Crypto collapse!

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RYAN   By Guest Blogger Ryan Lewenza
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Growing up in Windsor, ON I took advantage of living in a border town by making frequent trips to Detroit to see music concerts. Some notable shows included Nirvana at St. Andrews Hall, the Beastie Boys one New Year’s Eve and the garage rock band, The Hives. I was thinking of them and one of their hits, “Hate to say I told you so”, when I was drafting this post.

I’ve been a big skeptic of Bitcoin and cryptocurrencies and have strongly advised clients and investors to proceed with caution. My skepticism was largely predicated on two central aspects.

First, Bitcoin and other cryptocurrencies offer no real tangible benefit or output to society. It’s not a hard asset like a home, commercial property or a farm. It provides no income stream. It can’t really be valued like a stock or bond, so coming up with a forecasted future value is difficult to impossible (sorry, but Cathie Wood predicting it will hit $1 million is based on fairy dust rather than any fundamental underpinning). To me, it represented the essence of the greater fool theory – the premise that sometimes you can make money from an overvalued asset if someone else will come along and buy the overvalued asset at a higher price.

Second, I’ve been in the industry long enough to see investment fads based on suspect reasoning and extreme assumptions before. The crypto craze triggered my ‘spidey sense’ and at the moment, that spidey sense appears to be on the mark.

Unless you live under a rock or in some remote place without WiFi and the internet, than you know that Bitcoin and other cryptocurrencies have imploded leaving behind massive losses, broken dreams, and a trail of wreckage.

Let’s do a post-mortem of the ongoing crypto collapse.

Looking at the most prominent cryptocurrency, Bitcoin, it’s been absolutely clobbered falling from a peak of US$68,000 last November to US$20,000 today. That’s a 70% drop in eight months.

A key contributing factor behind the collapse has been higher interest rates, which can be seen in the chart below. As interest rates have surged in response to the high inflation and Fed rate hikes, Bitcoin prices have plummeted. The connection between the two is the Fed’s rate hikes and Quantitative Tightening are removing liquidity from the system (crypto was a beneficiary of all the liquidity) and the higher rates are making US Treasuries more attractive since Bitcoin pays you bupkis.

I guess Pierre Poilievre was off the mark when he stated that Bitcoin will allow Canadians to “opt out of inflation”. Just saying.

Bitcoin Price with the US 10-Year Bond Yield

Source: Bloomberg, Turner Investments

The carnage is not unique to bitcoin, with most cryptocurrencies down big. For example, Etherium is 76% below its peak of US$4,800 and Elon Musk’s favourite, Doge coin, is down 80% from last November. Gulp?!

When looking at the entire crypto market, we’ve seen over US$2 trillion in market capitalization evaporate since the November peak. Total market cap of cryptocurrencies hit US$3 trillion late last year and today sits at roughly $900 billion. Sure, we’ve seen large drops in the past, but nothing compared to this scale when looking at the total market capitalization of this space.

This collapse has left behind a lot of casualties and some proverbial bodies by the side of the road.

Over $2 trillion in Cryptocurriences has been Wiped Out

Source: CoinMarketCap, BNN

Let’s review some recent developments/headlines as a result of the crypto collapse.

Probably the biggest story is the collapse of the related Terra and Luna cryptocurrencies with billions being wiped out overnight. A gentleman named Do Kown, an engineer from Stanford, created a new cryptocurrency called Luna, which was based on a complex algorithm. He then created a ‘stablecoin’, which combines a cryptocurrency and the stability of fiat currencies. It was called TerraUSD, which linked with Luna to create this stablecoin.

Stablecoins are pegged at US$1 and are backed by either an equal amount of US dollar cash or cash-equivalents, or against the value of the underlying cryptocurrency (Luna), which in this case was based on an algorithm. Well, someone messed up the algorithm because on May 7th the TerraUSD ‘broke its buck’ and traded at 96 cents. In short order it has gone on to become basically worthless. That’s US$60 billion in market cap gone overnight.

And get this: the same creator/engineer has launched another currency, Luna 2, believing he fixed the problems from the first one. Of course, it’s down a lot since its recent launch. Who would buy version 2 of a failed version 1? The greater fool, that’s who!

Next up is Celsius Network, which is/was a crypto loaning company. The company allows users to place their cryptocurrencies with the company and either receive a loan based on the value of their digital assets, or allow the company to lend their digital assets and be paid interest (as high as 20% in some cases).

This company was viewed as a safer way to invest in cryptocurrencies with some big firms/pensions investing in the company. For example, the massive Quebec pension, Caisse de dépôt, recently invested $150 US million in this company, likely an investment they wish they could take back after the company halted all crypto sales and withdrawals from its clients. This led to a death spiral and now the company is in restructuring.

Below is the message you receive when you attempt to sell or withdraw funds. This is a mess and will take a lot of time to work out.

Celsius message: Users can’t Sell or Withdraw Funds

Source: Celsius Network Website

Another body left on the side of the road is Third Arrows Capital, which is/was a large hedge fund that invested in various cryptocurrencies for over a decade. They were big investors in Luna and TerraUSD, so when they blew up, so did their fund. They also had a large US$670 million loan come due (they needed to repay US$350 million and 15,250 Bitcoins), which has now forced the company into insolvency and liquidation. Again, billons down the drain as investors realize this isn’t all that it was cracked up to be.

Finally, Coinbase, one of the largest trading platforms for cryptocurrencies (the one that Matt Damon was hawking on those commercials), has gone from boom to bust in just a few months. Trading and revenues are falling fast, the company announced over 1,000 job cuts, Goldman Sachs cut it to a Sell rating (which rarely happens on Wall St) and the share price is down 87% since its peak of US$357 in November 2021. The damage from the crypto collapse is being felt across the whole industry.

Coinbase Share Price

Source: Stockcharts.com, Turner Investments

So clearly a lot of carnage and disappointment from this meltdown.

Now in fairness and to be objective, Bitcoin and other cryptocurrencies have been notoriously volatile since their existence with numerous plunges in price to recover again and again. Many of the crypto bulls/parrots also point to the long-term and where it will be in 5 or 10 years, but I think this time might be different.

Yes, we could see a big bounce given how much Bitcoin and others have fallen, but I believe the ‘bloom is off the rose’ as investors and true believers start to question the foundations and viability of this new investment craze.

In my view, the longer term remains very unclear and uncertain for cryptocurrencies and should be avoided. If you have to, keep it at a small weight in the overall portfolio, with the bulk of your assets in boring and beautiful balanced portfolios.

Ryan Lewenza, CFA, CMT is a Partner and Portfolio Manager with Turner Investments, and a Senior Investment Advisor, Private Client Group, of Raymond James Ltd.

 

133 comments ↓

#1 Phylis on 07.02.22 at 8:43 am

The price seems to be controlled by walls/fencing, why would I want to participate in that?

#2 LewenzaCountry aka Prince Polo on 07.02.22 at 8:57 am

I can’t wait for the BoC to create CanadaCoin!

What are your thoughts on central banks getting into digital currencies?

#3 Søren Angst on 07.02.22 at 9:00 am

Key words:

It can’t really be valued like a stock or bond, so coming up with a forecasted future value is difficult to impossible.

– Ryan

Yup. My assessment from Day 1. If I can’t calculate a value then to me, it has zero value.

Pyramiding scheme is all it is. A hustle. The few at the very beginning, 2009-2011 did well, the rest…well, read the Blog today.

Nicely written Ryan, indeed.

PS:

Thank you for you State of the Union Blog last year for this year when you mentioned go to dividend value stock. The ONLY reason I am still with a + rate of return incl. yesterday is that one sentence I took to heart.

#4 Dharma Bum on 07.02.22 at 9:01 am

Such early days for this type of currency technology.

It’s beyond my feeble brain’s ability to comprehend such complex stuff.

In a hundred years from now, when a crypto-like currency will be what is actually universally used, people will look back and laugh at the multitude of primitive versions that were being experimented with “back in the olden days of the 2020s”.

Investing in crypto today is the same as gambling in Vegas. Ya pays yer money and ya takes yer chances.

#5 Søren Angst on 07.02.22 at 9:12 am

Speaking of Elon…

Seeking Divine Intervention Jul 1 in Roma with the Pope.

And in Venezia today reminiscing *.

https://www.foxnews.com/world/elon-musk-breaks-twitter-silence-photo-pope-italy

Besides his Tweets, The Kid still tracking him…

Austin to Roma Ciampino, $33,947 cost of fuel.
https://twitter.com/ElonJet/status/1542835717914722304

Roma Ciampino to Venezia Marco Polo, $2,762 cost of fuel.
https://twitter.com/ElonJet/status/1542914213525557248

———————

* A part of me this morning (disgruntled TWTR stock holder) was going to hop the morning train to Venezia, 1h 5min, hunt him down and give him a piece of my mind. I know the Calle there like the back of my hand.

I can dream can’t I?

Still Signore Musk e Familia:

Benvenuti in Italia.

#6 the Jaguar on 07.02.22 at 9:21 am

Gold Coins I can understand (Kruggerands, etc), but Bitcoin? It takes a certain personality to warm to such nonsense…..++++

NP Snippet ( still living off the CERB money I guess………)

“Air Canada is cancelling more than 150 flights a day in July and August due to “unprecedented and unforeseen strains” in the global aviation industry, chief executive Michael Rousseau said in an emailed statement to customers on Wednesday.

“Despite detailed and careful planning, the largest and fastest scale of hiring in our history, as well as investments in aircraft and equipment, it is now clear that Air Canada’s operations too have been disrupted by the industry’s complex and unavoidable challenges,” Rousseau said.

Bank of Nova Scotia analyst Konark Gupta estimates that the cancelled flights amount to a 10- to 15-percent reduction in Air Canada’s flight schedule.

“The key factor behind flight cancellations is not AC’S shortage of labour, unlike some U.S. carriers, but rather shortage of airport workers, including security and customs officers,” Gupta said in a note.

#7 Søren Angst on 07.02.22 at 9:32 am

Speaking of collapses…

BC not defying BoC rate increases GRAVITY.

Yet another Realtor with the “how low can it go” bug tweeting price drops in BC:

https://twitter.com/jesse_kleine/status/1542903733209616384

Mysteriously Victoria not in the mix. But from all the NEGATIVE signs, pretty sure it’s probably not doing well either.

