Bitcoin tumbles more than 50% below its all-time high as crypto plunges again

[groundloop]

Source: CNN

The world's most valuable cryptocurrency was down 5% Monday after plunging again over the weekend. Bitcoin prices have now plummeted nearly 15% in the past week. At a price of just above $32,000, bitcoin is more than 50% below its record high of near $69,000 from late last year and at its lowest point since July 2021.

Other cryptocurrencies, sometimes referred to as altcoins, have been hit hard too. Ethereum, binance, solana and cardano are all down about 15% in the past week, while Elon Musk's beloved dogecoin has tumbled 10%.

Cryptocurrencies are proving to be just as risky as stocks and susceptible to the same concerns that are dragging down the Dow, S&P 500 and Nasdaq.

"Volatile trading in digital assets has not been that unusual in previous years," said Michael Kamerman, CEO of trading platform Skilling. "Cryptocurrencies are increasingly moving in sync with tech stocks with investors treating both as risk assets and often retreating to safer corners of the market during bouts of market volatility."

Read more: https://www.cnn.com/2022/05/09/investing/bitcoin-price-cryptocurrencies-stock/index.html

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Can anyone explain why bitcoin is something other than a scheme for money laundering and hiding online purchases?

[IronLionZion]

1. Crypto's insane volatility makes it unsuitable for use as currency

It has to be frustrating to price things in Bitcoin.

[bucolic_frolic]

2. Bitcoin is really Dutch Tulips that have helped hide Fed QE1-2-3

Inflation would have happened in 2016 without Bitcoin. But low interest rates distorted the economy anyway, encouraging massive investment in everything that will now be unsustainable.

How does Dow 17,400 sound to you?

[xocetaceans]

8. What theory predicted that inflation would have happened in 2016 - save Bitcoin?

And was that a binary prediction, or was it a quantitative prediction with error bars?

I'm just curious, because it has always seemed that economic theories are not predictive in the way that scientific theories actually are.

[bucolic_frolic]

9. Sorry, I've been prognosticating a long time

I believe my own sh*t. But I do have an economics degree, so there is that. I'm critical of most brands of economics, because they use theories to describe reality, and often are way off. Perhaps I am too.

[hueymahl]

20. The quantitative easing definitely got us in this mess

What is going to be interesting is whether the fed can continue is pace of tightening. I'm thinking that it cannot do so without bankrupting pretty much everyone. Not to mention the risk to the US debt situation.

Inflation is about the only way out of our debt mess.

Would love to hear your thoughts on the situation.

[xocetaceans]

47. Thanks, that's okay. I really don't know and ...

have always wondered if I missed something by not studying economics.

Economics, obviously, has a large amount of literature associated with it, but not having studied it, I've always wondered how close to repeatable experiments economic theory has ever come. I've also wondered if it were too unfair to view economics as a special branch of history.

(Relative to bitcoin and cryptocurrencies, I've wondered what their true "cost" ( I use this term very loosely in that I have no firm definition in mind in naming this as a "cost" ) is in terms of externalized factors that might not be being included in the discussion.)

Anyway, thank you for your reply - I appreciate it.

[XanaDUer2]

3. No matter what I learn

I don't get bitcoin and want nothing to do with it

[Rebl2]

34. Me either

[PSPS]

4. May explain today's surge in ransomware attacks that I'm seeing

Bitcoin's only value is within the criminal world of ransomware, drugs and child pornography.

[AZLD4Candidate]

5. I am convince crypto is one elaborate ponzi scheme

and everything I read about it solidifies that conviction.

[NBachers]

6. Meanwhile, the Let's Go Brandon cryptocoin scam is still worthless at $ 0.0000000008 -99.77%

https://www.coinbase.com/price/lets-go-brandon

[jmowreader]

30. You can see why

President Biden only has six more years to be hated.

On the other hand, a Fuck Donald Trump coin would be eternal.

[PoliticAverse]

7. "What goes up must come down.".... or....

Eventually you run out of greater fools.

[CrispyQ]

10. A friend has 3 bitcoin she bought for an average of $1800 a piece.

She never watches the price. When it reached 69K I told her, but she said, "My plan is to just hang onto it."

[hueymahl]

19. I would say she is extremely smart

it will continue to increase in value. This is just a short-term dip based on macro conditions.

[getagrip_already]

22. Or it's the beginning of a collapse.......

What exactly underpins the price of ecoins?

Nothing.

It can deflate a lot faster than it rose. Once people see it as a falling knife, nobody will be buying.

[hueymahl]

38. What is the underpinning of gold?

Nothing. Just a shiny rock. It has value because people agree it has value. Similar to all abstract forms of value used for exchange.

BTC is a store of value in the same way gold is a store of value.

