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    Cryptocurrency Daily Discussion - October 8, 2021 (GMT+0)

    October 08, 2021

    Cryptocurrency Daily Discussion - October 8, 2021 (GMT+0)

    Daily Discussion - October 8, 2021 (GMT+0)

    Posted: 07 Oct 2021 05:00 PM PDT

    Welcome to the Daily Discussion. Please read the disclaimer, guidelines, and rules before participating.

    Disclaimer:

    Consider all information posted here with several liberal heaps of salt, and always cross check any information you may read on this thread with known sources. Any trade information posted in this open thread may be highly misleading, and could be an attempt to manipulate new readers by known "pump and dump (PnD) groups" for their own profit. BEWARE of such practices and exercise utmost caution before acting on any trade tip mentioned here.

    Please be careful about what information you share and the actions you take. Do not share the amounts of your portfolios (why not just share percentage?). Do not share your private keys or wallet seed. Use strong, non-SMS 2FA if possible. Beware of scammers and be smart. Do not invest more than you can afford to lose, and do not fall for pyramid schemes, promises of unrealistic returns (get-rich-quick schemes), and other common scams.

    Rules:

    • All sub rules apply in this thread. The prior exemption for karma and age requirements is no longer in effect.
    • Discussion topics must be related to cryptocurrency.
    • Behave with civility and politeness. Do not use offensive, racist or homophobic language.
    • Comments will be sorted by newest first.

    Useful Links:

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    Bitcoin became legal tender in El Salvador a month ago. It is not going well.

    Posted: 07 Oct 2021 07:16 PM PDT

    This is a post about the cryptocurrency situation in El Salvador. I am posting this again because the previous one was removed by a bot. It is not about price, it should not be marked as such.

    Twitter post as proof of living in El Salvador: https://nitter.net/samsungsv19/status/1446177713413308428#

    A month ago, Bitcoin became another Salvadoran currency. I understand that my previous posts looked like complete FUD, but that's not my intention. I wanted to share how all of this affected Salvadorans, specially for those who barely have money to get a "decent" mobile device.

    Adoption is going pretty bad, specially because of identity theft. There have been hundreds of reports about people using the Chivo Wallet to steal money. The government is being quiet about it, and no one is offering a solution to the problem:

    https://diario.elmundo.sv/denuncian-robo-de-datos-personales-para-uso-no-autorizado-de-chequera-chivo/

    That is not a case of phishing or people authorizing full access to the Chivo Wallet, this is way worst. The Chivo Wallet "has facial recognition", or so they said however it is just storing a picture, any picture. There is no validation whatsoever, and because of that people are no longer using/trusting Bitcoin:

    https://imgur.com/a/7vRTft8

    And yes, I know you are going to say that this does not have anything to do with Bitcoin, but you gotta understand the Salvadoran culture: Once something fails, everything associated to it becomes bad. It doesn't make sense, I know, but that's how things really are here, and it is affecting adoption.

    Businesses are reporting low adoption. 93.1% of small/medium business are reporting ZERO Cryptocurrency transactions. The free bitcoin bonus was either converted to FIAT or spent in groceries, after that usage crashed.

    What about the protests? Did people finally accept the Bitcoin Law passed by the Salvadoran congress?

    Not quite.

    There were two protests:

    • September 15th

    • September 30th

    Both protests were massive, huge turnout. People are angry, and mad. Salvadorans do not want The Bitcoin Law:

    September 30th Protest against the Bitcoin Law

    https://imgur.com/gallery/izClFXl

    A protestor in front of Congress throwing spaguetti. The government has been giving people bags of spaghetti and tuna for months.

    https://imgur.com/gallery/vcSpiOw

    More photos of the protests:

    https://imgur.com/gallery/oTBmKXL

    https://imgur.com/gallery/Yflx5gi

    http://imgur.com/gallery/NRUp3yx

    http://imgur.com/gallery/wveAR41

    http://imgur.com/gallery/IaP1YGR

    http://imgur.com/gallery/ysl1jvC

    http://imgur.com/gallery/3HEf4z7

    http://imgur.com/gallery/hO23Vil

    http://imgur.com/gallery/zu263IQ

    http://imgur.com/gallery/61W1rmh

    What was President Bukele's response?

    Just like Donald Trump, he chose to mock the protests via Twitter:

    http://imgur.com/gallery/NhAqko0

    Three protests, and instead of listening to the people, he decide to just ignore them, and make fun of them.

    Are Salvadorans protesting because they dont understand technology? Are they afraid of changes? Why they don't want free money?

    Well, salvadorans are protesting because this whole Bitcoin Law thing has been shady. First of all, remember the "Not your keys, not your money" thing that you see pretty often here? We don't know where the 700 bitcoins that the President Bukele bought are. Who is our broker? How much did we pay for those bitcoins? What about the free 30 dollar bonus? How much did it cost? All information regarding the purchase of Bitcoin is classified.

    What about the ATMs? We only know that a known Bitcoin ATM company provided them, but the cost of those 200 ATMs is classified information because of "National Security" (whatever that is).

    But hey! El Salvador is mining Bitcoin with vulcanoes!

