Here’s the real question: Are the last few BTC obtainable?
BTC are mined at an ever increasing complexity of mathematical problems which in turn use ever increasing amounts of energy. (Nevermind the idea that a long trench dug by hand is not more valuable than one dug with a backhoe even though it used more time & energy.)
Does the scaling of math problems & energy use head toward infinity as one closes in on magic #21,000,000? Is it possible to mine the last BTC or will that take all the energy of the universe to do so? Its a Tuesday afternoon, and I’m just wondering…
Salmo Trutta
1 year ago
“A genuine Fed-issued CBDC would be very different in that respect. It would essentially allow Americans to open up an account at the Fed,”
So, it would be up to the FED to create money, not the banks.
Mike 2112
1 year ago
Mish, you left out a group of ppl: How many ppl are complacent and think their nation’s currency is eternal?
The Fed will destroy the dollar. Prob not tmrw or the next few yrs or even the next 20 yrs. Or maybe they will if they keep throwing ppl out of swift and abusing their power.
I dont own any BTC so I have no horse in the race.
8dots
1 year ago
There are 4TD until Sept 30. The markets might popup and be in a trading range, forming a congestion area. It was easy to dislodge Gorbie. It’s hard to dislodge Putin. Pain replaced QE. Global poverty will spread like fire.
Those who hate US today will hate us even more tomorrow. Shana Tova.
worleyeoe
1 year ago
The value of bitcoin goes away as soon as CBDC begins to go mainstream. Sure, it’s a fixed number unlike the US dollar, but look at all the different digital currencies that have proliferated over the years. And, Facebook dropped theirs, knowing what lies ahead.
FedNow, a CBDC alternative, is supposed to go live in 2023. Basically, they’re trying to play catch-up with China, since it’s going to take the Fed easily 5 more years to deploy a CBDC, while China is already in pilot mode.
Money flows,
the volume and velocity of money, are decelerating. M*Vt has always bottomed at the same time the
stock market bottoms – always.
Volcker never
tried monetarism. In fact, Volcker
discontinued monetarism via H.R.6267 – Garn-St. Germain Depository Institutions
Act of 1982, e.g., the “low reserve tranche” and the “exemption
amount”.
“Exempts
financial institutions with less than a specified amount of total deposits from
the reserve requirements of the Monetary Control Act of 1980.”
The FED’s
Ph.Ds. are clueless. Banks don’t lend
deposits; deposits are the result of lending.
I don’t care if the Fed is genius or clueless. I take the data, analyze it and figure out a way to make a profit. That’s all that matters. The Fed, politicians, religious nuts, wokeness, and all other human behavior is ‘noise’ that I need to filter to make money.
It is easy to sit and criticize everyone and everything, a lot harder to put money where one’s mouth is and show all of us how it’s being done.
The market will turn before the Fed is done hiking rates, (IMHO). This is not 2008 where some of the banks were going out of business. The FED seems to overshoot both ways.
I assume you are betting the market will go up sooner than later. I think it will go down further. This is what makes a market. Of course, I am both long and short. I am very long dividend stocks, bonds, and real estate and short home builder stocks and emerging markets. There is always a way to make money…always.
That buying in the last hour, when I look left on the charts for short-term price action, Friday 3-4pm looks almost entirely like short covering. JMO.
PapaDave
1 year ago
I understand that a small percentage of the gold that is mined each year is used in jewelry, art, and electronics.
Other than that, the vast majority of it is formed into coins and bars, and placed in safes or buried back underground in vaults; where it just sits there; doing nothing.
A thousand years from now, it will still be sitting there; doing nothing.
We do not do that with copper, nickel, aluminum etc. After we go to the trouble of extracting them from the earth, and refining them, we use them. Rather than burying them again.
Now, if anyone wants to “give” me some gold or some crypto, I will gladly accept it. I will then immediately sell it and use those funds for something I consider useful.
Good luck to all the gold bugs and the crypto hodlers here. But count me out.
Captain Ahab
1 year ago
If ‘the Fed is out to crush speculation’, surely that also includes stocks, bonds, real estate, commodities… including gold. What, then, is left? $US?
BDR45
1 year ago
If bitcoin has a “chain of title” via block chain, which tracks every change in ownership, then how can there be any “lost” bitcoins? I ask sincerely.
