Bitcoin / Cryptocurrency Discussion (And Predictions)

[csalvato]

Or you know, be a manufacturer of computer chips or medical tools or other electronics that use gold...

(as a store of value, gold isn’t going anywhere unless we discover a whole lot of it very fast. Possible, but not likely in the near term)

Why not have both? Or just Bitcoin if that's your thing. Gold/silver have massive industrial application, they are not just used as a store of value.

The value of gold as a building material is far lower than the price of gold as a store of value.

Gold is used less frequently as a building material than copper, which is in every single house in the first world, and almost all houses in the third world, aside from shanties.

Silver and platinum are used far more frequently than gold as a material.

Here are market caps of precious metal commodities right now:

Gold: ~10,000 B
Silver: ~1,500 B
Platinum: ~6B
Copper: ~60B

I wouldn't be surprised if the price of gold fell to match the value of these other metal commodities, which would make it's price somewhere in the range of copper, silver and platinum which means ~90% drop in price as the value of gold is reflected in the market.

 

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[Timmy C]

The value of gold as a building material is far lower than the price of gold as a store of value.

Gold is used less frequently as a building material than copper, which is in every single house in the first world, and almost all houses in the third world, aside from shanties.

Silver and platinum are used far more frequently than gold as a material.

I wouldn't be surprised if the price of gold fell to match this value, which would make it's price somewhere in the range of copper, silver and platinum which means ~90% drop in price as the value of gold is reflected in the market.

I 100% agreement.

 

[nitrousflame]

If you read the article, it's clear why energy consumption/transaction is not a fair comparison.

It takes a lot more energy to refute claims than to produce them. Further still, the energy required to reason a person out of a position they themselves did not reason into appears to approach infinity. Now that's a lot of wasted energy.

 

[Kak]

The value of gold as a building material is far lower than the price of gold as a store of value.

If this was true, gold would not be currently used in industrial applications. It is.

Gold sellers don’t give you a big discount for industrial use.

 

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[Sethamus]

I wouldn't be surprised if the price of gold fell to match this value, which would make it's price somewhere in the range of copper, silver and platinum which means ~90% drop in price as the value of gold is reflected in the market.

Think of the positives that would come from this. More adoption of gold in electronics and things such as PV cells lowering the cost and efficiency to the public. The switch to digital currency as a store of value could lower the cost of many things and possibly put green technology as a better choice in some instances.

Gold solar panels are one of the solar industry’s newest innovations

Solar technology is among the fastest-evolving innovations, and many fascinating inventions have appeared. Could gold solar panels be the future of solar?

artisanelectricinc.com

ISS uses gold panels currently as well.

 

[csalvato]

If this was true, gold would not be currently used in industrial applications. It is.

Gold sellers don’t give you a big discount for industrial use.

I’m not sure I follow your logic. Maybe you can clarify.

I didn’t say gold isn’t used in industrial applications. I said it’s used less than other materials.

Even if gold is used 2x as much as silver, with similar supply, its price would correct from 10T to 3T (70% drop).

But there is a far greater supply of gold because people have traditionally used it as a store of value.

So if you assume for the sake of argument that it’s not a store of value moving forward, the price would naturally go through a pretty brutal correction, no?

Think of the positives that would come from this. More adoption of gold in electronics and things such as PV cells lowering the cost and efficiency to the public. The switch to digital currency as a store of value could lower the cost of many things and possibly put green technology as a better choice in some instances.

Definitely. That increase in use as a material would be contingent on prices coming down dramatically so that the material is cheaper.

It seems you’re support my point, right?

 

[Kak]

Those that still think bitcoin and gold are somehow competing with one another as some kind of inflation hedge...

The dollar has rallied for 6 months. (Maybe a dead cat bounce)

Interest rates have rallied for over a month. For good reason.

Gold is down, like it normally would be under these circumstances... Most cryptos are up.

There is zero correlation, as I have been saying this entire time, between the dollar and bitcoin. It is a high flyer, people grow into it, bet on the future.

That doesn’t make is bad, that is just reality. It’s like buying Tesla or Amazon. That may pan out, or it may prove to be a bad decision. The delusion that there is no exposure to risk here is what I have a problem with.

Does any of this non gold like behavior it make it the new gold? No.

 

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[Guest-5ty5s4]

The value of gold as a building material is far lower than the price of gold as a store of value.

Gold is used less frequently as a building material than copper, which is in every single house in the first world, and almost all houses in the third world, aside from shanties.

