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Now that crypto seems to be firmly on one side of the Culture War, in that Trump and co. are actively promoting it, what do we see as the future of crypto under a Trump presidency?
Personally I am only just getting into the space, but continue to be surprised by just the sheer amount of money and energy behind a lot of these projects, and communities. For instance right now in the Solana meme coin market, AI agents on twitter and other areas are a huge point of interest.
What fascinates me is the fact that the crypto ecosystem seems to offer an alternative way to get funding for startups, especially in "hot" areas like AI. Instead of going the VC route, a creator can just go straight to twitter and create an automated agent, then make a meme coin off of that agent and potentially make millions of dollars.
For some examples of this, we have @truth_terminal, which is I believe the most popular AI agent on the site which sort of started the entire wave. https://x.com/truth_terminal. The fascinating thing about this account is that it asked for $50,000 to start making money, and Marc Andreessen actually gave it the money, which it then took and became a millionaire from crypto.
More recently, there are all sorts of projects coming out around meme coins and AI. A ton of them are just general slop, porn bots, et cetera, but some seem to have real creative vision / potential behind them, like for instance @pillzumi, which seems to be like a blend of AI agents + an AI-generated anime series, or something like that.
All this to say that while many see crypto as nothing but scams and a waste of time, in my opinion some of the most genuinely novel and interesting projects are happening there.
To bring it back to the culture war - almost all of crypto and these AI innovations seem to be swinging heavily right wing. Same with the broader VC / tech environment. How will the left respond? Do you think democrats will begin to be more friendly to crypto, or will they double down on trying to lock it out of traditional financial systems?
Do you think Trump will actually make significant progress in regulating crypto and integrating it in the financial system of the U.S.? What would be the main blockers? How much political capital will he really need?
There is strong “bubble” energy in the crypto markets and aside from their bad-rep for collapsing, bubbles can actually be pretty good for driving change and innovation: https://www.thepsmiths.com/p/review-boom-by-byrne-hobart-and-tobias
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I am admittedly not highly knowledgeable in the area, but the extent of this mostly just reinforces to me that the whole thing is pretty much just a pump-and-dump scam where grifters can make big money. The enthusiasm of the Trumpsphere for crypto strikes me as a feedback loop between grifters and idiots diving in and seeing line-go-up as a get-rich-quick scheme with no plausible reason that this is actually an investment.
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Okay, I'll bring a contrarian take to the table:
I'm a Bitcoin Maxi in the sense that I don't think any coins can possibly displace it at this point.
But there's seemingly very little stuff you can "DO" with Crypto. And the stuff you can do is based around avoiding financial regs or international monetary restrictions.
I will accept the characterization of BTC as "digital gold," but Gold can be put to use as something other than a store of value. And unlike Gold it could in theory be forked to increase supply or otherwise devalue/debase itself if the miners so chose.
So even without believing that its an unsustainable Ponzi, I just ask what goal are Bitcoin holders coordinating towards, other than getting really rich as denominated in USD?
I'm not even asking what the 'endgame' is, its just, what does one 'do' with the BTC other than hold it, occasionally buy more, and maybe sell it if you ultimately need to transact business in USD?
Because there's not a lot to 'do' with BTC, I don't think Trump will actually do much to it. He may call off the regulatory watchdogs which will lead to an influx of money into the space, but even if this leads to a lot more projects, we've been waiting for 13 years for a project that actually leverages BTC's properties to do something, shall we say, truly useful.
Yes, Bitcoin has basically failed to become a currency. Though a lot of it is due to regulators frowning on it and issuing veiled threats to jail you for financing terrorists if you try to make it useful.
Since Chevron deference was shot down by SCOTUS and Trump seems bullish on Bitcoin, it could be a good time to be a Bitcoin maxi again.
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Tyler Cowen and Alex Tabarrok just had a great discussion about this at the propeller-head level. You're pretty close to what I think their ultimate prediction is. They think crypto will be paired with a few major currencies, and that will be attractive to a bunch of minor countries who want the benefits of access to a more major currency, but without the regulatory strings the originators of those currencies would like to attach. They think that this will drive out more minor currencies, but that crypto can't completely do it on its own; it will still need to be sort of attached to one of a few more major currencies. With the speed of calculation managing arbitrage against poor management of one of these major currencies, I guess the hope is that it will help enforce better management of the handful of major currencies (also perhaps taking away some of the value a major currency supplier could typically try to get by doing any number of the typical 'poor management' things they typically otherwise do).
