Home Forums Hunting & Shooting Hunter's Campfire For Old Toot: Bitcoin discussion

https://podcasts.apple.com/us/podca...coin-podcast/id928933489?i=1000517048777

Greg Foss comes from the bond market angle.

https://rockstarinnercircle.com/fossgregfoss/

"Greg Foss has a 30-year history in banks, bonds and the credit markets as a whole. His insights around Bitcoin and the state of the banking industry and the global economy are amazing. "

I listened on my phone while working. Probably have to listen again. I'm not pumping bitcoin, just trying to get educated on the subject. If anyone has a chance to listen, I'd like to hear your thoughts.

I'll try to give it a listen tomorrow. Not that I need any more convincing..

I've been trying to read the institutional investment angle.

Pretty interesting interview. Preston Pysh is the real deal.

https://www.forbes.com/sites/prestonpysh/?sh=15eb3b5770a4

"I provide independent research of the stock market and central banking policy. I am currently the host of the #1 ranked investing podcast on iTunes, We Study Billionaires. I’ve written numerous books on investing and leadership and have been ranked as a top 35 business author on Amazon. As the Founder and President of the Pylon Holding Company, I specialize in the acquisition of private and public companies by assessing the durable competitive advantage and capacity for growth. I have a B.S. in Aerospace Engineering from West Point and have been awarded the bronze star in combat while commanding an attack helicopter company with the 101st Airborne Division. I am a Postgraduate Candidate at the Johns Hopkins Carey Business School in Baltimore, Maryland. "

I'll have to give it a listen when I have a chance.

I continue to believe that it is rare to find a traditional finance person who can wrap their brain around crypto and why people find it valuable. Most of it that I have seen from those people is barely a step up from the garbage tier take you can read from the boomers here. Most don't have the first clue about the technical merits and they can't make the mental connection needed to understand the market.

Making up value from thin air should be old hat to these people but when it comes to digital assets they choke.

Bitcoin and other crypto currencies are not currencies in the normal sense. They are not money because they are not legal tender backed by a government nor are they backed by a riskless asset. They are speculative assets like the Dutch tulip fad or like wildcat bank paper money in the 1830's-1860's. Yes, you can make money investing in them but there will be an inevitable run on their value. Only a matter of time unless legal activities somehow maintain their exchange value. They are indicative though of the movement of finance to shadow banks and unregulated markets because of the high regulatory cost burden we have placed on National and State chartered banks.

Bitcoin has ATMs scattered around the country where cash can be withdrawn.

Some car dealerships are accepting Bitcoin as payment.

The bigger banks have special departments dealing in crypto currency.

There are existing ETFs for it with others awaiting approval.

From the above it’s hard to envision Bitcoin as a ponzi type scheme.

Erikj,
Many thanks, Pard. I look forward to listening and reading these having read some of Foss’ works before.

Much appreciate this.

Toot, yes, no question, you are correct. It is being used as a medium of exchange. But history is replete with examples of assets that have temporarily been used as a medium of exchange. It cannot last though because it is not legal tender and because it is fundamentally a valueless asset. It has been valuable though in drawing attention to new technologies like blockchain which the Chinese are now using for better or worse) in their new digital currency.

I see what you’re saying but would ask that if it can be exchanged “directly” for US$ bills, legal tender backed by the full credit and faith of the US Government, how then would it be different from, say, silver or gold or platinum, etc.?

Precious metals don’t have dedicated ATMs that I’m aware of.

I do agree that it is a medium of exchange and that is apparently happening as we speak.

Edited to add:

China is now in on the crypto market offering their RMB out on the world market.

Excellent point. All I am saying is because its value is based on speculation (and perhaps its use in criminal activities) its exchange value with the dollar will inevitably fluctuate (and eventually plummet) which means it is not money. It is like any other asset. You can exchange stocks for cash as well, Or even guns. That does not make them currency. Other than the technology aspects it is just like tulips in Holland in the 1600s or like Planters Bank of Tennessee notes in he 1850s.

I see what you mean and appreciate your thoughts on it.

I don’t own any yet but I am entertaining some ETF purchases in the near future.

Stickfight and xxclaro have provided some in-depth explanations here at The Campfire in the recent past. It’s good reading.

Actually I do own some. I view it though like gambling or buying any stock. I think in the short run it might be a good gamble, I am not sure about the long run. Like all other speculative assets, timing will be everything. My view is make some money on it (hopefully) and get out. Bulls and Bears make money, pigs get slaughtered is an old investment cliche. Stay too long to try to get rich and it probably will not end up well.

The problem with crypto is it competes with government currencies, at some point they will decide they don't like the competition.

Yes, we all go to government sponsored crypto currencies at some point in the near future. They make a lot of sense as a safe asset for people to hold and might even make monetary policy easier with less distributional impacts than say current open market operations that work through interest channels and basically reward that segment of the population that holds interest sensitive assets. .

Well ETH and DOGE have done well for me. I am in the game now with "their money" so we'll see what it does.

Weren't tulips, ostriches, and other big bubbles destined to fail because of the unlimited potential supply? Is there a finite supply of bitcoin? I am curious because I don't understand it. I bought RIOT Blockchain at somewhere between $2 and $3 last year and it went almost to $80 and today closed at $48. Wish I had bought 20,000 shares instead of 200.

Yes bitcoin has a limited number. Some others do not.

I expect we will see a significant correction in the somewhat near future, I wish I knew when. There are so many different projects currently, running on different blockchains, and money is just flying around. Something has gotta give at some point. I think the big players and those solving real problems will survive, and rise from the ashes to new heights like they did in the previous crash. Like you said, best to take your profits early and reduce exposure well before it crashes, rather than trying to guess the peak.
It is a gamble, but at least its an educated gamble. Frankly, the potential is unmatched anywhere else that I know of. Making 100% gains in a couple months is considered not doing very well...

I think perhaps in part that was the case. Not the case for the wildcat bank notes though. One problem with bitcoin is its fictionalized creation. This is just a "thing" crated by solving computer puzzles. What is that "thing". It is definitely a fad and people are trading it and that creates value. But what is the intrinsic value? I could be wrong but I do not see how some fictional asset with no intrinsic value can possibly be worth anything in the long run unless it is backed by a government as legal tender. The mob might like it but once they realize it is really worthless they will use some other less traceable asset. Kind of like the dotcom stocks of the late 1990s that traded at high prices and then disappeared.

The world and history have seen many "currencies" come and go! All are doomed to fail. Outside of straight up trade, currencies all have weaknesses. You seem like a sharp guy, please tell us you don't really have the faith in our currency as you are leading us to believe.