Digital currency Bitcoin hits new high before losing S$200 in value in one day

The thing about conviction....it works for the upside....and the downside too.

Recently among financial blogs, I see the word "conviction" been used whenever the quoted prices of their investments start to go south a little bit. Sometimes, I wonder if people are actually putting the cart before the horse? ie. their conviction increases when things go against them.

Interestingly, recently I completed reading a book on Steve Schwarzman and Blackstone - These partners, guys at the top of the food chain, did a review of their past investments. Surprisingly, they found that conviction had an inverse relationship with the probability of losing money! Essentially, the stronger conviction they had about their target companies and/or the Mgt, when going into the deal, the chances of the target company bombing after the deal closed increased.

My take over is really, anytime I start to use the word "strong conviction" on myself OR to prove to others, I would have to be doubly alarmed and intellectually honest with myself.

Billionaire's bitcoin dream shapes his business empire in Norway

Mr Rokke has already created a Bitcoin investment company, called Seetee. The idea is to explore the potential of the cryptocurrency, using an initial capital injection of just 500 million kroner (S$108 million). Seetee's liquid assets will be in Bitcoin, which Mr Rokke says enjoys such a "huge lead" that other cryptocurrencies are unlikely to challenge its dominance.

Despite its lead, Bitcoin continues to be an extremely volatile prospect. Earlier this year, Nassim Nicholas Taleb, author of 'The Black Swan: The Impact of the Highly Improbably, said he was selling his holding of Bitcoin, noting that "a currency is never supposed to be more volatile than what you buy (and) sell with it. You can't price goods in BTC." But in his letter to shareholders, Mr Rokke said, "We have to expect a lot of volatility. But we don't care, because we believe in the long-term functionality." BLOOMBERG

https://www.businesstimes.com.sg/banking...-in-norway

BTC@30

This guy managed to capture the BTC touching 30k - less than 1 hour ago.



Stay home and stay safe, everyone.

For a start, I didn't know cryptos are traded on weekends! (Well, I reckon if you want to 10x to the moon, you have to sacrifice your weekends...whether is it on your own business OR cryptos)

Bitcoin volatility puts weekend traders on stomach-churning ride

A mid-week report from blockchain analysis firm Chainalysis showed over half of the US$410 billion spent on acquiring current Bitcoin holdings occurred in the past 12 months.

About US$110 billion of that was spent on buying it at an average cost of less than US$36,000 per coin. That means the vast majority of investments aren't making a profit unless the coin trades at US$36,000 or higher.

https://www.businesstimes.com.sg/banking...rning-ride

Usually I dont give 2 hoots about cryptos as they arent worth my time simply because a lot of them are extremely opaque.
But there is Tether, the supposedly most stable cryto and to a certain extent the back bone of this entire crypto universe.

To cut the story short tether is supposed to be as good as the USD and is backed by assets including the USD.
However no audit firm is able to confirm that. While it is easy to buy, it is difficult to withdraw. Also it has been minting a whole lot of coins due to "demand". Far too many red flags and smells exactly like a ponzi scheme.

So if the most reliable guy in the whole lot is likely a crook...
But there will be people getting extremely rich from it since it is created from thin air and highly likely some of them are minted at an astonishing rate without control.
The pools of "investors" needs to grow in order for it to work...so far so good.

(24-05-2021, 10:26 PM)Big Toe Wrote: Usually I dont give 2 hoots about cryptos as they arent worth my time simply because a lot of them are extremely opaque.
But there is Tether, the supposedly most stable cryto and to a certain extent the back bone of this entire crypto universe.

To cut the story short tether is supposed to be as good as the USD and is backed by assets including the USD.
However no audit firm is able to confirm that. While it is easy to buy, it is difficult to withdraw. Also it has been minting a whole lot of coins due to "demand". Far too many red flags and smells exactly like a ponzi scheme.

So if the most reliable guy in the whole lot is likely a crook...
But there will be people getting extremely rich from it since it is created from thin air and highly likely some of them are minted at an astonishing rate without control.
The pools of "investors" needs to grow in order for it to work...so far so good.