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Bitcoin has been forked multiple times because the OG protocols are, to put it bluntly, really bad. However each of those times (like BTC cash) the forks have basically died out while OG shitty infrastructure bitcoin continues to go up and up.
Personally I was quite surprised by this because e.g. when Ethereum was forked the fork came to dominate, but perhaps that's because the fork kept the name "Ethereum".
Alas the BTC/ETH ratio slowly keeps creeping up (My crypto holdings are largely ETH which actually has multiple good uses, I refuse out of principle to support such a shitty protocol as OG BTC) so what do I know, but it really is jarring in a similar way to how Gamestop's share price rise and stabilization way about fundamental value is jarring.
What are those? Because I played in the ETH ecosystem for a while (RIP Augur) and I came to be dissappointed because all the exciting projects died because ETH doesn't scale well, or because its REALLY hard to avoid programming bugs, or because whatever function they serve is just better done via centralized services.
So I tossed in the towel for now, while still holding SOME ETH in reserve (never uninstalled MetaMask).
Like, DAOs had a moment, and then seemingly nothing has been done with them. Same with NFTs.
NTF were useful only for scams of get-rich-quick variety and for scams of "this will be unique valuable collector item" (if these two scams are considered to be separate).
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Litecoin is a fork of Bitcoin, and I would not characterize it as having "died out". Its transaction volume is about half that of Bitcoin.
Bitcoin's design makes transactions super expensive so you'd expect it to have low transaction volume (note your graph is by number of transactions, not dollar value of the transactions) relative to its true size and so litecoin having half of even that (despite being a significantly better protocol for facilitating transactions) just shows how few litecoin transactions there really are. If you add Ethereum to your graph which is a more reasonable comparison it handily beats all of them and you can see there are around 6x as many Eth transactions per day compared to bitcoin.
Given the market cap differences between the two if bitcoin had a decent protocol for transactions I'd expect there would be between 15-20x as many BTC transactions per day compared to LTC.
The graph for that metric indicates near-identical median transaction sizes of around 230 dollars. (Mean transaction size is 250 k$ for Bitcoin vs. 50 k$ for Litecoin.)
I don't see how that's relevant to the original question of whether Litecoin has "died out". In my opinion, even if Litecoin has died out as a store of value (I have no opinion on that question), the combination of half-as-large transaction volume and near-identical median transaction size means that Litecoin has not died out as a medium of exchange in comparison to Bitcoin.
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Is crypto-skepticism contrarian now? I guess here it might be!
This is, while unlikely (after all, bitcoin is an attempted "fork" from fiat, and it's been remarkably successful so far), is maybe a good thing, it means that if a change is considered good by a consensus of nodes then it can be implemented, less subject to the whims of a single government than fiat, more amenable to change than gold.
The end game is that a significant amount of transactions are ultimately settled in BTC, and I guess also that a significant amount of reserves held are also denominated in BTC. You can argue that bitcoin is not good for day to day transactions between individuals, but it's way faster and cheaper (though the latter might be a matter of just not having a big regulatory structure above it) than the big movements that happen in the background.
Which I guess speaks to @faceh's objection: For all this to be "real", bitcoin's price needs to be a lot more stable. The simplest model of the value of bitcoin is something like p(it happens) * (total value of eventual transactions settled in bitcoin + all bitcoin eventually held in reserves), the idea being that, as p approaches 1, the price should start to settle. The thing is that the second factor is not constant either: Is BTC going to be used by developing countries? Is it going to replace the USD as the dominant currency? Is it going to just take over the world? The notion that further success begets more appreciation makes it hard for it to bootstrap its way into being a medium of exchange.
I'm not a turbo-optimist to begin with, but I guess you guys have managed to move me slightly to the more skeptical side.
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We can avoid worldwide CBDC tyranny if we establish a convention that currencies (and especially digital currencies) are more than just bits of paper arbitrarily created and destroyed by politicians and their banker buddies. Better to have Doge, Shiba and even HarryPotterObamaSonic10inu than to own nothing but digital good boy points.
