Ask HN: What happens if/when crypto will significantly go down?
As we know, the crypto sector has been up for a while, and I hear conversations about the inevitability of it going even higher. I am not sold on it.
In fact, I'm curious to hear what you think it will happen if crypto goes down by 20/30% or more. Would another crash happen? Would Microstrategy go bust? Etc.
Also, what's your bull or bear case for crypto, and for Bitcoin in specific?
What is the basis of the bitcoin valuation increase other than self-induced inflation?
Is bitcoin supporting anything productive?
It seems the one thing bitcoin can't do is be a useful currency because it's too slow and expensive.
With respect to "freedom", crypto currency is ultimately a cage: It is the most centralized instrument of trade ever implemented, and anonymous only as an accident of an incomplete implementation.
The infrastructure buildout to support bitcoin mining is self-justifying and provides a semblance of "growth" that gets proffered as an illusion of productivity, but this is an ouroboros.
If large amounts of money are being laundered through bitcoin, that might be confused with the dynamics of an investment. But that's not socially productive, it's regressive.
So bitcoin is a currency that's too expensive to use and not structured to produce returns as capital or reserves.
Ask people you know why they buy bitcoin. Is it because they want massively "profit" like the people they heard about who "invested" early?
An economically useless financial instrument with gains realized by distributing the proceeds from growing numbers future buyers towards cashing out shrinking numbers of early buyers is a pyramid scheme!
Pyramid schemes end when the supply of shills is exhausted.
> this is an ouroboros
Wow, I've never heard the term in English, but I looked it up [0] and of course it makes perfect sense. In my native Italian language, we would call it "a snake that eats its own tail", which is what an Ouroboros symbol depicts. Fascinating.
On the general comment: thanks, I personally agree with most of your assertions. And yet, it seems that rational negatives on crypto or BTC fail to make it crash, or kill it. It keeps growing. Perhaps we're just a bit behind a real huge crash, but what if not?
[0]: https://en.wikipedia.org/wiki/Ouroboros
There is "down" in terms of price and then there is "down" in terms of "the system is down".
The latter problem is looming for Bitcoin. Even though the Bitcoin price remains high, the volume of outstanding transactions is falling
https://www.blockchain.com/explorer/charts/mempool-size
People are still interested in Bitcoin as an investment, but not that interested in trading Bitcoins on the chain -- particularly not using them to buy things.
Right now miners are rewarded with Bitcoins for signing blocks, but that reward is halved every four years and will disappear by 2140 or so
https://www.investopedia.com/tech/what-happens-bitcoin-after...
in theory after that it will be well established and people will be willing to add a "tip" to have their transactions processed but that requires a high transaction rate.
2140 is a long time away and a lot can happen -- over all if the price of bitcoin doubles every four years mining rewards stay the same in terms of being able to pay your expenses, but to do so 29 times means it has to expand 536,870,912 times which will outrun the economy.
At some point in the future Bitcoin mining might not be profitable, and if that's the case for a sustained time, Bitcoin is cooked.
> At some point in the future Bitcoin mining might not be profitable, and if that's the case for a sustained time, Bitcoin is cooked.
Mining difficulty adapts over time; it can also decrease, so become profitable again. See [0].
[0]: https://www.coinwarz.com/mining/bitcoin/difficulty-chart
MicroStrategy's average is currently ~$72k: https://x.com/saylor/status/1947266086627360854
There are a now a number of companies attempting to run the same crypto treasury strategy with BTC and alts. I suspect the next FTX style blowout might be caused by these treasury companies.
Without any need to be a bull or a bear, but just observing and thinking: I'd say that if more companies try to become BTC treasuries, it is going to push the price of BTC up, way up. What do you think?
Plenty of material below if you click on the dots. Be sure to try the log function too
https://bitcoindeaths.com/
$180k eoy
$300k by 2030
beyond that - anything between $0 and $1M.
hard to imagine big dips in the near term (<5y) - too many people are sidelined with cash waiting to get it.
I'm sure your prediction will be correct, but there's a chance that it's simply a random comment and random numbers thrown out. What would be the reason behind these numbers?