    Yeaaaaaaaaah, about that.... It is true, but it is not a new well, nor new infraestructure. The mining farm is located in a poor town called Berlin, Usulutan. LaGeo is the name of the state-owned company that produces geothermal electricity for the Oriental Region (Usulutan and San Miguel), however due to the mining farm, we are starting to burn more coal to provide enough energy to the region. Electricity costs are rising up, but our President puts profits over people.

    Profits over people you say? Covid cases/cases are going up, but Bukele is not restricting movement because that would be a fatal blow to the Chivo Wallet adoption. You see, if people cant go outside they cant go to the Chivo Offices to set up the wallet and learn how to use it. Bukele cares more about profits, and spends his days tweeting about bitcoin prices (Trump would be so proud):

    http://imgur.com/gallery/ma4IgAY

    What is next? Another protest is scheduled for October 17th, and rumor has it that it will be bigger than the previous one. Will Congress concede and roll back the Law? We dont know.

    submitted by /u/sam-sung
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    Bank of America announces cryptocurrency research department - First they make fun of us, then the warn us, then they join us

    Posted: 07 Oct 2021 04:43 AM PDT

    Why ETH will hit $20K (as if we needed more Hopium today)!

    Posted: 07 Oct 2021 01:46 PM PDT

    Why ETH will hit $20K (as if we needed more Hopium today)!

    Why ETH will hit $20K

    What does Bitcoin's halving teach us about Ethereum's PoS merge?

    When you look at current prices and you take into account the efficiency gains of removing proof-of-work after the merge, we're looking at 13 billion dollars per year…of buy pressure relative to what we have today. - Justin Drake, Bankless

    Token economics is a growing field of study that ties the programmatic emission of tokens with incentives to drive economic outcomes. It's nascent and confusing. There are multiple ways to value a token, just like there are multiple ways to value equities (DCF, DDM, comparables).

    Other factors will certainly matter like regulation, network usage, EIP-1559, but if all else were equal, we could oversimplify why Ethereum will be valued at $20,000 after proof-of-stake to just one reason: Issuance.

    Issuance is the number of new coins that are created every day in a crypto network. However, it's not necessary to understand why issuance exists to understand why Ethereum is grossly undervalued: simply take note that issuance is a necessary aspect of all cryptocurrencies and is associated with the cost of securing a crypto network.

    To keep things simple, the cost of keeping a crypto asset's price stable is equal to the number of coins issued per day multiplied by the price per coin.

    Let's take Bitcoin, for example. In the case of Bitcoin, 900 new bitcoins are created every day. If each bitcoin is valued at $45,000 then the cost of keeping Bitcoin's price stable is at around $40.5 million per day. By "stable" I mean that there must be $40.5 million in new demand to offset the increased supply from daily issuance.

    Ethereum also has issuance, around 13,500 ETH are issued every day. At a price of an average of $2,000 per ether in 2021, it currently costs around $27 million per day to keep Ethereum's price from dropping.

    The big change that is about to happen is that Ethereum will undergo an upgrade that will reduce its issuance by 90%. I am referring to Ethereum's full transition to proof-of-stake. Again, you don't really need to understand what proof-of-stake is to follow my argument, just understand that it will reduce the number of new ETH created every day.

    This article predicts a fair long-term price of ether at $20,000 after the merge. The first part of my argument is very easy to understand: just simple algebra.

    The Algebra of Issuance Reduction

    Today our daily issuance is:

    13,500 ether x $2,000 per ether = $27 million

    This means that the cost of keeping the price of ether from going below $2,000 is $27 million per day. After the transition to proof of stake, we will have a reduction of 90% in issuance, bringing it down to around 1,350 new ether created per day:

    1,350 ether x $20,000 per ether = $27 million

    In other words, if the market continues to pump $27 million per day into ETH (as it has been doing throughout 2021) after proof-of-stake, the price of ether must increase to $20,000 per coin.

    How quickly will this happen?

    The rest of this article answers this question using a method called the inelastic market hypothesis. This hypothesis, developed by professors Xavier Gabaix & Ralph S. J. Koijen, puts forth the idea that markets respond inelastically to investors' flows.

    Using Bitcoin's past halving cycles, I measured the inelasticity of the Bitcoin market and extrapolated it to Ethereum. The inelasticity factor found for Bitcoin was 20, which means that every dollar invested in Bitcoin makes the market cap increase by 20 dollars. Using this inelasticity factor, I predicted that, after proof-of-stake, Ethereum's price should increase at an average rate of 8% per month due to the reduction of issuance alone.

    Inelastic Market Hypothesis: A Brief Background

    Two months ago, an interesting piece began circulating in Crypto Twitter from Xavier Gabaix and Ralph S.J Koijen titled "In Search of the Origins of Financial Fluctuations: The Inelastic Market Hypothesis." The authors put forth the proposition that today's stock market reacts inelastically to investors' flows. Their simplest model, which includes a bond market and an equity market, indicates that selling $1 in bonds and buying $1 in equities has the effect of increasing the equity market cap anywhere from $3 to $8. Their paper goes on to demonstrate, both theoretically and empirically, why this is the case.

    The main reason for the inelasticity of equity markets, according to the authors, is related to the behavior of households and institutions, who hold the majority of equities in the US (approximately 80%). Both households and institutions are illiquid market participants, meaning that they buy equities and hold them for extended periods of time, regardless of price fluctuations. Why?