I prefer digital good boy points because my decades-long experience is that I can reliably exchange them for goods and services that I desire. I grant that there is some systemic risk incurred by relying on said good boy points instead of the new and very reliable shitcoins, but I find that level of risk over the course of my lifetime to be acceptable, particularly when compared to the likelihood that I'll ever be in a situation where Delta or my local steakhouse are accepting Doge.
I get it, you just want to grill.
But what happens if the local steakhouse starts being rationed? Maybe they haven't met their Climate Obligations? Or maybe you aren't doing your part of the Green New Deal? You might want to go to a market... oh your digital good boy points can't be traded to Non-Licensed Traders?
How are you going to protest if you can't fund anything individually or collectively? How can you have free speech if you can't pay for a journal or web hosting? The next thing you know the police have invited you over to 'have tea' like they do in China and there's nothing you can do about it, certainly not paying for a lawyer.
Without freedom of transaction, there are no other freedoms.
Assuming this, I expect I cannot buy them with BTC either.
To avoid such scenario other methods are more efficient.
You can buy anything with Bitcoin, an early use-case was illegal drugs. They physically cannot stop you making the transaction. In this scenario they'd probably watch all the BTC addresses, so you'd actually be using monero or some other privacy-coin.
Anyway, no revolution can work without financing.
Still, in such case (meat being rationed) I expect that BTW will not help much compared to other barter and that it will be worse at barter than other mediums of exchange due to insane transaction fees and long confirmation period.
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I think my odds of being able to go to the farmer's market and buy beef with American dollars for the remainder of my life are quite high. Maybe I'll be wrong, but my general monetary plan isn't based on not desiring the ability to freely transact, but based on my evaluation that I can pretty much do so in the United States and I don't expect that to change any time soon. I'll be absolutely shocked if it turns out that in 2034 I can purchase brats with Bitcoin, but not US dollars.
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Are we talking 'creator' as in 'content creator' here? Do these regularly found startups? Using crypto currencies as a way to donate to artists, seems fine. If they want to hand out some shiteCoin to show their appreciation, why not. Just don't confuse it with an investment.
The blockchain has two valid use cases, in my opinion. One is as a system to implement revision-proofness: if I pay some token amount to put a hash of some file on the bitcoin blockchain, it will be very hard to deny that I had written that file at that time.
The other use case is to (with mixes) transfer funds anonymously without regulatory oversight.
As an investment, even established cryptocurrencies seem dubious, more pyramid scheme than anything. Gold has been used to store wealth for millennia, as it is both in demand for jewelry and rare. US$ is a reasonable mean to store wealth, that is reasonable because the country with the largest military in the world firmly insists that it's residents pay taxes in that currency. Likewise, US bonds. Stocks in companies residing in countries with a working justice system can be bought in the knowledge that the CEO risks jail time if they swindle investors too blatantly.
The big coins, like bitcoin and etherium (I think) are at least not entirely unreasonable investments, even if I would not invest more than a tiny fraction of my wealth in them. At the end of the day, bitcoin has little to recommend it over its myriad competitors besides having been around longer.
Coins issued by a single company are, to first order approximation, scams. People buy them because they think there is a bigger fool around whom they can sell their coins to before the rug is pulled. Sometimes they are right, they might even make a profit from them.
"Investing" in a company through coins seems likewise wishful thinking. At the end of the day, companies are worth something because they own real world assets. The link tying a companies assets to their stock owners is enforced by laws, a CEO who decides to pocket the assets of a company and leave his shareholders with a worthless husk will generally not thrive. The link between ownership tokens of some web3 company and their physical world assets is certainly not enforced by the blockchain, nor will the investment laws of most countries provide support for blockchain-based company ownership. (Besides, 'we will sue the CEO in federal court' would go contrary to the anarcho-libertarian world view of crypto currencies where you are supposed to trust math and the self-interest of the market participants, not some government.)
I am sure that some of the scams are genuinely novel and interesting projects. I am also sure that some of the projects are not even scams, in the same way that I am sure that some of the people sitting in death row have never hurt a fly.
Sure, some combinations of cryptocurrencies and chatbot might make a million dollar, but that will basically be because a million people find it novel and cute and pay a dollar to it, not because it does useful work worth 1M$. At the end of the day, it is the difference between some kids trying to run a lemonade stand and making a few bucks because their neighbor likes them and the McDonalds down the road, which runs a scaleable business.
