site banner
PaperclipPerfector  3mo ago (text post)   3147 thread views

Small-Scale Question Sunday for August 17, 2025

Do you have a dumb question that you're kind of embarrassed to ask in the main thread? Is there something you're just not sure about?

This is your opportunity to ask questions. No question too simple or too silly.

Culture war topics are accepted, and proposals for a better intro post are appreciated.

5
Top Bottom Old Controversial Comments
Jump in the discussion.

No email address required.

With all of the enthusiam of Ben Affleck, I figure that I should put some of my investment portfolio into Bitcoin. I expect that it'll move independently of or in opposition to the dollar. What is the boring approach do that, adjusting a boring set of current allocations across the usual boring large investment companies?

Sounds like you'll want to DCA into an ETF.

Though, if controlling your own money appeals to you, and you've got enough money to make the initial investment worth it, and you can be trusted to follow simple instructions and not reveal your seed phrase to anyone... Get a hardware wallet. Trezor is good. Mid range model.

I actually somewhat like bitcoin in the long term as a store of value. It is the first mover in terms of creating artificial scarcity, and has surprisingly few weaknesses in terms of preserving that scarcity. Contrast that to something like gold where changes in mining output or industrial demand can impose external price pressures outside of the supply/demand for a safe haven.

That being said, I think the rest of crypto is arguably the largest bubble in human history. I don't see any real value provided by the chains that try to act as both a platform and as a currency. And i expect that at some point those will all come crashing down. And when this happens, I expect that bitcoin will take a major hit. I doubt it will be a lethal blow, but I could easily see a >50% loss happening. That's a lot of risk if you are trying to preserve value.

Yes, btc and "crypto" are pretty different things. Btc is legit. 99,99% of crypto is worthless scammy trash.

And i expect that at some point those will all come crashing down. And when this happens, I expect that bitcoin will take a major hit. I doubt it will be a lethal blow, but I could easily see a >50% loss happening. That's a lot of risk if you are trying to preserve value.

People don't so much go via btc into crypto anymore like they were forced to do in 2017. If lots of shitcoins disappear, btc could easily survive and maybe even thrive more, with a larger proportion of the money finding its way to btc instead.

You seem to be confusing volatility with risk btw. There's no danger in a 50% downturn as long as it doesn't last for more than a few years. Obviously, if you're old/close to retirement, don't go heavy in risk assets. But that goes for the stock market too.

Long term I agree. The problem is, there is a high correlation right now between prices in the crypto space. A sudden plunge anywhere could cause a plunge everywhere. In theory BTC could bounce right back as the others collapse, but that isn't a forgone conclusion. It could just as easily take a major hit.

What is the boring approach do that

Dollar cost averaging. Takes time though (and of course the time to start were like 10 years ago :) You can either buy regular BTC (combined with cold-wallet storage, that protects you from certain third-party risks, remember - not you keys means not your coins) or if you're only interested on hedging and not owning actual BTC, then ETFs of course. There's a bunch of them from reputable providers now (I don't use them but I've heard about them). Look at the feeds - some ETFs for some reason have insane fees, over 1%, which is totally not warranted given they don't do anything but holding BTC. I see no reason to use those, use cheaper ones instead.

Do you have any desire to have access to/use the BTC, as in gain custody of them on a private key you control?

If not, an ETF is the straightforward choice.

If so, a coinbase account is easy, but there are numerous options.

Coinbase accounts are custodial accounts, which means they hold they keys and you just see the numbers on the website. You don't actually own any crypto, you just trust them to own it for you. Which may be ok for many people, but if that bothers you then you should get a real crypto wallet and hold your own keys. The danger here is that if you mess it up you could either lose the coins completely or get them stolen from you. Coinbase Wallet is one example of non-custodial wallet, though I am not sure how good it is (I personally prefer offline hardware wallets).

As far as I know, Coinbase still allows you to withdraw your coins to your own wallet whenever you want.

So you can, for most pursuits and purposes, think of those coins as 'yours' if you wanted to take them.

Unless your suggestion is that he find some dude to sell him BTC for cash, I dunno how else he would come to acquire the coins in his wallet.

As far as I know, Coinbase still allows you to withdraw your coins to your own wallet whenever you want.