Why BC price drops?

1. Orca’s on vacation (to cooler climes because of all the sweltering heat in the Lower Mainland & Islands),
2. Forest Primeval clear cut,
3. Noah repossessed his Ark,
4. Norse Gods of Valhalla left town for Scandinavia (in need of Vitamin D), and/or
5. Salmon seen migrating up the coast to Alaska, down the coast to WA instead – cheaper digs.

…the perfect BC storm in progress.

#8 ogdoad on 07.02.22 at 9:35 am

I was talking with a car salesperson (in the midst of a career change) the other day at a school event…super nice, 3 kids, not sure if he was colorblind but I wasn’t in the market for a car, either. Anywho, the feeling was that he didn’t want anything from me…until he found out what I did…hehe – then he started talking about cryptoes. “Now’s the time to buy”…”I just need Ripple to reach $500 and I’m done”…”just go to this site, set up an account and we both get 25$!”

Lol, you can take the person off the car lot but you car take the car lot out the the person.

Og

#9 crowdedelevatorfartz on 07.02.22 at 9:43 am

@#6 The Jag
“The key factor behind flight cancellations is not AC’S shortage of labour, unlike some U.S. carriers, but rather shortage of airport workers, including security and customs officers”
+++
Yep.
Judging by the amount of luggage piling up in airports…the shortage doesn’t seem to be pilots.

+++++

As for the Crypto meltdown.
One wonders if Poilievre is paying attention to this country……

https://www.coindesk.com/business/2022/07/01/el-salvador-purchases-80-additional-bitcoin-at-19k-president-bukele-says/

It seems El Presidente can’t admit he’s wrong and is “doubling down” on Craptocoin.

One wonders when El Salvador will default.

#10 Tales from the Crypto on 07.02.22 at 9:55 am

I’ve given crypto some thought.

It shines in the areas that governments enforce – namely illegal activity and movement of large sums between geographies without tax implications or tracking.

That is the main value of crypto.

Other than that, crypto is a verifiable-nothing.

#11 Sail Away on 07.02.22 at 10:04 am

Bins of dried mushrooms
Happy shaved dogs, tourist art
Bitcoin unneeded

#12 Don on 07.02.22 at 10:05 am

A house in Mississauga sells for $220,000 under asking price

https://www.insauga.com/a-house-in-mississauga-sells-for-220000-under-asking-price/?fbclid=IwAR1LHpsX-64rDV5QTjen56V-zZCHRxYIWq7pjpn13XdZhgRnFTSSZYdca2A

#13 Honest Realtor on 07.02.22 at 10:07 am

“First, Bitcoin and other cryptocurrencies offer no real tangible benefit or output to society. It’s not a hard asset like a home, commercial property or a farm.”

______________

You nailed it Ryan, so thank you for your balanced viewpoint.

I have always been dubious with my clients about crypto.

Helping people get into the property market as you mentioned is by far the most sensible move. And yes, I have helped clients buying rural properties, farms and even some commercial units and buildings. They are all doing well today. Same goes for the next decades ahead, in my professional opinion.

Leave the crypto nonsense behind, it is always part fairy dust. Don’t miss out on the best investment that most will ever make, a home for their families or businesses.

#14 Tales from the Crypto on 07.02.22 at 10:07 am

…also,

Back in the 1990, when CPU power and GPU power was limited and at a significant premium, I used to do some computing and rendering of very complicated animation environments.

This stuff took days in some cases.

Why is that work done by my computers long ago considered worthless today, and the work done and completed by some high end GPUs doing some calculations to mine “coins” within past decade worth anything whatsoever today?

That is in the past. Computed. Done.

What a scam.

Computing has become perverted by those Silicon Valley spies who creep on us and gather our information, violate our privacy, etc.

#15 Jean Zhimoons on 07.02.22 at 10:17 am

Ryan, ur from Windsor the armpit of Ontario, but never saw Kiss at Cobo Hall ..unforgivable…maybe ur a youngun…I remember when UW was called last chance U, better than no chance re. Bitcoin, what you so called experts qr missing is that it is proxy measure of isk, a bit like VIX index.

#16 crowdedelevatorfartz on 07.02.22 at 10:18 am

July 2nd and fuel in the Lower Brainland is $2.15/liter.
I missed my July 1st $3.00/liter by a wide margin call.
I’m amazed that Ponzie hasn’t been cackling like a demented crow.
But he was noticeably quiet about it in the weeks leading up to deadline day.
On well, the summer is an eternity in gas prices and with the ever widening war in Ukraine….who knows?
Speaking of Ponzies
July 13 for a 0.75% Bank of Canuckda rate increase.
The B.o.C. Van Helsings driving a stake into the heart of the Real estate price ponzie vampyres.
Good times.

#17 Søren Angst on 07.02.22 at 10:20 am

I like Martin Pelletier on Twitter when he gets wry.

Today on oil, selling:

https://twitter.com/MPelletierCIO/status/1543019677386887168
https://twitter.com/MPelletierCIO/status/1543111214581960704

Biden on drilling:
https://twitter.com/MPelletierCIO/status/1543230032944185345

——————-

As you all know, it’s been ONE UGLY JUNE for stock portfolios. 😢

This month going all in on oil, maybe even one of Doug’s pipeline picks.

Again, Cdn Big 5 Bank BOAT ANCHORS to B&D ETFs in Canada (a.k.a., as I watch my Maple ETF dissolve into nothingness, day by day):

https://www.google.com/finance/quote/BNS:TSE?comparison=TSE%3ATD%2CTSE%3ACM%2CTSE%3ARY%2CTSE%3ABMO&window=YTD

And again, TSE saving grace oil, smattering of 5 biggies incl. pipelines:

https://www.google.com/finance/quote/ENB:TSE?comparison=TSE%3ATRP%2CTSE%3ASU%2CTSE%3APPL%2CTSE%3ACVE&window=YTD

——————

Hope history REPEATS in the last half of the year:

https://www.marketwatch.com/story/whats-next-for-the-stock-market-after-the-worst-1st-half-since-1970-heres-the-history-11656503671?siteid=yhoof2

This month, I’m betting it will putting Threadbare cash where my mouth is (yeah oil). This guy seems to think the same:

https://www.reuters.com/markets/europe/berkshire-hathaway-buys-99-mln-more-occidental-shares-has-174-stake-2022-07-02/

#18 TurnerNation on 07.02.22 at 10:20 am

Weekend Deep Dive — into the devestating Social & Economic Lockdowns inflicted onto the now-former First World Countries.
Nobody would have accepted this tyranny in a democracy. Umm yeah about that. March 2020 Kommunism took over. As we see the old normal is GONZO.

— Fact: Summer 2020 you could walk into any airport, no mask or QR code needed, and hop a flight most anywhere. What you could not so is sit down with friends in your local restaurant. It was ToO dAnGeRoUs you see. Small business and independence? BZZT not permitted in the New System. Social isolation and fear is the name of the game. Work every time.

—–> NEW YEARS EVE 2022 was cancelled by the global government. Severe curbs on human behavior re-instated (this all makes sense when you get that to our rulers WE are the virus to be controlled. Q3 2022 — still going on)
Why? Per official govt web site “Cases” [sic] hockeysticked into space, late Dec 2021. Howcome? The miracle shot was out we were told. (“two and done” right?)

Well they just fudged the #s to make this happen. In their own words. Fool me once. They stare on this website “Testing strategy changed”. Aka making it up.

“Estimated Rate of COVID-19 Cases per 1 Million Inhabitants per Day in Ontario
(Testing Strategy Changed After Dec 23, 2021)”
https://covid19-sciencetable.ca/ontario-dashboard/

#19 Sail Away on 07.02.22 at 10:28 am

A Beaufort duff living off his wife’s pension
Believed his life rivalled the Ascension
With aching joints
And sour viewpoints
No critique was too small to mention

#20 TurnerNation on 07.02.22 at 10:45 am

Hurrah our high taxes! Health care safety net. The money is being spent instead on control over thought.
Recall that this WW, WW3, is for our MINDS this time around.

.Clinton, Ontario emergency room closed for entire Canada Day long weekend (london.ctvnews.ca)

.Perth hospital emergency department closing for five days due to COVID-19 outbreak (ottawa.ctvnews.ca)

.Misinformation causes real harm and potentially kills, Canada’s top doc says (theglobeandmail.com)
“Dr. Tam said the Public Health Agency of Canada is working on several fronts to combat mis- and disinformation related to the pandemic and vaccines, and has approximately $14-million so far on community-based projects designed to promote factual information. ”

— Yup Corvid is permanent. But only in the Former First World Countries.

.Australia – Health officials discuss the return of mask mandates – amid warnings of a third wave of the Omicron COVID-19 variant (skynews.com.au)

.New York City Mayor Says He Will Mandate COVID Vaccines for Children This Fall(outkick.com)


— Oh yeah about those PCR tests used to shut down the world. What is the CDC saying:

https://www.fda.gov/media/134922/download
• Detection of viral RNA may not indicate the presence of infectious virus or that 2019-nCoV is the
causative agent for clinical symptoms.
• The performance of this test has not been established for monitoring treatment of 2019-nCoV
infection.
• This test cannot rule out diseases caused by other bacterial or viral pathogens

#21 Victor Llearna on 07.02.22 at 10:49 am

Crypto is a worse ponzi schema than the toronto housing market. Hopfully the crypto sheep that bought in around $60k learna their lesson.
But the never do.

#22 Shawn on 07.02.22 at 10:53 am

BitCoin?

It was a great way for money to be taken out of the hands of some people (buyers at high prices) into the hands of others (the sellers at high prices). Those holding now are known as those left holding the bag. The bag of what?

#23 Senator Bluto on 07.02.22 at 11:01 am

Interesting… apparently the German people are much less interested in stopping a possible, potential, maybe, 0.1 degree C rise in temperature one hundred and fifty years from now than in not freezing to death this coming winter.

It looks like the government can act the effete poseur about something imaginary, but the people are ready to protect their own survival. Who would have thought that??

Besides, has anyone told the government that burning wood produces about 100X the pollution of natural gas??