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I tried to send 400 Euros the the Netherlands from Sweden this week. The transaction failed several times so I called the bank and they told me that international transactions are disabled since I haven't had that service activated. There was no notice, just a timeout notice. I spent half an hour on the phone asking questions about whether I knew the person I was sending he money to, how often I make international payments, my bank accounts with other banks and so forth. Finally the money was sent with a five Euro fee and it took three days for the money to arrive. My startup has employees in Pakistan. We pay exorbitant fees to the banks for currency transactions. We have had payments blocked for two weeks due to "investigations" and in the best case it takes a week for money to arrive. I know a professional poker player who gets paid in cash. He is effectively treated like a terrorist.
Banking is just money tracked in databases with a monopoly based on insane legal frameworks that make banking so profitable that their profits amount to several percent of GDP. Crypto has to get efficient enough to be easy to use and it will take off. It needs to be too decentralized for governments to effectively regulate it. Ethereum has better chances of becoming a viable unit of exchange for larger or international transactions that are too annoying to handle with conventional systems.
The other wild card is BRICS. Their alternative could easily be far superior to the ancient swift system. Maybe the US could push bitcoin as a non BRICS swift alternative.
I am regularly sending money abroad and receiving it (from 50 euro to 100 000 euro) and never run into real troubles. Within EU all transfers were free.
OK, I have not tried this. I bet that sending money to Iran would also be troublesome.
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I think Sweden is may be an outlier in terms of the hassles they put up for international transactions. I had to go through what sounds like the same process so that I could make a SWIFT transfer to pay a bill to a German company; the bank (Nordea) representative told me that they have to do this due to some new regulation concerning international money laundering. I have not encountered anything like it between other EU countries (I get around a fair amount), Eurozone or not, even in recent years.
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The richness of this experience, with the complaints of regulator brained normies that we need the government to crack down on crypto because it can be used by criminals. Well, I'm not a criminal, and I'm already treated like one by the banking system... so....
We are so far passed the sell at this point. One would think probable cause and a warrant would be required for the federal government to be as invasive with my banking as they are by default. Or that I'd have to have actually been convicted of some crime to have my transactions blocked.
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He has to do very little. And he'll reap valuable political loyalty. That's like the best setup for a politician.
All he has to do is appoint someone that won't sue the hell out of every single attempt to make a crypto thing, and take the coins USG already owns and put them in a bag with "strategic reserve" written on top of it.
He likely doesn't even need congressional approval for this. So I have basically no doubts it's going to happen. And the market agrees.
Whether or not we get good crypto regulation out of that state of affairs is really not a Trump question, but a congress question.
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I think the market has been "suppressed" lately and that suppression got lifted when the election results came in; a lot of this might be the Halvening taking delayed effect. This is what the market looks like when the FTC et al isnt expected to continue shitting on crypto.
I noticed IRL reddit-brained leftists snarl and scoff when the subject of crypto was touched upon this summer. They're always patient zero for left-wing propaganda.
Watching Coinbase literally beg the SEC to tell them what to do, willing to do virtually anything the SEC asked (short of unilaterally shutting down), only for the SEC to sue them (and get laughed out of court) and refuse to clarify or instruct in any way what so ever was maddening.
SEC accused them of selling unregistered securities, and refused to say what they were. Coinbase wanted to register to sell securities, the SEC refused to expose any process to do so. The SEC lost every single court case they brought against Coinbase, they were acting so lawlessly. I think they just had the attitude that their legal funds were unlimited, and Coinbase had to run out of money and shut down eventually. It didn't matter if they had a legal basis for their "enforcement" or not.
Oops. SEC was what I was thinking of, egg on my face.
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Man, I got into Bitcoin around 2017. It's been remarkable to see the bitcoin maxi's proven more or less right so far. At least not proven wrong yet. Their whole thesis was basically that fiat was doomed as soon as there was a viable offramp, a viable "defect" button. People can complain about the bitcoin not being a currency because it's transaction capacity is too low. Or that it lacks the easy of use that cash has. But if anything the environment that necessitates crypto has only gotten better. The weaponization of the USD can never be undone, nations view it as being in their critical national security interest to move away from dollar dependence. Debts have exploded around the world above and beyond what seemed to be the already impossible sums when bitcoin was created, at an exponential rate. I don't think fiat is going to vanish, but there is going to be a significant race by states to shore up their balance sheets with bitcoin, to help give their fiat credibility.