The current title in the chain, is locked up in a mathematical vault requiring a key that noone has anymore. And which is statistically “impossible” to accurately regenerate in less time than the current universe has left. So, while those coins may not be formally “lost”, the chances of any of them serving any monetary role anytime soon, are rather slim.
It’s a bit like Gold: There’s enough of it in the earth’s core to cover the earth’s surface to a dept of several feet. But the chances of any of that gold leading to inflation in the near future is, again, slim.
Lost password or phase on ledger that is stored on. One person in England was mining bit coin and the computer was making so much noise his girlfriend was not happy. He ended up throwing it out, this was when prices were low, he tried to find the hard drive in the dump and never did. It was worth millions. link to cnbc.com
Inflation is raging, but gold, silver and bitcoin failed to protect investors. The CPI/DXY ratio is down below 2018 high. DXY is rising faster than the CPI. The CPI stall. This ratio might rise to test June 2021 high @3.00, before falling apart. Option : in the next recession DXY will rule, because JP choice of QE abstinence : reducing free supply/ increasing pain. The want of dollars will rise. The $2,4T RRP maginot line might fail again.
Canadian oil : CNQ, TOU, CVE, IMO, SU… might tank. Next year y/y inflation might fall to the small digits, before diving underwater. Once there viscosity will keep it down. Thus, the current inflation is only temporarily. Silver predicted it. It’s only an option.
My theory is that we’re looking at a feedback loop instigated by the advent of Crypto. Meaning that in the old days you pretty much only had precious metals as an inflation hedge/convenient long-term store of value but then came Crypto and sucked in so many investors who would have otherwise put their money in gold. The result is that this diluted the ability of either gold or crypto to act as an inflation hedge since there is only so much investor money to go around.
When you flood ‘investment’ markets with vast amounts of capital at near-zero interest rates, all prices increase. Eventually, ‘investment’ flows into consumption–the inflation that is now ‘raging’, made worse by supply interruptions. Th only way to stop it is… investment interruptus.
When the Russians say that they want to use bitcoin to avoid the sanctions on payments then you can be sure that bitcoin and its use will mysteriously come under pressure.
BTC transactions don’t have to be “untraceable.” They just have to be harder to trace than “every single one spied on in detail” bank transfers. Not exactly a high hurdle to clear.
With current crypto-tracer software that is in use by the FBI and other agencies you can find out how much, when, where and who. Bitcoin transactions are not secret or hard to trace anymore by a long shot anymore. That is one leg that has been knocked out. I suppose what would be the next step that probably has already been studied is to counterfeit it and/or to screw up the chain to render it useless. If someone with lots of resources wanted to take it down for whatever reason they could if they felt it was worthwhile.
“Bitcoin transactions are not secret or hard to trace anymore by a long shot anymore.”
They never were. Them not being so, is the whole point of keeping the ledger public. If transactions could fly under the radar, how could anyone trust that they didn’t do so all the time?
The difference between BTC and bank transfers, is that the “who” you can trace on the BTC blockchain, are digital identities. Not physical people that the totalitarian-state-wet-panty crowd salivate over their favourite Dear Leader arbitrarily “holding accountable,” shaking down and shipping off to Gitmo and/or Siberia. And who other, less arbitrarily exalted, thugs can kidnap, threaten and otherwise focus their thuggery on shaking down, on the back of knowledge about who “owns” what.
That difference is exactly why the above mentioned totalitarians are so hung up about “regulating”; which is, of course, simple Newspeak for spying on and restricting; exchanges where BTC can be exchanged in and out of Fiat for Fiat. Since that is the only chokepoints reliably allowing a digital identity, and physical identity which scumbags are so dependent on to perform their scumminess, to be linked.
“When the Russians say that they want to use bitcoin to avoid the sanctions on payments then you can be sure that bitcoin and its use will mysteriously come under pressure.”
And then, when that pressure turns out to not do much, the sanctions predicating it, will come under pressure…..
A viable, widely available, currency beyond all of theirs’ control, is a much bigger existential threat to both Russian and Western regimes, who are after all wholly dependent on unconstrained spying on, and theft from, their pliant captives, than any of those regimes will ever be to one another.