Next government decree will be to stop burning wood. But wait…. wood is renewable biomass energy and is Okay to burn…

My head just exploded…

https://www.breitbart.com/europe/2022/07/02/imported-energy-crisis-sees-wood-burning-stoves-dry-firewood-sell-out-in-germany/

#24 Gr on 07.02.22 at 11:03 am

re: Battery tech. Some might be interested.

“The company wants to make a battery based on a new vanadium-based anode material that can charge in 3 minutes and run for 20,000 charging cycles at the expense of energy density, which la O’ says could be 80 to 90 percent that of present-day batteries.”
https://spectrum.ieee.org/vanadium-batteries

#25 Kool Aid on 07.02.22 at 11:07 am

Dear Pandora’s Box,

Thank you for considering, security, transparency, transferability, decentralization, custodianship, permission-less protocals, traceability, immediate settlement, fixed supply, divisibility, immutability.

#26 Earlybird on 07.02.22 at 11:15 am

Its creation is a play on the “money printing” paradigm of misinformation out there.
It did act as a relief valve for the the flood of stimulus money in the last few years, that would of ended up in stocks or real estate perhaps.
Maybe thats the point.
Why is it on exchanges and why are pension funds wasting money “investing” in it?
Its straight up gambling….

#27 Ponzius Pilatus on 07.02.22 at 11:21 am

More bad news for Cryptos:
And learned a new Acronym : NFT Non fungible token.
(Sounds like a poisonous shroom)

BY BJARKE SMITH-MEYER
June 23, 2022 1:53 pm

Crypto companies fear a new way of selling digital assets like artwork, music, memes — and even tweets — could soon be weighed down by Brussels’ old bureaucracy.
EU legislators are debating whether they should rope the market for so-called NFTs — non-fungible tokens — into an EU bill that will regulate crypto assets and the companies that handle them, dubbed MiCA. The legislation had originally stayed clear of these online collectibles. Not any more.
Lawmakers are determined to stop scam artists and money launderers from abusing the unregulated industry, which has attracted the attention of tax enforcers from Australia, Canada, the Netherlands, the U.K. and the U.S. now that it has become a popular way to buy and sell things like digital artwork. A major NFT marketplace called OpenSea, for example, faces multiple lawsuits in the U.S. amid complaints of stolen and plagiarized digital art, while New York prosecutors recently indicted a former employee for

#28 Scott in Gibsons on 07.02.22 at 11:23 am

So many parallels between the early days of the internet and crypto now. A new technology that threatens existing power structures. The internet flattened the information power structure and forever changed industries like music/movies/news media. Peer to peer information exchange allowed ideas (good and bad) to spread freely and change the world. Information power slipped from the hands of the few into the hands of all.

Crypto has the potential to do the same to finance. Peer to peer borrowing/lending using decentralized currencies offers so many advantages to the average global citizen compared to our current centralized and, some would say, corrupt arrangement.

IMHO Ryan you would do well to learn about the internet and try to follow its progress towards its ultimate use and form so you can serve your clients as they try to adapt and benefit from a new technology. In 2001 Amazon crashed to 30 cents and some said “I told you so!” Keep an open mind if you can.

#29 Ponzius Pilatus on 07.02.22 at 11:25 am

#16 crowdedelevatorfartz on 07.02.22 at 10:18 am
July 2nd and fuel in the Lower Brainland is $2.15/liter.
I missed my July 1st $3.00/liter by a wide margin call.
I’m amazed that Ponzie hasn’t been cackling like a demented crow.
But he was noticeably quiet about it in the weeks leading up to deadline day.
———————
I’m never one to double up on someone who’s down on his luck.

#30 Screwed on 07.02.22 at 11:26 am

I can’t wait until all the idiots that think getting rid of cash and money as we know is actually better has a face of disappointment. The communist Chinese government, UN, IMF, World Bank, WHO, central banks etc. will make sure you will be their slave.

#31 Hives on 07.02.22 at 12:03 pm

veni vidi vicious was the first album I ever bought when I was 11, so good, still listen to it now.

#32 JR on 07.02.22 at 12:14 pm

Fiat currency has utility stemming from forced taxation payments and is enforced by violence. It’s backed by nothing and is infinitly inflatable, controlled by the higher echelons of society. Any given fiat currency won’t last more than a few hundred years, and guaranteed will see it’s purchasing power wain over time. Any transaction (other than cash) requires a third party (usually a bank) to facilitate that transaction and honor the contract of payment. This can result in censorship and fraud.

Cryto solves all of this. Yes it’s early. I won’t even bother refuting why and how – DYOR.

#33 Quintilian on 07.02.22 at 12:15 pm

#4 Dharma Bum on 07.02.22 at 9:01 am
“It’s beyond my feeble brain’s ability to comprehend such complex stuff.”

Not true, it’s easy to understand.
It’s a fraud; simple as that.

Don’t confuse it with Digital Currency which if backed by government would be a totally different thing.

#34 crowdedelevatorfartz on 07.02.22 at 12:16 pm

@#23 Senator Bluto
“Besides, has anyone told the government that burning wood produces about 100X the pollution of natural gas??”
+++
Well.
When the choice is freezing next winter or burning easily available wood…..
I know which choice everyone would choose…..

#35 Sour Grapes on 07.02.22 at 12:17 pm

#11 Sail Away on 07.02.22 at 10:04 am
#19 Sail Away on 07.02.22 at 10:28 am

This Sturdy Conservative decided that 7AM on a Saturday was a very much not creepily obsessive time to craft a hate poem or two about an infrequently commenting elder sage of steerage and his bodily injuries sustained from a life well lived.

#36 crowdedelevatorfartz on 07.02.22 at 12:18 pm

@#29 Ponzie’s Petrol Price
“I’m never one to double up on someone who’s down on his luck”
+++
I’m not down on my luck Ponzie….fuel is $0.85 a liter cheaper than I expected.
Win!

#37 Ryan Lewenza on 07.02.22 at 12:18 pm

Jean Zhimoons “Ryan, ur from Windsor the armpit of Ontario, but never saw Kiss at Cobo Hall ..unforgivable…maybe ur a youngun…I remember when UW was called last chance U, better than no chance re. Bitcoin, what you so called experts qr missing is that it is proxy measure of isk, a bit like VIX index.”

I was too young for Kiss at Cobo Hall. And yes UofW was easy to get in but it was the only school I could afford and it actually had a decent business school. – Ryan L

#38 tbone on 07.02.22 at 12:23 pm

Never mind crypto . Gas is 1.87 / L today only .
Spend your money on that .
Gassed up both cars this morning and then spent the savings at Tim Hortons for breakfast …. hmmm ?

#39 DJT on 07.02.22 at 12:25 pm

WOW! BTC is down almost as much as Suncor was.

#40 Ryan Lewenza on 07.02.22 at 12:25 pm

Scott in Gibsons “IMHO Ryan you would do well to learn about the internet and try to follow its progress towards its ultimate use and form so you can serve your clients as they try to adapt and benefit from a new technology. In 2001 Amazon crashed to 30 cents and some said “I told you so!” Keep an open mind if you can.”

I agree the underlying technology (blockchain) is amazing and a game changer. Lots of potential applications and uses. My issue is with all the different cryptocurrencies and their values. Blockchain could be a game changer but that doesn’t mean Dogecoin is going to the moon. Engineers and tech experts can continue to invent new protocols/cryptocurrencies, which can devalue the standard like Bitcoin. Also regulations are a big obstacle for them. My main point is that this meltdown is causing a lot of participants/investors to re-evaluate the space and it’s reminding investors that investing is not easy. – Ryan L

#41 Yukon Elvis on 07.02.22 at 12:27 pm

#17 Søren Angst on 07.02.22 at 10:20 am
I like Martin Pelletier on Twitter when he gets wry.

Today on oil, selling:

https://twitter.com/MPelletierCIO/status/1543019677386887168
https://twitter.com/MPelletierCIO/status/1543111214581960704

Biden on drilling:
https://twitter.com/MPelletierCIO/status/1543230032944185345

——————-

As you all know, it’s been ONE UGLY JUNE for stock portfolios.

This month going all in on oil, maybe even one of Doug’s pipeline picks.

Again, Cdn Big 5 Bank BOAT ANCHORS to B&D ETFs in Canada (a.k.a., as I watch my Maple ETF dissolve into nothingness, day by day):

https://www.google.com/finance/quote/BNS:TSE?comparison=TSE%3ATD%2CTSE%3ACM%2CTSE%3ARY%2CTSE%3ABMO&window=YTD

And again, TSE saving grace oil, smattering of 5 biggies incl. pipelines:

https://www.google.com/finance/quote/ENB:TSE?comparison=TSE%3ATRP%2CTSE%3ASU%2CTSE%3APPL%2CTSE%3ACVE&window=YTD

++++++++++++

Big Five banks and Big Three Canadian pipelines paying 5-6% divvy is a screaming buy for me. I hold them individually and I am buying more. Back up the truck and buy the dips.
——————

Hope history REPEATS in the last half of the year:

https://www.marketwatch.com/story/whats-next-for-the-stock-market-after-the-worst-1st-half-since-1970-heres-the-history-11656503671?siteid=yhoof2

This month, I’m betting it will putting Threadbare cash where my mouth is (yeah oil). This guy seems to think the same:

https://www.reuters.com/markets/europe/berkshire-hathaway-buys-99-mln-more-occidental-shares-has-174-stake-2022-07-02/

#42 Quintilian on 07.02.22 at 12:31 pm

#16 crowdedelevatorfartz on 07.02.22 at 10:18 am
July 2nd and fuel in the Lower Brainland is $2.15/liter.
I missed my July 1st $3.00/liter by a wide margin call.

You were consistent with your other calls.

Still bullish on equities?

Still buying on the dips?

But no worries, Crowdie, you will definitely be right on the call that really counts-the RE Crash.

(math is on our side)

Tick Tock, Tick Tock

#43 yvr_lurker on 07.02.22 at 12:33 pm

but I believe the ‘bloom is off the rose’ as investors and true believers start to question the foundations and viability of this new investment craze.
———
Terrific post. I think that one reason why many millenials “invested” in crypto funds is a distrust and loathing of the conventional banking system (the “system is rigged” type
people). However, not being backed by a product or land or something tangible, and with all of the strange acronyms that the crypto fanbase would throw around at conferences, it all seemed like a modern version of a pyramid scheme. Rally more and more people to “invest” through using buzz words at crypto conferences (that nobody understands), peppered with comments about the banking system is corrupt etc…, and the market goes higher and higher…. until… until… it doesn’t. Cataclysmic freefalls of its value, or simple disappearance of the “investment” from fraud, are just two of the several main pitfalls….