I don't think big D Democrats can possibly become crypto friendly. They are too corrupt and obsessed with control and manipulation. They are the party of operation chokepoint, debanking, regulating industries that don't donate enough out of business, etc. For them to become crypto friendly would require the party be gutted by a populist coup and rebuilt from the ground up. And I mean, it's not impossible. Look what happened to the Republican party. You think the party of Bush, Romney or McCain wouldn't have behaved exactly the same way towards crypto that the DNC is currently?
Bitcoin isn't a currency because it's wildly deflationary. A $300K mortgage in ~2012 bitcoin would presumably mean the holder now owes a value equivalent of $3 billion. Would the value be pegged to whatever it was when the mortgage started, so back then you "owed" whatever, 30K bitcoins and now you owe 3?
At this point much of my hatred of bitcoin is fueled by resentment and a shitty education that didn't include things like "hedging one's bets" and "EV," but I thought it was a stupid idea then and a stupid idea now. I undervalued how much alpha there will always be in betting on stupidity.
My objection is that you just defined "deflationary" in terms of its U.S. DOLLAR VALUE.
Bitcoin is Deflationary due to the fixed supply and the halving rate of release over time, regardless of what its value vs. the dollar does.
But a mortgage taken out in 2012 Bitcoin would mean the holder now owes the same amount of BTC w/interest as they did before.
The holder of the note isn't exactly in a good position either, since their remedy for failure to pay is to foreclose on the house, and they ain't getting that 3 billion.
Ok but that’s just what deflation means- the value of the currency went up by more than the value of the asset.
Yeah, but you're using a second currency to denominate the value of the asset. Not the currency it was actually purchased in.
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I mean, there is no shortage of people telling stories about wishing they hadn't spent their bitcoin on weed back when BTC was less than $100. All the same it seems who whom the whole way down. Yeah, it sounds absolutely retarded to borrow bitcoin to buy a house, and then attempt to pay it back in bitcoin. It also sounds retarded to try to store wealth in a currency that will be worth less than 1/10th what it was when you first earned it over the course of your working life. If you are lucky!
There is no single foolproof solution to this problem, and many false paths. Most people give up and accept that they'll be on the job until they drop dead. Can't blame people for making an attempt to escape.
This math on inflation is super wrong. 1.02^50 is about 2.6. 1.03^50 is 4.4. What inflation rate do you suggest is normal?
Pull up an actual historical inflation calculator. 1973 to today shows, 51 years, shows about 7.5x inflation, not 2.6 or 4.4. Turns out a few really bad years every now and again really compound.
And I make no proposition about what rate of inflation is "normal". Because nothing about how inflation is created follows any sort of natural law. Its man made and manipulated from top to bottom. What is normal is desiring the value you derive from your labor to not be virtually wiped out over the course of your lifetime.
Fair point on actual inflation, but 1/10th still seems like a major overstatement of what "will" happen (especially because 50 years is also a pretty long assumption for a career). More broadly, inflation is more or less inevitable for a healthy economy; someone keeping their money in cash under a mattress is just very foolish to not put it into an asset like bonds, stocks, gold, real estate, bitcoin, etc.
Sure, but what is a foolproof strategy that doesn't require a financial advisor to utilize all those assets to preverse the value of your labor? And why is bitcoin obviously worse than gold, bonds, stocks or real estate? None of those are foolproof.
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Ok, I’m willing to believe bitcoins rise is inevitable- is this a good time to buy, or no? It seems like a bubble right now.
My advice is the same advice I got in 2017. Buy bitcoin every month with whatever money you are willing to lose. Store it in a hardware wallet like a Trezor. Wait 10 years.
If Bitcoin had gone to zero over the last 7 years I'd be out low to mid five figures. Probably less because presumably I'd have stopped at some point. The upside has been significantly more than I could have lost. But it's still an amount I would have been fine losing. Oh I would have been upset. Probably had a few drunken nights to ease my sorrows. But ultimately I'd have been fine.
Stay away from anything that's not bitcoin. Don't touch alt-coins, ICOs, NFTs. Don't invest in mining companies, don't invest in exchanges, don't try to earn interest on your bitcoin, don't try to take out a loan against your bitcoin. Put it on a hardware wallet, backup the seed, put it in a safe.
