Bitcoin in a hyperbolic bubble

[tecate]

There is some merit to your valuation but its pretty limited in terms of strategy. By the sounds of it you are trying to minimise risk (no bad thing) to point of perhaps never taking any risk (useless)
When was the last time gold was at $610? 10yrs ago? In the meantime you have completely missed some massive upside and I suspect you may be waiting a long, long time before you see $610 again, if ever.

That's why I didn't even bother addressing it. It's a complete cop-out. The other irony is that whilst the greatest aspect gold has going for it as a store of value is its long history, its more recent history demonstrates a whole decade where it was equally as volatile as bitcoin (or more recently still when between 2011 & 2015 it fell from $1875 to $1000)...yet ridicule is to be reserved exclusively for bitcoin as a store of value apparently.

 

[letitroll]

Thanks. Still vague but let me help summarize the above - in the absence of your current BTC holdings, you would be a potential buyer at todays prices (~$29,000) and below.

I appreciate you giving us the broad postal code for your personal valuation framework for BTC.

Like seriously what was so hard about throwing that out there on an anonymous forum on the internet. Very strange.

 

[noproblem]

Oh yeah - what’s your fair value range for BTC…..the price under which your a happy accumulator? Genuinely interested.

I’m going to assume you didn’t jump in and buy more at $40k, $50k, $60k……you seem to think $19k is a good deal…..is $25k a good deal then?….you buying right now?

So what’s @tecate BTC valuation range?

Might be €1, might be €500,000. In the same way experts say it has no value, others seem to believe otherwise.

 

[DazedInPontoon]

Now spit out YOUR estimation of BTC’s current price where your a happy buyer/investor @tecate ?

I can chime in too. As I've said before peaks and troughs are just volatility, the long term average is the closest thing I can use to determine some kind of fair value based on a point in the adoption curve.

Given that, the Mayer multiple is probably as good a rough guide as any https://stats.buybitcoinworldwide.com/mayermultiple/ and it's pretty low right now, indicating that now is a pretty good time to buy. Like tecate I would buy some if I didn't already feel I had enough of an allocation, I'll probably buy regardless if it does get back near 20k.

 

[letitroll]

https://stats.buybitcoinworldwide.com/mayermultiple/

Interesting model, I'm sure it helps many sleep well at night.........I'm sure it also SELLS a lot of bitcoin to people.......the link itself is hilarious BUYbitcoinworld........its marketing nothing more & nothing less........the bitcoin equivalent of 2 minute Abs.......for those who put any stock in it as a robust statistical valuation framework........well what I can say nothing in this world is more deluded than the belief that differential calculus & econometrics can be applied to the emotional oscillations of homo sapiens buying and sale a thing between each other with no intrinsic value other than a vague belief somebody will buy it later on for the same price or more

 

[DazedInPontoon]

.the link itself is hilarious BUYbitcoinworld........its marketing nothing more & nothing less........the bitcoin equivalent of 2 minute Abs

totally agree, it's just the first one I found with a chart of the mayer multiple

 

[WolfeTone]

with no intrinsic value other than a vague belief somebody will buy it later on for the same price or more

Ah, not the old intrinsic value argument again?

My valuation framework for gold is as a pretty but scarce metal that’s consumed in the production of jewelry and other ostentatious displays of wealth. I expect it will always have this function and so will always be in demand as the globe grows wealthier and more populous.

So based on the above I would happily buy gold all day long as a prudent investment at 5% below the current extraction/replacement cost…..measured by the the lowest cost per Oz scale global gold producer/miner…..currently that’s Polysus from Russia which has an AISC (all in sustaining cost ) of $640 / oz of gold produced.

I’m a happy buyer/investor in gold therefore at ~$610/oz. or below.

In short, a vague belief that someone will buy gold later at $610 or more.

 

[letitroll]

In short, a vague belief that someone will buy gold later at $610 or more.

Vague - get your dictionary out @WolfeTone

Let's be clear. I'm no investor or lover of gold. Lots other more sensible things to do with my assets. I was asked to estimate the price at which I would consider Gold as an investment. My thesis is that its been prized for at least 5,000 years by humans as a thing of value. Not a terrible supposition that that might continue for the next 50 years of my life given the track record? This then somewhat answers the question of whether demand for Gold is likely to exist in the future. Not guaranteed but 5,000 years is a long time and 50 years is short by comparison.

I then asked myself in a world where the probability of demand remaining robust is high over my investment horizon what is the incremental production cost for an oz of Gold. The lowest cost miner, Polysus, can produce gold at an all in cost of ~$640/oz.....for a reasonable IRR I'd want a discount to that price......5% seemed reasonable - ~$610 gets me to that price.