Much of the rest of cryptocurrency (e.g., ETH), has massive use cases in rebuilding and decentralizing finance through smart contracts.

I wish more around here knew about it, because it fits very well with progressive ethics. Removing the gatekeepers and toll takers from the system so money is more free and democratic. Reduce the power of goldman, etc.

Then there is gaming, property rights management, reformation of the music industry to give artists more of what they earn.

I really encourage everyone to educate themselves about the possibilities.

[rpannier]

55. Then there is...

tax evasion
less money for schools, roads and other infrastructure
I hear it's quite popular with human traffickers and assassins

[hueymahl]

59. Dead wrong

It is called a public block chain for a reason. Every transaction ever made can be traced. It is terrible for hiding money or criminal transactions.

Maybe early on before authorities (or the criminals) understood about blockchain technology it was partially used for criminal purposes. Now you would have to be a fool to do so. Remember Silk Road? It got brought down in large part because the authorities could trace all of the payments.

Visa, mastercard, cash, wire transfers, diamonds, foriegn banks. They have 99.9% of the criminal transactions flowing over them. Tax evasion is handled by lawyers and accountants and foreign banks.

Those arguments are almost a decade out of date and has been disproven again and again.

I urge you to educate yourself about blockchain technology. It aligns with progressive ideals of removing corruption and flattening the financial system to make it more fair for average people, among dozens of other benefits.

[Lucky Luciano]

24. You would think the bitcoin bros would be thrilled with inflation because...

…only fiat currencies are susceptible to inflation. Bitcoin with its limited supply will never have to deal with inflation! LOL

Bitcoin has been down a lot exactly when we were experiencing extreme inflation and it has proven to be a useless inflation hedge.

[hueymahl]

39. Bitcoin is in price discovery mode

And is currently correlated with tech stocks. Long term (think 10+ years), btc will start to act a lot more like gold.

[Lucky Luciano]

42. All that tells you is that when people lose money in tech stocks...

…they cash out some bitcoin to not go broke. The correlation makes a lot of sense.

Look, I play along with betting on bitcoin here and there, but ultimately I think it’s stupid and I would like it to go to zero just to tell the fanbois to stfu. They need to be taken down 10 notches for thinking they’re geniuses because gambling happened to work out. That said, SBF was genuinely smart with bitcoin. He did a real arbitrage over and over because he put in the work and didn’t have to give a shit about bitcoin itself other than hoping liquidity stayed high for long enough to execute the arb as often as he did. The arb did require considerable operational effort. I can respect that as being smart. I cannot Respect some dope who got lucky buying Shiba coins.

Not sure why Satoshi, some random anonymous person, gets to create money.

[hueymahl]

45. I agree with you about the fanboys and dog coin shills

BTC maxis are annoying as hell. Don't even get me started on Shiba and its bastard progeny.

I hold some BTC as a long-term investment. But the real action is in ETH and alt-coins that have utility.

As an aside, it was not Satoshi that gets to create money. He just created technology in response the the central bank fucking over the average person during the housing crisis while protecting the banks.

BTC only has value because people believe it to have value. This is historically how money works. Whether it is sea shells, salt, silver, gold or now paper money.

It has only been recently when central banks have had such a strangle hold on money that they have been able to use it as a weapon to punish people they find undeserving and protecting those they like (exactly what happened in 2008).

Pretty sure you know all of the above - not trying to talk down to you - but figured the others reading this would appreciate the background (or not!)

[Lucky Luciano]

51. Let's say your right long term and crypto dominates having eliminated all central banks.

The reality will be that the few crypto whales out there will be the new oligarchy, so the argument that this is progressive is not clear at all. Many of the whales are hedge fund and prop shop guys!

There are lots of hard right libertarian magats big into crypto too that just want to get rich in the new paradigm. If they succeed, they will be tomorrow’s economic assholes.

[hueymahl]

52. I'm not saying they eliminate all central banks

But they will provide balance to them. Help keep them from the worst of their excesses because there is actually competition.

Look at the IMF. They are scared shitless about BTC. So much so, they are making its regulation and non-use a condition of future loans. The IMF has singularly caused more death and destruction through wrong financial requirements than most wars in history. All they do is protect rich nations at the expense of poor ones.

True, lots of libertarians into crypto. Does not mean they are wrong just because they are wrong about most other things. Progressives really should be on board - there is a lot more aligned with progressive ideals than libertarian ones. Including UBI, which crypto makes more possible. Including providing transparency for how we spend money. Crypto can shine daylight into corrupt government handouts to corporations and big political doners, for example.

[Jose Garcia]

11. Any wonder why Larry David was paid in dollars instead of cryptocurrency for

his cryptocurrancy exchange Superbowl ad.