Hence, as a means for Russia to end the “sanctions”, tentatively letting the crypto cat out of the bag, is a very good bet. They’ll do their darnedest to ensure they don’t let it out far enough out not to be able to, in concert with their then newfound western “friends”, stuff it back in, though……
zimminy
1 year ago
You can’t compare Gold or Silver or Oil or any commodity to Bitcoin or any Cryptocurrency. All commodities have a market value but beyond the value the Market sets they all have an Intrinsic value. Gold and Silver each have specific properties that make them a sought after commodity. Oil goes without saying is the commodity that fuels the world. Bitcoin and all Cryptocurrencies have absolutely NO intrinsic value. The only value they have is a perceived value and that perceived value is only based on the belief that the price will go up and up and up. People aren’t buying it to use it as a currency, why would you use it for a transaction over fiat, credit cards etc? There is no advantage and because of it’s very small acceptance as a form of payment it’s pretty useless.
Like anything and everything else that has Zero intrinsic value, the minute it’s perceived value diminishes there is absolutely no foundation to keep the price from crashing. It is nothing more than a digital number which is worthless in itself. And the belief that Ethereum or any of these Cryptocurrencies will be adopted by a Central Bank or government is laughable. When has a government ever given up their control of a currency?
You read about one of the thousands and thousands of new Cryptocurrencies that pop up and about how this coin will be the one, the next Bitcoin. And it’s laughable because you know nobody believes this yet they still buy the worthless “coin”. Why? Because they buy it with the hope that a Greater Fool will be willing to pay more than you paid pushing the price to the moon. Nothing but one giant for now legal Ponzi Scheme.
“Bitcoin and all Cryptocurrencies have absolutely NO intrinsic value.”
Not true. The all have the intrinsic value of the piece of paper, skin, transistors or whatever the key to any of them happens to have……
That non-monetary value is rather low compared to their monetary value. Just as it would be for Gold if it was still used for all commerce. Probably even more lopsided in BTC’s case, but you’re still talking matters of degree. No fundamental difference.
More fundamentally, there is nothing which requires something to have medicinal value, in order for it to have value as a fuel. Ditto monetary value vs value as jewelry. If something is very well suited to cure a disease, or facilitate conducting trade, it doesn’t really matter much if it isn’t very useful for much of anything else. There’s no eternal law of nature nor logic forever prohibiting the existence of something which could serve well as money, yet not be particularly useful for much else.
the proper history of gold is mostly used by artists for religious and imperial ornaments………..for wealthy and poor alike. in bad times, gold is used as currency. power of gold by bernstein is the most realistic history of the shiney metal.
Which doesn’t strictly mean that being “mostly used by used by artists for religious and imperial ornaments” is some form of necessary, universal prerequisite for being well suited to the role of money….
Furthermore, while Gold is good enough at being money(at least in most of The West) that crypto currencies would likely face more of an uphill battle; that is not at all the case for fiat money. And, and this is important: Pretty much ALL currently popular Fiat currencies, are getting worse and worse at being money every single day.
Ensuring that, just as crypto is moving irreversibly forwards as technology improves, experience with it broadens, and even the mathematical horizons underpinning them are pushed ever further out; the Fiats which crypto is competing against, are instead becoming more ad more rapidly debased. More and more spied on. The latter for no other reason than to make it ever easier for totalitarian hacks, and their connected dilettante hangers-on, to ever more egregiously compromise what is supposed to be someone’s “store of value.” If evert ambulance chasing hack who went to ambulance chasing school with money The Fed stole from you and handed to his dad, can take every dollar you’ve got whenever he feels like it; dollars aren’t really all that, as far as being money is concerned anymore.
So, for anyone who hasn’t simultaneously been living under a rock for the past 50 years, AND have also had that rock fall on his head repeatedly to boot, it shouldn’t take a Fields Medal to predict in what direction the relative attractiveness of crypto vs fiats will move in over time.
MPO45
1 year ago
If only gold offered returns Bitcoin has and while I don’t own bitcoin now, I’d rather have it than gold.
The chart’s yAxis is logarithmic for better visualization and to cope with Bitcoin’s parabolic advances over time.
Bitcoin was launched in 2009 by Satoshi Nakamoto who’s true identity remains unknown. According to Satoshi’s Whitepaper, Bitcoin promises to be the first purely peer-to-peer version of electronic cash without having to rely on any financial intermediary
What has been lost in all of the bitcoin debate is the fact that the invention of bitcoin spawned entire new industries and helped grow others. NVidia’s ascent and increase in production has bitcoin to thank for all the graphics cards that were purchased to mine bitcoin. I have no doubt bitcoin created millions of jobs in coding, research and development, and other areas and ironically that’s where the real gold has been.
