I have no experience in crypto investing, so I don't know how significant this is, but there has been talk of $60,000 in Bitcoin in various major media outlets recently. It seems like the crypto market has a habit of coming in and out of the limelight like this, so why is this boom coming back? Is it simply due to something like ETF approval? If there's a technical reason, let me know.
Readit News
1) The approval of various ETFs (so demand is heightened). It's much easier to invest in it than in was in the past.
2) Traders expecting the supply to tighten (see bitcoin halving which is due very soon) and the demand there also heightening due to supply constraint expectation.
3) A lot of the uncertainty in terms of exchanges is gone. Coinbase looks like it can stand up to scrutiny and this furthermore boosts demand.
When you have huge demand vs. constrained supply, bubbles form. Of course, are all of the factors I mentioned enough to keep the bubble going for a very long time? Well, that I can't answer. No one knows how long this will last. I can tell you though that this to me looks like it is the next Tulip bubble. I see almost no reason to use bitcoin as a store of wealth. As a decentralized currency it has tremendous value, but treating it as gold I have reservations on since a lot of corrupt gangs and regimes are currently using it as a method of payment and laundering (including North Korea), as well as it being a huge drain on the world's energy supply due to mining energy needs...I don't really see what value it brings to the world at all, so treating it as 'virtual gold' (the way the world has been treating it) makes 0 sense to me, but in general, the world in the short-term sometimes makes very little sense. Over the long term, things tend to clear up. Hopefully that helps.
On the other hand, when I keep seeing news about El Salvador getting out of a national financial crisis with bitcoin, or Sam Altman issuing a worldcoin, or what Optimism did with artificial intelligence, I wonder if it's really worthless.
Some say that various tokens will be in the spotlight at Ndivia's upcoming event, but what I'm most interested in is whether this crypto market really helps with AI distributed processing. In fact, when creating an LLM, the biggest concern is how to handle quantised data.
First time I see this. Could you share some links?
Demand is outpacing supply by 12 to 1 at the current pace and all signs point to further tightening as demand continues to grow and supply remains programmatically fixed and soon to fall by half.
The world has never before experienced an asset with perfectly inelastic supply and exponentially growing demand.
It is the perfect storm.
Fully agree, and a point that most folks who shout "no intrinsic value" on the rooftops, completely fail to understand.
Furthermore, no economic theories exists to this day (that I know of) that can get a handle on this kind of asset class and predict its future behavior and impact on society.
ETH Merged from PoW to PoS in Sept 2022, and decimated the entire GPU mining industry, cutting obscene power usage down to just running some servers. Sure, there is a small amount of shitcoin PoW mining still, but overall it was a massive change across the board.
Combine that with the transactional burn introduced into EIP-1559, supply is going down because the network isn't having to pay as much for security.
Then, we have EigenLayer, which is taking staked ETH and restaking it to provide an additional layer of security to layer 2 networks. Now, you're just locking up even more ETH. 3m ($12b) are locked into that one alone. Vicious cycle.
ETH is about to have a network upgrade, the first since the Merge, that helps lay the groundwork for scaling.
These factors are all contributing to the growth as new money rolls back into DeFi.
https://ultrasound.money/
https://decrypt.co/119687/4-6-billion-ethereum-flames-since-...
You do realize that being a great store of value is orthogonal to criminals using it or its energy consumption, right? Criminals also use USD bills, far more than they use bitcoin. Are you going to claim that USD is not a great store of value for poor countries then?
Others buy because the prices are going up. Some genius draws lines on a graph that tells them prices are going to go up even more, and they buy more. Because the Bitcoin halving tends to be over a 4 year cycle, it's very convenient for the line drawers to predict patterns, and it becomes a self fulfilling prophecy.
> On March 5, when Bitcoin reached a new all-time high, the BlackRock ETF (IBIT) saw a record inflow of $788.3 million in a single day. This meant that BlackRock had to buy over 11,000 Bitcoins, which likely brought Bitcoin to its new high.
https://finance.yahoo.com/news/blackrocks-bitcoin-etf-breaks...
This is the answer. There is a spread of expectations around what the Fed will do. I’ve been hawkish, figuring since last year that rates will stay higher, for longer, than the median expectation. Silicon Valley has been dovish. (In my opinion, aspirationally.)
Crypto, for obvious reasons, appeals to those predisposed towards dovishness. (It sounds contradictory. But if you believe the Fed is fucked you’ll always predict imminently-lower rates.)
Me: "correct"
Tiger Cub: [begins converting a large single-digit percentage of his assets from Dollarydoos to BTC].
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Early 2023, I'm asked "so this ChatGPT thing, who else besides NVDA is making all the hardware?"
Me: "awkshually, NVDA nor Apple nor AMD actually make their microchips — it's TSMC, using ASML machines. You should look at MSFT's recent $1,000,000,000 investment into OpenAI, the maker of ChatGPT."
[a few days later, MSFT announces additional $10B over a decade investment]
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His family chartitable foundation gave away so much money this past year [for tax reasons == profits].
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My take on bitcoin, having been a fungible user since 2012: it's not that BTC protocols are "so great" (they're not); rather, it's that fiat currency is so terrible... is why I HODL.
This is kind of the main use case for crypto. Fear and Greed
Like, “crypto will go away as soon as humanity stops feeling fear or being greedy”?
TBH, if anyone really wants to take the air out of crypto, they need to make an easily accessible, divisible, provable deflationary asset, that doesn’t require a lot of work to find or store (so not real estate, gold, guns, rare LEGO sets, etc.)
No.
Fear and greed have motivated human investors since the dawn of investing, but saying that because this motivation is and likely ever will be omnipresent means that every individual thing this fear and greed have acted on will also be omnipresent is, off (Can I interest you in some Dutch Tunips, only 10k each?)
- Interest rates rise cut cash flow to many startups - NFT bubble burst - And mostly: the FTX drama, which froze even more investments in the market
Now it's starting to get back to "normal" (actually a bit more than normal with the Bitcoin spot ETF being approved)
So if you want to view HN as hating crypto, you can find posts that confirm that. If you want to see it as heavily pro-crypto, you can also find confirmation.
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Crypto is like the startup that perpetually just burns cash, but keeps on luring in investors with its shiny tech, huge promises, and ever expanding user base. But people in the know are aware that that tech isn't especially useful.
That being said: I am riding this wave again, as I have ridden two of the past three and might as well harvest while the sun is shining.