Monitoring the Crypto Bubble

[IPDA]

Stablecoin supply is limited by growth of underlying assets that back the coins. They are not fiat constructions where supply can be inflated at will (at least, not if they are honest).

CBDCs are fiat constructions that are not backed by any underlying assets. Central banks can manipulate supply as they wish.

The stablecoins that currently exist do not employ virtual machine programming systems or smart contracts AFAIK. CBDCs were being designed to mimic the features that exist in major crypto blockchains including programmability (which makes it easy for central banks to control who, what, how, where and why with respect to transactions).

Stablecoins <> CBDCs

But hasn't Tether, the largest stablecoin, never shown actual proof of reserves? They've been audited, but not by any licensed trustworthy auditors in the states. So couldn't they also just be creating Tether out of thin air too?

And with programmability, are the existing stablecoins restricted to any other features? Or could they also deploy smart contracts and the such in the future... if so, stablecoins and cbdcs seem a lot alike. I'm obviously looking at this with a skeptic bias, so I might be overlooking something there.

 

[mmm....shiney!]

Regarding programmability and a CBDC it really depends on the desired end use of the token whether it would have a programmability capacity or not. For example, if it was to operate alongside cash and digital currency then there'd be no need nor desirability for an "if - then" contractual component to be written into the algorithm, on the other hand if it was to operate as a means of quickly injecting supply into a region devastated by a natural disaster then programmability would be advantageous in achieving the goals of the cash splash.

The report from the RBA's trial program: https://www.rba.gov.au/payments-and...-the-future-of-digital-money-in-australia.pdf

 

[pmbug]

But hasn't Tether, the largest stablecoin, never shown actual proof of reserves? They've been audited, but not by any licensed trustworthy auditors in the states. So couldn't they also just be creating Tether out of thin air too?

That is the rumor, but Tether isn't a compliant (or domestic) stablecoin for USA purposes. USDC and Ripple's new stablecoin are likely to get the USA regulators stamp of approval IMO. Probably PayPal's stablecoin too perhaps. There might be a few others. We'll see.

And with programmability, are the existing stablecoins restricted to any other features? Or could they also deploy smart contracts and the such in the future...

I'm not 100% sure. Stablecoins are centralized systems - owned and managed by a company (which also manages a treasury of underlying/backing assets). They obviously can change the coding for the coin as they want. I'm not sure how easy it would actually be to make a major change like adding a virtual machine capable of executing smart contracts or even if that would be desirable (I suspect not). Most people use stablecoins to trade in and out of decentralized crypto positions. They aren't really used for commercial transactions and I don't think many folks in the crypto ecosphere would want to use them for that purpose.

 

[IPDA]

Rough... Glad I did not participate in this. I did do a practice short, I was trying to time the top, I didn't do too bad (not real funds).

 

[mmm....shiney!]

^ my certainty is growing that most alts are only good to trade (or hold short term) and that for anyone in the market looking for long-term exposure then BTC is the most obvious asset.

There's a gaping opportunity cost when it comes to investing in alts rather than BTC long term when measured in BTC rather than fiat eg:

 

[IPDA]

I mentioned something negative on a cryptobro channel, saying how most likely Bitcoin and MicroStrategy stock will fall, and my comment got deleted lol. These channels are trying to keep you within the bubble, they don't allow the other side of the opinion to raise their voice.

So yeah, I hate crypto youtubers they're scum and are going to hurt their followers. I'd understand if what I said was just rude, but I simply disagreed with the video and still had my comment deleted lol.

 

[IPDA]

Echo chambers!

 

[sodl]

 

[mmm....shiney!]

^ is this post going to feature on every crypto thread?

BTW, how's Reggie's token going? Didn't he "invent" crypto?

 

[mmm....shiney!]

Will Altcoin season ever return? I highly doubt it. There'll be pockets of gold of course but a sector wide appreciation is of a time past thanks to the morphing of BTC into collateral.

 

[Real $ Return]

The system relies on printing, so is there enough to go around? Some think that BTC/Crypto market will eat into Gold market possibly reducing $ worth of gold, replaced by "digital gold" i think both have place but place majority in the physical which is what i trust most. Any thoughts on BTC devaluing gold? To much crap to think bout thats 1 reason dont trade anymore just want to hold long term

 

[pmbug]

... Any thoughts on BTC devaluing gold? ...

Gold price is being set by (Eastern) central banks. BTC price is highly correlated with NASDAQ. If central banks buy in to the 'strategic reserve' gambit, it could potentially diminish their gold activities, but that doesn't seem likely at the moment IMO.