During the gold rush of the 1800s in california, the real gold wasn’t the metal out of the ground, it was selling shovels, blankets, pots and pans sold to prospectors. It never ceases to amaze me how so many people miss the real profit opportunities.
“Imagination is more important than knowledge.” – Albert Einstein.
I dabbled in Bitcoin earlier this year. Then sold it. I have trouble understanding the business case for it. And like gold, it pays you nothing while you wait.
Most of my oil stocks are paying me 5% to 15% in dividends while I wait for the longer term scenario to play out. As more of these companies become debt free in the next year (some already are debt free), they are committing to paying out 50-100% of free cash flow.
Example: TOU. Will be debt free before year end 2022. Has committed to paying out 65% of FCF going forward. Which equates to 17%/a dividend at $100 oil/strip gas.
NatGas demand is only going to increase going forward. Of course, prices will be volatile, but the long term price pressure is UP.
During the pandemic panic, oil traded at -$38/barrel at one point. I remember sitting here and texting my kids a screen shot at oil in negative territory. I did so because it was so rare but there is a proverb that says, “If it happened once, it can happen again.” Primo Levi
During the Great Depression in 1929, 20,000 companies went bankrupt.
I don’t know if we’re heading into a great depression or not but if we are heading into a global downturn, the best way to buy insurance is PUT options on your favorite stocks. Suggest you learn how to buy PUT options on youtube. I only buy stocks that have the ability to trade options (calls/puts) and avoid the rest for this reason. PUTS = insurance. Best of luck to you.
I remember oil was negative for a couple of days in 2020. Anything can happen in the short term. In fact, much like you, I embrace that, and take advantage of the trading opportunities.
But my core investments, which I do not trade, are based on the long term.
Many of the oil companies I hold have breakeven points of $30-$40 oil. Which means they can maintain current production and current dividends at those prices. And since maintaining production is their current goal, any price above $40 means that they have extra free cash flow to use as they wish.
Although it is a “back of the envelope” calculation, you can roughly add an extra 5% FCF for every extra $10 in price over $40. So 5% FCF at $50 oil; 10% at $60; 15% at $70; 20% at $80; 25% at $90; 30% at $100; etc.
Since I expect oil to be around $100 going forward, I expect roughly 30% returns from these companies going forward. Of course, the oil price may fluctuate from $70 to $130, but that is a short term thing. Long term I expect around $100, though others expect even more.
In spite of this positive outlook, oil shares have been trading at significant discounts to their historical valuations. Companies that previously traded at 6-8x cash flow are now trading at 1-3x cash flow. So in addition to offering juicy dividends going forward, there is also the opportunity for significant capital gains as share prices re-rate to more normal values.
Now, of course, a global depression would affect all investments. I do not expect that to happen. I do expect slow growth for the rest of this decade.
And as I have mentioned before: oil stocks are my favourite investment right now; but only roughly 60% of my stock portfolio is oil stocks; and that only represents 15% of my overall wealth.
Yep. Unaware. Please explain how this works, how lucrative it is , and how long you have been doing this? I am always interested in learning more about investment ideas.
And no one has mentioned this here before. Why is that?
Like all insurance policies, it varies. How much does your life insurance policy pay? How much coverage does your auto insurance provide? How about your home insurance? You can buy a 100k policy or 1,000,000. the answer to all of your questions will always be the same: IT DEPENDS.
Let’s talk about an even earlier gold rush: Spain in the New World. According to you, the real gold was building ships and armies. Curiously, the Spanish economy did not benefit (in the long term) by the vast wealth of gold brought to its shores.
And why was that? Now you’re getting into politics. Having access to wealth doesn’t guarantee anything if it is misused or dumb things are done with it. They say 80% of people that win the lottery are bankrupt within 5 years, why do you think that is? Is it because these ‘winners’ had absolutely no clue to how manage or invest money? how to hedge? how to insure wealth?
but as for spain, it was the ships and armies that enabled the conquest of land. you know 750 million people in Latin america speak spanish right? Spanish is the second most spoken language around the world after Chinese. How’s that for returns?