The cryptocurrency to pay attention to is Ethereum. 

The case for Ethereum maximalism | Eli Dourado

Ethereum: Into the Ether - Colossus (joincolossus.com)

It wont end up well, we just dont know when. But while the party carries on, a lot of people are going to be extremely wealthy. Over a trillion dollars of market cap created from nothingness. Quite significant as it marks the end of an era where only something tangible can be hyper inflated.

My guess is that it will probably be approved, with all the lobbying. And then maybe that will mark the start of the end, I suppose?

Memo to SEC: don't enable the bitcoin bubble

No one has ever invested in bitcoin. They speculate. This is a distinction that Gary Gensler, chairman of the Securities and Exchange Commission, should keep well in mind when the SEC rules on a pending application for a bitcoin exchange-traded fund (ETF) proposed by VanEck.

An SEC decision could come in June. If the regulator greenlights VanEck, bitcoin will be significantly more available to retail folks.

...........

Gensler taught crypto at MIT, and is said to be sympathetic to the industry. The SEC also is under pressure to act because Canada has approved several crypto ETFs. The industry is applying soft pressure by throwing money at former regulators. (Two former SEC chairs are shilling for the industry.)

https://rogerlowenstein.substack.com/p/m...he-bitcoin

Why Bitcoin will fail.

https://alanyeoinvest.com/2021/06/07/why...will-fail/

Well, most VBs are skeptical of bitcoin (me included). But I am all for experimentation as that means progress.

We all know the downsides of using bitcoin as a medium of exchange, from theory. In practice, it looks like it is working (at least in a bull market since mid 2019) on a small scale basis. Would be very interesting to observe how it works on a country wide scale (El Salvador is as big as Singapore in terms of population)

Bitcoin Beach: What Happened When an El Salvador Surf Town Went Full Crypto

Maria del Carmen, a mother of six, says she was skeptical about storing money on her phone. She reluctantly started accepting payments for her tiny eatery, run out of a kitchen in front of her home. Bitcoin now accounts for as much as half of her roughly $45 a day in sales. Four of her children have migrated to the U.S., where approximately 2.5 million Salvadorans live and send home $4.5 billion a year in remittances. Now, instead of receiving money from her daughter in California, del Carmen sent her $2,000 from Bitcoin savings, she says. She still has almost $2,000 in the account.

At the Point Break Café, owner Enzo Rubio says his strategy with all the Bitcoin payments that come in is to treat them as a savings account he doesn’t plan to touch. The first order he accepted in Bitcoin was worth $10 back in November. When I was there, that value went up to $30, and it’s now just above $22. He’s ridden these bouts of volatility by paying close attention to Bitcoin’s moving average, he says, already describing his strategy in crypto parlance: he’s HODL, Bitcoiner language for “buy and hold.”

https://www.bloomberg.com/news/features/...l-salvador

Skeptical of Bitcoin as an investment personally (not a value producing asset). 

But I'm less skeptical of it's ability to go up for a long time; like gold bugs, bitcoin believers could dig their heels in it, and price follows supply and demand. And true believers are increasing by the year.

As new sunk cost are added every year (cost of buying crypto, cost of training and learning about crypto, hiring and formation of crypto departments by financial institutions, r&d investment in crypto tech etc.), beliefs are strengthened, causing a reflexive virtuous cycle to demand and price.

Cults come and go, but religions can last for thousands of years. And religions, are generally very profitable (https://www.weforum.org/agenda/2017/01/r...e-thought/), in addition to being spiritually fulfilling. 

In general, once a belief is acquired, it's hard to change your mind; as we can observe regarding politics, conspiracies, stocks etc. Again, sunk cost fallacy and cognitive dissonance; one would rather find a contrived excuse (rationalization) of why a new fact contradicts your belief, than to admit they are duped/wrong etc.

(not vested; small exposure through Tesla and Square)