Bitcoin price falls 15% following launch of ETFs(ft.com)
ft.com
Bitcoin price falls 15% following launch of ETFs
https://www.ft.com/content/99e406f0-c5af-4a67-9937-afb1ea885565
60 comments
You should buy bitcoin for the long term. The people who understand bitcoin don't care about price movements over 3 weeks.
They care about price movements over 3 decades.
They care about price movements over 3 decades.
First, you held bitcoin in a wallet. You couldn't buy anything with it but at least having it was cool.
Second, you could give your bitcoin to a third party with a website that said you really had that much bitcoin. You forwent the promises of security, and you still couldn't buy anything with it, but at least you could now speculate in it.
Now, you can hold your claim to bitcoin buy buying a fund that owns the bitcoin.
The very existence of the ETFs and their enormous value show how far we are from the original idealisim into wherever we're at now. And... you still can't buy anything with bitcoin.
Second, you could give your bitcoin to a third party with a website that said you really had that much bitcoin. You forwent the promises of security, and you still couldn't buy anything with it, but at least you could now speculate in it.
Now, you can hold your claim to bitcoin buy buying a fund that owns the bitcoin.
The very existence of the ETFs and their enormous value show how far we are from the original idealisim into wherever we're at now. And... you still can't buy anything with bitcoin.
Ethereum staking (the S in PoS) is similar that Lido has around 33% share: https://dune.com/hildobby/eth2-staking
Of the nodes that have the blockchain (which there are less than 6000) 50% is cloud hosted: https://ethernodes.org/network-types
Of the nodes that have the blockchain (which there are less than 6000) 50% is cloud hosted: https://ethernodes.org/network-types
Now Bitcoin represents a store of value, not a platform for transactions like Visa, PayPal, Venmo, etc.
In this phase of it's life, bitcoin is proving itself as a store of value. It can't start to compete as a common medium of exchange until its value has stabilised enough to be a good unit of account. This will likely take decades and a bitcoin value over $10M/BTC
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I'm not sure the idealism was ever really there.
I've been in the FOSS community for 25 years, and I could see and feel an entire generation of contributors missing in action for a good long while. Legions of young folks thinking they had found the ticket to convert their nerdiness into money, status and sex. The crypto-induced brain drain from arguably more useful SW was enormous. And I saw very little of it happen for noble reasons.
I've been in the FOSS community for 25 years, and I could see and feel an entire generation of contributors missing in action for a good long while. Legions of young folks thinking they had found the ticket to convert their nerdiness into money, status and sex. The crypto-induced brain drain from arguably more useful SW was enormous. And I saw very little of it happen for noble reasons.
ETFs make it easier for people to put money into bitcoins. Why anybody should actually want to, still not clear.
> Why anybody should actually want to, still not clear.
Including the recent drop, if you bought bitcoin a year ago, you'd be up 71.77%; the 5-year return is 995.26%.
Including the recent drop, if you bought bitcoin a year ago, you'd be up 71.77%; the 5-year return is 995.26%.
This isn’t actionable, though.
If I’d bought Beanie Babies or Stanley Cups at a very particular point in time, I might be up 1,000% at another very particular point in time.
If I’d bought Bitcoin in 2021, I might still be down almost 50%.
None of this answers the question “Why would I want to buy Bitcoin?”
If I’d bought Beanie Babies or Stanley Cups at a very particular point in time, I might be up 1,000% at another very particular point in time.
If I’d bought Bitcoin in 2021, I might still be down almost 50%.
None of this answers the question “Why would I want to buy Bitcoin?”
> This isn’t actionable, though.
Of course it is. If you bought Bitcoin five years ago, you'd be up about 1000% and could sell. That's actionable.
Long term Bitcoin investors believe it'll be significantly higher in the years to come.
If you bought $1000 worth of bitcoin in 2013, it would be valued at over $2 million at the end of 2023 [1].
[1]: https://www.goodfinancialcents.com/bitcoin-annual-returns/#b...
Of course it is. If you bought Bitcoin five years ago, you'd be up about 1000% and could sell. That's actionable.
Long term Bitcoin investors believe it'll be significantly higher in the years to come.
If you bought $1000 worth of bitcoin in 2013, it would be valued at over $2 million at the end of 2023 [1].
