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MI.

I've been screaming for you guys for months now to put your preconceptions aside and look at Bitcoin/GBTC again. Bitcoin/GBTC is just crushing any system and all systems we design. We have a unique opportunity to get in before the institutional money gets in. We have at least 200 days to get in and then leave, even if you guys are right about it being a *TULIP BULB*.

Even Bloomberg now calls it legit:

https://www.bloomberg.com/news/articles/2017-10-31/bitcoin-g...

William Miller III, the man who beat SPY for about 15 straight calendar years is crushing it- through Bitcoin.

https://www.cnbc.com/2017/10/30/bitcoin-nearly-a-third-of-bi...

This is the Digital Age and the newer generation just does not view gold as a store of value as much as the older generations. Many of the big winners are digital- FANG (AMZN- AWS makes most of their profit). Even if I am only 5% right, with Bitcoin replacing 5% of Gold, it puts GBTC in the thousands and Bitcoin well over $10,000.

Cases for real use as a currency- any country who's fiat currency has failed- Venezuela, Zimbabwe, etc. https://www.cnbc.com/2017/08/24/bitcoin-mining-is-popular-in...

Modern Portfolio Theory- You can lower risk by carrying diversified assets- i.e. assets with no correlation to each other. Bitcoin/GBTC does that. It is not correlated with any other asset- Stocks. Bonds. Foreign. Domestic.

A lot of you guys are smart, but there's always room for a different view. Think. Outside the box.

DoesMIWork
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[off topic]
Thanks DoesMIWork! I'm thinking your btc holdings are doing pretty well.

Mark Cuban's take [just 1 man's opinion...]: " when it comes to blockchain — a decentralized ledger used to record and verify transactions — Cuban said he’s a big fan. But when it comes to bitcoin BTCUSD, +0.11% ethereum and other cryptocurrencies, he said it would be a struggle to see them become real currencies because only a limited number of transactions can be done.

“So, it’s going to be very difficult for it to be a currency when the time and the expense of doing a transaction is 100 times what you can do over a Visa or Mastercard, right?” asked Cuban, adding that really the only value of bitcoin and ethereum is that they are just digital assets that are collectible.


“And in this particular case, it’s a brilliant collectible that’s probably more like art than baseball cards, stamps, or coins, right, because there’s a finite amount that are going to be made, right? There are 21.9 million bitcoins that are going to be made,” he said.

Cuban said initial coin offerings — fundraising for new cryptocurrency ventures — “really are an opportunity,” and he has been in involved in UniCoin, which does ETrade and Unikrm, which does legal sports betting for Esports and other sports outside the United States.


But he and Bass [a co-interviewee] both commented about how the industry needs regulating, with Bass noting that ICOs have raised $3 billion this year, and $2 billion going into September. While many are “actually going to do well,” so many are just completely stupid and frauds,” he said.

“It’s the dumb ones that are going to get shut down,” agreed Cuban.

One problem: “There’s nobody at the top that has any understanding of it,” he added, referring to the Securities and Exchange Commission.

Cuban ended the interview with some advice on where to invest now. He said for those investors not too knowledgeable about markets, the best bet is a cheap S&P 500 SPX, +0.31% fund, but that putting 5% in bitcoin or ethereum isn’t a bad idea on the theory that it’s like investing in artwork."

Other developments...shorts are getting into GBTC perhaps responsible in part for the narrower NAV spread...seem to have gotten squeezed toward the end of last week as btc jumped...again. Also exchanges have filed for btc futures trading, & "Two ETF sponsors filed for funds related to blockchain, bitcoin’s foundational technology" [won't hold btc itself]

I have no idea what all this means....
:-)Shawn
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Does this mean that tulip bulbs are no longer a thing?
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“So, it’s going to be very difficult for it to be a currency when the time and the expense of doing a transaction is 100 times what you can do over a Visa or Mastercard, right?” asked Cuban, adding that really the only value of bitcoin and ethereum is that they are just digital assets that are collectible.
This really is the issue with bitcoin, although other (perhaps better) estimates have it as 1000x more expensive than a regular financial transaction.
https://motherboard.vice.com/en_us/article/ywbbpm/bitcoin-mi...

So any investing in bitcoin (or similar) is essentially a bet on a "greater fool" or the criminal marketplace as the physical first principles don't hold up. Blockchain could well be a thing though, just (as in most technologies; for example DNA sequencing in the late 90s) not in it's initial form. Which is not to say that right now Bitcoin isn't a fantastic speculative instrument - it is - but that doesn't make it a sensible investment for most people either.

It might be wise to get out at least your initial capital while the goings good, in case it all comes to tears.
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"Blockchain could well be a thing though..."