    In the case of institutions, they often have mandates which force them to keep a part of their holdings in equities. Households that do not actively trade the stock market often prefer a "buy and hold" strategy. This lack of liquidity in the equities market causes volatility, and this volatility can be quantified and explained by the inelastic market hypothesis. The inelasticity factor given by their study is 3-8, which means that for every dollar invested in equities, the market cap may increase from 3 to 8 dollars.

    This general behavior of households and institutions in the equity market reminded me of the HODL culture of the Bitcoin community, who pride themselves in holding their bitcoins regardless of price fluctuations. If volatility is so closely related to illiquidity, and if the inelasticity of equity markets is 3-8, and knowing that this is caused by similar behavior in both markets, how much more inelastic is the crypto market if compared to the equity market?

    This is the first objective of this paper, to arrive at an estimate for the inelasticity of the Bitcoin market. The method used will be analyzing Bitcoin's past halving cycles and measuring the effect that the supply shock from each halving had in accelerating the price increase of Bitcoin after the halving date.

    The second objective of this paper is to predict how Ethereum's EIP-1559 and the transition to proof-of-stake will affect its price. This will be done by estimating the magnitude of the supply shock of each of these two events and factoring in the inelasticity factor found in the Bitcoin market.

    The Bitcoin Halving: A General Framework

    Let's understand how issuance works for Bitcoin:

    1. New bitcoins are created and sold on the market every day.
    2. The number of newly created bitcoins is abruptly reduced by half every four years. This event is called the halving.

    Let's put our first point in context. If new bitcoins are created and put on the market every day, the overall supply of bitcoin increases every day. As you can imagine, if nobody were there to take these newly issued bitcoins off the market, the price of Bitcoin would tend to go down. This is easy to understand: if there is too much of something, it becomes cheaper. Hopefully, at some point, the price of this asset becomes cheap enough that people choose to buy an amount equal to what is being created, keeping the price stable.

    Let's say that we have arrived at this stable price, at which the newly issued bitcoins are bought by a group of investors.

    If Bitcoin's price remains the same for an extended period of time, this indicates that there is a constant demand for bitcoins. Otherwise, if there weren't investors willing to buy the newly issued bitcoins, the price of Bitcoin would trend towards zero, as mentioned before.

    A Closer Look at Supply Shocks

    So let's think about the Bitcoin market right before the halving event. Come the day of the halving and, as expected, the issuance of bitcoins is reduced by half. If we assume that demand remains the same as it had been before, then this will force the price to go up over time because of the ensuing supply shock.

    For our paper, the supply shock will be the reduction in the number of bitcoins issued after the halving date. In other words, the supply shock equals the number of coins that would have been issued if the halving had not happened.

    My argument is that the supply shock multiplied by the average value per bitcoin accrues to the value of the Bitcoin network over time. This can be represented as "value invested," since the flow of money works as an investment of capital:

    supply shock x average price per bitcoin = "value invested"

    "Value invested," which used to keep the value of Bitcoin from decreasing, now contributes to increasing the value of Bitcoin. The factor by which "value invested" increases the market cap, represented by h1, is the inelasticity:

    "value invested" x inelasticity = h1

    Here is a simple example to clarify these concepts. Imagine you have an office building, and that you have to pay $100 every month for the air conditioning bill because it is summer. Every month your accountant writes off $100 that goes to paying for the electric bill of the AC. When summer ends, you don't need to pay $100 anymore because it is colder. Let's say you end up paying $50 in AC bills now that summer is over. This means that you now have $50 dollars more to invest in your company. Now your accountant can register that you have a surplus of $50, which adds value to your business.

    The difference between the example above and Bitcoin (and equity markets in general) is the concept of inelasticity, which means that those $50 of "value invested" may actually accrue, say, $200 to the value of the asset (inelasticity factor of 4, in this example). Also, the halving acts as a perpetual winter, which decreases your air conditioning bill by half, every four years.

    Next let's estimate these these variables:

    • The increase in market cap due to the supply shock, h1
    • "value invested"

    If we have these variables, we can arrive at the inelasticity of the Bitcoin market:

    h1/ "value invested" = inelasticity

    This approximation of the inelasticity of the Bitcoin market can then be used to calculate the magnitude of the price change that Ethereum will undergo after EIP 1559 and the transition to proof-of-stake.

    The Bitcoin Halving Cycle: A Tale of Two Curves

    Let's use the 2016-2017 market cycle as an example of how to calculate the increase in market cap, h1, due to the supply shock, and "value invested". The same process described below was used to infer inelasticity from the 2012 and 2020 cycles.

    Below is a chart of Bitcoin's market cap beginning in January 2015, and ending around March 2018. I included some points on the graph, which represent the following dates:

    • Blue: Lowest market cap since prior halving
    • Yellow: Halving date
    • Red: 100% increase in market cap from Halving date (or a 2x increase in the market cap relative to the market cap on the halving date)

    ​

    https://preview.redd.it/esi50ymg93s71.png?width=1205&format=png&auto=webp&s=4d533a3e1b0b8a25ab834eaef8e8636e5b66481a

    Blue, the lowest point since the prior halving, is our starting point. At this point, the price of Bitcoin has become so low that investors are happy to buy the new bitcoins that arrive on the market. The price is increasing from Blue to Yellow and then from Yellow to Red. We can be sure then, that the new bitcoins entering the market are being bought. Yellow is the halving date, the date on which Bitcoin´s issuance is reduced by half.