No thanks…. our banking system does have its issues for sure, but outright theft of an “investment” from one of the top 7 is not what I would worry about….

#44 Ryan Lewenza on 07.02.22 at 12:39 pm

JR “Fiat currency has utility stemming from forced taxation payments and is enforced by violence. It’s backed by nothing and is infinitly inflatable, controlled by the higher echelons of society. Any given fiat currency won’t last more than a few hundred years, and guaranteed will see it’s purchasing power wain over time.”

First, it’s absolutely untrue that fiat currencies aren’t backed by nothing. The USD, for example, is backed by a $22 trillion dollar economy, tax revenue from individuals and corporations. It’s backed by the value of Apple, Google, GM, Tesla etc. It’s backed by the value of ports, land, water etc. What is the worth of the Grand Canyon? I have no idea but it’s worth a lot. While it’s not backed by the same value of gold in a warehouse, it’s backed by an entire economic system. Second, your time horizon of a few hundred years is pretty long. Depending on your age you probably have another 40-50 years left. Will the USD cease to exist in your lifetime? No chance. Finally, if you’re right the governments will just regulate Bitcoin and other currencies into oblivion. Lastly, this seems to be the only argument for cryptocurrencies (ie fiat currencies will implode due to the debt and money printing). This is all I hear from crypto believers. To invest my hard earned savings I need more than some simplistic premise that fiat currencies will ultimately implode. – Ryan L

#45 Canadian soldier on 07.02.22 at 12:46 pm

You are literally focussing on the worst 8 months in bitcoin. As an investment manager shouldn’t you know better than that? When you say bitcoin has imploded you are referencing the last few months. Is that your investment timeline? Months? Have you tried “zooming out” ? and looking at the past decade? Seems crazy how a professional could overlook this.

#46 Sail Away on 07.02.22 at 1:09 pm

#35 Sour Grapes on 07.02.22 at 12:17 pm
#11 Sail Away on 07.02.22 at 10:04 am
#19 Sail Away on 07.02.22 at 10:28 am

This Sturdy Conservative decided that 7AM on a Saturday was a very much not creepily obsessive time to craft a hate poem or two about an infrequently commenting elder sage of steerage and his bodily injuries sustained from a life well lived.

———

Hello pustule. You should respond in rhyme.

#47 Ponzius Pilatus on 07.02.22 at 1:22 pm

#28 Scott in Gibsons on 07.02.22 at 11:23 am
So many parallels between the early days of the internet and crypto now. A new technology that threatens existing power structures. The internet flattened the information power structure and forever changed industries like music/movies/news media. Peer to peer information exchange allowed ideas (good and bad) to spread freely and change the world. Information power slipped from the hands of the few into the hands of all.
———————————
So did the invention of the printing press, but at least you first had to set the press up, print and then distribute.
And most of it was Church propaganda.
As far as I’m concerned not much has changed, except the speed of distribution.
Garbage in, Garbage out.

#48 Ponzius Pilatus on 07.02.22 at 1:29 pm

#38 tbone on 07.02.22 at 12:23 pm
Never mind crypto . Gas is 1.87 / L today only .
Spend your money on that .
Gassed up both cars this morning and then spent the savings at Tim Hortons for breakfast …. hmmm ?
——————-
Two bad choices in a day.
Well, it’s Canada Day weekend.
So we let this one go.
Be more careful in the future.
You wallet and your body will thank you.

#49 Wowzet on 07.02.22 at 1:31 pm

It’s always easy to bash an asset class after it goes down, and ignore its previous meteoric rise.

We could say the same thing about stocks – worst H1 in 60 years (and ignore that in December 2021 it was at its peak)

More billionaires and millionaires were made faster than at anytime in history via Bitcoin. Even at todays valuation.

If you missed out on that, that’s on you. I put $1000 in Bitcoin when it was 57 cents.

#50 Stone on 07.02.22 at 1:43 pm

#49 Wowzet on 07.02.22 at 1:31 pm

More billionaires and millionaires were made faster than at anytime in history via Bitcoin. Even at todays valuation.

———

Prove the statement above. Lots of talk. Little to back it up. Just like crypto itself.

All that gets talked about is how people get cleaned out as a result of buying crypto. Where are all your brazillionaires? Crickets.

#51 already in recession on 07.02.22 at 1:46 pm

crypto collapse, economic collapse, all the same.

Atlanta Fed GDP now estimated at -2.1% (that’s a DECLINE FOR Q2). Q1 was a DECLINE of 1.6%

so the US in RECESSION by the time the ‘Official’ numbers come out. two consecutive quarters of NEGATIVE GROWTH.. . this is not priced into stock prices.

#52 Sail Away's Pustule on 07.02.22 at 1:47 pm

#11 Sail Away on 07.02.22 at 10:04 am
#19 Sail Away on 07.02.22 at 10:28 am
#46 Sail Away on 07.02.22 at 1:09 pm

I wish Sail Away would stop posting and get me to the clinic to be looked at. I may be a sign of a disease that leads to mental illness, irrationality, logical decline and fear of his own minimal significance in the world and lives of others.

#53 millmech on 07.02.22 at 1:48 pm

#45
I know someone who lost $450,000 on Luna, when he zooms out the zero just gets bigger.

#54 wallflower on 07.02.22 at 2:03 pm

definition cryptocurrency – ‘algorithmic ponzi’

definition cryptocurrency buyer – ‘specuvestor of a greedality nature’

#55 Philco on 07.02.22 at 2:33 pm

Craptow LOL

Ok Im always behind cause Im working paying 6 digit’s In taxes.
So posted a lil late.

#157 Philco on 07.02.22 at 1:55 pm
#126 Cancel Canada Day on 07.01.22 at 9:00 pm
DELETED (Anti-Canada)

Find another country or maybe just come to my house. Both will work.
Burning churches ect ect
All you whiners B I Ts with all your pathetic movements or causes need to leave or grow a brain. Most want to come here from other countries because we are the biggest best place on earth… You wanna destroy us from within?????
Yes just come to my neighborhood. My retired neighbor’s that immigrated here 60 years ago will have a chat with you cry babies.
Grow up lets get a new PM and MAKE THIS COUTRY GREAT AGAIN.
My family immigrated here over 300 years ago we built it we proud as hell. Cheers!!

#56 espressobob on 07.02.22 at 2:50 pm

As a global index investor I’ve made my share of mistakes years ago playing commodities. Timing this stuff, forget it.

Can think of another reason to avoid crypto going forward…

https://www.reuters.com/markets/us/us-senators-unveil-bill-regulate-cryptocurrency-2022-06-07/

#57 Tales from the Crypto on 07.02.22 at 2:56 pm

#21 Victor Llearna

Crypto is a worse ponzi schema than the toronto housing market. Hopfully the crypto sheep that bought in around $60k learna their lesson.
But the never do.

—-

Actually, there re many such indicators. Perhaps they are showing something more broadly sick about what we think are free markets.

After all, there is money on the other side of the trade, and greed is being exploited to part greater fools with their money.

—-

#32 JR

JR, your entire post is a laundry list of why governments are threatened by crypto. After all, control of your currency is power. Any threat to that control is risk.

Either governments:

– own the cryptocurrency blockchain and thus all the relevant info and are gathering data about all these movements
– know how to crack it, track it, trace it, claim it – as recently proven by various confiscations of crypto by US agencies
– or they don’t see it as a threat

My bet is on the fact that they are gathering info.

Ultimate fun surprise will be when we find out CIA created and is behind BitCoin.

Oh how I will laugh.

#58 Philco on 07.02.22 at 3:01 pm

Ryan
Indeed!
First, Bitcoin and other cryptocurrencies offer no real tangible benefit or output to society. It’s not a hard asset like a home, commercial property or a farm. It provides no income stream. It can’t really be valued like a stock or bond, so coming up with a forecasted future value is difficult to impossible (sorry, but Cathie Wood predicting it will hit $1 million is based on fairy dust rather than any fundamental underpinning). To me, it represented the essence of the greater fool theory

And the amount of electricity it consumes is mind blowing.
Nothing good given inflation and the increasing cost per Kw hr.
The environmentalist should have been outraged LOL
Bye bye Krapto.
Ill take lumber, equipment , commercial RE. They all make me money no mater what the greater FOOL is up to. Turtle wins :0
Best to you Ryan.

#59 Pbrasseur on 07.02.22 at 3:10 pm

Crypto is a bad solution to a very real problem: extensive printing of money and asset buying by central banks to apply stimulus and manipulate credit markets.

Runaway inflation is now the result of this reckless behaviour, and it’s not going away anytime soon, mainly because of labour market shortages in just about every sector.

Something very serious is happening that will have deep impacts in all layers of societies, here and elsewhere, and it sure looks like this blog is not seeing the writing on the wall…

#60 Vancouver Keith on 07.02.22 at 3:25 pm

Bitcoin was founded by an anonymous person or persons.
The original purpose was to facilitate transactions on the dark web, (illegal guns, drugs, human trafficking). It’s difficult to conceive of a sketchier beginning.

Fiat currencies are backed by the taxation power of a sovereign government, and their value is stable enough to be useable as a medium of exchange. Every time there is a financial crisis, money flows into the U.S. dollar, for very good reasons. Blockchain technology has great potential, but crypto resembles a Ponzi scheme more than anything else.

#61 Philco on 07.02.22 at 3:32 pm

Belly roll
Ryan I’m still laughing you couldn’t even make this sh!t up!

#21 Victor Llearna

Crypto is a worse ponzi schema than the toronto housing market. Hopfully the crypto sheep that bought in around $60k learna their lesson.
But the never do.
—————————
assets get over valued at time. Krapto is not an asset… Housing is a far cry from a ponzi scheme. Its the humans that do it. Monkey see monkey doo and Bubble TV does not help. When you figure all that out then its easy to get rich.