A lot of people have doubt about Bitcoin, but not about blockchain. Even the skeptics on Bitcoin have little doubt on the future of blockchain. It's here to stay. However, who maintains the blockchain? What is the incentive for someone to keep all those records and make sure that it's legit? That's why the miners get paid. They get paid for maintaining the blockchain. They get paid in Bitcoin, not dollars, Euros or Yen.

Why is GS considering BitCoin trading operations? Why is CME planning to launch Bitcoin futures? The answer to BOTH is this: their clients are asking and that there is enough of them! Tulip or not, "all comes to tears" or not, what I am saying is that we have an opportunity to seize the moment- before the institutional money gets in.

My bet is this: Bitcoin will rise between now and when the first crypto ETF comes out.

DoesMIWork
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Does this mean that tulip bulbs are no longer a thing?

some people made some (a lot) of money in tulip bulbs. Many people buy knowing bitcoin may be in a bubble, but believe they can get out before the bubble bursts. Not me
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No. of Recommendations: 6
It is in use by drug dealers and terrorists and is subject to instantaneous 18% drops when China criticizes it since China dominates its trade. Buying it is not investing but speculating. Someone may also make money on Beanie Babies but that doesn't make the decision a wise one.
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"...18% drops when China criticizes it..."

In early 2017, China basically prevents the flight of the yuan b/c people were using Bitcoin to do it. At the time, China accounted for over 90% of all Bitcoin transactions- extremely unhealthy. Bitcoin drops immediately. Traders leave China for other countries. Price recovers. Japan legalizes Bitcoin. Price skyrockets.

On September 2017, China shuts down bitcoin exchanges. The price collapses, but recovers WITHOUT China- within a month. Like an immune system, the body (Bitcoin) keeps getting hammered, but keeps getting back up- and each time, being stronger and healthier than before. Bitcoin has "died" 183 times, as of 11/3/2017 (https://99bitcoins.com/bitcoin-is-very-definition-of-a-bubbl...) and yet is strong enough to keep making all time highs!

Drug dealers, etc.- There are two sides to a coin. What about the good it does in places like Venezuela, Zimbabwe and Argentina? Here's a paper on Bitcoin in Argentina:

http://chicagounbound.uchicago.edu/cgi/viewcontent.cgi?artic...

Anyway, I'm just here to help, not to defend a PhD dissertation on Bitcoin. Google Bitcoin yourselves. The bottom line- it's your money, not mine.

DoesMIWork
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I was so intrigued with the notion of bitcoin a few years back that I put a little fiat money into it just to see what "might" happen. My return on that little bit of investment has been off the charts. As it price climbed higher I have always struggled with the notion of its true worth. I had this struggle when it hit $250, then again when it went to $500, and $1000 (I said this cant be real?) ... and yet today it sits at over $7000 and is still rising. While my return has been off the charts I am still not convinced or can point to why ... other than speculation on a MASSIVE scale.

What I have come to believe is that its financial value on a stand alone basis is small and likely nowhere near what it is trading at on the market. However, from a broader perspective the technology will likely produce significant value to thousands of organizations. I believe it is one of those things that is so valuable that it becomes worthless over time. There are dozens of examples of products and services like this.

Think of the notion of when email first came to be and then went mainstream. Those companies that tapped into the technology early, such as AOL and Hotmail, made a lot of money in a short period of time. Then, it all disappeared a few years later. Who is willing to pay for email now? Most email accounts are free or charge a small nominal amount to service the account. While its financial value has been reduced to nearly zero, email as a service is a huge value to millions of people and businesses - yet no one pays for it.

Since Bitcoin is not a company with earnings, or a rare commodity, and is something that can be replicated at practically zero costs I struggle to see how its price will stay in the heavens. What will break its back and when? I do not know. Maybe it's some clever programmer that finds a way to counterfeit the coins. Something similar has already happened with Ethereum coins and the gods that control the code set to unwind the hack with hard forks. Maybe it happens over time as people/companies realize the technology provides the value and it can be easily replicated - why buy a bitcoin for $7000. Or, maybe other realize the technology is the key and simply force the value of their new coin to zero by producing an infinite amount so that the value of the coin isn't the root for the demand but rather the services that can be made off the coins back.

IMO, BTC price will come crashing down at some point. I just don't know when, why, or how quickly. Meanwhile, I took my original investment off the table a while ago and am simply enjoying the ride.

-AllTooFoolish
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Reality Shares Nasdaq Blockchain Economy ETF will target companies expending material resources working with bitcoin technologies, whether that be to develop, use or support blockchain and related technologies. Eligible companies must have more than $200 million in market capitalization and a six-month average daily trading volume of more than $1 million.

Amplify ETFs has also filed for a fund—this one actively managed—targeting companies involved in the blockchain space.

