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Do you own Cryptocurrency? A poll

Any other investment discussions eg. peer to peer lending

Do you own any cryptocurrency? If yes, what proportion of your assets is it worth?

Yes - less than 1%
11
11%
Yes - more than 1% but less than 5%
5
5%
Yes - more than 5% but less than 10%
2
2%
Yes - more than 10% but less than 20%
1
1%
Yes - more than 20% but less than 50%
0
No votes
Yes - more than 50%
1
1%
No
82
80%
 
Total votes: 102

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Re: Do you own Cryptocurrency? A poll

#404180

Postby NotSure » April 14th, 2021, 1:19 pm

seekingbalance wrote:BCI25 looks exactly like the kind of thing I am after. I’d prefer one without the top 5, a sort of ftse250 type of thing, with perhaps coins 6-30 instead of 1 to 25, but still, not bad.

Fees look excessive though, 2% on initial then 2% on the rebalance. How do you know how much this lenient will amount to over a year?


I too would like a 'mid-caps' version, but at least on the BCI25, they limit the maximum weight which helps steer it in that direction.

Indeed - fees are a bit steep, but they limit the maximum amount of rebalancing each month. The 2% is just on what they have to sell and buy, which may be just 10% of the index or less, depending on relative price movements. To me, it's a small punt on one or two of the index 'going large'. To construct a portfolio oneself would be even more expensive. I am not 'investing' here, just buying a lottery ticket for a bit of fun, so I can live with some attrition in return for a very convenient platform. The back testing in the article I linked included the effect of rebalancing fees.

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Re: Do you own Cryptocurrency? A poll

#404232

Postby Bubblesofearth » April 14th, 2021, 4:19 pm

justfisk wrote:Bitcoin is perhaps the important invention since the internet.

Education
Perhaps you dont understand it, perhaps you've heard of it or read about it in your favorite Mainstream News organization.
If you do not "get it" yet, it is not too late!
Most of the World is still not exposed to it even though it is currently growing faster than the internet.
If you decide against owning this asset, you want to have made that decision from a position of knowledge as opposed to a making it from a position of hearsay.
If you do not own Bitcoin you should at the very least be educating yourself about it. Information travels asymmetrically even at this time. I am seeing a lot of antiquated talking points here from 5-9 years ago.
A lot has changed since then!

Life Changing
Owning Bitcoin can be life changing, as the depositors in Myanmar may now be finding out as I watch videos of them queuing up to access their own money from ATMs after strict limits were imposed. These people are seeking permission to their own property. Bitcoin is permissionless, Unconfiscatable (Hello Cyprus 2013!) and censorship resistant. Nothing else like it. Perhaps in the history of the World it is the only asset you really own on your own Terms.

Investing
As investors, Owning Zero Bitcoin is the wrong allocation regardless of risk Appetite.
Owning Bitcoin to your portfolio reduces risk. Bitcoin is the only asset that has a Sharpe ratio greater than 1!
The very early-adoptors got in a few years early, however getting a portion now gets you in with the so-called smart -money and institutions.
As more people learn about Bitcoin's merits, they would want to own some which in turn grows the Network which strengthens the Network which grows the value, which grows the Network....
As Halvings occur, scarcity is pre-programmed.

Macro
Fiat is wasteful and inflationary.
Technology in general and Bitcoin is deflationary
In a deflationary world, playing inflationary games may be quite costly and wasteful.

FUD
The regulatory environment in many Western countries has grown to be very friendly towards it. It has helped grow the Bitcoin network as this Asset is now being traded on regulated exchanges with anti-laundering compliance etc. In Authoritarian countries where centralized Bitcoin exchanges are strangled, the P2P exchanges have exploded with a premium on price. Those States who adopt Bitcoin would benefit and those States that do not would be left behind.
Those are not my words, those are recent words of the House minority Leader in the US advocating to embrace it in the realm of Geopolitics.

Do not apply an analog lens in a Digital World!

thanks,
JF


This reads like a sales pitch but it lacks one of the most important pieces of information relevant to any investment - price. What price represents fair value for Bitcoin and why? As there is no income stream any profit must come from capital growth - what is this projected to be and why?