    Since the price of Bitcoin increases steadily, as can be seen in the graph, we can express this upward trend as a slope, m1:

    ​

    https://preview.redd.it/62zse0jn93s71.png?width=1110&format=png&auto=webp&s=ad115b7bce6f0dd3b2552768b1edd775b58ba4d5

    What does m1 represent?

    The daily increase in the Bitcoin market cap prior to the halving date. For simplicity, I used a linear regression between these two points. Further research could focus on alternative regressions. So what happens around the actual date of the halving? If you take a closer look at the graph, in the vicinity of July, 2016, what happened was a typical "buy the rumor, sell the news" event.

    After this noise, Bitcoin continued to go up.

    The halving, it seems, was not priced in!

    Bitcoin continues its upwards trend after the halving, but now at a faster rate, m2. We can represent the new rate of increase in market cap after the halving by drawing a second slope, m2, from the halving date to an arbitrary point on the graph, in this case, at 2x halving market cap.

    ​

    https://preview.redd.it/0ifqlhep93s71.png?width=1038&format=png&auto=webp&s=6e528cd9cfbe2ca162e9757a54aa6b4aa11ac11b

    Let's take a step back to put all this in context with an example.

    Before the halving, let's say the price of Bitcoin was at $1,000 and that there were 50 bitcoins issued per day. If the price of Bitcoin was stable or going up over time, this means that the market was paying $50,000 a day for the newly issued bitcoins. After the halving, the market keeps paying these $50,000 per day; however, there are only 25 bitcoins being issued after the halving event.

    At $1,000 per Bitcoin, what happens to those extra $25,000 dollars? They accrue to the value of the network!

    This is what I chose to call "value invested."

    "Accruing to the value of the network" is just a fancy way of saying that this money will be used to buy old bitcoins, or bitcoins that were not issued that day. Inelasticity is relevant in this context because those $25,000 may actually make the market cap of Bitcoin increase by $125,000 if the inelasticity factor is 5. The next section deals with determining "value invested" and the increase in the market cap due to the halving effect, which we will call h1.

    Inferring Inelasticity from the Difference Between m2 and m1, "value invested," and h1

    Let's imagine that the halving had not occurred. In this case, we can assume that Bitcoin's market cap would have continued to increase at the rate of m1, and would most likely be near the green point on the graph.

    ​

    https://preview.redd.it/x93lihys93s71.png?width=1207&format=png&auto=webp&s=3ff3ce36de26390774bf1a8643471e0ad2c92eed

    We can calculate how much of the increase in Bitcoin's market cap after the halving was due to the halving effect. This can be done by taking the difference between the market cap at the red point and the market cap at the green point, which gives us the increase in the market cap due to the halving effect, h1.

    Simple, huh?

    Now comes the final step: determining "value invested;" it is equal to the number of bitcoins that would have been issued if the halving had not happened (supply shock) multiplied by the average price of these bitcoins:

    supply shock x average price of bitcoins = "value invested"

    Again, I call this "value invested" because this is the value that is invested in the Bitcoin network, the value that accrues to the Bitcoin network. If we divide h1 by "value invested" we arrive at a rough estimate of the 13 inelasticity of the Bitcoin market.

    h1/ "value invested" = inelasticity

    Results

    Here are the values of inelasticity that I found for each Bitcoin cycle:

    • 2012 - 24.9
    • 2016 - 20.7
    • 2020 - 70.2

    As you may imagine, I was pleasantly surprised at how close the inelasticities of cycles 2012 and 2016 were and disappointed at how different the inelasticity of 2020 was in relation to the other two. After giving it some thought, I arrived at an explanation for this.

    The Covid outbreak made markets plummet right before the halving, and the effects of quantitative easing quickly recovered these markets right after the halving, around May 2020. These two factors reduced the average price per Bitcoin before the halving and decreased the time it took for Bitcoin's market cap to double after the halving (see Appendix B). I share the frustration of other analysts who have had only three data points on which to base their predictions. Actually, in my case, one of those data points can be considered an outlier due to the Covid outbreak.

    Comparing to the Harvard paper, the inelasticity of equity markets was within a 3-8 range. We can tentatively say then that the Bitcoin market's inelasticity is ~20, which means it is 3-7 times as inelastic as equity markets.

    To put this into simple terms, every $1 used to purchase BTC results in a $20 increase in its market cap.

    Ethereum: what to expect from EIP-1559 and PoS

    The next part of this paper assumes that the Ethereum market has a similar inelasticity as the Bitcoin market. Being the second-largest cryptocurrency by market cap and displaying similar volatility movements as Bitcoin, this is a fair assumption.

    On-chain data indicates that people have been holding ETH in anticipation of the transition to proof-of-stake, which is further proven by the reduction of ether on exchanges. Furthermore, the day-to-day price fluctuations of these two cryptocurrencies are near identical. Therefore, we can assume that their inelasticity values are similar.

    Knowing that both markets exhibit similar behaviors, we will use our baseline inelasticity of 20 to predict the price action of Ethereum after EIP 1559 and the transition to proof-of-stake. The steps I followed to calculate the monthly increase in the price of Ethereum due to its catalysts are essentially the reverse process of calculating inelasticity.