Silver and platinum are used far more frequently than gold as a material.

Here are market caps of precious metal commodities right now:

Gold: ~10,000 B
Silver: ~1,500 B
Platinum: ~6B
Copper: ~60B

I wouldn't be surprised if the price of gold fell to match the value of these other metal commodities, which would make it's price somewhere in the range of copper, silver and platinum which means ~90% drop in price as the value of gold is reflected in the market.

The comment I was replying to said “you’d have to be on crack to ever buy gold again.”

So my reply is that, no, that’s false, you would at the bare minimum need to be using gold for another application that isn’t going away.

I did not say what it is worth as a building material, merely pointing out that it CAN BE a building material.

The original comment by @Timmy C ignored other uses of gold entirely, regardless of value compared to other materials.

Point being gold has intrinsic value greater than $0.

Bitcoin...doesn’t have a physical application. That may or may not matter! But it is a very obvious fact.

Even paper money can be burned or used as toilet paper, lol.

 

[Sethamus]

I’m not sure I follow your logic. Maybe you can clarify.

I didn’t say gold isn’t used in industrial applications. I said it’s used less than other materials.

Even if gold is used 2x as much as silver, with similar supply, its price would correct from 10T to 3T (70% drop).

But there is a far greater supply of gold because people have traditionally used it as a store of value.

So if you assume for the sake of argument that it’s not a store of value moving forward, the price would naturally go through a pretty brutal correction, no?




Definitely. That increase in use as a material would be contingent on prices coming down dramatically so that the material is cheaper.

It seems you’re support my point, right?

I’m not supporting what will actually happen as people are stubborn and a lot of wealth is locked up in gold. Someone would have to lose big money for this to happen.

I see the benefits for the future if it did happen and support that. If more people pitched crypto vs gold with the benefits of cheaper and better technology due to a decrease in value, resulting in an increase in material usage. Then I could see more people pushing to crypto. When someone gets on the news and starts to talk to the public about this with real examples I believe that could be a movement the mass gets behind.

 

[Kak]

I’m not sure I follow your logic. Maybe you can clarify.

I didn’t say gold isn’t used in industrial applications. I said it’s used less than other materials.

Even if gold is used 2x as much as silver, with similar supply, its price would correct from 10T to 3T (70% drop).

But there is a far greater supply of gold because people have traditionally used it as a store of value.

So if you assume for the sake of argument that it’s not a store of value moving forward, the price would naturally go through a pretty brutal correction, no?




Definitely. That increase in use as a material would be contingent on prices coming down dramatically so that the material is cheaper.

It seems you’re support my point, right?

You repeatedly agree about how gold is very different, yet you still think the investor objectives of a bitcoin investor and a gold investor are somehow aligned. They aren’t

You are on the right track if your assumptions were reality, but if they were, you’d already be a billionaire.

Your assumption that all or even most gold is going to enter the industrial market at the same time is asinine dude. Even one tenth of gold supply being sold off for industrial use isn’t going to happen. Not without a serious catalyst...

Now your next assumption... That catalyst is somehow Bitcoin. Despite the radically different types of investors.

That isn’t going to happen any more than investors dumping dividend stocks and rushing to tech all at once.

Here’s what Bitcoin has in common with gold... This picture:

I literally think this picture has painted it as something it is not to an entire community of people.

 

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[csalvato]

You ...

You are ...

Your ...

Not sure why you are consistently choosing to make this personal, rather than discussing the facts and us both coming out the better for it.

If that's the game we are playing, so be it, I guess. I still get value out of hearing your perspective, so it's still worth engaging.

You repeatedly agree about how gold is very different, yet you still think the investor objectives of a bitcoin investor and a gold investor are somehow aligned. They aren’t

For a gold investor who has been holding/accumulating for 40+ years, I am sure I am missing out on some nuances.

I believe that if you are an investor who is holding a lot of cash today, and evaluating your options (gold, BTC, real estate, fine art, etc.), BTC is bubbling to the top as a very viable option.

In this frame, it does compete with gold, and according to the charts and market movements, BTC, collectibles/fine art and real estate are winning that fight.

All the evidence I've seen points to this:

1. Residential and real estate in almost every market, including cities where people are fleeing, are going for 1-25% over asking price, with Dow Jones REIT index being up over 41%. Homeowners literally cannot keep up with how fast the demand is rising and are underpricing themselves.
2. Collectibles of all types are hitting all time highs (pokemon cards, baseball cards, rare gems, NFTs, etc.).
3. Corporations and hedge funds are buying up inflation hedges, and multiple funds and corporations have assessed that the bet is good that BTC will outperform the dollar and gold, and that's where they have put their money.
4. BTC is up 1200% in the last 12 months.
5. Gold has not garnered mass attention of institutions as an inflation hedge.
6. Gold is up only 17% in the last 12 months.