In short it makes no sense to say X is a great investment without reference to price.

Regarding this point;

As investors, Owning Zero Bitcoin is the wrong allocation regardless of risk Appetite.

It's worth remembering that no-one ever lost money not investing in something. There will always be missed opportunities, the key is to invest when there is a strong case to do so and that case has to include careful consideration of price.

BoE

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Re: Do you own Cryptocurrency? A poll

#404274

Postby 1nvest » April 14th, 2021, 6:14 pm

Back in the early days and a acquaintance was gifting bit coins as a means of introduction to bit wallets storage/transfer. A offer I with hindsight foolishly ignored. :cry:

Still never bought any later either as I saw it as just another borderline illegal Ponzi that I thought sooner or later would be closed out. But that now (very limited knowledge) seems to be being given more official approval/support. Maybe states like the idea of such digital currency, will permit it to establish before letting it blow up and then step in to seize overall control. Which still means its a Ponzi, that will collapse, transition over to being traceable/accounted, and taxed, as part of reinstating currency restrictions/controls on the £.

We're in a era of currency wars, where all are printing trillions in order to offset others trying also to devalue their currency. When the crunch comes only those left holding physical assets will have preserved value. Even conventional gold ETF's supposedly backed by physical gold may fail as much of that actual physical gold is borrowed/lent. Scandals yet to be revealed. Those with actual physical gold in their possession will see the value soar and be real. Synthetics/paper/digital gold will largely be worthless other than those that actually manage to secure possession of physical ahead of the rest.

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Re: Do you own Cryptocurrency? A poll

#404287

Postby justfisk » April 14th, 2021, 6:56 pm

This reads like a sales pitch but it lacks one of the most important pieces of information relevant to any investment - price. What price represents fair value for Bitcoin and why? As there is no income stream any profit must come from capital growth - what is this projected to be and why?

In short it makes no sense to say X is a great investment without reference to price.

How much value is stored in Gold?
How much value is stored in Property?
....Bonds, Stock Market, Arts, Collectables?
We have been scrambling trying to figure out how to outpace inflation by storing value in all sorts of Assets.
We are all on this website because of this store-of-value problem we are trying to solve. :D

Even if Bitcoin takes a small percentage of each of these assets, you come to a fair Price.


Regarding this point;
It's worth remembering that no-one ever lost money not investing in something. There will always be missed opportunities, the key is to invest when there is a strong case to do so and that case has to include careful consideration of price.


This is simply wrong. Try telling the Guy in Argentina storing his wealth in the Peso that he has not lost any money over 1 year, 5 year, 10 year or 20 years.
If I was in Venezuela and stored my wealth in the Bolivar I could have lost it all as opposed to storing it in the US Dollar or British Pound.
By the way, those currencies have performed better against the Dollar or GBP than
the British Pound has done against Bitcoin.

Over a large enough timeframe the fair Price for any Fiat currency is Zero.

JF

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Re: Do you own Cryptocurrency? A poll

#404391

Postby Bubblesofearth » April 15th, 2021, 7:46 am

justfisk wrote:How much value is stored in Gold?
How much value is stored in Property?
....Bonds, Stock Market, Arts, Collectables?
We have been scrambling trying to figure out how to outpace inflation by storing value in all sorts of Assets.
We are all on this website because of this store-of-value problem we are trying to solve. :D

Even if Bitcoin takes a small percentage of each of these assets, you come to a fair Price.


Gold has 1000's of years of history on its side as a store of value. The correspondence with both wages and stuff (loaves of bread are often quoted) has stood the test of time. Lots of volatility of course but the long-term relationships are there.

Property, stocks and bonds have relatively easily calculable value from the income they produce.

Art and collectables have intrinsic value linked to their appeal. Strip away all the investments/transactions and a painting by Turner is still nice to look at and a vintage wine still tastes good.


This is simply wrong. Try telling the Guy in Argentina storing his wealth in the Peso that he has not lost any money over 1 year, 5 year, 10 year or 20 years.
If I was in Venezuela and stored my wealth in the Bolivar I could have lost it all as opposed to storing it in the US Dollar or British Pound.
By the way, those currencies have performed better against the Dollar or GBP than
the British Pound has done against Bitcoin.