    The results: EIP 1559 should increase the price of ETH by 2% a month; the transition to proof-of-stake should increase the price of ETH by 6% a month.

    This means that the combined effect of both these catalysts is an 8% increase per month. This is an average value, which assumes that everything else remains the same. Short-term fluctuations in price are impossible to predict, I am interested in the long-term.

    Bringing it All Home, Where is the Price Headed?

    Consider this: in 2021 so far, ether had an average price of $2,000 and an issuance of 13,500 ether per day. This means that, at $2,000 per ether, the market needs an injection of $27 million per day just to keep the price stable at $2,000. Let's say that ether remains near this price until the transition to proof-of-stake.

    daily issuance x price per ether = daily cost of keeping ether´s price stable
    13,500 ether x $2,000 = $27 million

    So what happens when issuance drops by 90% after the transition to proof-of-stake? Well, let's assume that $27 million keeps pumping into Ethereum. Then, let's put our new issuance of 1,350 ether per day. At what price could ether be sustained?

    $27 million / 1,350 ether = $20,000 per ether

    After the transition to proof-of-stake, ether will at least increase in price at an average rate of 8% a month, with $20,000 per ether being an acceptable price over the long term after 2022.

    Many people will look at my $2,000 average price per ether with suspicion. These people could argue that using the average price of 2021 is biased since ether has seldom achieved these price levels before in its history. Perhaps it would be more realistic to use the average price of Ethereum going further back in time.

    The simple rebuttal to this argument is that the number of people who have entered the Ethereum community has increased in such a way that it is almost impossible for ether to revisit the triple-digit range.

    Xavier Gabaix explained this phenomenon in his paper by saying that "a permanent shift in the demand for stocks must create a permanent shift in the equilibrium price." If I were to use the average price of Ethereum using data from 2020, I would be disregarding the NFT mania, DeFi summer, the Ultra Sound Money meme, the Triple Halving meme, and other meaningful events and ideas that lured people to Ethereum this year.

    The market has been channeling $27 million per day just to keep ether's price stable for over 8 months. From my perspective, 8 months is enough data points to defend my argument.

    Some people might say: what about the ether that is being produced and held by miners? They are getting ether for a lower price than $2,000, so we cannot say that the market is necessarily paying $27 million per day to buy the new ether.

    My answer: although it is true that miners produce ether at a cost lower than the market price, not selling this ether for a profit represents an opportunity cost to them. Also, since proof-of-work mining is a low-profit margin business, the cost of producing ether may not be that much lower than the actual market price.

    My Speculative Predictions for What is to Come

    1. Ether will continue an upward trend throughout 2021. Corrections of ~30% as price moves up, reaching newer local highs. A ~50% correction will only occur in the case of a black swan event.
    2. After proof-of-stake, there will be a "sell the news" event, a correction no larger than ~20-30%.
    3. Ether is headed to a long-term price range of $20,000, the maximum price between 2022 and 2023 will likely overshoot this figure due to speculation, new market entrants, hype.
    4. After the bubble pops, ether will stabilize at ~$20,000 over the long term, after 2022.
    5. In 2024, Bitcoin will undergo its 4th halving, moving the entire market to new all-time highs

    Final Thoughts

    Importantly, the data are consistent with a quite long-lasting price impact of flows. Indeed, in the simplest version of the model, the price impact is perfectly long-lasting. This is not necessarily because flows release information, but instead simply because the permanent shift in the demand for stocks must create a permanent shift in their equilibrium price. -Xavier Gabaix, In Seach of the Origins of Financial Fluctuations: The Inelastic Market Hypothesis

    Raoul Pal has said that he predicts $20,000 for ether this market cycle, but he believes that the transition to proof-of-stake will be a "buy the rumor, sell the news" event. I agree with him, but I do not believe that we will have a cycle top in the vicinity of the transition to proof-of-stake. If we reach $20,000 before the transition to proof-of-stake I would interpret that as hype, because the market is not sophisticated enough to price this change, and I would expect a major correction. Reaching $20,000 can happen any time, keeping the price stable at $20,000 will be a result of flows of capital entering Ethereum over an extended period of time, after proof-of-stake.

    Here's an interesting ramification of my argument: every time Bitcoin undergoes a halving its price should at least double relative to its average price before the halving. Because other factors come into play after the supply shock resulting from the halving (new market participants, hype…) its price increases much more than that.

    That is why I believe that Ethereum's all-time high this cycle will be above its long-term price of $20,000.

    The new all-time highs we reach now will serve as a reference for the next cycle's expectations. Look at the quote above. "The price impact is perfectly long-lasting… A permanent shift in the demand for stocks must create a permanent shift in their equilibrium price." You can be sure that whatever all-time high we reach this cycle will be surpassed on the next cycle. This much is obvious to a great part of crypto enthusiasts and is probably the reason why we did not revisit lower lows after the China ban of May 2021.

    One final note: the timing of this event, the transition to proof-of-stake, is not a coincidence: this will be the bridge between Bitcoin's halvings. It will prevent a longer crypto winter and speed up the adoption of cryptocurrency. A friendly, albeit perhaps unwanted, pat on the back of bitcoiners.