No vague beliefs @WolfeTone in my $610 assessment of where I'd even consider hitting buy with Gold. Nothing certain either - just a reasoned and probabilistic assessment based on multi-millennium historical demand for Gold extrapolated out to the future with the contemporaneous replacement cost discounted by 5% to allow for return. Vague isnt the word I'd use for what i just laid out. If thats the case I'd like to see your VAGUE btc value thesis?

 

[DublinHead54]

Vague - get your dictionary out @WolfeTone

Let's be clear. I'm no investor or lover of gold. Lots other more sensible things to do with my assets. I was asked to estimate the price at which I would consider Gold as an investment. My thesis is that its been prized for at least 5,000 years by humans as a thing of value. Not a terrible supposition that that might continue for the next 50 years of my life given the track record? This then somewhat answers the question of whether demand for Gold is likely to exist in the future. Not guaranteed but 5,000 years is a long time and 50 years is short by comparison.

I then asked myself in a world where the probability of demand remaining robust is high over my investment horizon what is the incremental production cost for an oz of Gold. The lowest cost miner, Polysus, can produce gold at an all in cost of ~$640/oz.....for a reasonable IRR I'd want a discount to that price......5% seemed reasonable - ~$610 gets me to that price.

No vague beliefs @WolfeTone in my $610 assessment of where I'd even consider hitting buy with Gold. Nothing certain either - just a reasoned and probabilistic assessment based on multi-millennium historical demand for Gold extrapolated out to the future with the contemporaneous replacement cost discounted by 5% to allow for return. Vague isnt the word I'd use for what i just laid out. If thats the case I'd like to see your VAGUE btc value thesis?

Ahh @letitroll don't you know that Wolfetone has a model they've developed using various inputs that correctly valued and predicted the Bitcoin price at $34k a few weeks ago.

 

[WolfeTone]

Vague

Ok, I'll let you have that one. But the premise is still the same. You will buy at $610 on the belief that you will be able to sell it later at that price or higher.
It's randomonics, as mentioned before next to zero strategy.

@Dublinbay12 has finished his daily prayers at the alter of high priest Central Bankers. You still following their ten commandments?

Your premise for feeling 'sorry' for anyone buying bitcoin over $30,000 was on a ludicrous assumption that I was offering investment advice on bitcoin.
Had anyone taken my posts as advice they would have bought bitcoin at $3,500, bought some more at $10,000, bought some more at $17,000 and offloaded all, or some, at $54,000...before it crashed back to my predicted valuation of $34,500.
At which point I mentioned I'm somewhat bearish in the short-term... (that's 3 months in my model). What's it price today? Up or down from $34,500.
As things stand, looking to the alter you worship I can only envisage so more sudden drops, but if it goes below $27,000 within 3months then, as @letitroll might say, I will 'load up the truck'.

If however the facts change, as they do, then my forecast will change.

Whats not to like about my model for forecasting bitcoin price?

 

[letitroll]

It's randomonics, as mentioned before next to zero strategy.

Respectfully disagree - my gold valuation is probabilistically sound and likely to return, if it were ever to drop to $610, a very respectable return in a wide range of scenarios…..not much more you can ask, nothing is 100% certain in forecasting. I even retain a very small probability in my mind that BTC will one day exceed $64k again but I put in the earth shattering comet collision category. Possible but highly highly unlikely.

When was the last time gold was at $610? 10yrs ago? In the meantime you have completely missed some massive upside and I suspect you may be waiting a long, long time before you see $610 again, if ever.

You seemed to wholeheartedly agree with me a few posts ago on gold PT - and actually poo poo’d it as too low.

In regards to missing massive upside in Gold - so what, I miss a lot of upside in a lot of things. I‘m not required to have an opinion or strategy on gold and only provided one for the purposes of this discussion but also to highlight that both you & @tecate were unable or unwilling to provide anything close to the logical & reasoned thesis I built for Gold AND I dont even care about gold! You guys sure seem to care alot about bitcoin, so I would have expected something more robust back but the lack thereof confirms my thesis on bitcoin, so thank you both & see you at $19k when I shall come to haunt you both again.

Stay well, stay lucky……and always buy dip….eventually you’ll dollar cost average down to ZERO and you literally cant lose then. Its a winning formula.

 

[tecate]

my gold valuation is probabilistically sound and likely to return, if it were ever to drop to $610, a very respectable return in a wide range of scenarios…..not much more you can ask, nothing is 100% certain in forecasting.

As Wolfie pointed out to you from the get go, your 'valuation' is about as useful as an ashtray on a motorcycle...although you get points for actually having a go. Pricing models are wrong more often than not - albeit occassionally useful. That's as far as it goes.