Over a large enough timeframe the fair Price for any Fiat currency is Zero.

JF


I agree. Which is why it important to invest money in assets that can either provide a reasonable return (income and/or cap growth) over time. Keeping a significant amount of your money in cash over long periods of time is widely regarded as an investment mistake. However, that in itself is not an argument for investing in Bitcoin which has to stand or fall on the merits of the cryptocurrency. Which has to include a consideration of what constitutes a fair price.

So, again, what is a fair price for Bitcoin and why?

BoE

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Re: Do you own Cryptocurrency? A poll

#404399

Postby Urbandreamer » April 15th, 2021, 8:19 am

Bubblesofearth wrote:So, again, what is a fair price for Bitcoin and why?

BoE


I have just created a thread to a link on an interesting video about hypreinflation, on this board, that I watched last night.

Arguably, if there IS a fair price, it is unbounded. That is to say that todays price may be fair but that over time will be seen as cheap. This is because we are looking at it's price from the viewpoint of a currency that is designed to devalue. Even modest inflation should ensure that, provided people still want the stuff, it goes up in price like the price of a chockolate bar.

It all depends upon your view of bitcoin as a store of value and your view of others views. It's a Keynsean beauty contest.

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Re: Do you own Cryptocurrency? A poll

#404416

Postby Bubblesofearth » April 15th, 2021, 9:40 am

Urbandreamer wrote:
I have just created a thread to a link on an interesting video about hypreinflation, on this board, that I watched last night.

Arguably, if there IS a fair price, it is unbounded. That is to say that todays price may be fair but that over time will be seen as cheap. This is because we are looking at it's price from the viewpoint of a currency that is designed to devalue. Even modest inflation should ensure that, provided people still want the stuff, it goes up in price like the price of a chockolate bar.

It all depends upon your view of bitcoin as a store of value and your view of others views. It's a Keynsean beauty contest.


The examples of hyperinflation are linked to economic destruction, not surprising as the value of a currency at any given time is linked to the economy behind it. Almost all countries have been hit by the pandemic and have printed in response. But, despite what the video tries to portray, these countries economies are nowhere near as weak as the examples given. The most likely scenario going forward is that there will be economic recovery. Some inflation is certainly possible but the argument for hyperinflation is a stretch IMO.

For Bitcoin an argument for what constitutes a fair price has to be made according to exchange rates that prevail today. You can't say the price is unbounded any more than you can claim the price of any good is unbounded. Yes, if there is hyperinflation then the price of all stuff will tend to infinity in the hyperinflating currency.

The trick here is to look at underlying value. What makes something of value to someone. For property that's easy, it's a place to live in an area you want to live in. For stocks it is the demand for goods that the companies produce that makes the valuable. Likewise collectables. As long as people want to look at or drink them then they will retain value. All of these things have a price in todays market.

So for Bitcoin there remains the question of what that price should be. If it helps, think of that price in relation to other stuff rather than fiat. What is a fair price for Bitcoin in terms of a detached house in York? Bottom line, if you are investing in Bitcoin then you are deciding to invest in it instead of something else and price remains critical.

BoE

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Re: Do you own Cryptocurrency? A poll

#404420

Postby NotSure » April 15th, 2021, 9:55 am

Bubblesofearth wrote:So, again, what is a fair price for Bitcoin and why?


I'm guessing you are totally unaware of NVT and the Metcalfe Ratio? :? ;)

Believe it or not, crypto-native (sort of) equivalents to P/E and P/B and the like are used to compare, if not to quantitatively value the crypto tokens.

Of your examples, I think crypto is more like art than any other - it is of course worth what people will pay for it. You could argue that fine art could generate a revenue - you could rent it to a gallery, or charge people to view it, but that revenue would nowhere near justify its perceived value. Like art, fashions change - I'd bet that Warhol and Pollock would have struggled to sell their work in the 19th century, and the owners of their work may struggle to shift it in the 22nd century. I think crypto, like art, is a punt on what future people will pay for it. In the case of Bitcoin, its fixed supply and decentralised nature are very attractive to many people, rightly or wrongly. But is it any stranger than paying 7 or 8 figures for dribbles on canvas?