[in2herbs]

12. Last week there was an article about Fidelity investing some of their clients' 401(k)s in

bitcoin and other cryptocurrencies without their express knowledge and without Fidelity disclosing that they are a major investor in the mining of bitcoin. The article said Eliz Warren was investigating. I wonder how many Fidelity 401(k)s lost money today.

[kirby]

17. Source?

Are you sure this is true. I read they were going to offer a new 'Digital Asset Account' that people need to specifically opt-in to. That is much different than investing without express knowledge.

A bigger issue here is why the hell is it even possible for crypto to be allowed Tax-deferred retirement status by the IRS. It is so highly speculative, it should be non-retirement accounts only.

[hueymahl]

36. There is no source because it is not accurate

Fidelity announced that it was going to make BTC available as an option in certain accounts. They certainly have not "placed" it in anyone's account without permission or direction.

Personally I think it would be a bad idea to not offer it. People should be allowed to make their own investment decisions and allocate risk in a way that suits them best.

[kirby]

40. Yeah but...

Cryptocurrency is not an 'investment', it is pure speculation with no underlying asset. If people want to put their money in it, we taxpayers should not be giving them preferential tax deferred status. I still say Fidelity should only offer it in non retirement accounts that don't have the preferential tax status. (and maybe Roth accounts)

[hueymahl]

43. Maybe

That is more of a policy discussion about whether it should be allowed in tax advantaged accounts. Reasonable minds can disagree.

BUT, will take the stand that cryptocurrency is absolutely an investment. There are billions of dollars in venture capital going into the the field to create new markets, modernize financial systems, create a whole new set of technology.

Literally, it is the beginning of a whole new type of industry that will impact the way we do things in society on a scale similar to the internet.

[in2herbs]

49. The shit being pulled by the USSC is keeping me kind of busy but the article was posted

on DU within the past week. I'm not going to spend time looking for it and I decided not to get too upset about this issue as well cuz Eliz Warren is on it.

[Trueblue1968]

29. those clients need to SUE Fidelity.

[oldsoftie]

46. Your Fund HAS to disclose its holdings. Or the feds will come calling.

NO major company is going to take the risk of investing in things their customers aren't aware of.

[in2herbs]

50. EW is on it because they haven't been giving their clients full disclosure and Fid. ignored

the letter the Cte. she is on.

[oldsoftie]

53. Please link us to any story telling us that. I find nothing.

[turbinetree]

13. I just received my May -June edition of Mother Jones and one of the articles in the magazine

has this title's : Looted How private equity is stripping America for parts

When one reads the articles about this "private equity" and then link them to how these "coins" are working tandem with each other, I think Elizabeth Warren is correct....these "firms" need to be pulled into the regulatory market instead of using Puerto Rico as a safe haven to do what they do.......

https://lifeafarcapital.com/why-cryptocurrency-investors-should-think-about-moving-to-puerto-rico/#:~:text=As%20of%20January%201st%2C%202020,appreciation%20of%20securities%20%E2%80%93%20like%20cryptocurrencies.

[Orrex]

14. You can still by Boardwalk or Park Place, but not both

[orwell]

15. But Bitcoin...

...and other "proof of work" Cryptos do have the "advantage" of using massive amounts of energy to mine them into existence, in a world where energy is rapidly exploding in price and contracting in availability.

There's always that silver lining...

[muriel_volestrangler]

16. "Cryptocurrencies are proving to be just as risky as stocks " - WTF, CNN, do you know nothing?

They have always been far more risky. Why is CNN letting someone ignorant write on this subject?

[hueymahl]

18. Lot of gleeful misinformation on this thread

I get that most people don't know much about cryptocurrency and why it is valuable and the important role it serves. But every point made so far is so wrong and disproven it is laughable. It's almost like listening to people in 1980 discuss how this whole computer thing is a ridiculous fad.

[JCMach1]

25. Exactly, almost 0 understanding here... When they are ready

To hear Blockchain, ledgers, DeFi, Lightning Payments, etc. I will be glad to.

However,.not really interested in discussing this with people whose first response is to shutdown discussion by saying: tulips...

Personally, I am not willing to surrender revolutionary technology to libertarians and RW trolls, so I will soldier on whatever the Luddite left says.

[hueymahl]

33. Amen

This tech has the potential to bring progressive ideals to fruition. It is a shame that it is viewed so negatively by most on this board.

Maybe we can get a group going to have real, rational discussions and education?

[oldsoftie]

27. Well, if you sold a car a couple weeks ago for 1 Bitcoin,

You look like a fool today. Unless you converted it to something else right after the sale. If you BOUGHT the car, you probably feel great!
Anything that volatile can't be a reliable currency without some kind of control.

