[Abbas]

Originally Posted by SmartCat

Well, I learnt two new words today (thanks to a crypto whatsapp grouo)

- Proof of Burn
- Coin Burning

Attachment 2186560

Crazy!

So now you burn to maintain price. By this revelation, all coins are prone to burn then. Wonder where the world is heading.

[Samurai]

Originally Posted by SmartCat

- Proof of Burn
- Coin Burning

How is this different than quantitative tightening practiced by central banks? I thought free market decided everything in crypto...

Instead of the highly trained economists at central banks, we will have bunch of nobodies (hackers/speculators) decide liquidity in the market. Perfect!

[DudeWithaFiat]

Is it safe to assume that investing in cryptocurrency is still in its nascent state from the point of view of investment? Of all my friends and acquaintances, I have met only two who have actually invested in cryptocurrencies. Imagine that. It makes me feel that there will be a bull-run in the next few years or months when more and more people will come to know about this and start investing.

P.S:- I really don't think that the whole 'removing the middleman' is going to work since no government would want that and in many cases it is better to have a middleman, but that's another thing.

[warrioraks]

Originally Posted by Samurai

Instead of the highly trained economists at central banks, we will have bunch of nobodies (hackers/speculators) decide liquidity in the market. Perfect!

This post from Samurai should be marked and read by everyone before they invest in crypto.

For me, both Fiat and Crypto currencies are same at a fundamental level. They have near zero tangible value but become important because collectively we start attributing them some value. On the other hand, there is a key difference as well which makes me jittery when people ask me to invest in crypto:
- Fiat currencies work because an entire system is developed to create, manage and destroy the currency. This system is backed by institutions (central banks mostly) which are in principle working for the government and the populace of the currency users.
- Crypto currencies also have an entire system to create, manage and destroy (thanks Smartcat for the informative post) the currency. But instead of central institutions, this system is backed by currency creators/owners. Who are these currency owners working for? Forget about who are they working for - who are these currency creators? Till the time these questions are answered, how does one decide on which crypto to invest in? What if bitcoin operator decides to burn 90% coins tomorrow (demonetisation of crypto ), are they answerable to the currency holders under any mechanism? What happens once the currency creator dies or is no longer interested in managing it? Too many questions around something which is one of the hottest commodity nowadays.

The only benefit I see around crypto is that it is a cross border currency which is a big plus against Fiat currencies of the world. But otherwise the whole idea seems like a giant bubble fuelled by excessive liquidity in Fiat currencies.

Disclaimer: I am a novice with no intention of investing in crypto. But I am willing to accept any knowledge fellow members would like to share on the above concerns.

[SmartCat]

Originally Posted by DudeWithaFiat

It makes me feel that there will be a bull-run in the next few years or months when more and more people will come to know about this and start investing.

There are 2 ways of investing/trading in a volatile financial asset - fundamental analysis and technical analysis/price action analysis.

For fundamental analysis of:

- Stocks: you look at its earnings growth, dividends, return on capital etc.
- commodities: you can look at supply/demand data and news flow (Eg: Biden's trillion dollar infrastructure spending will result in huge demand for basic commodities like copper, zinc/nickel (used for making steel) etc)
- Currencies: You look at relative strength of economy, inflows of foreign exchange etc. You can then buy USDGBP futures if you feel UK economy will falter

But for cryptocurrencies, there is no proper methodology of doing fundamental analysis yet. So the only other option is to do technical analysis/price action analysis and buy/sell based on simple rules.

For eg: Go to a charting platform like www.tradingview.com and insert a 50 day moving average line (blue line in this case) on bitcoin chart.



As the name suggests, a 50 day moving average is the average of last 50 days prices. Your trading rule for cyptos could be as simple as:

- Buy BTC if current price crosses over its 50 day moving average line
- Exit BTC if current price drops below its 50 day moving average line.

This way, you will buy when it is trending up and exit just before it crashes. This methodology is very simplistic, of course. You can refine the idea a bit more, adding different moving averages. Google the phrase "moving average" to learn more.

[download2live]

Originally Posted by warrioraks

For me, both Fiat and Crypto currencies are same at a fundamental level.

I think one big difference is that goverment can print Fiat currency (think US dollars) as much as they want. Now I do not have link but 20% of all the USD in circulation was printed in 2020 !!

In 1970(?) US decided to break away from using gold as a backing for the US dollars.

I used to think that Crypto is a overhyped thing but now I that I am reading more about it I am slowly getting a hang of it. It has a place in this world. Things are happening at a breakneck speed. I like this major distruption happening in the Banking world. They needed this wakeup call.

However it is not a place where faint hearted can invest. Do not get swayed by the bullish statements put out by the Pundits. If you do not understand the technology then do not invest.

[warrioraks]

Originally Posted by download2live

I think one big difference is that goverment can print Fiat currency (think US dollars) as much as they want. Now I do not have link but 20% of all the USD in circulation was printed in 2020 !!