    We're gonna make it.

    submitted by /u/cannainform2
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    Do NOT buy SHIB right now

    Posted: 07 Oct 2021 08:51 AM PDT

    A whale bought more than 6 Trillion SHIB causing the price to go up. If you are having some FOMO about SHIB, please ignore it. Do not buy it. Because when the whale sells, it is guaranteed that SHIB will crash. This is just a ploy to get people to invest more into SHIB. Right after the whale bought SHIB, the price has kept going up.

    If you buy SHIB right now, this is exactly what the whale wants you to do. They will certainly cash out on all their SHIB once this hype starts to lose momentum. Plus this is just the only whale that we know of, there are probably more whales that bought SHIB earlier ready to sell.

    Remember, SHIB is a hype coin with no real motive other than to get people to invest before the creators can rugpull. Do yourself a favor and DO NOT invest. This coin has absolutely nothing unique about it other than hype. When the hype dies down, so will the coin.

    Edit: SHIB crashed 33% hours after I made this post.

    submitted by /u/Many_Scratch2269
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    As of today, what are your top 5 long-term crypto investments and why?

    Posted: 07 Oct 2021 05:59 PM PDT

    The crypto world of today as we all know is teeming with so many coins. So many that it can be very difficult to keep track of them all. The staggering amount can often dissuade one from trying to do extensive research. I for one know that I'm one of these individuals.

    So, in an easily digestible nutshell, what are your long-term top 5?

    There are no right or wrong answers here, this is purely opinion. Ultimately, I would like to find out if there are any projects out there that we as traditional retail investors should know about. And perhaps do additional research.

    submitted by /u/13redle
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    What is your biggest regret in your crypto experience?

    Posted: 08 Oct 2021 02:36 AM PDT

    When it comes to investing in crypto, we do many operations, most of them positive. The problem is, could everything have been so much better? People selling and seeing their coin pump some time later, or not buying some coin that you have been considering and miss a x5 or x10.

    My biggest regret has been to sell part of my ROSE at $0.09, having bought at $0.06.

    It's not a big deal or anything comparable to people who sold BTC at $100 or bought ICP at $600.

    What has been the worst operation or the one that you regret the most?

    submitted by /u/chancletazo_es
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    Moon distribution…

    Posted: 07 Oct 2021 06:20 PM PDT

    Some of you might already know, when moon time comes around, I give all of mine away. I know they mean more to other people than they do me. I want you to give me two sentences on why I should give YOU my moons. Make those 2 sentences count. If it is less than 2…you get no moons. If it is more than 2..you get no moons. So, how well can you follow instructions? I will scroll through these comments as soon as I get a chance and spread the wealth. No catch. Just a giveaway. And yes, I know I only have 80 something…but thats besides the point. I dont HODL moons.🚀🌕

    EDIT: Pot has increased to 97 due to kind contributions. Woot woot!! 🥳

    EDIT 2: I keep getting more contributions and the pot is growing as I am steadily giving them away…this is what it's all about!! YOU ALL ROCK!!!

    submitted by /u/OurTimeToShine3521
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    Bitcoin is worth more than Facebook right now

    Posted: 07 Oct 2021 01:40 PM PDT

    So how are US taxes going to work after someone like me has made 1000 trades this last year?

    Posted: 07 Oct 2021 08:05 PM PDT

    So I know each trade or exchange is a taxable event. I know there is an 8949 form that we fill out, but I mean: how is every expenditure on a Coinbase card going to have to be listed? How am I going to write in every time I hopped into doge for an hour on a bulll run just to buy high and sell low? I have this foreboding feeling that my reckless trading has made days of work for myself. Last year I kept everything off exchanges and never reported. How fucked am I really, or is the 1099 from my exchange going to simplify this whole thing?

    submitted by /u/boatnofloat
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    Be careful when speeding with your Lambo in Denmark

    Posted: 08 Oct 2021 12:25 AM PDT

    Just read an article about a dude from Norway that got his brand new Lambo Huracán confiscated! He had just bought it in Germany and was driving home to Norway, got caught speeding while doing 236km/h (146mph), so danish court confiscated it.

    Apparently they have a law for reckless driving were first strike can get your car confiscated. Maybe they did him a favor, getting caught at that speed in Norway would give you jail time

    source (in danish): https://jyllands-posten.dk/indland/politiretsvaesen/ECE13351061/norsk-bosiddende-iraker-faar-konfiskeret-spritny-lamborghini-ved-koersel-paa-236-kmt-ved-hjoerring/

    submitted by /u/mr_sarve
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    Michael Saylor: "The Implicit Endorsement Of Bitcoin By Major Banks And Regulators Is Going To Accelerate The Collapse Of Gold And The Rise Of Bitcoin"

    Posted: 07 Oct 2021 11:47 PM PDT

    We're about to enter Alt season, be prepared and make sure to take some profits

    Posted: 07 Oct 2021 03:01 PM PDT

    Most of the top 20-30 crypto coins look primed to rally soon, With Bitcoin rising to almost $55,500 yesterday and now stabilizing around mid $54k range. It's not early to say that the money will be flowing to alts, usually it flows to top caps. So if you're in these large and some mid cap coins, hold tight because things are about to get wild. BUT make sure you take some profits, now I know HODL is good because your coin may go up another 500% but try to take profits in stages. Securing profits is the best thing you can do to yourself in the alt season, at the same time letting the rest ride just in case things go wild. So sit tight and watch how things unfold in the next few weeks.

    submitted by /u/Faze-Cumshot
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    Tether plot seems to be unraveling. Their CEO has deleted twitter account, and social media is abuzz of imminent DoJ/SEC action.