The Reality Shares fund is set to list on the Nasdaq, but the filing did not include a ticker or expense ratio.
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https://www.wired.com/story/how-to-keep-bitcoin-safe-and-sec... on keeping your bitcoin safe for those who play the game
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Bitcoin now has a market cap of almost $120 billion, which makes it bigger than Goldman Sachs or Morgan Stanley or Paypal or Netflix. Only 21 million bitcoins will ever be made, so the supply is going to be limited, and that will be a factor driving up the price. The supply right now is about 17 million bitcoins.

Blockchain is a breakthrough technology that potentially eliminates things like high credit card fees charged to vendors, wire transfer fees, and a whole lot of other transactional fees that banks charge. This technology is not going to go away, and it's only going to get bigger, since it's very early in the adoption cycle.

Here's a good article to learn more - https://seekingalpha.com/article/4121499-bitcoin-series-1-ba...


-Rana
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You guys keep complaining about low future returns, very high CAPE, mocking Bitcoin, chasing yield, LT bonds already had their 40 yr bull run, nowhere for the money to go, etc and here is something new, just for the taking. CME (Chicago Mercantile Exchange) considers cryptocurrency as a new asset class. Even if it captures 2% of gold, Bitcoin would be about $10,000, about a 35% increase from today's value. I have a lot of faith in my MI, but the actual performance is abysmal. I've only beaten SPY in two out of the nine years I've been in MI. People! This is a unique opportunity to get in before any institutional money comes in!

From the article:“The world in the 1970s didn’t look at currency trading as a valid instrument of finance. I too went from not believing (in bitcoin) to wanting to know more,” he said."

Link: http://www.reuters.com/article/us-cme-group-bitcoin/bitcoin-...

DoesMIWork
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I bought $100 of bitcoin in August, then forgot about it.

It's now worth $171.

Yesterday, I bought another $100. I think it's gone up 10% in 24 hours.

I used ipayyou.io to purchase the bitcoins, but it seems like that's become an expensive and cumbersome method. I researched it back in August, and got very confused about the best way to do this. I find it VERY opaque. Screams for some kind of consumer-friendly regulation. I can't make heads or tails of fees, risks, etc. But with a CAGR of like 300%, it's hard to resist, even with high transaction costs!

Any tips on the cheapest, easiest, safest (in terms of scrupulous vendors, not investment risk) way to buy and sell bitcoins?
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No. of Recommendations: 9
BAGoldmn,

It's a little difficult to use, but getting on to the internet was hard in the beginning too. I expect things to improve in the future.

I use Coinbase. They make you do all kinds of stuff to prove that you are really you- photo ID, picture of yourself, etc. After that, I wired money to Coinbase, but DO NOT BUY from there! You have to transfer the money to their trading platform GDAX. They are sister companies. Coinbase charges a lot (like $75 for Ethereum) for transaction fees but GDAX only charges you pennies. Once your are on GDAX, the trading platform looks like any other brokerage firm.

I'm a Bitcoin bull, but there's always a chance that everyone else on this board (the Tulip crowd) is right and I'm wrong. Don't put more than you can afford to lose. I get a lot of insight from Seeking Alpha. There are a lot of views from both the Bull camp and the "Tulip Bulb" camp. Follow the symbols ("COIN" and "GBTC").

"COIN" is the proposed ETF symbol for Bitcoin, founded by the Winklevoss twins. They run their own crypto exchange platform, Gemini, which competes against Coinbase.

DoesMIWork
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Anyone who would consider GBTC needs to be aware of 2 factors: there is a huge markup from the price of BTC. So for anyone who can, it makes more sense to buy BTC directly.

Secondly, they have no insurance! If the BTC that GBTC is holding is stolen in a hack, or if they simply did not maintain proper backups, or if there is a phishing attack, etc, then there is going to be no recourse.

But that is the same for anyone who trusts an exchange (eg, coinbase), to hold BTC on their behalf. As far as I know, the exchanges have no insurance.
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idoun,

You can hold GBTC in an IRA. Bitcoin IRA is the only other way that I know of that you can hold Bitcoin in an IRA.

In the old days, people used to split their cargo into different ships. If one sinks, there's always hope that the second ship could make it safely. Similarly, I hold have crypto in both GBTC and Coinbase vaults and am hoping to put some in crypto wallet. That will be three different "ships."

Exchanges- You can move your crypto off the exchange into private vaults, created by Coinbase,etc. In order to access those vaults, you need some combination of multiple passwords, texting to phone , secondary email to ok release of funds and Google Authenticator. In addition, you can place a limit on how much can be withdrawn in a single day.

Finally, another play would be to buy OSTK, which I think I missed the boat on. That would be four ships.

Of course, DoesMIWork could be totally wrong/Tulip crowd right and all four ships sink!