So while someone who identifies as a "gold investor" does likely have an aversion to investing in BTC and sees this as apples to oranges, the rest of the market, IMO, does not.

Feel free to disagree on that.

Your assumption that all or even most gold is going to enter the industrial market at the same time is asinine dude. Even one tenth of gold supply being sold off for industrial use isn’t going to happen. Not without a serious catalyst...

Now your next assumption... That catalyst is somehow Bitcoin. Despite the radically different types of investors.

That isn’t going to happen any more than investors dumping dividend stocks and rushing to tech all at once.

Of course it's asinine when to say that all the gold will enter the industrial market in the same time. Luckily, I never said that.

Not in my most recent post, but in previous posts, my estimate is that, if my assertion in the first part of this post is correct, the spot price of gold will have to correct down 70%+, most likely 90%, over the next 5-10 years, as it's primary use will be as a building material and something shiney.

So to agree with this conclusion, it really comes down to whether or not you buy into my premise – that BTC and other assets will continue to win out over gold in the long term.

Even if you think that it's an unlikely possibility, the probability is likely still significant. I think to ignore this possibility is a mistake.

But, hey, you do you.

 

[csalvato]

Point being gold has intrinsic value greater than $0.

There is no such thing as intrinsic value. It's a myth.

Even in the finance space, intrinsic value simply means the value that multiple analysts agree on, which has absolutely nothing to do with the market aside from being a bet guess.

I wrote a bit more about that here:

HOT! - INVESTING - Hey MJ & co. Why Is "Everyone Doing It" On NFTs? Is It The Real Deal?

I haven't found this thread in the Forum, and I'm sure many more will ask it again, so here it goes: No matter what career you have, you'll have probably stumbled with crypto and NFTs. Because they're everywhere, from Gary Vee's channel to Google News. With curiosity, I started and learned...

www.thefastlaneforum.com

So long as people need gold to satisfy some need or desire, it will have value. If that need/desire disappears, the value disappears with it.

Value is never inherent/intrinsic to any asset.

 

[Kak]

Not sure why you are consistently choosing to make this personal, rather than discussing the facts and us both coming out the better for it.

Because this morning I’m replying to YOUR comments.

 

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[csalvato]

Because this morning I’m replying to YOUR comments.

ehhhhhhhh

 

[nitrousflame]

I hope people casually reading through this are able to zoom out enough to realize that bitcoiners and gold bugs can be friends.

I personally store value in gold, bitcoin, real estate, businesses and more, and the world is still spinning.

 

[Kak]

There is no such thing as intrinsic value. It's a myth.

Lol. Intrinsic value = objective value.

Is there such thing as a good deal? A bad deal? A value stock? An overvalued stock? If there isn’t some objectivity to value, there is no such thing as a right price for anything! I guess they could change the name of the show to: The Price is Wrong.



I believe in subjective value because supply and demand reign supreme, but supply and demand absolutely considers objective value to an extent.

Would YOU pay 600k for a new Tesla? No.

Would YOU pay 10k? Yes.

Would YOU buy a gulfstream 6 for 100k? Yes.

Would YOU pay 10 million for the Empire State Building? Yes.

Would YOU buy an apartment complex for a bitcoin? God I hope you would.

 

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[Kak]

I hope people casually reading through this are able to zoom out enough to realize that bitcoiners and gold bugs can be friends.

I personally store value in gold, bitcoin, real estate, businesses and more, and the world is still spinning.

Thank God!

Some of you, while I’m calling BS on some of these arguments, fail to understand that I still absolutely like crypto for a shit load of reasons.

 

[nitrousflame]

If there isn’t objective value, there is no such thing as a right price for anything!

Haha, the funny thing about this is that if the market determines the right price, then the price is subject to the market, thus voiding its objectiveness! Gotta love semantics.

 

[Sethamus]

I’m just trying to make some money over here, don’t really care which one wins out.

My question to everyone, though mostly gold bulls. If there were possible technological advances or improvements in life due to the change of gold as a means of value to a pure industrial use and price point ( more adoption in electronics due to drastically lower price point). Would this be something you would support? Willingly allow gold to lose the majority of its value to become more widely used for the betterment of humanity?