    Posted: 07 Oct 2021 06:26 AM PDT

    Tether plot seems to be unraveling. Their CEO has deleted twitter account, and social media is abuzz of imminent DoJ/SEC action.

    Tether episode may come to a climax soon, if latest buzz in both media and social media is anything to go by.

    Bloomberg has just published a detailed article trying to ideintify the source of the $69 Billion backing Tether, only to conclude that they have not been able to identify the money.

    The only source who would speak to Bloomberg is the person running Deltec bank in Bahamas, who could account for around 1/4th of Tether's money (around $15 BN) but stayed coy when quizzed on the other money.

    Tether has never tried to explain where exactly their money is stashed. If their statements are true, they would be the world's 7th largest commercial paper holder, with almost $30 bn in this..but no one in wall street has heard of them.

    All of this unfolded over the last few months, but just few hours ago the CEO of Tether has deleted his twitter account.

    Aaaannd its gone!

    ​

    There is massive speculation that Tether may be holding papers from China companies, that would explain why Wall St has no clue about Tether, but at the same time make Tether highly risky as China seems to be heading to a financial crisis.

    ​

    SEC may be looking at Tether too.

    Just yesterday, US Deputy Attorney General Lisa Monaco announced the formation of a task force headed by DOJ to crack down on crypto entities including exchanges, manipulators etc.

    submitted by /u/DetroitMotorShow
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    Has anyone told them about “Market caps”?

    Posted: 08 Oct 2021 02:03 AM PDT

    Don't FOMO into shib - you will regret it

    Posted: 08 Oct 2021 01:23 AM PDT

    So we all see the crazy run from shib lately, but let me tell you - even if you like memecoins (I do, like totally) it is the worst moment to FOMO into it.

    We are already seeing a start of crash from ath, which probably will get deeper (possibly with another spike before the crash) - you DON'T want to be on receiving end for this dump.

    Shib was around 5b market cap before this crazy run, now it is around 11b and dipping. For reference, doge cap is 32b. So yes, there is some potential, if shib flips doge, but it is even more possible we might get a big ol' dump on the heads, even close to 70-80% (pre pump price).

    If you still feel like FOMOing, go watch shib price chart, it has spiked 2 times so far, which resulted in hard hard dump moment after. Since may, up to today, shib was only going down except those 2 moments. What more, if you bought at ath in may, you are still at a loss today, shib didnt even match last ath after all those gains.

    If that isn't enough, think for a moment - some whale bought like 6 trillion shib, moment before this big pump. Now he made like +300% on this crazy amount. Why wouldn't he dump? He got crazy returns, and shib has high risk of crashing now, losing him those profits. So we will probably soon see 6 trillion whale dumping back, which will invalidate RH news gossip which created this craze in the first place.

    Also, ask yourself - if it starts crashing hard, would you be happy to hodl it long term and pretty much getting stuck with it? Yeah, that's what I thought:p

    So hopefully this posts help you with FOMO - this is literally worst moment to get into shib, for every reason possible. Don't get burnt friends and stay safe!

    Tl;dr Shib spiked like crazy, and if you buy now, you are at prime risk of it crashing. Also whale who created this hype had made a killing, and will probably dump on you in next days.

    submitted by /u/OmegaDDoge
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    Unpopular opinion - Is CoinBureau unbiased or his opinions in last video about ALGO vs. SOL are affected, because he is SOL holder?

    Posted: 07 Oct 2021 11:46 PM PDT

    Hey Guys,

    To be clear - I like CoinBureau. Till now, he was the best source of unbiased info about crypto and blockchains for me, but his last video "SOLANA vs. ALGORAND" made me think about it.

    Link to video - Solana vs. Algorand

    I like both chains, I hold bags of both and I do believe both of them have great future (even with latest SOL issue), but I think that his last video is not unbiased at all. I get it, it´s difficult, when you have to be unbiased, when you are holding one of these coins, but since he has a lot of followers and huge influence, he should be extracareful. I will still follow him, because I like him, BUT I think we should look at these two ALGO misconceptions:

    Misc 1 - Algorand staking:

    "Staking SOL is much easier to do" - At first I´ve thought I´ve heard it wrong, so I´ve had to rewind it. It looks like sending Algo to native wallet, where it´s automatically staked is somehow more difficult than sending it into wallet and immediatelly receiving rewards, choding a validator, amount to participate and waiting for 5 day (lock up period). I do not understand how Guy came to this conclusion. Algo has the easiest staking mechanism I´ve seen do far, so I do not agree with this statement at all (and I am not the only one according to discussion under video).

    Misc 2 - Accelerated vesting:

    According to info from Algorand Foundation, accelerated vesting already ended on 5th of October (source - The Accelerated vesting). I kinda get it, because video was posted on 7th of October, so two days after, but this was mentioned in almost every ALGO analysis I´ve read/seen - "Bad tokenomics". I do not think Algo Tokenomics is bad compared to SOL (where they released shitload of coins from day to day, but somehow it did not affected price...God knows why. To me it looks a bit fishy and I see it as bigger problem than Algo and their exact plan, but whatever).