[1]: https://www.goodfinancialcents.com/bitcoin-annual-returns/#b...
Yes but that is in the past. Why would someone want to put money in today is a more relevant discussion.
ummm what about 2022
2023 gains already being erased fast after such a huge loss in 2022.
Including the recent drop, if you bought bitcoin a year ago, you'd be up 71.77%; the 5-year return is 995.26%.
BTC post 2017 returns are worse than QQQ including dividends.
2023 gains already being erased fast after such a huge loss in 2022.
Including the recent drop, if you bought bitcoin a year ago, you'd be up 71.77%; the 5-year return is 995.26%.
BTC post 2017 returns are worse than QQQ including dividends.
yes, I could cherry-pick data to make any investment look good too.
It'll also make it easier to short this asset class.
Same reason maybe people buy gold?
Gold has a limited supply and has an industrial use, where it is irreplaceable, creating a floor to its price. Bitcoin has no use where it is irreplaceable and thus has no price floor. They are incomparable.
If the price of gold dropped to its industrial use demand it may as well go to zero.
Hell, if it did this maybe we would have more uses for it. That would be cool.
Hell, if it did this maybe we would have more uses for it. That would be cool.
Only genuine use I can imagine (In like todays real world, not the Bitcoin maximalist fantasy world) is it's a way to escape a warzone with some of your wealth in tact.
Bitcoin has no use?
My company works with franchise restaurants in countries with hyper inflation and they use it to hedge their local currency when buying hard goods.
My company works with franchise restaurants in countries with hyper inflation and they use it to hedge their local currency when buying hard goods.
You dropped "where it is irreplaceable". The traditional hedge in such places has been to use a more stable currency, like dollars or euros, as a hedge if the national currency is subject to hyperinflation.
You're misquoting GP: No use where it is irreplaceable.
It's definitely being used by people for various purposes, but Bitcoin forks are much easier to spin up than alternate scarce chemical elements.
It's definitely being used by people for various purposes, but Bitcoin forks are much easier to spin up than alternate scarce chemical elements.
Only 10% of global gold production is used industrially. Most of gold's price is sustained by pure speculation.
Around half of the global demand is apparently for jewellery:
https://www.gold.org/goldhub/data#demand-and-supply
https://www.gold.org/goldhub/data#demand-and-supply
Yup. 10% industrial, ~45% jewelry, and ~45% bullion. Jewelry's use of gold is speculation just like bullion. People want gold or other precious metals in jewelry not because they provide the best physical properties at a given price-point (there are many superior alternatives), but only because such materials are expensive, ie. they speculatively assume the high prices will stay high and/or continue to appreciate.
Bitcoin obviously has uses (arguably better served by other cryptocurrencies), and gold is far from irreplaceable in the vast majority of its uses.
Because they are manufacturing high-end audio cables?
it has always been generally easy to buy bitcoin. this is not 2012. Any American who can open up a brokerage account can also open a Coinbase account. Or Robinhood. Or BITO. Tons of ways to do it.
Looks like the drop was due to folks taking the opportunity to unload. Is this a temporary movement due to a number of reactionaries or will it sustain?
In the big picture view of bitcoin, a 15% drop in the price is meaningless. Even with the drop, the 5-year return for bitcoin is 995%.
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someone could have said the same about Enron's initial 15% drop in 2001. Stock indexes have a century-long history of recovering. Bitcoin? a decade.
> someone could have said the same about Enron's initial 15% drop in 2001
Not someone who's been paying attention to Bitcoin and knows you can't compare it to a stock, especially one that became the poster-child for corruption and how the financial system can be manipulated.
> Stock indexes have a century-long history of recovering. Bitcoin? a decade.
Certainly no asset has been declared "dead" [1] more times than Bitcoin has in its first 15 years--the white paper was released October 2008 and the Bitcoin blockchain went live January 2009.
Bitcoin has dropped at least 15% in a single day many times; that's to be expected for a new asset class the vast majority of people don't understand. Once things settle down, Bitcoin will continue to do what it's been doing since 2009—increase in value compared to fiat currencies. The 15% drop over a couple of weeks is inconsequential.
[1]: https://buybitcoinworldwide.com/bitcoin-is-dead/
Not someone who's been paying attention to Bitcoin and knows you can't compare it to a stock, especially one that became the poster-child for corruption and how the financial system can be manipulated.