#62 crowdedelevatorfartz on 07.02.22 at 4:10 pm

@#42 Quinty Quants
“Still bullish on equities?
Still buying on the dips?”

+++
Apprently reading and comprehension are your strongest points.
I’m still in the markets( not selling or buying) and I’m loading up on cash for eventual investment or vultching.
Unlike the instant gratification, 10 second attention span generation….
The fat, old, vultures….have patience..

#63 Ryan Lewenza on 07.02.22 at 4:14 pm

Canadian Soldier “ You are literally focussing on the worst 8 months in bitcoin. As an investment manager shouldn’t you know better than that? When you say bitcoin has imploded you are referencing the last few months. Is that your investment timeline? Months? Have you tried “zooming out” ? and looking at the past decade? Seems crazy how a professional could overlook this.”

Tell that to the people who purchased Luna or used Celsius to store their crypto. And the selling may not be done yet. – Ryan L

#64 Jake the Flake on 07.02.22 at 4:24 pm

#13

and commissions into your pocket.

#65 Jake the Flake on 07.02.22 at 4:27 pm

#60 Vancouver Keith

The original purpose was to facilitate transactions on the dark web,

no it was not.

#66 Philco on 07.02.22 at 4:36 pm

#60 Vancouver Keith on 07.02.22 at 3:25 pm
Bitcoin was founded by an anonymous person or persons.
The original purpose was to facilitate transactions on the dark web, (illegal guns, drugs, human trafficking). It’s difficult to conceive of a sketchier beginning.

Fiat currencies are backed by the taxation power of a sovereign government, and their value is stable enough to be useable as a medium of exchange. Every time there is a financial crisis, money flows into the U.S. dollar, for very good reasons. Blockchain technology has great potential, but crypto resembles a Ponzi scheme more than anything else.
———————————-
Well put and accurate Keith!
Greed shows up as always then like always.
And the guy that invented the inet is horrified on which it formed into.
There’s evil among us. Stay sharp.

#67 Cory on 07.02.22 at 4:38 pm

The BIS(bank of banks)KazarianMafia just advised that ALL banks should have atleast 1% allocation in BTC. Stop posting about crypto until you actually do some research- I will agree- MOST crypto will go to zero….but BTC has still been the #1 investment in the history of the world.

#68 CL on 07.02.22 at 4:44 pm

I never touched cyptos but I have been wondering if cryptos are causing a lot of the equity market turbulence. I mean could people purchase crypto with margin and now they’re getting hit with margin calls so people are forced to sell equities to cover? Seems plausible since so much money has been flushed in cryptos.

#69 Leave the gun take the Cannoli on 07.02.22 at 4:59 pm

* A part of me this morning (disgruntled TWTR stock holder) was going to hop the morning train to Venezia, 1h 5min, hunt him down and give him a piece of my mind. I know the Calle there like the back of my hand.

I can dream can’t I?

Still Signore Musk e Familia:

Benvenuti in Italia.

————

I’m in Venezia right now.

Absolutely beautiful.

#70 DonCarlos on 07.02.22 at 5:01 pm

Agreed – most crypto are scams, Ponzi schemes, pump and dumps, etc. However, I still believe the two that stand apart are BTC and ETH. ETH is the foundation on which Web3 will be built. It’s already happening. We are just starting to see the potential. It’s certainly a risky investment, and I would much rather invest in Ethereum the technology company than Ether, the token, but at the end of the day there will be massive blockchains powered by ETH that could accomplish anything from secure bank transfers to identity protection, replacing cumbersome and inefficient human-run processes. So I remain proudly invested in ETH, with the caveat that it is a miniscule part of my portfolio and always was (less than 1%), and if it goes to zero, so be it.

#71 Ustabe on 07.02.22 at 5:35 pm

The folks having a conversation with Sail Away today are not me or my alts.

1) I don’t use alts, although if its late and I don’t pay attention you might see a posting from U…that would be me. I think it has happened twice.

2) Garth or his website admin can see the ISPs. This is the only time my ISP will be seen. So far, anyway.

3) Recall just a day or so ago when our favourite second rate engineer in a third rate city told us all to stay on topic. I guess stomping on Ryan’s post to make some weak ass point about me is on topic for a text book narcissist.

4) Narcissism is extreme self-involvement to the degree that it makes a person ignore the needs of those around them. While everyone may show occasional narcissistic behavior, true narcissists frequently disregard others or their feelings. They also do not understand the effect that their behavior has on other people.

#72 Sail Away on 07.02.22 at 5:39 pm

Hi Ryan, following is a cautionary tale, and illustrates very well some of the ‘financial advisory’ services out there. From a university professor friend January 2021:

‘Hi Sail Away,

Happy New Year! My apologies for not responding to your email before now. Last semester consumed all of my attention with pivoting to classes and all business and student interaction online. As such, I did not give any attention to investing at all, although I did meet with my F.A. and changed my portfolio around a bit.

I take your comments… into full consideration, as my portfolio has performed, in my mind, very poorly over the last decade and more [2011-2021!]. However, I must also take into account the two big crashes and subsequent troughs that occurred in that time into consideration. Still, a 7.14 % increase overall [in 10 years of bull market!] sounds pretty meager to me. I think it may be that the F.A. is doing better than I am with my portfolio…..(?) ;-D

Anyway, if you don’t mind, I would appreciate your thoughts on a suggestion I just received from my advisor this morning, which has me thinking twice about going with his suggestion. Again, I’m a small investor, but because of that I can’t be foolish. I took a gamble on Cannabis stocks last year and ended up losing $xxK, which for me stings. Since then, we redirected over to renewable energies (Innergex) and health products (Good Natured Prods), which appears to be doing better so far.

My advisor is suggesting, “Bitcoin – YES, you are hearing this right. Note that I do NOT believe bitcoin will become what many suggest it will but short term I can see this digital “asset” continuing to move up. My rationale is that buying bitcoin used to be limited to non-registered funds but with the opening of 2 “bitcoin funds” in Canada (and a third one on the way) you are now able to use your RRSP and any other type of registered account to buy it. This will make a substantial amount of assets available to be deployed in bitcoin. At the end of the day it is a supply-demand situation and more money will be going into this investment (or at least will be available for that) in the short term. My hope is to buy you $xxK through the new bitcoin fund that will be available early February. You’d be participating on the original/new shares of this bitcoin fund.”

I’m aware that I might be asking too much in requesting your thoughts, but if you have any to offer, it would be greatly appreciated.’

**

I suggested he get in touch with your team. He didn’t. The three holdings he mentions have lost an average of 55% in the last 18 months.

#73 Philco on 07.02.22 at 5:50 pm

#65 Jake the Flake on 07.02.22 at 4:27 pm
#60 Vancouver Keith

The original purpose was to facilitate transactions on the dark web,
no it was not.

But thats how it went down lol.
They got rid of thousands dollar bills for a reason too.
Harder to move cash but ironically the banks colluded with the drug king pins to keep the ball rolling. Your flagged at $10k and need a letter from mom why and when. But millions and billions move around and is laundered. STILL

#74 Andrewski on 07.02.22 at 6:00 pm

A friend’s son was 19 back in 2010. He got a $10K inheritance from a great Aunt’s estate in the fall of that year & plonked it all down on Bitcoin. He had heard about Bitcoin while playing online video games & figured that he had nothing better to do with the money. He could not care less about what the current value is as he’s not had to find gainful employment since he finished post secondary school. All about timing.

#75 crowdedelevatorfartz on 07.02.22 at 6:17 pm

Its not the heat.
Its the humidity.

https://www.theweathernetwork.com/ca/news/article/british-columbia-may-endure-a-months-worth-of-rain-by-early-next-week

Well if the rivers weren’t flooded by now from the late Spring freshet snow melt…..they will be….

#76 Edmontonian on 07.02.22 at 6:19 pm

The author is in such a hurry to tell everyone how right he was that he didn’t bother getting most of the details in this post correct. His explanation of the Luna/Terra situation is terrible. Matt Damon’s ad was for Crypto.com, not Coinbase. I could go on… Pretty embarrassing.

#77 Bitcoin Bro on 07.02.22 at 6:28 pm

A friendly reminder that:

A) Bitcoin =/= “Crypto”.

B) Bitcoin is a relatively simple network protocol akin to TCP/IP, SMTP, HTTP, etc that continues to grow in use (all time highs in terms of wallets, hashrate, etc.). It enables true peer to peer wealth transfer, settlement, and storage with no involvement of a third party required. If you don’t think this has value to society you’re not thinking hard enough. Consider half of the world population living in authoritarian regimes.

C) Bitcoin remains the single best performing financial asset of the last decade and its not even close. Yes, even after this latest crash.

#78 Saint Herb on 07.02.22 at 6:38 pm

“First, Bitcoin and other cryptocurrencies offer no real tangible benefit or output to society.”

Bitcoin = Honest Realtor
Cryptocurrencies = Real Estate Agents

Really; what’s the difference between my Real Estate agent and my Instacart Shopper?

#79 Peter Vronskislope on 07.02.22 at 6:38 pm

Ten years of various post high school education to find a job that gave me the luxury of a basement apartment in the slums of Toronto.

Just another classic taker. Crypto gambling is indeed a risk, but what do young people have to lose anyway in Sunny Ways Trudeau?

#80 Reality is stark on 07.02.22 at 6:39 pm

The best thing about crypto and tattoos is that they advertise that the person extolling their virtues is mentally unstable.
You don’t need to waste valuable time with volatile impulsive characters.

#81 Linda on 07.02.22 at 6:57 pm

Ryan, have to say that in the case of crypto currencies Pierre was correct. Canadians who own or owned such currencies DID ‘opt out of inflation’. An asset that plummets in value even as prices increase could be said to opt out of inflation, no? I don’t know if this qualifies as deflation but given the direction of this asset would say yes. Of course, there will still be winners in the crypto currency ructions. Someone has to have made a bundle & gotten out before the losses occurred!

#82 Philco on 07.02.22 at 7:06 pm

#76 Edmontonian on 07.02.22 at 6:19 pm

Who cares none are real assets and all trash.
If ya drop it and hurts your foot. Prolly ok.
Id be embarrased if i owned it.
Many came to me asking about it. I said run for the hills youll live longer.
Real aseets move up and down and always come back over time. Bitcrap wont. Bet ya $10k bro?