In 1970(?) US decided to break away from using gold as a backing for the US dollars.

At one point of time, US dollar was supposed to be available in limited supply. This was the time dollar had to be backed by gold. The coupling with standard is speculated as one of the reasons of the great depression in US.

As you have pointed out, it was 1971, the dollar was completely decoupled from gold and the Fed is allowed to print as much money as they feel necessary. This has led to credit fueled growth throughout the world.

Now looking at Crypto, this is what I get from internet on the supply for three major ones:
1. BitCoin - Supply cannot exceed 21 million coins
2. Etherium - Unlimited supply
3. LiteCoin - Supply cannot exceed 84 million coins

Isn't crypto following the same path as fiat where initially it was supposed to be limited supply? How does crypto solve the problem that US dollar faced when it was pegged to gold? What's the guarantee that the supply cap in individual crypto coins cannot or will not be altered?


Maybe these are already answered or will be answered in due-course of time as the crypto-currency concept matures. But I don't see people around me who are investing in crypto even doing any basic level of due-diligence or thinking about where is their money going.

I have had conversations with such people who have tried to convince me on investing in crypto. I was able to convince them that what they are asking me to do is gambling/betting and not investing.

[SmartCat]

Another major revelation for me -> some investors actually believe that cryptocurrencies have fundamentals!



On a more serious note - this MATIC (Polygon) story is quite interesting. The founders are all Indian.
Website: https://polygon.technology/

Meet India's first crypto billionaires
https://www.livemint.com/companies/p...112486971.html

Jaynti Kanani, Sandeep Nailwal and Anurag Arjun co-founded Polygon (formerly Matic), a blockchain scalability platform in 2017. The valuation of Polygon’s native token, Matic, has zoomed from a mere $26 million when it was first issued in 2019 to over $14 billion. The rise in Matic’s price has turned its co-founders into billionaires, part of it stemming from their current stakes in the cryptocurrency at around 4-5%.

Billionaire investor Mark Cuban of Shark Tank fame, who is also the owner of the National Basketball Association's (NBA) Dallas Mavericks, recently invested an undisclosed sum into Polygon

[warrioraks]

Govt plans to bring a bill, cryptocurrencies to be treated as commodity

https://m.economictimes.com/news/eco...w/85885645.cms


I think more and more countries will take the same view when it comes to crypto. Rather than a currency, it will be treated as a commodity. In parallel, most central banks will release their own Blockchain based Fiat currencies to benefit from this technology.

[Mr. Nobody]

Overall portfolio profit turned 40% today after starting this year . Only wish I had invested years ago.

[joe1980]

Came across this news today, just thought of sharing it.

https://www.ndtv.com/business/bitcoi...ndtv_topscroll

[ValarMorghulis]

Ok, so where does one start investing in cryptocurrency? Purely as a hedge and diversification.
I mean how does one go about it, legally & safely, in India?
The first Google search result throws up a MoneyControl article which suggests WazirX.

Safe? Please suggest.

[Rehaan]

Originally Posted by Mr. Nobody

Overall portfolio profit turned 40% today after starting this year .

Man, I couldn't help but laugh at this one a little

There's a common belief in crypto, and it's shockingly true -- any time you screenshot your portfolio or tell someone how happy you are about it, that's when you should take some profits as there's probably a crash coming.



Please don't get me wrong. I'm not one of the crypto-haters in this thread, and I went through that 20% drop too, but I just thought I'd share this belief in good spirits (and took the liberty to do so because I assume you're still in profit).

The recovery should be rather quick, but personally I don't think we'll break 52 - 55k before going down further again.

Originally Posted by ValarMorghulis

WazirX.

Safe?

Yes (in relative terms, of course).

See my post 475 in this thread. (And maybe a post or two of mine before or after that one).

[Mr. Nobody]

Originally Posted by Rehaan

Man, I couldn't help but laugh at this one a little

There's a common belief in crypto, and it's shockingly true -- any time you screenshot your portfolio or tell someone how happy you are about it, that's when you should take some profits as there's probably a crash coming.

Attachment 2204863

Please don't get me wrong. I'm not one of the crypto-haters in this thread, and I went through that 20% drop too, but I just thought I'd share this belief in good spirits (and took the liberty to do so because I assume you're still in profit).

The recovery should be rather quick, but personally I don't think we'll break 52 - 55k before going down further again.




Yes (in relative terms, of course).

See my post 475 in this thread. (And maybe a post or two of mine before or after that one).

Haha. Well it's recovered now and I bought quite a bit during the dip so the next growth cycle will be even better for me. I had 30% in crypto and 70% waiting in dollars for the dip and it happened and I went all in now. No loss in my overall holdings.

[Samurai]

How come nobody is talking about China ban on all crypto transactions?

https://www.bbc.com/news/technology-58678907

Of course, I don't think there will any long term impact on the price of bitcoin. That is the advantage of having no fundamentals to worry about.