    Conclusion:

    I like CoinBureau. Guy and his team are making great videos and I will still follow him, but this is something I strongly disagree with, because both points are incorrect. I am wandering if it´s because he did´t knew about it, or because he is holding SOL and do not hold ALGO. In my opinion Algo´s biggest issue - accelerated vesting, is actually a bonus. It was planed, everyone knew about it, they were slowly releasing coins to circulation to avoid pumps and sumps, so I do not see a problem here and staking is...just try to stake Algo yourself:). On the other hand I appreciate that Guy mentioned other pros and cons of both coins:). This video won´t change my opinion on these two chains and I will still hold both.

    P.S.: Now you can downvote me to oblivion:).

    submitted by /u/MoodSoggy
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    'The end of physical currency, cash, is certainly drawing near': Economist

    Posted: 08 Oct 2021 03:42 AM PDT

    Analyst expects Ethereum price to explode to $30,000 amid network adoption

    Posted: 07 Oct 2021 06:19 AM PDT

    This guy at my record store

    Posted: 07 Oct 2021 03:31 PM PDT

    So I'm the owner at a local record shop and yesterday this guy came in causing a ruckus. He smelt like a bowl of ramen and wouldn't stop talking about how crypto is the future.

    When it was time for him to checkout, he was waiving his "coinbase debit card" around but in fact it was an expired library card covered in cocaine residue. When I told him that's not a form of payment, he proceeded to point out the "Visa logo" which was the logo of the library the card was for.

    After politely asking for a different form of payment he finally pulled out a real Visa card while mumbling, "The only reason I'm not taking my business elsewhere is because this record is underpriced, I can sell it for 10x as much!"

    On his way out he stumbled into the door and yelled, "I want my 4% cash back, Stellar to the mooooon!"

    Hopefully all of you crypto people aren't this obnoxious, have a good day!

    submitted by /u/Creepy-Nectarine-225
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    Harmony One - Latest fad or next big thing?

    Posted: 08 Oct 2021 01:20 AM PDT

    It's no secret that this bull run has been great for the cryptocurrencies that have potential to integrate blockchains and build an ecosystem. Just look at ETH, ADA, DOT and many more; their market caps have grown huge amounts and now sit at $10s of billions.

    Money tends to flow from larger caps into smaller caps as the bull run progresses. This has resulted in me looking for the next big thing in this area and a name that keeps coming up is Harmony One.

    Harmony One market cap sits at $2.1 billion, if it is to reach levels close to any of the previous mentioned cryptos it can 5x, 10x or more. Harmony One processes transactions very fast, fees are extremely cheap, it is backed by a solid team, there are great staking rewards and much more.

    I'm wondering what everyone's thoughts on ONE are? Is it a name that's getting pumped because others in this area are doing well? Will it live up to expectations and provide investors with good returns? Is it something you would/have invested in and why?

    submitted by /u/CLB_SLMN
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    What's in your bag?

    Posted: 08 Oct 2021 02:24 AM PDT

    Seeing as this crypto space is so diverse with so many coins, tokens, and various places to store and stake them all, I thought it would be fun to ask this sub what they're holding, where they're holding it and what they're doing with it. I'll start:

    Bag:40% - BTC locked in crypto.com 3 month earn, giving me 4.5% APY
    30% - ETH staked as BETH in Binance
    15% - ADA staking in binance 3 months locked programme, giving me 7.7% APY
    10% - CRO, staking in crypto.com DeFI wallet with 10% APY (saving up to get the Indigo card)
    5% - Tiny amounts of VET, SOL, and DOT in crypto.com
    Edit: I also have my 1 emotional support MOON, which I cherish very dearly.
    Edit: 2 MOONS! WOOHOO!

    I still want to buy into Tezos, Algo, Link and One, but I'm having a hard time deciding which of the alts to DCA into.

    What do your bags look like?

    Edit: This is most definitely *NOT* me shilling CDC. This is just how my holdings have ended up. In fact, 45% of my bags are in Binance, but no one seems to be accusing me of shilling Binance. Anyways, so far CDC has been decent to me, but there are a couple major red flags that are scaring me, and are making me seriously consider moving to a cold wallet. But that's a story for another thread...

    submitted by /u/Carvalho96
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    Senator Cynthia Lummis discloses a Bitcoin Purchase worth up to $100,000

    Posted: 07 Oct 2021 07:54 PM PDT

    I track trading by US senators and just noticed Sen. Lummis buying $50-100k of BTC

    Posted: 07 Oct 2021 02:23 PM PDT

    Here's where I track trading by US Senators and here's a link to the original disclosure.

    Lummis held Bitcoin when entering office, and has added $50-100k more to her portfolio based on today's disclosure. This is one of the first congressional purchases of cryptocurrency while in office, and is one of the largest financial transactions I've seen of any sort this year by members of congress.

    submitted by /u/pdwp90
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    Ethereum 2.0’s first upgrade will happen this month — a step closer to denting the competitive advantage of ‘Ethereum Killers’

    Posted: 08 Oct 2021 01:53 AM PDT
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