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RE: Is Bitcoin becoming irrelevant?
The other side of this debate is, there's nearly 50B in altcoins and that bubble is about to pop and the vast majority of that money will be flowing into BTC pushing it at or above $3K "soon".
I don't think it's about to pop for another 2 years. If it does pop, where is the money supposed to go? For now not a lot of money is in the space. 50 billion in the global economy is not a lot of money. It's only considered a bubble because of the rate it's coming in, but just because it comes in at a quick rate doesn't mean it can get out as quickly. High taxes, lock ups, deflation and other reasons will make it hard to get out.
Unlikely it would pop and flow to Bitcoin. It will flow to something but we don't know what that something is yet.
I'm no bubble boy, I'm just offering up the counter-narrative which is popular among many in #price, and this guy ...
But, I do disagree with you on this point ...
We go up on stairs and come down on elevators. :)
How? If you buy and sell at a loss then you lose money by buying high and selling low. IRRATIONAL.
If you buy low and it goes way up and you sell within 2 years then you get to pay the highest possible capital gains tax. IRRATIONAL so many have to wait before they can exit into fiat without paying almost 40% tax or higher in some places.
I realize markets are irrational, but I don't see an easy exit like there is in the fiat world. In fiat people buy into stocks and can just as easily cash out. All the banks make it easy and in a lot of cases it's handled by professionals. There are even tax efficient ways to deal with stocks. In this space the reason I say the bubble wont pop for at least 2 years, well one reason is the capital gains taxes will be extremely high for people who cash out any time before that if they are just getting in, and also the infrastructure to exit isn't really built out as much as the infrastructure to on-board.
You can't for example sell Bitcoin or Ether to buy real estate. You cannot even easily buy a cup of coffee and know the legal implications of doing that. So I think your quote doesn't apply because there isn't an elevator for most people. Only institutional investors and investors in certain parts of the world have that elevator but will that be the case that Japanese investors and Korean investors leave crypto any time soon? I think considering how much money they have, we have a long way to go.
I do think we are entering a bubble period but bubbles last for years. The housing bubble for example hasn't popped. The Dot Com bubble took years before it popped. The housing bubble is more like this bubble, as these altcoins are like digital real estate. It wont pop as long as developers keep building on it, but it's like with housing if the housing value doesn't keep going up then it can all crash down. I don't think it's like the dot Com bubble, just as houses aren't so easy to sell when prices are going down, neither will be the crypto because the price could go down and then swing back up, and then go back down, and the day traders have to measure taxes on all that but the average person wont want to deal with it.
I expect a lot of people just will buy these tokens and then not think about it while they go on with their lives, treating it like a lottery ticket. Day traders aren't the average people and while they do create bubbles, the long term holders who will wait 4-5 years wont be negatively effected because it's still early enough that almost anything you buy could be up in 4-5 years.
I'm discussing an altcoin bubble (if one exist), which allows people to exit into Bitcoin at an elevators pace. However, Bitcoin is not immune to an elevator exit, regardless of tax implications.
The belief that Bitcoin's price is lagging behind where it should be due to the scaling debate is something I can get behind, so I don't think Bitcoin is in a bubble at all and am very bullish for many years to come.
It's inferior tech allows competitors, but a "Bitcoin maximalist" would tell you that any altcoin feature could be implemented in/on Bitcoin at some point (and I believe even in the video I link above they mention the "DCR proposal", that wasn't).
It's the "at some point" that may end up allowing one or more of the altcoins to gain even further ground on BTC, but BTC is what it is and the others are what they are and can all coexist without the "who's going to win?" that seems to go on constantly.
What if ... they all win?! =)
I don't want to cash out into fiat currency. I want to get rid of fiat currencies. #financial-terrorist
I don't think we're in disagreement on much, outside of how fast a price can fall.
So you do think people will even if all in Bitcoin decide to just get all the way out of crypto and pay unknown tax consequences? The IRS is already cracking down on Coinbase.
I haven't really put a lot of thought into this or heard views either way, so I'm just going off of a gut feeling on this specific question.
People are irrational and I believe that most don't even think about tax implications and some of those are probably not even aware of their existence.
If Bitcoin started nosediving, yes I think the majority of small hodlers would sell into fiat instead of altcoins or hodling BTC for the ride.
I would assume a 50/25/25 split on medium hodlers, just for safety since I'm guessing. 50% would hodl, 25% would hedge into altcoins, 25% would buy USD ... all depending upon how big a dive in price we're talking about and the bigger the dive, the more those percentages would change.
You, I and most people really into crypto are aware of the IRS situation, but the majority of the people I talk to that are new to crypto are either not aware, don't think it's a big deal, will take their chances or don't really give a shit ... "cuz I got guns" ... lol.
With large hodlers, I will assume most all are going to do the right thing, whatever that is for their situation.
I don't know what the split is or if anyone knows how much of the current supply is owned by large, med, small hodlers, but for shits & giggles I'm going to say the majority of BTC is held by medium players (pick your own #'s, whatever is "medium" to you) and that there are more small players vs whales. But that sounds like a lot of people that could cause a very irrational panic sell into fiat, based off of statistics I've pulled from my ass on the fly.
Sell! Sell! Sell!
#lines #circles #arrows
:)