If he doesn't understand the fundamentals then he's not right. He may think he's right but cryptos didn't crash because they're not physical.
Even now we're wondering whether cryptos are just correcting, crashing OR going to zero. Fed already experimenting with CBDC $. Meanwhile: BTC getting ready for another major dippity-dippity-dip!
look at it today, it is not above but now below the Nov 8 (Nov 9th, actually) low. The last time was this low was in Dec 2020, before the big boom.
I do love the idea of Btc but i have my questions and doubts and time will answer them all. Ive learned vast amounts of patience as a stacker haha.
Doomberg on the crypto "fundamentals": The question is even more complex in the crypto universe, where magic beans are traded back and forth between speculators but fiat only really trades hands on the rails into and out of the grand digital casino. Even though most tokens are quoted in US dollars, the price on the screen (and the balance in your “account”) are in many important ways a mirage: good luck leaving the casino with that many Benjamins unless more is flowing in to replace them. In a piece we wrote in January called Dollars Ex Machina, we told the story of an equity investment we made back in 2016. A brilliant friend had started a company working in the Bitcoin space, and despite our complete lack of knowledge about the underlying technology, we decided to bet the jockey. With some proverbial skin in the game, we set about the task of trying to understand what cryptocurrencies were, and developed the following mental model (emphasis added throughout): “In the following months, we engaged in a series of philosophical conversations about cryptocurrencies with our friend to learn more. Concurrent with this quest for knowledge, the paper value of our modest investment began to soar, which had the understandable effect of increasing the urgency of our research. We distinctly recall drawing two circles on a piece of paper. In the circle on the left, we wrote ‘real economy,’ while in the circle on the right we wrote ‘crypto universe.’ We drew two pipes between the circles – one flowing into the crypto universe and the other flowing back to the real economy – and labeled both pipes with ‘fiat currencies.’ While we understood how fiat currencies from investors could flow in, we failed to grasp what could be occurring within the crypto universe that would create more fiat currency for investors to take out at a later date. There seemed to be many brilliant people excited to be working in the space and using a technical language foreign to us, so we concluded that our inability to understand this rather pertinent issue was a fault of our own making.” While many crypto enthusiasts ridiculed our analysis and filled our comments section with vitriol, missing from their trolling was a compelling reason why our model was wrong. If fiat is your framework, how could it be? To be sure, many said a similar analogy could be drawn with gold, but gold is directly traded in fiat and the size of the gold market is a fraction of the global circulating supply of fiat. By definition, the total exit value of all crypto tokens as measured in fiat is capped by the amount of fiat floating in the crypto universe. Wash trading magic beans with tiny floats to ever higher “valuations” cannot change this truism. https://doomberg.substack.com/p/follow-the-fiat
For some reason I never believed in crypto, these are NOT currencies. Whatever they are, they are terrible investments. Marc Faber was right, they were invented to make a very small number of people very rich and a very large number of people very poor. If it goes down almost to where it rose up from (let's say if it goes down below 5,000 k, perhaps even 3,000 k), then you can forget about the logarithmic rise. It just plays up 'n' down. But, remains to be seen if it's really logarithmic. Scam coins after scam exchanges. The entire "market" is soooo complicated it has split away from the REAL economic system. It's like a computer game. No-one really understands how the crypto space-economy really works. This is why the entire environment is so dodgy, hazy, chaotic. I say PM's rule!
The whole "reliance is security" and "third party risk is fine" mantra with the cryptards is reality now. I hope they all lose every penny. Good riddance. The should have bought gold moments are adding up fast.
Crypto is in a bear market, that's for sure. But to say it is a bad investment or that it's designed to only make a few people rich (I'm guessing Faber never invested in it) is laughable. I have a friend that is pretty aggressive with his investing, and he has (or had been) cycling his portfolio through a mixture crypto, stonks and PMs. PMs have done poorly lately, but they have not and will not crash, IMO. At least not majorly. I'm in the "sit and wait by the sidelines" camp regarding crypto right now, as there doesn't seem to be much upside potential (at least to my mind) at the moment.
The "real economic system" is like the environment. It's a constantly evolving, dynamic interaction amongst individuals and groups. There is no defined model or genuine example of a "real economic system". Models, theories and principles get outdated. Therefore there is little basis to the argument that the crypto market, or any market in general has split away from the "real economic system" because the "real economic system" doesn't exist. There are irrational periods, innovative periods, periods where the creation of value gets distorted, periods of growth and periods of decline. And the only reason those things happen is because humans are what we are. Crypto is part of the innovation while the SBF saga is a part of the irrational exuberance that we see from time-to-time.
CMEGroup CEO Terry Duffy recalls his encounter with Sam Bankman-Fried https://twitter.com/OnTheTapePod/status/1593960785742647297 lol a few guys here would have been the ones talking about the "innovation"
amazing that they owned the banks, politicans, build a golden goose earning 10mil a day and counter traded the best traders with insider info but still managed to lose it all.
Crypto is hyper-hysterical, beyond volatile. And has an even higher potential to go to zero than the US dollar (or any other fiat currency). It's not even a real market. Billions of dollars are being burned forever on it. I'm stunned how people come up with financial arguments, when the main factors of the crypto "wonder" are technical/IT-related, security, speed-related issues. The economic arguments/forces behind digital fiat are very few. DCA will get most people lose their invested money, timing is vital in case of cryptos. More than in case of silver. Yet, permabull superinvestors keep promoting DCA-in, so that enough fools get on the boat, which will only make the superinvestors richer, who then make tsunami sell-offs. What is very sad is that the blockchain is paving the way to an Orwellian suffocating dictatorship. And people are all so enthusiastic about blockchain. What crypto is good at is giving the average Joe Schmoe the hope that he can become a billionaire without putting any effort. I still want to see wide-range adoption of any crypto (Doge, Cardano, Ethereum, Bitcoin, Stellar, Ripple, Solana... all promise and don't deliver) in serious applications (states, industries, culture etc.). That still hasn't happened.
You're rambling. You're conflating digital fiat with crypto-currencies. People are enthusiastic about blockchain because it offers a decentralised, immutable record of transactions. The "Orwellian suffocating dictatorship" thing could very well use a blockchain, but it's not going to be decentralised. As a result, we remain enthusiastic about the use of blockchain and other DLTs.
I don't see the economic miracle in cryptos, they're a mere technical miracle. Decentralization is a dream, unfortunately many of these cryptos are centralized. Besides, even if decentralized, some of these cryptos are run by businesses. They can be shut down and then it's almost over. Their coins will continue to circulate, still... I think the exchanges are being attacked purposely and perhaps the cryptos are being bought up as well with the goal to destroy the market and bring in a CBDC, "backed by a social credit score"