I even retain a very small probability in my mind that BTC will one day exceed $64k again but I put in the earth shattering comet collision category. Possible but highly highly unlikely.

There's probably a support group for the long list of naysayers here who said that $20k would never be topped again. I'd advise sending out a few DMs as your assumptions could very well be well and truly punished in this regard.

I‘m not required to have an opinion or strategy on gold and only provided one for the purposes of this discussion but also to highlight that both you & @tecate were unable or unwilling to provide anything close to the logical & reasoned thesis I built for Gold AND I dont even care about gold!

This discussion played out a long time ago in these parts and nothing has changed. You contrive to deliberately miss the point. The point is that you have no notion what the price of gold should be right now. Using production cost is at least some sort of answer - but what utility does that measure have then if theres no reasonable expectation of gold trading at or below production cost in the short or medium term? Secondly, I've no doubt that production cost informs decision making in the $10 trillion gold space - but clearly its not being utilised as the sole determinant re. price. It's current market price speaks to that.

That's what you provided. Now to the ongoing and wayward criticism of bitcoin pricing. I'm not going to apologise for there not being a nice neat little formula to determine price (just like there isn't with gold - and as above, production cost calcs don't cut the mustard - sorry). If you were genuine in your approach to this discussion, you'd simply acknowledge that. It's even possible to do that and still respectfully maintain the opinion that you see bitcoin as pointless, etc etc. What comes through is pure salt and bile (because there's nothing pragmatic about your view here - you're ideologically opposed to bitcoin).

so thank you both & see you at $19k when I shall come to haunt you both again.

See my last sentence above - and now read yours. You won't be 'haunting' me with anything - you don't have that power my embittered friend. There are a myriad of exogenous factors that can send btc price up/down/sideways over the course of the short/medium/long term. I respect that - clearly you don't.

Stay well, stay lucky……and always buy dip….eventually you’ll dollar cost average down to ZERO and you literally cant lose then. Its a winning formula.

Very classy indeed.

 

[tecate]

totally agree, it's just the first one I found with a chart of the mayer multiple

I suspect you didn't push matters any further as you've far more respect for your own time than I do when it comes to mine. However, its the height of bad faith argument to attack the domain name that Trace Mayer uploaded his Mayer Multiple calc to rather than to be pragmatic and examine and challenge the actual calculation. Further bad faith argument on display when the old trusty 'meh no intrinsic value' card is played.

 

[WolfeTone]

my gold valuation is probabilistically sound and likely to return

Yes, I agree. But if we are talking about investing then you need to consider a timeframe otherwise what you are saying is as about as significant as saying your house will be valued at $0 one day. It will, but when? 100yrs, 200yrs, 500yrs?
Without a timeframe, then you are simply avoiding the risk of ever being wrong, in which case it is not strategic investment you are talking about, rather a prediction on par with say - one day war will break out somewhere in Europe.

small probability in my mind that BTC will one day exceed $64k again but I put in the earth shattering comet collision category.

This is just the opposite side of coin that you accuse bitcoiners being unable or unwilling to do. You have admitted that there is a 'small probability', so spit out your formula for that to occur!

were unable or unwilling to provide anything close to the logical & reasoned thesis I built for Gold

I will give you a small insight into my thinking. I do not proclaim to speak for anyone else but I would imagine there is some common thinking.
I do happen to think bitcoin, in the digital age that we are living in, is a new asset class. It is property rights. It is a medium of exchange (poor), it is a store of value. It is a viable alternative option to store private wealth outside of the centralised command banking system.

Now you can disagree, and that is your perogative. Maybe I am crazy?

But how much is it worth? How do I value it?
I happen to think that bitcoin, given my views on what it is, has potential to reach as many people than say, Facebook, Amazon or Apple or Google. In fact I would say probably all those put together and more.

I also happen to think central bank credibility is slowly being shot to pieces. The pure drivel coming out of the hierarchy is pathetic. To put it another way, when was the last time a CB forecast was right?
They are on perpetual money printing - 10yrs later after the initial round of QE - it's a farce. And some people around here fall at alter of their monthly statements.

I am bearish, short term for bitcoin, namely because of mining disruption and yes there is going to be some political pushback. But in my view, from what I've heard, most of this pushback is 99% bluster and waffle and FUD regurgitated by one cycle of idiots after another clueless to what they are talking about.

I look to the future, I think bitcoin will be here in 10yrs time at least (save a superior tech being invented to replace it). In 10yrs time the people running the country and the world will be more exposed to bitcoin, and 10yrs after that too.

Buy bitcoin at any price. But in my opinion over next few months the price is not going anywhere significant.

eventually you’ll dollar cost average down to ZERO and you literally cant lose then.

Too late, already past that point.