> Stock indexes have a century-long history of recovering. Bitcoin? a decade.
Certainly no asset has been declared "dead" [1] more times than Bitcoin has in its first 15 years--the white paper was released October 2008 and the Bitcoin blockchain went live January 2009.
Bitcoin has dropped at least 15% in a single day many times; that's to be expected for a new asset class the vast majority of people don't understand. Once things settle down, Bitcoin will continue to do what it's been doing since 2009—increase in value compared to fiat currencies. The 15% drop over a couple of weeks is inconsequential.
[1]: https://buybitcoinworldwide.com/bitcoin-is-dead/
It is worse than that. It is due to Grayscale mass liquidations, which few people apparently saw coming. The unlocking of liquidity backfired on longs due to liquidation of GBTC. This is another example of how speculators and investors tend to get blindsided. You think you understand the risks but you don't. You understand the risks you know, not the unknown ones that only manifest when too late.
The concern now is grayscale will keep dumping , so people are selling into this fear, creating additional selling on top of the Grayscale selling in anticipation of more Grayscale selling.
The concern now is grayscale will keep dumping , so people are selling into this fear, creating additional selling on top of the Grayscale selling in anticipation of more Grayscale selling.
it won't sustain.
it's the ftx bankruptcy selling into liquidity and a cyclical kind of sell the news local top.
it's the ftx bankruptcy selling into liquidity and a cyclical kind of sell the news local top.
This -15% fall was sort of expected as the ETFs were already priced in, which is why Bitcion went up before their launch. Now Bitcoin is back to $39k, which is early Dec 2023 levels, ie. back when the market thought ETF being approved were unlikely. In other words, this price move is a non-news.
Also, it's always good too look at the big picture: https://bitcoin.zorinaq.com/price/ And, yes, a log-chart is the only proper way to look at an asset that gains/loses orders of magnitudes over the years.
Also, it's always good too look at the big picture: https://bitcoin.zorinaq.com/price/ And, yes, a log-chart is the only proper way to look at an asset that gains/loses orders of magnitudes over the years.
What was unexpected was Grayscale + FTX taking a major dump on the market. The assumption was some speculators who bought in anticipation of the approval would take profits, not that the biggest holder of Bitcoin would undergo major liquidation. The people who bought the GBTC trust at a discount want to exit.
Clichéd, I know, but this is good for Bitcoin.
For the first time, people have the ability to express short interest in Bitcoin. Sure, there are sketchy credit markets inside of the various cryptocurrency exchanges, but soooo sketchy. The biggest was FTX, for example.
But now organizations and individuals can actually express short interest in Bitcoin. Ideally the ETFs would be redeemable in kind, rather than the cash-settled ones that are all that the SEC will allow, so there may be disconnects to the spot price, but this is very exciting for long-time Bitcoin believers like myself (as opposed to hodlers) because price stability is the goal.
For the first time, people have the ability to express short interest in Bitcoin. Sure, there are sketchy credit markets inside of the various cryptocurrency exchanges, but soooo sketchy. The biggest was FTX, for example.
But now organizations and individuals can actually express short interest in Bitcoin. Ideally the ETFs would be redeemable in kind, rather than the cash-settled ones that are all that the SEC will allow, so there may be disconnects to the spot price, but this is very exciting for long-time Bitcoin believers like myself (as opposed to hodlers) because price stability is the goal.
Shorting a stock often helps get it to the "correct" market price faster. If the market truly thinks that BTC is really propped up by Tether, then well, downward price pressure should help the market price the true value of BTC.
I do believe the true price is Zero, like most crypto currency has gone to over time.
I do believe the true price is Zero, like most crypto currency has gone to over time.
Exactly! Price discovery in Bitcoin has always been a nightmare, but now there's at least a chance of getting some serious information into the market.
What I think is interesting is that when a crypto something goes to zero, it never recovers. Whether it's an NFT, a coin, or a so called stable coin.
It dies, and there's no underlying value to liquidate. You bought some cryptographically signed number that no one wants anymore.
It dies, and there's no underlying value to liquidate. You bought some cryptographically signed number that no one wants anymore.
> You bought some cryptographically signed number that no one wants anymore.