Yes, of course. But: this is only while everything is well. At any moment if something goes wrong Coinbase could stop withdrawals, and you can do absolutely nothing about it - short of suing them of course. Just as with the bank: normally, you just transfer money with a couple of clicks, but if the bank has problems, you have problems. Except there's no FDIC for bitcoin, so you're not protected by anything.

Unless your suggestion is that he find some dude to sell him BTC for cash, I dunno how else he would come to acquire the coins in his wallet.

No, acquiring coins through Coinbase is just fine. But then get a self-custodial wallet (I prefer offline hardware ones, but you don't have to go as far if you don't want to, any computing platform can hold a wallet - though do back up it and/or the keys if you use software) and move the funds there. That's what I do when I DCA - it's very convenient to set it up on the exchange, but once it gets to something sizeable that I'd hate to lose, I move it to my custody.

Worth noting that in contrast to normie banking, the main bitcoin marketplace regularly blows up/top guy absconds with the money (Mt gox, FTX) . Crypto makes it so much easier to be a thief and a scammer. Better prepare yourself mentally. Worse part is not even losing all your money without recourse, but the merciless sneering from cigar-chomping bankers.

That's exactly why I said "not your keys, not your coins". If you keep the keys, none of the blowups can hurt you, ever (well, if you keep away from shitcoins and NTFs, of course) - whatever happens, if you owned 1 BTC, you'll still own it as long as you have the key (and nobody else does). If you play speculative games (like, trade shitcoins, etc.) then well, it gambling, and you may lose all your money at any moment. So coming at it, decide if you're there to invest or to gamble. Both can be done, but the way they are done are very different.

My theory of crypto value is that most of the coin gets stolen every few years. The thieves, fearing being connected to the crime through the ledger, never dare to touch their ill-gotten gains. One day, as we all must, they die, rich in spirit, and their cursed coins follow them into the grave.

Destroying money is strongly deflationary. There‘s only like 6 bitcoin left in circulation, that‘s why they are getting bid so strongly.

My theory of crypto value is that most of the coin gets stolen every few years

It is lost and misplaced, not stolen, and it is not most, estimated number of lost BTC is about 10-20% of total supply

My theory of crypto value is that most of the coin gets stolen every few years.

If by "the coin" you mean bitcoin, it's not true. Currently, about 20 mln bitcoin is outstanding. Known bitcoin thefts, as far as can see, over all history, amount to under 1.5 million, and significant part of it has been recovered. Of course, some thefts may not be discovered until the funds are moved - if somebody knows your keys, you wont know it until they move the coins. But then it doesn't make any difference on the pricing. As I see from reports, e.g. https://river.com/learn/who-owns-the-most-bitcoin/ most bitcoin is owned by individuals, and the largest custodian of bitcoin is Coinbase, which holds around 10% of the supply. Which puts it in roughly the same position as Chase bank (the largest US bank) has in dollar economy.

If you talk about shitcoins, anything is possible, it's a wild chaos and pretty much any wild claim could be true for some subsets of them.

There‘s only like 6 bitcoin left in circulation, that‘s why they are getting bid so strongly.

That's hilariously far from truth, Coinbase alone has over 2 millions, and since it holds the keys for every single one of those, it can trivially recover coins that are known to be stolen. And if they are not known to be stolen, again, there's no difference in economic effects - if the original owner did not intend to move them and also the thief doesn't move them, there's zero effect. One can only wonder - why would anybody bother to steal anything in order to never ever use it?

Those 2 million aren’t in circulation per se, though, since the mantra of most owners is to buy and hold. In many ways it’s a demonstration of the issues with non-fiat, non-inflationary money.

Well, that's an interesting questions - e.g. banks use deposits to issue loans, but what Coinbase is doing with its 2 mln bitcoin deposits? This is a valid question but very different from the assertion @Tree was proposing. Looking at https://data.bitcoinity.org/markets/volume/30d?c=e&t=b the trading volume in BTC is in around tens of thousands of coins traded daily, which is of course small part of overall bitcoin mass but still a respectable volume as it seems to me. Over a longer period of months, the volume is in millions, so I don't think it'd be right to assume the BTC market is so illiquid that the prices are substantially caused by lack of liquidity. Of course, I am not an economist, so if somebody more qualified could point out an error in this assessment, I'd be thankful, but that's what it appears to be to me.

since the mantra of most owners is to buy and hold.