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Re: Do you own Cryptocurrency? A poll

#404426

Postby seekingbalance » April 15th, 2021, 10:10 am

NotSure wrote:
Indeed - fees are a bit steep, but they limit the maximum amount of rebalancing each month. The 2% is just on what they have to sell and buy, which may be just 10% of the index or less, depending on relative price movements. To me, it's a small punt on one or two of the index 'going large'. To construct a portfolio oneself would be even more expensive. I am not 'investing' here, just buying a lottery ticket for a bit of fun, so I can live with some attrition in return for a very convenient platform. The back testing in the article I linked included the effect of rebalancing fees.


Thanks again.

I have looked more closely at the fees, and a few people have posted their statements on line. This thing has only been going for about 6 months, so limited data so far, but the average seems to be quite a lot of trading. In every example every single coin was traded, buy or sell, which as they rebalance to exact percentages I guess is always going to be the case, and at least one, sometimes two or three coins were totally replaced each month. This last results of course in 6 full buy/sell trades. All the other trades were somewhat or much smaller, but on average the fees added up to between 0.5% and 1% - so let’s say 0.75% per month. So, in a single year that is 11% in fees, including the initial 2%. On a £10k buy that’s around £1100 a year in fees, and more if it goes up as we hope.

Too rich for me, I think, and way too overtraded.

It’s a lot more work, but I think I’ll do my own version - £500 in each of their 20 “mid caps” via Binance at 0.1% fee, then rebalance quarterly or 6 monthly, and only to approximate roundup levels. I estimate the fees on that would be closer to 0.3% for the entire year, saving £1070 in fees.

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Re: Do you own Cryptocurrency? A poll

#404428

Postby Bubblesofearth » April 15th, 2021, 10:12 am

NotSure wrote:
I'm guessing you are totally unaware of NVT and the Metcalfe Ratio? :? ;)

Believe it or not, crypto-native (sort of) equivalents to P/E and P/B and the like are used to compare, if not to quantitatively value the crypto tokens.

Of your examples, I think crypto is more like art than any other - it is of course worth what people will pay for it. You could argue that fine art could generate a revenue - you could rent it to a gallery, or charge people to view it, but that revenue would nowhere near justify its perceived value. Like art, fashions change - I'd bet that Warhol and Pollock would have struggled to sell their work in the 19th century, and the owners of their work may struggle to shift it in the 22nd century. I think crypto, like art, is a punt on what future people will pay for it. In the case of Bitcoin, its fixed supply and decentralised nature are very attractive to many people, rightly or wrongly. But is it any stranger than paying 7 or 8 figures for dribbles on canvas?


Art has intrinsic value. It is nice to look at. It is also a reflection of the genius (or otherwise!) of the creator. Bitcoin has none of the qualities of collectables except for its relative scarcity. But scarcity alone is not a reason to value something. Otherwise I could make a fortune from my nail clippings.

The argument for it being a decentralised currency still comes up against 'so what?'. We have fiat currencies that can be used to buy stuff and we have plenty of things that we can exchange that currency for that act as a store of value. Why do we need Bitcoin?

The argument that the price of Bitcoin is whatever the market will bear is of course valid. But it allows for the possibility that it is a speculative bubble, especially if there is no sound case for intrinsic value.

I have no idea what NVT, Metcalf radio or crypto-native are. Maybe you can explain how they can be used to arrive at a fair price for Bitcoin?

BoE

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Re: Do you own Cryptocurrency? A poll

#404430

Postby NotSure » April 15th, 2021, 10:28 am

seekingbalance wrote:
NotSure wrote:It’s a lot more work, but I think I’ll do my own version - £500 in each of their 20 “mid caps” via Binance at 0.1% fee, then rebalance quarterly or 6 monthly, and only to approximate roundup levels. I estimate the fees on that would be closer to 0.3% for the entire year, saving £1070 in fees.


I agree - if you are putting £100s in each, the fees are way too high. But for me, who is sticking in a tiny fraction of that, they stack up. To me, my stake is just a lottery ticket. My crypto holdings are not on my spreadsheet! I've just spent, not invested, a few quid.

