Bitcoin

IdleRich

IdleRich
Yeah, same argument as with pounds euros. If interest rate in pound rises then it becomes more attractive to change your bitcoin to pounds and lend them out, if it falls then vice versa as you say. So my first thought is that - all other thing being equal - Bitcoin/Pound exchange rate ought to rise and fall in the opposite direction to UK interest rates. But I'm saying that's just a very quick guess and I'm happy to be told I'm wrong if I've forgotten a factor or whatever.
 

HMGovt

Bamber Clatscoigne
I like this chart a lot, it's a clear illustration of deflationary character of bitcoin, with a seemingly inexorable rise to $100,000+ before next halving in 2024. Surely worth a small punt for anyone who can spare it?

EkfiQ7nVoAEzvjR.jpeg
P.S. note log scale
 
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HMGovt

Bamber Clatscoigne
Yeah, same argument as with pounds euros. If interest rate in pound rises then it becomes more attractive to change your bitcoin to pounds and lend them out, if it falls then vice versa as you say. So my first thought is that - all other thing being equal - Bitcoin/Pound exchange rate ought to rise and fall in the opposite direction to UK interest rates. But I'm saying that's just a very quick guess and I'm happy to be told I'm wrong if I've forgotten a factor or whatever.

I believe it's decoupled from fiat macroeconomics. For while, it looked like BTC was correlated with the S&P this year, but today that's not the case - S&P is down 10% and BTC is at a 3-year high.
 

IdleRich

IdleRich
I believe it's decoupled from fiat macroeconomics
I'm just thinking about what affects the value of money in general and (off the top of my head) most of those factors don't really matter or apply to BTC except in as much as they make other currencies more or less attractive (with the relative inverse effect on Bitcoin presumably).
What about if you lend bitcoin to someone, do you set your own rate? Is there a market for doing that... I assume you can do it?
 

HMGovt

Bamber Clatscoigne
But what the thinking behind that idea? Or was it simply the correlation?

Yes, a brief correlation in the time of peak COVID shock. Maybe Wall Street influence? It's a little murky to me. I'm sure some quant genius has figured it out.
 

HMGovt

Bamber Clatscoigne
I'm just thinking about what affects the value of money in general and (off the top of my head) most of those factors don't really matter or apply to BTC except in as much as they make other currencies more or less attractive (with the relative inverse effect on Bitcoin presumably).
What about if you lend bitcoin to someone, do you set your own rate? Is there a market for doing that... I assume you can do it?

Yes, a firm called Blockfi does that for you. But the "not your keys, not your coins" problem applies if you hand over custody like that
 

IdleRich

IdleRich
Yes, a brief correlation in the time of peak COVID shock. Maybe Wall Street influence? It's a little murky to me. I'm sure some quant genius has figured it out.
A guess would be that S&P goes up, people cash out some money and had a flutter on bitcoin which could lead to some correlation but is hardly a cast iron relationship.

Yes, a firm called Blockfi does that for you. But the "not your keys, not your coins" problem applies if you hand over custody like that
And they set the interest rate or what? Or is there like a market where people offer differ amounts at different interests? I suppose really what I'm getting at is, if someone said "what is the interest rate for the pound in the UK?" then there would be an answer that you could give (within certain provisos about which one you mean and so on) - but is there at a given time an "official" interest rate for Bitcoin?
 

HMGovt

Bamber Clatscoigne
I don't think there is an official interest rate, no. It'll probably never have to go negative though. Blockfi are offering 6% APY. I've not really looked into this side of things, it looks like an emerging thing. https://defirate.com/btc/
 

IdleRich

IdleRich
Well interest rate seems like something that normal currencies have and that bitcoin hasn't.. but if you can borrow and lend it why not?
 

IdleRich

IdleRich
But ultimately the market will decide. I mean that's really what happens in the UK but there is a monetary policy committee who have such buying/selling power that they can bully the market to where they want it.
 

vimothy

yurp
basically the idea is that in the future, bitcoin will be money, so get in now ahead of the curve. but that's nonsense, bitcoin will never be money youre just bouncing up and down on some local fluctuation
 

IdleRich

IdleRich
I see why you compare it to a ponzi... But, you say it will never take off, HMGT says that it certainly will. I'm pretty much bang in the middle and I think it's quite interesting and I don't think it can be dismissed as easily as all that. People have been predicting its demise for years and they've all been wrong so far.
 

vimothy

yurp
its not a question of it collapsing immediately, "the market can stay irrational for longer than you can stay liquid" and all that
 
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