#83 uncle dave on 07.02.22 at 7:09 pm

Good read as always, but your replies Ryan today have been worth the dive down into the steerage section.

#84 Philco on 07.02.22 at 7:18 pm

#76 Edmontonian on 07.02.22 at 6:19 pm

Splitting hairs.
Its a train wreck bro sounds like you were in it?
Pls do tell? Lol

#85 Reality Check on 07.02.22 at 7:18 pm

Crypto and Canadian real estate valued on the same basis

When you think about it both crypto and Canadian residential real estate are now valued on the same basis……Emotional Speculation.

Basically they are both worth what somebody, usually possessing no investing acumen, is willing to pay.

Yes, I hear you say what about using the cost of building and land to “value” a house? Sure, that was a good valuation method when it resulted in a rational house value. But with major Canadian city house values so irrational one must assume there is a huge emotional/speculative premium in the valuation.

Basically a religious like faith that the value is correct and will continue to appreciate substantially as a way to justify the irrational holding costs of the house “investment”.

#86 In Flat Ion on 07.02.22 at 7:19 pm

#51 already in recession on 07.02.22 at 1:46 pm
crypto collapse, economic collapse, all the same.

Atlanta Fed GDP now estimated at -2.1% (that’s a DECLINE FOR Q2). Q1 was a DECLINE of 1.6%

so the US in RECESSION by the time the ‘Official’ numbers come out. two consecutive quarters of NEGATIVE GROWTH.. . this is not priced into stock prices.

—-

With high inflation pulling dollar values higher YoY too.

If they didn’t manage to jack prices of stuff to full MSRP with the inflation/supply shortage excuse and gasoline/energy through their OPEC and Russia attack excuse, this % drop would be even worse.

I wonder how close we are to actual deflation? As in, this post-pandemic apparent spending romp (which I’m not buying into being that real) suddenly turning into the realization that we don’t need more stuff. Covid not only made many people realize that losing weight is beneficial for their health. It likely made them realize that life is not about buying stuff, no matter what the pathetic propaganda marketing tells you.

Could it be happening already actually?

Hence the excuse about supply shortages pumped by propaganda media, but in fact these are supply excesses with inventory that has no place to go – hence supply chain is plugged up with oversupply due to drop in demand. Companies are trying to make the consumer panic buy claiming otherwise. Entirely possible.

#87 Balmuto on 07.02.22 at 7:23 pm

“And then another time, Bitcoin went all the way up to $68,000 and then it CRASHED down to $20,000”.

So the moral of the story is, don’t buy Bitcoin, cuz you know it’s gonna CRASH:

https://youtu.be/XbZ8zDpX2Mg

#88 Quintilian on 07.02.22 at 7:24 pm

https://globalnews.ca/news/8958297/cryptocurrency-regulations-european-union/

juste pour pleurer

The European Union took a first step late Wednesday by agreeing on new rules subjecting cryptocurrency transfers to the same money-laundering rules as traditional banking transfers.

Just another reason why it’s going lower.

#89 millmech on 07.02.22 at 7:24 pm

Seems like everyday there are multiple posts about this, one has to wonder how many deals are actually falling apart now as prices and appraisals drop in value and rates rise.
I am curious how far the domino effect goes on the original failed deal.

https://www.reddit.com/r/PersonalFinanceCanada/comments/vpyilj/home_buyer_may_back_out/
https://www.reddit.com/r/PersonalFinanceCanada/comments/vpzshx/if_a_buyer_backs_out_of_a_real_estate_deal/

#90 45north on 07.02.22 at 7:30 pm

Looking at the most prominent cryptocurrency, Bitcoin, it’s been absolutely clobbered falling from a peak of US$68,000 last November to US$20,000 today. That’s a 70% drop in eight months.

Bitcoin Guy

https://www.youtube.com/watch?v=lQegMA_kY9Y

#91 PeterfromCalgary on 07.02.22 at 7:31 pm

So the dollar drops in purchasing power by 8% and people think the world is ending. Bit coins purchasing power drops by over 300% and people are still defending it as a replacement for dollars. Go figure!

#92 Calgary on 07.02.22 at 7:37 pm

https://www.buybitcoinworldwide.com/price/

#93 Darthviduz on 07.02.22 at 7:52 pm

What people are missing is that unlike a normal OEM or tech vendor stock, bitcoin is a medium of exchange. Just like a worthless piece of paper called currency. It is only an asset in this sense and just as currencies it can fluctuate in value and be traded.

#94 tkid on 07.02.22 at 7:53 pm

Hi Ryan, is there any chance the fallout in the crypto markets could impact the stock market a la 2008?

#95 Faron on 07.02.22 at 7:55 pm

#53 millmech on 07.02.22 at 1:48 pm
#45
I know someone who lost $450,000 on Luna, when he zooms out the zero just gets bigger.

Hah! Good one.

#96 Philco on 07.02.22 at 8:05 pm

Ya deleted my good one on Mr B and Mr T :-(

#97 Leon Umsk on 07.02.22 at 8:09 pm

Remember that one guy who sent out a message to his crypto bros saying something like we’ve got your money, nothing you can do about it. You’re so screwed. The most honest of the crypto cretins.

#98 Jake the Flake on 07.02.22 at 8:13 pm

#73

More nefarious transactions are conducted using U.S. dollars than in Bitcoin by far.

#99 Diamond Dog on 07.02.22 at 8:17 pm

#70 DonCarlos on 07.02.22 at 5:01 pm

Agreed – most crypto are scams, Ponzi schemes, pump and dumps, etc. However, I still believe the two that stand apart are BTC and ETH. ETH is the foundation on which Web3 will be built. – DonCarlos

We can re-examine that assertion concerning web3. Web 1 was read, web 2 is read/write, web 3 is sharing of mass data and web 4 is AI:

https://hackernoon.com/web-10-to-web4-a-brief-history-of-the-evolution-of-internet-technologies-tl64341x

We really need to be careful how we brand it because parts of web 3 and 4 are here now. There’s no clear start or endpoint to it and for all the talk Crytpo will become the “new currency” online, that’s all it is. For alt coins or bitcoin to suggest it’s the new currency of the evolving web is to fall for another pitch for value built on confidence and hope, common bait for the “greater fool”.

“It’s already happening. We are just starting to see the potential. It’s certainly a risky investment, and I would much rather invest in Ethereum the technology company than Ether, the token, but at the end of the day there will be massive blockchains powered by ETH that could accomplish anything from secure bank transfers to identity protection, replacing cumbersome and inefficient human-run processes. So I remain proudly invested in ETH, with the caveat that it is a miniscule part of my portfolio and always was (less than 1%), and if it goes to zero, so be it.” – DonCarlos

Hope & pride should never be a part of the investment equation. Nor should high fees absolve ETH from it’s risk on investment. There is big risk there with ETH from what I see based on shrinking volume and exposure to failing alt coins and trading platforms alone.

A case in point with ETH, they’ve been dangling a tech upgrade “merge to proof” that ETH claims makes it far easier for miners to find an compete against each other for transactions. Ethereum claims to be able to reduce computation needs by 99.5% with a new software upgrade that they’ve been dangling for 1.5 years now. Of course, the upgrade is always imminent maybe this time Sept or later etc. … and if they don’t have it?

We are talking about a narrative that has done nothing other than build confidence and hope for? Greater fools. I will remind, ETH is the same as the rest, a corp in an unregulated wild west market. They can say whatever they like and get away with it… until they can’t.

Here’s the fundamental problem with industries that rely specifically on confidence. It’s all good when volumes of investment and use for fees are up. It’s not so good when volumes go down and confidence is shaken by the rug pulls, scams and insolvencies that happen during this trend. This is what’s happening to the Crypto “industry” if one can call it that.

Anyone who thinks Bitcoin has bottomed or is near bottom isn’t paying attention. The entire world economy is sliding into recession as China grapples with it’s grotesque property bubble imploding and reducing rates in the face of high inflation, or Europe sliding into recession as the consequence of war and the U.S. sliding into recession as a consequence of a rapidly increased money supply spawning an everything bubble that has no choice but to be deflated by the Fed or face future high inflation and all that comes with it.

Case in point, this world’s human financial constructs aren’t doing so well. In the U.S. alone, look at the Shiller chart (look at how this site in particular has manipulated data, closing P/E’s hit 40 late last year, trending above 38 for months but you won’t see it on this chart, way of the world):

https://www.multpl.com/shiller-pe

How low can S/P 500 P/E’s go based on history? How about based on high inflation history? “It’s different this time” is based on? As Mark Twain twice said, “history doesn’t repeat itself but it does rhyme.”

Can Bitcoin recover with the constant drip of alt coins, defi, stable coins and general pyramid schemes and Ponzi’s going broke in a wild west unregulated environment? Doubtful. Couple that with what’s going on macro economically and with regs to come, it could be a year, maybe 2 before Bitcoin finds it’s bottom as macro economics finds it’s bottom and regulations creep into the “industry”.
It could be years before Bitcoin moves the needle from there depending again, on regulation. As for alt coins, they are all at risk of insolvency.

https://coinmarketcap.com/

It’s a house of cards relying on confidence and hope in a backdrop of narratives filled with scams, incompetence and pyramid ponzi schemes gone bust. One needs only to look at “Proof of stake” and how alt coins including Etherium can hope to honor double digit rates rates in an ever declining volume environment where investors are bailing and greater fools are drying up. I marvel at the level of misplaced trust out there with Crypto, even now.

As I said yesterday, use inversion. Argue both sides. Argue not just what could go right, but what can go wrong. If we do this without bias, we’ll see the true state of Crypto.

#100 Diamond Dog on 07.02.22 at 8:35 pm

#76 Edmontonian on 07.02.22 at 6:19 pm

If you think you can step up and do better, by all means go for it.

In the meantime, I’ll just repeat myself to readers. Just based on a chart, if we go to the 5 year bitcoin chart, support is below 10,000:

https://www.cnbc.com/quotes/BTC.CM=

Factor in a growing world wide recession, a U.S. recession coming off an everything bubble, the steady drip, drip, drip of scams, pyramids and Ponzi’s and poorly run Crytpo corps going broke, an “industry” running on confidence that is clearly shaken with more shoes to drop on his centipede not to mention the longer term regulations destined to hit Crypto if it’s still favored enough to be regulated at that point and we see a bottom below 6,000, perhaps as low as 3,000.