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Re: Do you own Cryptocurrency? A poll

#404432

Postby NotSure » April 15th, 2021, 10:38 am

Bubblesofearth wrote:
NotSure wrote:I have no idea what NVT, Metcalf radio or crypto-native are. Maybe you can explain how they can be used to arrive at a fair price for Bitcoin?
BoE


Apologies - the emojis I added were intended to indicate that I was very skeptical, joking even. I am not convinced by crypto as a thing, let alone as an investment, but am interested in a phenomenon that generates so much discussion and controversy.

For what little it is worth, NVT is Network Value to Transaction Ratio, where network value is market cap and transaction is how much changed hands over the last 24 hours, the Metcalfe Ratio derives from computer science and it a measure of the number of nodes and interconnectivity of a network. In a qualitative sense, proponents say these can indicate over and under-pricing - like PE, buy low, sell high. Crypto-native simply means the metrics are specific to crypto and not applicable to 'proper' assets.

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Re: Do you own Cryptocurrency? A poll

#404824

Postby NotSure » April 16th, 2021, 8:32 pm

seekingbalance wrote:It’s a lot more work, but I think I’ll do my own version - £500 in each of their 20 “mid caps” via Binance at 0.1% fee, then rebalance quarterly or 6 monthly, and only to approximate roundup levels. I estimate the fees on that would be closer to 0.3% for the entire year, saving £1070 in fees.


I would be very interested to know how you get on. Which 20 are you picking and why?

Today was a day for the 'tiddlers'. As I said, I have only a trivial stake - no more than a typical each-way punt on The National. However, despite the more well-known tokens dropping today - BCI5 and BCI10 were consequently both down by a few percent - the BCI25 was up over 8%. Your mid cap selection would have done better still as you are avoiding the underpeforming big caps. On my ISA/pension investments (global equities and a small percentage of bonds), I'd be absolutely delighted to see 8% total return this year. Should have just stuck the lot on BCI25 for 24 hours then moved into cash for the next 364 days ;)

It really is very silly. The BCI25 biggest mover in percentage terms (and probably also absolute) was DOGE (+100%), which is, quite literally, a joke coin. But it's at least as much fun as Bingo!

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Re: Do you own Cryptocurrency? A poll

#405007

Postby 1nvest » April 17th, 2021, 10:40 pm

justfisk wrote:How much value is stored in Gold?
How much value is stored in Property?
....Bonds, Stock Market, Arts, Collectables?
We have been scrambling trying to figure out how to outpace inflation by storing value in all sorts of Assets.
We are all on this website because of this store-of-value problem we are trying to solve. :D

Buy and hold is no different to costlessly selling and lumping in again every day. I hope that in 10, 20 ... whatever years time to still be lumping in every day into much like what I already choose to lump into and as such my inflation rate for those assets can be liability matched - inflation problem solved :). For example if in 10 years time I expected to lump into 50% stock, 50% home value then today's 50/50 home and stock prices inflation adjusted price in 10 years time for both of those will perfectly match 'inflation'. Along the way there's dividends and imputed rent thrown in on top.

CPI is a distorted figure, most assets mid to longer term out-run CPI, art, gold, stocks, house prices ...etc. broadly by around 2.5% to 5%. Money is something that is intentionally devalued over time, more printed, taxed ...etc. and where real inflation rates are understated, replaced by something else called 'CPI' that is manipulated as desired. Buying Gilts is lending to a cheat who can adjust interest rates, taxation, print money ...etc. to their advantage. A better 'currency' are assets like stocks, art, gold, land ...etc. Only liquidating such into cash at near the times you intend to buy something. In India there's less faith in legal tender currency and many opt to hold gold and only convert to currency as/when needed. In the West we tend to have more faith in currency and accept its devaluation as 'inflation', at a contrived (lower than actual) rate. Hard cash however is no different to Gilts - just its a zero coupon immediately redeemable note/bill/bond.

Historically costs were higher, used to cost £100 per trade and market makers given postal trade orders might widen spreads out to 10% or more. Historic basic rate tax averaged 38% and applied as now to nominal 'gains' not real gains.