[hueymahl]

32. And a year ago it was the exact oppoiste

BTC, like most cryptocurrency, is in price discovery mode. So it is going to be more volatile than gold, for example.

But if you put $1000 in gold under your matress two years ago, it would be worth about $1050 today. $1000 in cash under your mattress two years ago (or even in a savings account), would be worth about $900 today. $1000 worth of bitcoin would be worth about $3000 today.

All the controls by the central bank have done over the years is devalue the US Dollar. And now we are paying for it. And it is about to get a whole lot worse.

[Justice matters.]

28. Cryptocurrency represents a THREAT to climate systems all around the world.

But, hey, who cares... we may disrupt the natural food chain but short-term profits are a lot more important than massive extinction-level crisis full of METHANE up in the air...

Yea. We will "adapt" to chemical foods or we'll just die.

[hueymahl]

31. No, it does not

BTC and ETH are the only cryptocurrencies (other than a few microscopic ones) that currently use proof of work. ETH will stop using proof of work sometimes this year.

BTC is quickly making massive improvements in its environmental profile. It seeks out cheap energy, and renewables are becoming the cheapest. A large and growing percentage of its energy is supplied by renewables and stranded energy sources. For example, miners are starting to be placed to consume methane from garbage dumps, natural gas and methane that are byproducts of the oil industry (and are either currently flared or leaked because it is not economic to capture). Not to mention the whole argument that the social utility of BTC is worth the cost.

[Justice matters.]

37. Yes, it does.

In 2020, China controlled over 65 percent of the global processing power that runs the Bitcoin network; miners took advantage of its cheap electricity from hydropower and dirty coal power plants.

Recently, however, China cracked down on mining out of concerns about cryptocurrency’s financial risks and enormous energy consumption that works against China’s goal to be carbon neutral by 2060. As a result, many Chinese bitcoin miners are trying to move operations to other countries, like Kazakhstan, which relies mainly on fossil fuels for electricity, and the U.S. A number of U.S. states are eager to attract Chinese miners to boost their own economies.

If the miners are unable to move, however, they are selling their equipment to other miners across the globe. U.S. miners themselves are raising hundreds of millions of dollars to invest in bitcoin mining and converting abandoned factories and power plants into large bitcoin mining facilities.

https://news.climate.columbia.edu/2021/09/20/bitcoins-impacts-on-climate-and-the-environment/

My prediction: Just like all the other promises from the G7 countries China will NOT reach its 2060 goal (buying Putler's oil? Really?).

It's a race to the bottom.

[hueymahl]

41. Your knowledge is out of date

For one, China no longer has any significant mining going on because it has been banned by the central authorities. The US is now the leader in hash rate (measure of mining activity). And the miners are increasingly using green energy to do it.

https://watcher.guru/news/how-bitcoin-mining-can-help-save-the-environment

https://www.livemint.com/market/cryptocurrency/use-of-green-energy-in-bitcoin-mining-jumped-to-56-in-june-quarter-report-11625212165534.html

[JCMach1]

44. This report is so far outdated it's not even funny...

Just one example: a number of mining operations moved to the US in the oil patch where they use blowoff (waste) NG to power operations.

So please, slow down on the big bank propaganda about climate and BTC.

[Justice matters.]

48. So far outdated that the climate crisis has gotten exponentially...

worse since.

[JCMach1]

56. Caused by Bitcoin no doubt. What type of vehicle do you own? How is your electricity generated?

Ever fly?

Your overwhelming concern about the effects of Bitcoin mining and global warming is noted

[EarthFirst]

58. The recent drop is the result of the UST/Luna situation...

I won’t go further into it; as the majority won’t understand.

[GregariousGroundhog]

23. The U.S. Dollar also has zero inherent value and is only worth what someone will pay for it.

[oldsoftie]

26. Not really. Today no one will give me more than a dollar for a dollar.

Tomorrow the same will happen. But Bitcoin might go up or down $1000
Dollars lose value slowly over a long period of time. Its lost about 30% of its value in the last 12 years. Bitcoin lost that in the past few months.

[hueymahl]

35. Today no one will give me more than a bitcoin for a bitcoin

You are not comparing apples to apples.

The dollar will continue to lose value forever. Always has, always will.

We will see about bitcoin. But I am betting bitcoin will be worth three times what it is today in the near future, while the dollar will continue to lose 5-9% of its value for the indefinite future.

[hunter]

54. The value of a dollar is in the U.S. Government's ability to collect taxes, enforce contracts...

... and regulate markets.

Bitcoin is just a "magic" number.

[pfitz59]

57. Ponzi scheme wasting energy and computer space

Dying a natural death

[hueymahl]

60. Agreed

The traditional financial system is certainly a ponzi that wastes far more energy, computer space and office space than crypto and is dying a natural death. Good riddance to it!