The Thai Baht just hit a new 16 year low against the Dollar.
CNNfakeNews
1 year ago
I love all the FUD about crypto. I remember when articles (circa 2000) were written in newspapers about how the internet was just a passing fad. Digital currency will be adopted. It is already so pervasive (as a utility at minimum) in the financial world that there is no stopping it. Governments are invested along with many, many banks and financial institutions including Blackrock who are offering the asset in their clients’ portfolios for investment. As soon as we yank this traitorous president out of office after one excruciating term and get our country back on track economically, crypto will rise as will every other asset class. Not all coins will make it, of course, but Bitcoin will along with Ethereum and Ripple. Don’t believe me? Do your own due diligence and be careful of the FUD propaganda.
OUdaveguy
1 year ago
All asset classes are being imploded by the Fed, but it sure seems the more speculative ones have the furthest to fall…..
Sunriver
1 year ago
I like boring old Walmart as an investment as opposed to the extremely mature Bitcoin play. Congrats to those who bought Bitcoin in the ‘early years’.There is much more importance in things we need as opposed to things we don’t. This will be the rule of thumb for many years to come. That does not bode well for Bitcoin.
There are similar stories for Montgomery Ward, Woolsworth, and many other “institutions” that no one thought would go bankrupt. I’m not saying Walmart will go bankrupt any time soon. I think if you’re 50+ walmart will be around till you die but if you are 20, don’t be so sure.
The first retail bitcoin transaction was in 2010 when 10,000 BTC was paid for two pizzas but people keep writing the obituary for bitcoin for some reason. Bitcoin wasn’t intended for the 50+ crowd, actually most things new arent for older people like virtual reality, NFTs, and eventually tech implants and designer drugs and gene therapy.
I’m not saying Walmart will go bankrupt any time soon. I think if you’re 50+ walmart will be around till you die but if you are 20, don’t be so sure.
After all the boomers are dead, life will go on and so will bitcoin. Any discussion about bitcoin demise now is kinda pointless.
Indeed, Bitcoin is a product. Products come with a product life cycle.
More importantly, as central banks move to cryptocurrency, they will not tolerate competition.
RonJ
1 year ago
“One way of looking at things is there is less of a chance of a big wave of whale dumping if 30 percent of the coins are lost.”
I’m looking at the shiny new 2022 Denver Mint pennies and dimes i got in change this week.
Six000mileyear
1 year ago
At least depositors and banks have a recovery mechanism in case hackers make successful attacks. Every digital currency needs to have a recovery mechanism to be robust. Maybe some of these lost key stories are driving away potential cryptocurrency participants.
What we have in Bitcoin is classic market saturation. As investment capital dries up, so too will Bitcoin. MP045’s puts are probably better hedges, and less risky.
It’s easy to pretend you have a “recovery mechanism” for Fiat, since all you have to do is freely print up some more. Of course, that printing is simply shorthand for robbing those competent enough not to get hacked, in order to hand the loot hence stolen to some connected incompetent who did get hacked. “Saving the system”, the idiots have been told to mindlessly and uncritically call performing exactly such theft..
Stay Informed
Subscribe to MishTalk
You will receive all messages from this feed and they will be delivered by email.
Money flows,
the volume and velocity of money, are decelerating. M*Vt has always bottomed at the same time the
stock market bottoms – always.
Volcker never
tried monetarism. In fact, Volcker
discontinued monetarism via H.R.6267 – Garn-St. Germain Depository Institutions
Act of 1982, e.g., the “low reserve tranche” and the “exemption
amount”.
“Exempts
financial institutions with less than a specified amount of total deposits from
the reserve requirements of the Monetary Control Act of 1980.”
The FED’s
Ph.Ds. are clueless. Banks don’t lend
deposits; deposits are the result of lending.
I’m sure what Mish meant is that the coins are irretrievable, not that they have gone missing.
Yep. Unaware. Please explain how this works, how lucrative it is , and how long you have been doing this? I am always interested in learning more about investment ideas.
I like boring old Walmart as an investment as opposed to the extremely mature Bitcoin play. Congrats to those who bought Bitcoin in the ‘early years’.There is much more importance in things we need as opposed to things we don’t. This will be the rule of thumb for many years to come. That does not bode well for Bitcoin.