Old Money, generational wealth, tends to opt for a "currency" of art, land and gold. Such that even when a legal tender currency 'note' vanishes into history their currency endures. Art can be rolled up into a tube and transported to somewhere safe, as can gold. Whilst land might be lost in some cases later family claim can see it being returned, but failing that a 33% loss assuming equal weightings of land, gold, art is more a 'inconvenience' rather than being financially fatal. A Cambridge University study of Keynes' art collection of £13,000 invested between 1917 and 1945 found that end of 2018 valuations compared to that of all-stock total returns (with dividends reinvested) over the same period. Art in that context was a good hedge of stock price inflation (and the equivalent accumulation of all dividends), which in turn massively outran CPI inflation.

A all-PM (precious metals) investor since 1917 would of, as at the end of 2019, have outpaced official/reported 'inflation' by 3% annualised. However sub-set periods within that did see some large swings of relative out/under performance so you can pick start/end dates to favour whatever picture you might want to paint. That's based on a assumption of a degree of common-sense, for instance prior to 1932 when money and gold were convertible at a fixed rate it made more sense to hold money deposited earning interest such that that bought back more ounces of gold when converted back again, it was like being paid for someone else (the state) to safely store your gold. Also as the US remained on the gold standard until the late 1960's/early 1970's it was assumed that silver was favoured over gold between 1932 and 1971.

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Re: Do you own Cryptocurrency? A poll

#405021

Postby ursaminortaur » April 18th, 2021, 12:24 am

1nvest wrote:
justfisk wrote:How much value is stored in Gold?
How much value is stored in Property?
....Bonds, Stock Market, Arts, Collectables?
We have been scrambling trying to figure out how to outpace inflation by storing value in all sorts of Assets.
We are all on this website because of this store-of-value problem we are trying to solve. :D

Buy and hold is no different to costlessly selling and lumping in again every day. I hope that in 10, 20 ... whatever years time to still be lumping in every day into much like what I already choose to lump into and as such my inflation rate for those assets can be liability matched - inflation problem solved :). For example if in 10 years time I expected to lump into 50% stock, 50% home value then today's 50/50 home and stock prices inflation adjusted price in 10 years time for both of those will perfectly match 'inflation'. Along the way there's dividends and imputed rent thrown in on top.

CPI is a distorted figure, most assets mid to longer term out-run CPI, art, gold, stocks, house prices ...etc. broadly by around 2.5% to 5%. Money is something that is intentionally devalued over time, more printed, taxed ...etc. and where real inflation rates are understated, replaced by something else called 'CPI' that is manipulated as desired. Buying Gilts is lending to a cheat who can adjust interest rates, taxation, print money ...etc. to their advantage. A better 'currency' are assets like stocks, art, gold, land ...etc. Only liquidating such into cash at near the times you intend to buy something. In India there's less faith in legal tender currency and many opt to hold gold and only convert to currency as/when needed. In the West we tend to have more faith in currency and accept its devaluation as 'inflation', at a contrived (lower than actual) rate. Hard cash however is no different to Gilts - just its a zero coupon immediately redeemable note/bill/bond.

Historically costs were higher, used to cost £100 per trade and market makers given postal trade orders might widen spreads out to 10% or more. Historic basic rate tax averaged 38% and applied as now to nominal 'gains' not real gains.

Old Money, generational wealth, tends to opt for a "currency" of art, land and gold. Such that even when a legal tender currency 'note' vanishes into history their currency endures. Art can be rolled up into a tube and transported to somewhere safe, as can gold. Whilst land might be lost in some cases later family claim can see it being returned, but failing that a 33% loss assuming equal weightings of land, gold, art is more a 'inconvenience' rather than being financially fatal. A Cambridge University study of Keynes' art collection of £13,000 invested between 1917 and 1945 found that end of 2018 valuations compared to that of all-stock total returns (with dividends reinvested) over the same period. Art in that context was a good hedge of stock price inflation (and the equivalent accumulation of all dividends), which in turn massively outran CPI inflation.