That's not necessarily it. I used to know a guy that donated 1000 BTC to a minor-mid influencer, back when the price was in single digits. It later came out that the recipient lost his wallet key, without selling a single coin.

Either way, I don't really is see the problem. The pathologization of savings always struck me as economist cope.

More comments

I view the custody concern only in terms of "my financial advisor stole everything and disappeared". At the scale of those ETFs, I don't see the bitcoin assets being significantly different from any other assets under management. That page looks helpful, thank you.

If you are using bitcoin as a hedge against financial collapse, it's a bit risky to use custodial counterparties that would go under in the event of a financial collapse.

It's an interesting question whether Coinbase is already qualifying as "too big to fail". I'd say probably not yet, but could become before this decade is over. Of course, massive regulatory interventions would accompany that.

Thus far bitcoin has largely tracked US equities with higher beta. Given that bitcoin shares an investor base with leveraged magnificent 7 etfs, with many day traders, growth funds, FAANG gamblers and venture capitalists, the expectation would be that in the next financial crisis and stock market collapse that it would suffer a great fall in value. There has never been a prolonged global financial crisis in bitcoin’s existence.

It only lost 30% of its price during the April nonsense. Nvidia lost more. There were some early signs of btc perhaps turning into a safe haven for some people. Which is intriguing, though yes I agree it'll in all likelihood take a quick and serious beating in the next highly serious crisis. But that goes for most assets. Then it'll rebound. After a few hundred "deaths" as the media would have it, it's not too shabby at the Lazarus act.

I’m not predicting a permanent or final collapse, although it’s a tail risk. But I think a lot of people will rush for the exits if only because a lot of their other assets will have plummeted in value, they may have lost a job or other additional income and need to liquidate, and if you’re one of those people you may end up selling at the trough.

You're pretty much stating the obvious. Again.

People capitulating at the bottom is not unique to BTC. That comes down to poor planning and poor emotion management, regardless of the asset. But yes, like I already agreed with, BTC will take a quick and serious beating in the next crisis (before rebounding) because it'll be one of the first things people liquidate.

There has never been a prolonged global financial crisis in bitcoin’s existence.

Clearly Bitcoin is warding off large financial crises!

More seriously, this has been my main logic for never going all-in on BTC.

All-in would not fall under "boring". I'm pretty much looking for different ways to manage sequence-of-returns risks, before I pull the trigger on retirement.

What is this place?

This website is a place for people who want to move past shady thinking and test their ideas in a court of people who don't all share the same biases. Our goal is to optimize for light, not heat; this is a group effort, and all commentators are asked to do their part.

The weekly Culture War threads host the most controversial topics and are the most visible aspect of The Motte. However, many other topics are appropriate here. We encourage people to post anything related to science, politics, or philosophy; if in doubt, post!

Check out The Vault for an archive of old quality posts. You are encouraged to crosspost these elsewhere.


Why are you called The Motte?

A motte is a stone keep on a raised earthwork common in early medieval fortifications. More pertinently, it's an element in a rhetorical move called a "Motte-and-Bailey", originally identified by philosopher Nicholas Shackel. It describes the tendency in discourse for people to move from a controversial but high value claim to a defensible but less exciting one upon any resistance to the former. He likens this to the medieval fortification, where a desirable land (the bailey) is abandoned when in danger for the more easily defended motte. In Shackel's words, "The Motte represents the defensible but undesired propositions to which one retreats when hard pressed."

On The Motte, always attempt to remain inside your defensible territory, even if you are not being pressed.


New post guidelines

If you're posting something that isn't related to the culture war, we encourage you to post a thread for it. A submission statement is highly appreciated, but isn't necessary for text posts or links to largely-text posts such as blogs or news articles; if we're unsure of the value of your post, we might remove it until you add a submission statement. A submission statement is required for non-text sources (videos, podcasts, images).

Culture war posts go in the culture war thread; all links must either include a submission statement or significant commentary. Bare links without those will be removed.

If in doubt, please post it!


Rules


Recommended Posts And Communities

Recommended Realtime Chats