News right now is that London is having a problem with gold deliveries:

https://www.reuters.com/world/uk/lo...-bank-gold-after-big-shipments-us-2025-01-29/

The rush for physical is apparently happening. Gold is gold. IYKYK.

 

[Real $ Return]

Everything is up...its an everything bubble, i believe in gold and long term growth but due to many factors almost every asset class on earth is at ATH...and not sure if this is a good thing, nothing rises for ever and some valuations seem very high and surely not sustainable, gold has room to run especially long term. But stockmarket keeps pushing up despite crappy economic conditions and low GDP? For how long? Reactions in my uneducated mind seem to defy reality atm

 

[Real $ Return]

Assets as always only place to be but and those without them are eating it hard

 

[Real $ Return]

Gold price is being set by (Eastern) central banks. BTC price is highly correlated with NASDAQ. If central banks buy in to the 'strategic reserve' gambit, it could potentially diminish their gold activities, but that doesn't seem likely at the moment IMO.

News right now is that London is having a problem with gold deliveries:

https://www.reuters.com/world/uk/lo...-bank-gold-after-big-shipments-us-2025-01-29/

The rush for physical is apparently happening. Gold is gold. IYKYK.

"Borrowing from central banks" inspires confidence

 

[IPDA]

Everything is up...its an everything bubble, i believe in gold and long term growth but due to many factors almost every asset class on earth is at ATH...and not sure if this is a good thing, nothing rises for ever and some valuations seem very high and surely not sustainable, gold has room to run especially long term. But stockmarket keeps pushing up despite crappy economic conditions and low GDP? For how long? Reactions in my uneducated mind seem to defy reality atm

Wouldn't be surprised if we saw a decent correction in equities soon.

Gold and silver still have growth imo, and the signal lies within how mining companies have been accumulated during the massive gold run. Typically, they move in tandem, but this time it was different. Newmont is a perfect example of this, the way it has reacted is algorithmically telling that there is about to be a large run higher.

 

[mmm....shiney!]

Any thoughts on BTC devaluing gold? To

I think they'll end up being 2 different types of assets. But eventually the MC of BTC will be larger than gold's because BTC's intrinsic properties makes it a more versatile asset.

Gold will retain appeal with retail investors as a hedge against other investments, with some in the retail sector viewing it as the only investment they would consider. I don't know what is happening or will happen with institutional investors in the spot market. I view the futures market as a consequence of the spot market, therefore I don't consider it a driver of demand. Non- western CBs will continue to hold it as a domestic currency hedge, demand will ebb and flow in that sector depending on how their balance sheets look.

If expectations are fulfilled with regards to BTC, then it is probably going to fulfill the same needs as gold in the retail market with eventually some capacity for them to collateralise their holdings. The spot ETF market will continue to drive demand from retail and institutions which don't want to or can't hold BTC directly. Corporate interest will be driven from a treasury/collateral perspective as companies seek to add shareholder value by holding BTC. Publicly traded companies engaging in such activities will get the attention of investment houses that can't buy spot BTC, as well as other companies offering synthetic investment products based on those companies buying and holding BTC. And if Trump winds back regulatory restrictions around BTC investment then new institutional interest will enter the spot market from sectors that can't buy spot etfs. And of course there's the fact that BTC's supply is finite, whereas gold's is infinite.

And I haven't mentioned the establishment of a strategic BTC reserve which is just a stupid idea. But that doesn't mean it is not going to happen.

So yeh, BTC will eventually flip gold, but I don't think it will affect the price of gold much as most of BTC's activity will occur in markets and products where gold is not a big player.

 

[mmm....shiney!]

Depending upon an individual's goals, we can view BTC investment alternatives in these terms..

1. If you want to hold BTC and get 1x return then either buy BTC directly or a spot ETF.

2. If you want to higher returns eg 2x, 3x etc then by a leveraged ETF or MSTR.

3. If you want to really juice your returns with options then go out and buy MSTY.

And as far as MSTR or MSTY go, there's going to be plenty more of those investments hitting the market over time.

 

[mmm....shiney!]

I forgot to mention States establishing BTC reserves, that makes sense, unless you're worried about volatility.

 

[mmm....shiney!]

And back on the BTC/alt market decoupling:



Unit bias is the inclination that humans have to favour whole units ie whole BTC or whole ounces of gold and therefore if a whole unit is beyond their price means they have a reluctance to purchase. Witness many saying they have a preference for silver over gold because they view a unit of gold as "expensive" by way of example. ETFs on the other hand tend to be more "affordable" because their price point is measured in 10s of $ eg IBIT at $59.

And I think he means "with" rather than "without".