Either way everyone active in the thread, no matter how stubborn you may be, should be ahead of the curve in whichever wins. @Kak could be taking gold baths in his physical coins atm, but would be able to at least see the trend turning ( which it has not yet) and cash out before a huge loss. @csalvato has already stated a 95% drop is needed to lose his investment if he stayed in crypto. Very unlikely scenario it crashes to zero before hard data comes out showing this and he loses his investment.

 

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[Kak]

Haha, the funny thing about this is that if the market determines the right price, then the price is subject to the market, thus voiding its objectiveness! Gotta love semantics.

Yeah you could loopty doop this around all day. At some point you could say a supply and demand curve with enough data points makes a level of objectivity. Which it pretty much does.

An intelligent blind person would even buy a new Tesla for 10k. To them it is subjectively worthless. So why then?

 

[Kak]

which one wins out

This is the mentality I’m talking about. One “winning out” over another. Like they can’t coexist. Like they are competitors.

I’m not saying gold will stomp out the value of bitcoin.

I am saying they aren’t competition.

Bitcoin guys, however, are saying bitcoin is going to stomp out all the value of gold and insist on the competition, even if they say they’re not.

 

[Sethamus]

This is the mentality I’m talking about. One “winning out” over another. Like they can’t coexist. Like they are competitors.

I’m not saying gold will stomp out the value of bitcoin.

I am saying they aren’t competition.

Bitcoin guys, however, are saying bitcoin is going to stomp out all the value of gold and insist on the competition, even if they say they’re not.

I think it is a competition of capital placement, not value and usage. When this bull run ends I see gold going up at a higher rate due to capital investments shifting from crypto to trusty old gold. Gold may go up before the bubble pops due to the regular factors like the dollar index, but a crash in crypto “I believe “ would help push gold up even more.

 

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[Kak]

Would this be something you would support? Willingly allow gold to lose the majority of its value to become more widely used for the betterment of humanity?

I won’t have a choice in the matter, it will happen or it won’t. If I see that actually start to happen, I won’t be such a gold bull.

I’m not bullish over reason. I’m reason first. The cart doesn’t pull the horse for me. My reasoning drives my investing decisions.

While I have more gold exposure than most of you, I also have energy stocks, tech stocks, foreign stocks, reits, dividend stocks, private equity, real estate, and, GASP, even crypto!

 

[Sethamus]

GASP, even crypto!

You are in this thread too much to not have any crypto. Not surprising at all you own some.

 

[Timmy C]

I hope people casually reading through this are able to zoom out enough to realize that bitcoiners and gold bugs can be friends.

I personally store value in gold, bitcoin, real estate, businesses and more, and the world is still spinning.

We can be friends provided you sell all of your gold.

 

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[csalvato]

I hope people casually reading through this are able to zoom out enough to realize that bitcoiners and gold bugs can be friends.

I personally store value in gold, bitcoin, real estate, businesses and more, and the world is still spinning.

I think I didn't make my point well because this isn't Gold vs. BTC.

This is Gold vs. everything.

Gold is a dud vs. everything.

And I haven't heard gold's bull case aside from "intrinsic value" (myth) and that it doesn't need the internet (irrelevant).

If someone has another bull case for gold, I'm all ears.

I don't identify as a "Bitcoiner". I go where the evidence leads me. If it pointed to Gold, I'd be all in. If it pointed to BTC going to zero, I'd be all out.

I had a high % in gold + silver. I sold a few months ago. The evidence points to its days being numbered, IMO.

@nitrousflame you store a portion of your net worth in gold, so it's definitely something worth considering.

That's the only reason I am banging on this drum at all – to help other people who may not have sat down and thought about it from that perspective.

If you come to a different conclusion after that, that's great. Let's discuss.

 

[csalvato]

Lol. Intrinsic value = objective value. Is there such thing as a good deal? A bad deal? A value stock? An overvalued stock? If there isn’t some objectivity to value, there is no such thing as a right price for anything! I guess they could change the name of the show to: The Price is Wrong.

Yeah, they are the same.

And neither exist. They are a myth.

Intrinsic value/objective value is nonsense. It's all relative to the individual and subjective.

A "good deal" isn't objective value. It's simply saying that, in that moment you buy it, you can sell it for more than you paid (i.e. it's a lower price than consensus).

Just because we reach consensus on value as a society ("oh man $10 is way too much for a gallon of milk!") doesn't mean that's it has some objective value, inherent to the existence of the object.