Much like: you bought a slip of paper that's effectively a Nancy Pelosi/Mitch McConnell's Chuck-E-Cheese token that gets conjured out of thin air to the tune of trillions whenever the next mega-omnibus fraud bill that no one even reads anymore needs to be financed.
And this is done precisely because the tax burden of all these wars and social programs would be indefensible if it they were actually levied against the voters through taxation. Even billionaires can't finance this size of govt, you could confiscate all their wealth and that only works once. So they go with the invisible tax of currency devaluation, which robs everyone in the present and kills saving which robs people in future.
Face it: every fiat currency is on a one-way trip to zero. Every currency in world history has that fate.
Much like: you bought a slip of paper that's effectively a Nancy Pelosi/Mitch McConnell's Chuck-E-Cheese token that gets conjured out of thin air to the tune of trillions whenever the next mega-omnibus fraud bill that no one even reads anymore needs to be financed.
And this is done precisely because the tax burden of all these wars and social programs would be indefensible if it they were actually levied against the voters through taxation. Even billionaires can't finance this size of govt, you could confiscate all their wealth and that only works once. So they go with the invisible tax of currency devaluation, which robs everyone in the present and kills saving which robs people in future.
Face it: every fiat currency is on a one-way trip to zero. Every currency in world history has that fate.
So if you hate fiat currency without any underlying value, why are you willing to defend any "currency" without any underlying value?
You could proclaim "GOLD STANDARD" I guess, and it might be better, or probably even worse. The big problem is that God filed all the gold under NOT USA. If South Africa wanted to devalue our currency then, they could mine a whole bunch of gold and put it on the market.
If you're going to have a currency valued on something tangible, it needs to exist only in the US, something we can control.
Also if you want to own gold, BUY GOLD! No one's stopping you! It has an intrinsic value in both jewelry and electronics! No need for this crypto nonsense!
You could proclaim "GOLD STANDARD" I guess, and it might be better, or probably even worse. The big problem is that God filed all the gold under NOT USA. If South Africa wanted to devalue our currency then, they could mine a whole bunch of gold and put it on the market.
If you're going to have a currency valued on something tangible, it needs to exist only in the US, something we can control.
Also if you want to own gold, BUY GOLD! No one's stopping you! It has an intrinsic value in both jewelry and electronics! No need for this crypto nonsense!
the crypto market was huge well before the approval of the ETFs. price discovery was never a problem.
It's been possible for years to short Bitcoin on reputable exchanges. For example Coinbase and Gemini, to name two of the most regulated and compliant US-based exchanges... unlike FTX which was not in the same category, and definitely sketchy. What the ETFs do is not so much help bears place their bets. The ETFs simply make the asset more accessible, to a broader pool of traders, who now don't have to sign up to crypto exchanges, but can trade from their usual brokerage firm.
How can there ever be price stability without any mechanism to buffer changes in economic activity?
The demand for money is highly variable and roughly correlated with economic activity (just think of 2020!), so with the supply fixed, large swings will always occur even (and especially) in a world where Bitcoin really becomes a usable currency.
The demand for money is highly variable and roughly correlated with economic activity (just think of 2020!), so with the supply fixed, large swings will always occur even (and especially) in a world where Bitcoin really becomes a usable currency.
I think that's an interesting question. Long term I feel that there is an arbitrage between Bitcoin prices / block reward and energy prices.
You may be right about big swings as demand for money fluctuates, but we need functioning credit markets in Bitcoin for that to even be an option. This is still very far in the future.
You may be right about big swings as demand for money fluctuates, but we need functioning credit markets in Bitcoin for that to even be an option. This is still very far in the future.
it has always been easy to short crypto. Futures, for example.
Bitcoin futures on CME are not really accessible to retail investors, and the market there has always suffered from tepid liquidity as a result.
Buy on speculation, sell on news. Welcome to the real world, BTC.
since the start of 2024, leveraged tech ETFs have gained, and BTC has fallen a lot
There is no reason to hold BTC when , controlling for volatility , TECL & TQQQ have more upside, less risk. Speculators hoping to get rich with crypto would be better off with the 3x tech funds. Bitcoin has a recurring habit of dumping 10% in a week for no good reason, while the Nasdaq chugs along to new highs or flat. No good.