But who am I besides an ordinary dirt farmer in the S.W. sticks of Saskatchewan that asks “what could go wrong”.

#101 Ohm on 07.02.22 at 8:44 pm

The way I see cryptos is like a penny stock. Those that make a quick buck against what the commerce and false info throws at you are quick winners it is like a good card game. Bells ringing off!! It is a gamble for now!

Highly speculative but if one has a few thousand and especially knowledge can make or lose a few thousand in a matter of minutes. Which one are you???

#102 Slow Crypto Bro on 07.02.22 at 8:56 pm

#77 Bitcoin Bro on 07.02.22 at 6:28 pm

…Bitcoin =/= “Crypto”…

…hashrate…

So this non-cryptographic digital currency is both uncrackable and requires cryptographic hashing to function? Very Schrodinger, much wow.

#103 J on 07.02.22 at 8:57 pm

#70 DonCarlos on 07.02.22 at 5:01 pm
“ETH is the foundation on which Web3 will be built.”
“So I remain proudly invested in ETH, with the caveat that it is a miniscule part of my portfolio and always was (less than 1%), and if it goes to zero, so be it.”
————————————————–
I study computer science. I specialize in data structures and algos that answer queries on movement data, so totally unrelated to ether and Web3 stuff. But, I’ve been fortunate enough to hang out with and absorb at least some info on blockchain tech from other PhD students, researchers, and profs that specialize in this area, via informal chats and formal lectures.

I agree with you that it would be nice if one could invest in ether software IP (but it should still only be a tiny portion of your portfolio). There is a chance that it *may* turn into something big. The current iteration of the tech seems to have some issues, but engineers are pretty good at solving problems. There *may* be some pretty fundamental use cases that this software could solve or at least improve on. I think the jury’s still out though.

I’ve looked at investing in ticker ETHY.TO, but that is essentially investing in ether tokens, which I am quite leary of. Check out the YTD performance to see why…

I’ve also recently posted a scathing opinion on this topic from Berkeley computer scientist Nicholas Weaver who says this should all “die in a fire”.

If folks want more education on this topic, it just so happens that the Freakonomics podcast is currently doing a whole series on blockchain/crypto/NFT. They seem to be fairly balanced in their reporting. I think it’s worth a listen.

www.https://freakonomics.com/

#104 crowdedelevatorfartz on 07.02.22 at 8:58 pm

@#76 Deadmonton
“His explanation of the Luna/Terra situation is terrible. Matt Damon’s ad was for Crypto.com, not Coinbase. I could go on… Pretty embarrassing.”
+++

I’m quite sure Matt Damon was very very well paid for his sales pitch for whatever garbage he was pumping..
That’s how Ponzies work.
Get someone famous to hype it.
Then let the rubes swarm in.
I’m sure the people that borrowed $10’s of $1000’s or put everything they had on this crap wished someone had warned them.
Embarrassing is defending this crypto garbage.
Backed up by nothing but hype.
But you know better.
How much did you lose so far?
Or are you too embarrassed….

#105 crossbordershopper on 07.02.22 at 9:22 pm

32 years ago right out of university i got a job for a chop shop in downtown toronto, we were suppost to call people up and then the brokers pitch them on worthless stock, well they werent worthless at the time but after the promotion had ended the go to oblivion. i was nieve, i didnt know i thought money management, stocks, what did i know. until you learn and learn, but i didnt need to learn anything really. its an old story.
some people get up in the morning and go to work , and others figure out a way to steal money from people who go to work everyday, the story changes but it always start with you putting up your hard earned money to participate in a story. and you dont even get a kiss first. Crypto, pot stocks and on and on. same old story.

#106 Shawn on 07.02.22 at 9:23 pm

Math challenged in Calgary

#91 PeterfromCalgary on 07.02.22 at 7:31 pm

So the dollar drops in purchasing power by 8% and people think the world is ending. Bit coins purchasing power drops by over 300% and people are still defending it as a replacement for dollars. Go figure!

*****************************************
Tell me you don’t understand basic math without telling me, just show me.

#107 Balmuto on 07.02.22 at 9:25 pm

I don’t agree that fiat currency is backed by the economy. You can’t go to the Federal Reserve and redeem a US dollar for a piece of the American economy. Can you exchange it for goods and services in the marketplace? Sure, but you can also exchange Bitcoin for goods and services. That doesn’t make either currency backed by the economy in any way, shape or form.

You can argue, on the other hand, that fiat is backed by the central bank’s balance sheet. The Federal Reserve for example is sitting on trillions of US Treasuries that it can sell in the open market, thus “redeeming” US dollars for financial assets. But those financial assets are just borrowings by the US government. And in any case the Federal Reserve has been doing the opposite over the past decade; buying bonds instead of selling them, thus inflating the money supply. You, the owner of a U.S. dollar, have no control over this process.

The reality is that currencies are more of a confidence game that anything else. We’re a long way off from crypto currencies displacing fiat, but there’s no “intrinsic” quality to fiat that would stop it from being replaced in the long run.

#108 crowdedelevatorfartz on 07.02.22 at 9:34 pm

@#90 45 North
“Bitcoin Guy

https://www.youtube.com/watch?v=lQegMA_kY9Y

++++

Good one.
:)

#109 Canadian Soldier on 07.02.22 at 9:39 pm

Canadian Soldier “ You are literally focussing on the worst 8 months in bitcoin. As an investment manager shouldn’t you know better than that? When you say bitcoin has imploded you are referencing the last few months. Is that your investment timeline? Months? Have you tried “zooming out” ? and looking at the past decade? Seems crazy how a professional could overlook this.”

Tell that to the people who purchased Luna or used Celsius to store their crypto. And the selling may not be done yet. – Ryan L

You are correct that things are not perfect. Before Celsius there was mt gox. Before luna there was bitcoin cash. Yes there will continue to be shitcoins and sketchy institutions. But I think your wrong. Lumping bitcoin together with Luna, or declaring bitcoin dead is very prejudice. I guess we will see in ten years. I do respect you and Garth tremendously, thank you for the amazing content.

#110 Interstellar Old Yeller on 07.02.22 at 10:22 pm

Thanks for the summary of events, Ryan. This isn’t an asset class I pay much attention to but I do see the headlines and wonder what’s been going on. Easier to have a round up like this to read!

#111 Ponzius Pilatus on 07.02.22 at 10:45 pm

Talking about Cryptos is like talking about the sitcom “Seinfeld”.
It’s was a show about “Nothing”.
It’s all just ether, or “non-fungible tokens”.
Just watched “The Grapes of Wrath” with Henry Fonda.
Now that’s a movie to talk about.
Or even read the book.

#112 Youngblood on 07.02.22 at 11:09 pm

Ryan, love your analysis usually but you should do yourself a favor and do your research before advising on an asset class you obviously haven’t put the time into. Saying it doesn’t have any use case or provide any value? You don’t think an unstoppable peer-to-peer transfer of any monetary amount nearly instantaneously and free (ever hear of the lightning network?) to anywhere on the planet doesn’t value? You sound like the old man saying the internet will never be adopted back in the 80’s or that cell phones are a fad in the 90’s. Do your fiduciary responsibility and do more than a google search to educate yourself, especially on the fastest asset to a trillion dollars ever.

#113 Greg on 07.03.22 at 12:04 am

Bitcoin’s institutional rate of acceptance which has obviously been increasing, is the key to sustained price appreciation. The current selloff is being bought up.

I think many regular investors at least that I know of got in before the 2017 runup or at the 2019, 2020 lows and sold most of it on last year’s runup to 60k.

Buying BTC incremently and swapping those purchases for ALT coins is happening. Privacy coins such as Monero, Dero and Pirate chain will do better than BTC if regulation isn’t introduced, although I’m sure it will be.

Pumping BTC to a very high price is the ” tangible benefit”. Which is the reason why I think the Whales will give it another pump. They need the price very high.

Although I am wondering if it will eventually be replaced by a global CBDC agenda. In the future I do not see how the CBDC, BTC and ALT coins can coexist. CBDC may be the only option.

#114 ulsterman on 07.03.22 at 12:16 am

#49 Wowzet on 07.02.22 at 1:31 pm
It’s always easy to bash an asset class after it goes down, and ignore its previous meteoric rise.

We could say the same thing about stocks – worst H1 in 60 years (and ignore that in December 2021 it was at its peak)

More billionaires and millionaires were made faster than at anytime in history via Bitcoin. Even at todays valuation.

If you missed out on that, that’s on you. I put $1000 in Bitcoin when it was 57 cents.

Yeah, sure you did. So at the peak you had, what, $100m rattling around in your pocket but you were spending time on this blog. Ok, sure.

#115 Satoshi on 07.03.22 at 5:14 am

Remember guys “Don’t buy Bitcoin. It’s going to crash!!” /s

https://www.youtube.com/watch?v=XbZ8zDpX2Mg

Also remember, don’t take advice from people who have never used crypto currency. These 2 no-coin fools on this website have been saying Bitcoin was a bad investment since Bitcoin was worth a couple thousand dollars.

Bitcoin has outperformed the stock markets & real estate nearly every single year since inception. Look at the actual data, not the boomers here who have no exit strategy for your stocks because it’s in their interest you don’t liquidate your stocks even before an inflation triggered down market was obvious… and they knew it.

Bitcoin vs Stocks vs Real estate: The actual data!
https://www.goodfinancialcents.com/bitcoin-annual-returns/

#116 JOHN PICKETT on 07.03.22 at 7:12 am

Back in the mid-1980’s there was a Ponzi scheme going around called a Booze Cruise. You got people to give you a 40 ouncer and they had to find people to give them a booze bottle. Sooner or later you ran out of suckers. Bitcoin seems a lot like that Ponzi scheme, just dressed up in the technology of the 2020’s.

#117 Bitcoin Bro on 07.03.22 at 7:32 am

102 Slow Crypto Bro on 07.02.22 at 8:56 pm

Oh you cheeky little devil, I think you know exactly what I mean.

Many folks make the mistake of equating Bitcoin with “Crypto” AKA the thousands of projects out there that are unregulated securities. In fact the SEC Chairman just made the distinction in the press last week.