A all-PM (precious metals) investor since 1917 would of, as at the end of 2019, have outpaced official/reported 'inflation' by 3% annualised. However sub-set periods within that did see some large swings of relative out/under performance so you can pick start/end dates to favour whatever picture you might want to paint. That's based on a assumption of a degree of common-sense, for instance prior to 1932 when money and gold were convertible at a fixed rate it made more sense to hold money deposited earning interest such that that bought back more ounces of gold when converted back again, it was like being paid for someone else (the state) to safely store your gold. Also as the US remained on the gold standard until the late 1960's/early 1970's it was assumed that silver was favoured over gold between 1932 and 1971.


US citizens were forbidden to privately own and trade in most* gold from April 5, 1933 (executive order 6102) and silver bullion from August 9, 1934 (executive order 6814). Though the executive order on silver was rescinded in 1938 much earlier than that for gold.

https://en.wikipedia.org/wiki/Executive_Order_6102

https://en.wikipedia.org/wiki/Executive_Order_6814

https://www.jmbullion.com/investing-guide/buying-physical-metals/fdr-silver-nationalization-1934/

* A limited amount of gold coinage was allowed - $100 worth in 1933 dollars. And any amount of silver coinage was allowed.

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Re: Do you own Cryptocurrency? A poll

#405026

Postby 1nvest » April 18th, 2021, 1:23 am

ursaminortaur wrote:US citizens were forbidden to privately own and trade in most* gold from April 5, 1933 (executive order 6102)

Yes the plan was clearly to re-peg the US$, as such all gold was physically purchased by the state at the 'current' peg rate, before ramping the price/peg higher. It still remained pegged however, and 'illegal' until 1971 when President Nixon again decoupled the US$ from gold as a means to pay down the cost of the Vietnam war. Money no longer pegged to anything tangible/finite, free to print as much money as needed (or that the markets would tolerate). That motion started in 1968 but took until 1971 before being made 'official', which was a indicator of a good time to be accumulating gold - and up to 1980 that paid large dividends (price of gold soared i.e. $ was devalued). In 1980, when it took a little over 1 ounce of gold to buy a Dow index stock - that was a indicator of a gold price peak, and turned out to be a great time to own stocks (1980 to 1999). In 1999 the Dow/Gold ratio was up at new highs, around 40 ounces of gold to buy a Dow Index stock, suggesting stocks had become overstretched, gold relatively cheap. Easy with hindsight to see those peaks/troughs, not so easy when in real time, however even jumping in/out too early/late was still relatively OK. Or even just simple fixed weightings and yearly rebalancing.

A astute investor might have held money earning interest and having gold pegged at a fixed amount to the US$ up until the early 1930's and then upon seeing the compulsory purchase of all gold perhaps seen that for what it indicated and opted to buy/hold gold - maybe in London/UK. Then after the re-peg sold that gold and moved back to $ cash earning interest and pegged to the higher gold price peg, perhaps from 1935 onward. Those that respect the governments wish to 'confiscate money' paid the price, gold/money peg was ramped from around $20/ounce to $34/ounce. Those less inclined to be caught by that might have gained 70% relatively quick/easily.

States don't openly default, they periodically partially default via stealth. Printing money, increasing taxes, devaluing currency ...etc. Prior to doing so often there'll be indicators such as currency controls, forbidding taking more than just token amounts of money out of the country, locking down gold trading ...etc. Generational Wealth looks for such signals and moves ahead of actions to safer alternatives. When the US was waving a big flag of its gold/$ intent it was a pretty clear indicator of 'time to move capital/assets elsewhere'.

They say "don't fight the Fed", not ... the Fed is your friend, because it isn't, its an adversary. Karate style, use a larger forces own motion to your benefit. When for instance the National Savings ended new issues of inflation bonds the intent was not for savers benefit - the state was happy to continue/issue such when the payouts were likely low and in their favour, withdrawn (at least to new investors) when there was a potential swing in the other direction.

Don't be surprised if owning gold is made difficult/awkward at some time in the future. Perhaps higher taxation or whatever. With physical you could bury it in your back garden to leave it buried until sunnier times. With bitcoin likely the policy will be to make it much more transparent/traceable before instating barriers or outright banning it. Physical trumps both paper (gold funds, even if they suggest that they're backed by physical but where push comes to shove that might all disappear (lent/borrowed/whatever)), and virtual (data bits suggesting value/ownership - but that could vaporise overnight). Yes for liquidity, tighter spreads some paper (gold fund) or bitcoin might be used for 'rebalance' purposes, but only as a smaller proportion, a sideline on top of a physical core/base. If/when paper/bit gold hits a wall, potentially physical will be in massive demand as part of that .