I have actually made bank off investing in COIN, but do as I say, not as I do.
That's really the unspoken truth about the market as it stands.
The exact type of person who would throw a bunch of money into this thing AND could manage to store it long term without losing it to scams or hacks AND would have the discipline to HODL through massive swings AND would resist YOLOing into meme coins or other moonshots/boondoggles trying to 100x their money... that's probably a rare combination.
So many folks lost funds to scams, blew it on shitcoin plays, or the exchange they traded on blew up, or they panic sold in one of the various crashes, or lost their keys or fat-fingered a transfer to a dead address. Those folks aren't going to advertise their failures. Some might have bounced back.
I can't think of many known whales who were around since the beginnings and are clearly riding high on their wise decisions over the years since then.
Even Mr. Bitcoin Jesus Roger Ver managed to fuck himself by pissing off the IRS.
Yeah, all that is true. Which is why a little advice can go a long way. It's actually kind of sad, but I've noticed a lot of the wisdom from when I got started has completely vanished. I think in large part because participating in those discussions makes you a scam target.
Yep. As I recall it, the "HODL" meme came into existence as simple advice to keep people from panic selling AND from jumping from onto non-bitcoin coins (shitcoins, mostly) and thus from avoiding the biggest risks to your Sat stack, your own emotional decision-making.
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Yeah I 100% agree. I was on the fence but earlier this year seeing the insanity of Covid spending it finally tipped me over into getting in. I'm glad I did.
Yeah this is a persuasive argument. At this point the democrats would need an almost entire restructuring of their party if they were going to promote something like crypto, which is inherently decentralized.
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I think the main blocker is that stronger Bitcoin adoption could be a disaster for the US, given that it's a direct competitor to its main export: US Dollars/Treasuries.
On the other hand, stablecoin adoption should thrive, for the same reason.
The Fed's position is that Bitcoin is a competitor to Gold, not USD and that they already hold to Gold's current market cap not being a threat, so as long at BTC remains under Gold, it's also not a threat.
People seem to forget that while Bitcoin is now ostensibly "a real thing" it's still worth less than Apple. It's a contender but not yet a systemic risk in the grand scheme of things.
If maxis are right, it will become something of this (perhaps in the next cycle). But not right now.
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On the third hand, what if the Federal Reserve did what Microstrategy is doing. Sold treasuries to gorge on the rapidly appreciating asset that is Bitcoin.
Is the Fed not required to disclose its asset holdings on a regular basis? If so, wouldn’t we find out soon if they were hodling BTC
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Well, it's working for Saylor, so why the hell not?
Right? The current market cap of BTC is $2T-ish. The US National Debt is $36T. This much money, what's a
carcryptocurrency? I'm sure our government has wasted $2T on worse things.Part of the problem here is that for all its claims to be a valid currency (medium exchanged for goods and services) the most important factor is user buy-in. Gold is at least rare, shiny, and has practical uses. Fiat at least has governments willing to issue it, pay with it, and expect taxes in it. Bitcoin has, I guess, a decade of history and meteoric rising valuations.
Which isn't to say that we couldn't rapidly lose trust in fiat or gold either (goldbugs when the philosophers stone is invented, or asteroid mining), but I do have doubts people would take Bitcoin as seriously if the US Treasury owned a majority stake in it. Although I suppose that feels less existential to crypto as the idea has matured and people hear about it.
I mean, theoretically it would work more like a hostile takeover than a private acquisition. Which is to say, the Federal Reserve would be forced to pay market rates over a period of time allowing others to do the same. Unless they pull an FDR and just outlaw private ownership of Bitcoin the way they did Gold, in which case I agree, it would probably cause people to take Bitcoin a lot less seriously.
If you can get past the obvious 1A issue, that is; Bitcoin being speech and not a physical thing helps in that regard.
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Yeah this is a huge and complicated problem. Ultimately would have to tie it to the dollar somehow, which yeah I guess is what stablecoins are trying to do.
Can you invest in stablecoins the same way you do other cryptocurrencies though?
Sorta. In liquidity pools, there are coin/stablecoin pairings and stablecoin/stablecoin ones (with lower payout).
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Context Copy link
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Context Copy link
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Context Copy link