TBH, your argument seems like a straw-man, laced with feel-good assertions and funny jokes that is deflecting from your main point:

"Gold isn't going to correct down in price, because it has "intrinsic value " that is 7x greater than Silver and 4 orders of magnitude greater than copper. "​

If I somehow misunderstood your position, let me know.

Of course I'd buy a Tesla for 10k if I were going to flip it today.

I'd do that with gold, too, because of the current subjective value on the open market.

But I wouldn't hold that Tesla for 10 years to preserve or grow my wealth just because it's a physical object that has "intrinsic value", just as I wouldn't hold Gold for 10 years for the same reason.

 

[nitrousflame]

@nitrousflame you store a portion of your net worth in gold, so it's definitely something worth considering.

That's the only reason I am banging on this drum at all – to help other people who may not have sat down and thought about it from that perspective.

If you come to a different conclusion after that, that's great. Let's discuss.

Thanks for the post.

When it comes to portfolio allocation, I prefer decorrelation over diversification. E.g., I'd prefer to hold four or five lowly correlated assets over a thousand correlated ones. Bitcoin certainly fits this bill, and in some of my accounts, I cannot (easily) access bitcoin yet, so gold fits nicely in there, and yes, it's paper gold.

Additionally, I don't see it as a zero sum game where money out of gold ~ money into bitcoin, but even if this was the case, my bitcoin holdings will gladly offset my gold holdings should gold go to zero. The reverse is probably not true though, at least not for me as I'm what some like to call "irresponsibly long" crypto.

 

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[csalvato]

Additionally, I don't see it as a zero sum game where money out of gold ~ money into bitcoin, but even if this was the case, my bitcoin holdings will gladly offset my gold holdings should gold go to zero. The reverse is probably not true though, at least not for me as I'm what some like to call "irresponsibly long" crypto.

Thanks for informing me on your strategy + position.

I also don't see it as a zero-sum game between BTC and gold. I see people increasingly choosing other vehicles (many of which are not BTC) instead of gold.

I'm also "irresponsibly long", and glad I have been so far.

 

[Kak]

@nitrousflame you store a portion of your net worth in gold, so it's definitely something worth considering.

That's the only reason I am banging on this drum at all – to help other people who may not have sat down and thought about it from that perspective.

Jeez. IMO, this shit is literally the biggest bear case for crypto and the biggest bull case for gold I have ever seen.

The hubris of the bitcoin community is unparalleled. I LOVE the technology, but I loathe the sentiment around it. Imagine if a stock had this much bullish pretension around it. Sell that shit NOW. The very pontification of this "helping" people "see," as you are the one who has "sat down and thought about it," damn man.

@csalvato, taking subjective value theory out of context, you have literally the same zero bull case for crypto as anyone would have for anything. You are basically claiming that everything is price soup. Of course, it isn't. Just because it is "subjective," doesn't mean pricing is meaningless.

You might be surprised, but I think a bitcoin is worth (in the moment I write this): $58,490 USD. Yes, I FULLY understand subjective value theory and 100% agree with it. Something is ALWAYS worth what someone is willing to pay for it. End of story. Lock it up. Done.

Now, what someone is willing to pay for something is ABSOLUTELY affected by external factors. We can argue in the same loop all day, but I will leave you with this...

Bitcoin has just as much reason to go up as go down. NOTHING. There are no earnings. There are no dividends. There are no bullish management moves. There is no reason to believe that its biggest competitors will fail. The headwinds and tailwinds consist of how many people search google for it and how few times a politician decides they want to regulate it. Today may be its highest day ever again, or its lowest day ever again.

I don't know... BUT NEITHER DO YOU!

I have made a bull case for gold in this thread. It has been a rough 6 months, but such have the conditions that typify a rough condition for gold. When the fed has to act more and more frequently to artificially suppress the ever-rising interest rates, we will see what happens...

I will leave it at that. This exceedingly arrogant community surrounding bitcoin in lock step opposition to Gold is precisely a bullish trade on gold. To make money, you have to trade against the consensus and be right... The media and hype consensus says bitcoin. Being a bitcoin bull makes you part of the majority. The average. And... We all know how smart the average usually is.

Go watch The Big Short, some of you guys sound like the mortgage lenders.

But once again, there you are beating up on gold AGAIN, while saying you don't, just like you always do. I guess gold just offends your sensibilities at this point, which is the mark of an emotional investor vs a sage investor.

Hey buddy guess what!!!!!