#118 Ryan Lewenza on 07.03.22 at 9:01 am

Youngblood “ Ryan, love your analysis usually but you should do yourself a favor and do your research before advising on an asset class you obviously haven’t put the time into. Saying it doesn’t have any use case or provide any value? You don’t think an unstoppable peer-to-peer transfer of any monetary amount nearly instantaneously and free (ever hear of the lightning network?) to anywhere on the planet doesn’t value?”

The underlying technology (blockchain) is impressive and I would say valuable. My main contention is with the actual cryptocurrencies and their values. I struggle to see why Bitcoin is worth what it is or the same for Dogecoin, XRP et al. Maybe Bitcoin sticks around but I see many of the other ones going the way of Luna. My view is it’s mostly a house of cards that one day will come crashing down if it’s not already. If I’m wrong you can come back to me and say “Hate to say I told you so”! – Ryan L

#119 crowdedelevatorfartz on 07.03.22 at 9:20 am

@#116 J. P.
“Bitcoin seems a lot like that Ponzi scheme, just dressed up in the technology of the 2020’s”
++++

Yes Ponzi was popular in the 1980’s
What’s old is new again.
Popular Ponzie.
Ugh.

************
************

@#111 Ponzies Prehistorical Ponderings
“Just watched “The Grapes of Wrath” with Henry Fonda.
Now that’s a movie to talk about.”

++++
The 1950’s called. It wants it’s hair back.

#120 crowdedelevatorfartz on 07.03.22 at 9:26 am

@#115 Satoshi Nakamoto

https://www.goodfinancialcents.com/bitcoin-annual-returns/

You created bitcoin and you hang out here to mock boomers?
Loo-zer.
Give me 10 million ( i’m not greedy) and I’ll take you to Vegas for the weekend.
Show you geeks how to have fun…..then …….you’re on your own.

#121 Tales from the Crypt-Oh? on 07.03.22 at 9:39 am

#99 Diamond Dog

Web 3.0 sharing of mass data?

DD, of all the things we’ve seen about the internet to date, we can clearly say that the internet is about gathering our date, capturing our data, creeping.

Plenty of technology exists to secure data and it’s not being used and you can be assured Big Tech knows how to capture, own and share the data among themselves. We certainly don’t own our own data and our politicians ensure that we can’t.

So…Web 3.0…sharing data…do tell more.

#122 Shawn on 07.03.22 at 10:43 am

Here’s the fundamental difference between BitCoin and the stock and bond markets.

BitCoin gains and losses in value are 100% based on investors valuing BitCoin amongst themselves. No outside money enters the equation.

Stock and bond values are supported by a flow of money from outside the population of investors. Money flows from customers of businesses to owners of businesses. Money flows from borrowers to bond and other fixed income owners. This money flow ensures that investors as a population make money over the long term term. These long term gains are slow but reliable in the long term.

Meanwhile stock and bond investors also engage in betting against each other just like BitCoin investors. But the fundamental difference is that it is only investor money that pumps BitCoin up and down. No “customer” money flows in to support the value of the BitCoin so-called currency. Neither does it for regular cash dollars, which is why simply holding cash dollars under a mattress for a decade or a century is always a losing proposition.

#123 Bitcoin Sam on 07.03.22 at 11:00 am

Hi Ryan – Thanks for your summary on crypto, but I offer some counter arguments to your uneducated opinion. Most of your essay is written from headline news and offers little to no understanding of this nascent technology. First not all crypto is the same. I write about Bitcoin.

There are three underlying technologies that will disrupt investments, payment systems and banking in the very near future; SHA-256, Merkle Trees, and Proof of Work. SHA-256 provides one way encryption that is impossible to break, providing a 64 bit Hash code that is used to verify transaction authenticity. Merkle Trees offer a uniqe way to reduce transaction information into an efficient process. Proof of work mining secures a network through consensus. All of this is verifiable by anyone, anywhere, anytime.

The Bitcoin network runs 365 days per year, 24 hours per day, has never been hacked nor has there ever been error on the blockchain. Can you say that about your bank?

Bitcoin addresses are on a trajectory greater than the internet was given a comparable time period. Projections are that Bitcoin addresses will surpass those of the internet in 2035.

Sure – there is volatility, but if you were to study the reasons why there is volatility, you will come to understand that Bitcoin volatility is closely correlated with halving events, meaning the reward for mining is cut in half every 210,000 blocks (approximately four years). The increase in Bitcoin price is a mathematical certainty.

The headline news you write about is largely politically motivated FUD.

Bitcoin will go through challenging times but is has withstood a 51% attack, Chinese mining bans, SEC FUD etc. But if you look closely at the price over time, you will see it retains close correlation to the halving events more so than externalities, including recessions.
Thanks for posting my response and look forward to answering every and all questions patrons may have.

#124 Shawn on 07.03.22 at 11:58 am

Bitcoin valuation

Depends on greaterfools or possibly greater geniuses.

Rembrandt paintings provide no dividend and really don’t produce anything. But it was probably genius to buy one 20 years ago, 50 years ago etc.

I have zero ability to predict the value of such things but I think the Rembrandt has a better case for rarity (one-off per painting versus what is it 22 million off identical “coins”?)

#125 Quintilian on 07.03.22 at 11:59 am

#123 Bitcoin Sam on 07.03.22 at 11:00 am

“The increase in Bitcoin price is a mathematical certainty.”

Only in theory, and on agreed mathematical axioms embedded in the technology.

The limit on supply is as consequential as stones proved to be after the stone age.

But hey, it’s backed by a decentralized authority that should make it worth a million soon right?

#126 My Body My Choice on 07.03.22 at 12:16 pm

Total crypto in my portfolio: $0

Total percent NASDAQ in my portfolio the past couple of years: 0

Percent of my portfolio the past couple of years in oil, gas, and pipelines 35%.

I can sleep at night.

#127 Bitcoin Sam on 07.03.22 at 12:21 pm

#122 Shawn

You wrote “BitCoin gains and losses in value are 100% based on investors valuing BitCoin amongst themselves. No outside money enters the equation.”. This is a false statement. There fiat currencies around the world moving in and out of Bitcoin on exchanges and private transactions continuously. The value of bitcoin relies on supply and demand – pretty much how bonds/stocks/gold all work, except it is far more efficient.

Comparing Rembrandt’s paintings to Bitcoin doesn’t make a lot sense. Paintings are not divisible and only appeal to a select group of very weathly people. Not comparable.

Bitcoin has the potential to become the most trusted asset in the world. There are no government controls, not printing and the monetary policy is open to all. Halving events with defined rewards, until all 21 million bitcoins are solved in the year 2140.

It will be interesting to see how many cycles of US currency is invented until 2140.

#128 My Body My Choice on 07.03.22 at 12:30 pm

“The Freedom Convoy of truckers, right-winger nutcases and anti-vaxers managed to abscond the flag and turn it into a symbol of anti-left ‘patriotism’ as did the Trump supporters on January 6th.”

The morally-superior hypocrisy of slamming the radicals who tore down your flag and then slamming patriotic Canadians who waved the flag in Ottawa during the Freedom Convoy, is breath-taking.

You yahoos have weaponized the flag. Not much difference from destroying it. Both extremes have robbed average Canadians of their national symbol. – Garth

#129 Elon Fanboy on 07.03.22 at 12:37 pm

#123 Bitcoin Sam “ The Bitcoin network runs 365 days per year, 24 hours per day, has never been hacked nor has there ever been error on the blockchain. Can you say that about your bank?”

My bank can reset my account password if I forget it.

Who do i call if that happens with a Bitcoin account?

Ohh that’s right….

NO ONE !!!

Game over.

Never gonna become mainstream.

#130 Shawn on 07.03.22 at 1:13 pm

There are no dollars “IN” Bitcoin

#127 Bitcoin Sam on 07.03.22 at 12:21 pm
#122 Shawn

You wrote “BitCoin gains and losses in value are 100% based on investors valuing BitCoin amongst themselves. No outside money enters the equation.”. This is a false statement. There fiat currencies around the world moving in and out of Bitcoin on exchanges and private transactions continuously. The value of bitcoin relies on supply and demand – pretty much how bonds/stocks/gold all work, except it is far more efficient.

***************************
Agreed the value of Bitcoin depends on supply and demand. And the same is true for stocks. But for stocks there is dividends and earnings to support the value.

When Joe buys 100 shares of Walmart from Frank the money flows from Joe’s brokerage account to Frank’s. No money arrives in Walmart’s account in this scenario. Walmart gets cash from its customer and later sends some of that to owners as dividends.

When Joe buys a Bitcoin from Frank, there is similarly no flow of dollar’s to some BitCoin Inc. The dollars only flow from Joe to Frank. And there is no BitCoin inc. getting any dollars from customers. And no share of earnings ultimately belonging to the BitCoin owners.

BitCoin never even had an IPO issuing coins for money, right? It issues coins for math and never receives anything, right?

See the difference?

You might want to ponder this difference between stocks and BitCoin.

Like you say, BitCoin might have great value as a replacement for say the U.S. dollar. Good luck with that.

#131 Steven Rowlandson on 07.03.22 at 2:05 pm

From a legal stand point I would think crypto currencies would be an afront to the soveriegn power of government to create currency. By now there should have been a crack down and mass arrests for financial crimes.
Electronic currencies encrypted or not should never be allowed.

#132 Bitcion Sam on 07.03.22 at 3:19 pm

#129 Elon Fanboy

In fact, if you self custody Bitcoin, you have to manage 12 or 24 passwords if you need to regenerate your private keys. Owning Bitcion is exclusive in the sense there are no middle persons.

Never mainstream? Bitcoin adoption is increasing at a faster rate than the internet. Never gonna become mainstream.

#130 Shawn

Most stocks listed in North America do not pay dividends. Inflows/outflows of fiat currency occur daile on markets. It’s the same with Bitcoin.

A lot of these questions are good ones. Bitcoin is a new invention. The technologies driving innovation will change the financial system and not neccessarily in retail’s best interest.

Carving off a small junk of fiat to understand Bitcoin does not compromise your future – in fact, it may enhance your understanding.

#133 Luddite on 07.04.22 at 9:50 pm

@sailaway – great haiku and limericks, keep doing those!