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Re: Do you own Cryptocurrency? A poll

#405072

Postby NotSure » April 18th, 2021, 10:56 am

Crypto is currently tanking in specular fashion. Holding must feel like living in Southern California, waiting for the next 'big one'. (Well, I am a holder - the princely sum of £50, which quickly became £55, and is now probably nearer £40). It's still very early in most of USA, and Sunday afternoon in Asia. It's hard to imagine many are even looking, let alone trading amounts that could cause these shifts - I was just on a news site that had a ticker in the banner and it caught my eye.

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Re: Do you own Cryptocurrency? A poll

#405159

Postby justfisk » April 18th, 2021, 4:53 pm

Crypto is currently tanking in specular fashion. Holding must feel like living in Southern California, waiting for the next 'big one'. (Well, I am a holder - the princely sum of £50, which quickly became £55, and is now probably nearer £40). It's still very early in most of USA, and Sunday afternoon in Asia. It's hard to imagine many are even looking, let alone trading amounts that could cause these shifts - I was just on a news site that had a ticker in the banner and it caught my eye.


Fiat investors have gotten quite comfortable to low volatility markets in recent years. When markets are manipulated globally as they have been for so long, people have gotten complacent. A "Big one" occurred in the Fiat system in 2008. As is the habit in the Fiat system, the Can has been kicked multiple times down the road. The European Sovereign debt crisis in 2012 accrued further Can-kicking. Fiat investors may have a lot of confidence in Can-kicking, but they are advised to watch out for potentially another "Bigger one" down the road. The Fiat track record speaks for itself.

For those new in Bitcoin, welcome to the actual Free Market!
it is indeed an Open 24hr/365 day trading Market trading round the clock non-stop.
In actual Free markets, there are No Stop Gaps
No "Circuit breakers", or "trading halts"
No man behind the Curtain
Trading is not "halted" after 7% drops.

In Free Markets, Price is a Signal
Truth is reflected in Price rather quickly.
If there is a major power blackout in Xinjiang affecting the Bitcoin Mining Hashrate, the Price reflects this fact as well as other factors rather quickly. The Market responds.
Further decentralization of Hashrate occurs which strengthens the Network.

A fledgling Asset, with a Sharpe ratio over 1, 200% returns per year and 15-40% yield, does not take the Crown of a 5000 year Store of Value with NO volatility.
For those with weak Hands, one may decide to wait 13 years when Bitcoins peak volatility is on track to drop below fiat volatility (EURUSD). You may calculate the price of the Asset at that point noting its adoption growth and wait.
(For those who are interested, the fundamentals of the Network may be analysed by using on-chain analytic tools such as Glassnode)

thanks,
JF

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Re: Do you own Cryptocurrency? A poll

#405160

Postby scrumpyjack » April 18th, 2021, 5:01 pm

OTOH the price of gold and other expensive metals could fall sharply when asteroid mining eventually gets going as many think will happen. Many asteroids are thought to be stuffed full of heavy metals as they come from the core of stars :D

https://en.wikipedia.org/wiki/Asteroid_mining

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Re: Do you own Cryptocurrency? A poll

#405254

Postby GoSeigen » April 19th, 2021, 10:18 am

NotSure wrote:Crypto is currently tanking in specular fashion. Holding must feel like living in Southern California, waiting for the next 'big one'. (Well, I am a holder - the princely sum of £50, which quickly became £55, and is now probably nearer £40). It's still very early in most of USA, and Sunday afternoon in Asia. It's hard to imagine many are even looking, let alone trading amounts that could cause these shifts - I was just on a news site that had a ticker in the banner and it caught my eye.


This is a misunderstanding of how trading works. A large price shift doesn't require any volume of trading, a single unit of smallest size is enough. When liquidity is poor price will fall/rise until there is an interested buyer/seller at that price.


GS


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