy to google.

    • by ebvwfbw ( 864834 )

      I take it you haven't been paid with it yet? Man, you need to get out more. They've even bought Papa John's pizza with bitcoin. Famous example done years ago.

      Do your homework. You're a babe in the woods if you don't realize it. No, I really mean it. If you don't know what a wallet is, how to secure it, exchanges, which ones to get on and such, you're like a babe with say $1000 or whatever you have walking downtown in NYC flashing it around. You won't have it long unless you learn how to handle your money. G

  • Even on the small drops and increases, a person can make 50 bucks here and there. If your out $1000 it isnt the end of the world and watching the numbers and trying to make that 50 is a lot of fun.

    • If your out $1000 it isnt the end of the world and watching the numbers and trying to make that 50 is a lot of fun.

      Dunno about you all, but I'm guessing this contribution comes to us from a teenager with rich parents.

    • I don't know where you buy and sell your coins, but in most places the fees will make the small pump and drop useless to try to trade them, because what you could possibly earn will be less than the fees...

  • by Anonymous Coward

    1. If the total supply of bitcoin remained the same the price would increase because fiat is inflationary. Although the amount of bitcoin in circulation increases over time the total supply decreases as wallets are lost.
    2. The utility of bitcoin increases every time someone new obtains some and every time a business agrees to accept it as payment - 2017 saw an explosion in both of these. The utility of bitcoin will increase farther with improvements to the underlying technology - ie. lightning network.
    3.

    • by EzInKy ( 115248 )

      1. If the total supply of bitcoin remained the same the price would increase because fiat is inflationary.

      Which is exactly why fiat currency is far superior to bitcoin.

  • by Anonymous Coward

    Bitcoin was never a serious contender for replacing the dollar. What we need is a cryptocurrency that can maintain a very large volume of transactions. There's a problem with the size of the blockchain. We need the blockchain to maintain trust, but it quickly becomes a serious impediment to new comers. Further, we need a way to reward processors of transactions even after the currency becomes stable and there's no need for new coins.

  • Bitcoin's high-cost high-latency transactions make it a lot less useful as a currency than everyone hopes. Without some sort of centralized credit agency backing it to amortize those transactions, it'll never be able to take off for e.g. buying a cup of coffee.

    It seems obvious the bubble will burst and I'd question how many more bubbles it'll be able to recover from without major changes.

    • Lightning Network is spinning up as we speak, with near zero transaction costs, and without need for trust in centralized parties.

      • by mentil ( 1748130 ) on Monday January 22, 2018 @05:04AM (#55976545)

        As much as I'd love Lightning to be a panacea, I don't see how it'll work out. It's too easy to anonymously bring your competitors to financial ruin by challenging the off-blockchain ledger, forcing the ledger to be posted to blockchain, costing your competitor a huge transaction fee every time you do this. Now, say you have a bot challenging the ledger every 5 seconds, or 5 milliseconds; those savings become a huge liability very fast. This just brings us back to the real problem: posting to blockchain is way too expensive. If Lightning fails to work as advertised, Bitcoin will be out of magic bullets.

  • Believe ? (Score:5, Insightful)

    by OneSmartFellow ( 716217 ) on Monday January 22, 2018 @04:21AM (#55976415)
    "...Dallas Mavericks will accept bitcoin and Ethereum as a method to pay for tickets starting next season. Even if the tech investor doesn't fully believe in cryptocurrency, he's clearly willing to try to profit off it..."

    He doesn't have to hold the currency longer than a few seconds.  So, he doesn't have to "believe in it" at all.
    • He doesn't have to hold the currency longer than a few seconds.

      More likely, there's a cryptocoin-processing middleman who is guaranteeing that Cuban will get a certain amount in USD for a transaction, and he doesn't have to hold the coins at all.

  • by Anonymous Coward

    Missed the bandwaggon, eh Petey?

  • The crypto space—regardless of what happens to it in the long term—is brim full of intentional Ponzi schemes and pump and dump operations on a scale that would otherwise be difficult to access elsewhere. Operations like Bitconnect collect over a billion dollars from poor sods that don’t know any better and just vanish into the night. Goodbye decades of savings. While far from impossible, it would be very difficult for an illiterate investor to destroy his capital this quickly with the exch
  • by kenh ( 9056 ) on Monday January 22, 2018 @08:41AM (#55977227) Homepage Journal

    Showing just have far Cuban has come on bitcoin and cryptocurrency, he announced earlier this week that his Dallas Mavericks will accept bitcoin and Ethereum as a method to pay for tickets starting next season. Even if the tech investor doesn't fully believe in cryptocurrency, he's clearly willing to try to profit off it...

    Many/most retailers that previously accepted Bitcoin have walked away from the cryptocurrency because the valuation is too erratic - there is a fair to better chance any bitcoins accepted today as payment for goods and services will go down in value before the retailer can convert them to US currency tomorrow, costing retailers rather than profiting them. .

  • ..and, after the BC bubble is over, so will Bitcoin be.

  • I'll not invest in BTC till OPEC sells Oil in it

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