DoesMIWork
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The main uses for Bitcoin now seem to be speculation and criminal activity. Not a game I want to play, but interesting to watch.

https://www.vox.com/conversations/2018/4/11/17206018/bitcoin...
"It appears that Bitcoin’s main accomplishment is that it allows people to buy things clandestinely, only in an absurdly inefficient way."
"But the arguments in defense of this stuff are getting loonier and loonier."

George Soros Prepares to Trade Cryptocurrencies
https://www.bloomberg.com/news/articles/2018-04-06/george-so...
“As long as you have dictatorships on the rise you will have a different ending, because the rulers in those countries will turn to Bitcoin to build a nest egg abroad,” Soros, 87, said on Jan. 25.
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The main uses for Bitcoin now seem to be speculation and criminal activity. Not a game I want to play, but interesting to watch.

"now"?

: )
Jim
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The main uses for Bitcoin now seem to be speculation and criminal activity. Not a game I want to play, but interesting to watch.

So can I assume you don't use US dollars (or any fiat currency) either? Orders of magnitude more speculation and criminal activity occurs with fiat than all cryptocurrency combined.

Brian
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"...The main uses for Bitcoin now seem to be speculation..."

Didn't railroads, cars, internet start the same way too? Discovery of the New World- East India Company- same way. Lots of speculators.

From IBD about blockchain, the https://www.investors.com/etfs-and-funds/etfs/blockchain-tec...

"Could it be a bigger disrupter than the internet?" Read it for yourself. Why would so many companies invest in it, if the technology is useless?

In short,

1) Bitcoin is based on blockchain.
2) It is decentralized. This is critical. If only one company, such as Chase, owned the blockchain, then it can be hacked- Home Depot, Yahoo, Best Buy, Target, the US elections- all hackable. It's like the internet. There is no one place where you can shut it down. Not all cryptos are decentralized.
3) Because it takes lots of energy to maintain the blockchain, it costs a lot of money. This comes in the form of a token, such as Bitcoin. If the token is worthless, then no one will maintain the integrity of the blockchain.

There are lots of cryptos with more technology than Bitcoin. However, it comes with a cost- security.

DoesMIWork
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So can I assume you don't use US dollars (or any fiat currency) either? Orders of magnitude more speculation and criminal activity occurs with fiat than all cryptocurrency combined.

There is a difference between the % of transactions and total transactions. The % of transactions that are 'suspect' with Bitcoin are vastly higher than the % of transactions in Fiat currencies.

tecmo
...
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Why would so many companies invest in it, if the technology is useless?

I'm not arguing the merits of bitcoin, blockchains, or other related technologies, but that's not exactly water tight reasoning.
It's pretty solid proof there is a bandwagon, though. (Bandwagons can have merit or not)

Anybody remember the seminal 1989 paper entitled "My Cat is Object Oriented?"
Readers familiar with the development of object-oriented programming will recognize the phenomenon.
As this programming paradigm became popular, people started calling all manner of things " object-
oriented " in an attempt to attract attention and approval – a state of affairs satirized by the title of the 1989 paper, " My Cat Is Object-Oriented "


Jim
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Bitcoin is also a fiat currency, as are all currencies, including gold for that matter.
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Bitcoin is also a fiat currency, as are all currencies, including gold for that matter.

Hmm, not by conventional definitions.
Fiat basically comes from some entity saying "make it so", in the sense that the value comes from trusting that entity or obeying the command of that entity.
If there isn't an entity whose will you're trusting or obeying, it's not in that strict sense a fiat currency.

In the case of Bitcoin, whose will exactly are you trusting? Whose decree are you following?
There is no entity that requires you to use a bitcoin to pay for anything. Your taxes, say. Or who backs up its value with its promise.
It does meet one of the four definitions suggested at Wikipedia, "an intrinsically useless object that serves as a medium of exchange".
So colloquially you might think of it as a fiat currency in that it is not backed by any hard asset. But it's not fiduciary money.

Gold is just gold.
Not very good as a currency, but it can be pressed into service. Or into coins.
It's not a fiat currency in any definition that I've seen.

Jim
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Readers familiar with the development of object-oriented programming will recognize the phenomenon.
As this programming paradigm became popular, people started calling all manner of things " object-
oriented " in an attempt to attract attention and approval – a state of affairs satirized by the title of the 1989 paper, " My Cat Is Object-Oriented "


I noticed a phenomenon like this recently on Amazon when sellers started describing everything as "tactical".

No Fool Like An Old Fool,
Incog
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"In the case of Bitcoin, whose will exactly are you trusting?"

You are trusting the MATH.

For instance, if I need to state that this Bitcoin belongs to me, every computer in the network has to agree, based on the MATH, not my reputation, what someone says, what the majority of the people say, what the government says, etc.

I'm not really good at explaining things, but this guy is!

https://www.youtube.com/watch?v=HaJ1hvon0E0

DoesMIWork

Bryan- I hope my explanation was simple, to hell with the details, etc.
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