How is everyone going to get paid?

topdecko

OK so i have been dabbling in crypto since 2013.
I recently cashed out completely as hit target i wanted and walk away with a decent chunk after little work in last few years. I missed recent gains but thought market was going to blow early Jan.
My temperament not suited to crypto really and happy to walk away now(all be it castigating myself for weak hands:)
My question is where does the catch lie?
I presume everyone on this thread has made a decent ROI since getting involved. The simple laws of economics dictate that not everyone can make money so where are the losers??
The only way i can see this playing out is that somewhere along the line the whole thing crashes and the exchanges will go bust so that whilst your fiat account in coinbase whilst showing a healthy balance there it isn't actually backed up - tether adds to suspicion that alot of this manipulated.
I may be wrong and crypto is really ushering in a new era of free money for digital stuff but I have a bad feeling about
1 similar parabolic gains to previous crashes
2 involvement of banks/hedge funds this time - they will not be left holding the bag, it will be recent entrants with FOMO.

again i don't wish this to happen but i was there in December 2017 and watched the whole affair unfold in real time and there wasn't a thing you could do. Coinbase went down and when it opened up again 50% portfolio value was gone.
That definitely informed my approach to recent exit and now i can just chill out.

Anyways good luck to you all and continued mooning etc but i assume everyone has thoughts of just how all this money can be made for nothing really.....

grindle

topdecko wrote: »

The simple laws of economics dictate that not everyone can make money so where are the losers??

People holding USD in a savings account while it's being printed = these are the losers. The US printed the equivalent of 1/3 of their total M2 broad money supply last year alone in order to maintain the slow and steady inflation spiral. They'll be printing again this year.

topdecko wrote: »

i assume everyone has thoughts of just how all this money can be made for nothing really.....

Somebody should alert the Fed to your thoughts, they seem to think it's necessary to make up money.

In the time since Bitcoin has been around it's notional market cap value is equal to less than 5% of the amount of money printed by the US since 2008 (~$17.5trillion), which they're doing to prevent a true market correction - which would be cataclysmic economically and as a superpower.
Imagine prices dropping, production slowing down, massive unemployment and the true non-inflated value of products, property and services being found after the pendulum swings too far downwards.

Keeps people happy even if they don't quite pay attention to the fact that they're kicking a can down the road and owe ~$90k per capita.

Crypto is a money sponge and it's not even doing it fast enough to soak up the money being printed ostensibly to save face.
Fair enough for them to do it with a pandemic, the rest of the time they do it cos they need to maintain the illusion of price stability and a "healthy market" with no apparent thoughts or concerns about when it's going to be paid or who is paying it.
No budget surplus since 2001, plus printing 58% of what the CBO projected they'd need for the next decade in one single year... outlook not great, YMMV.

topdecko

Thanks and i get the notion of central banks printing insane amounts of money and how that is reflected in ever increasing price bitcoin and that lots of that money flowing in there and to stocks in general which are in a obvious bubble.
Still doesn't explain to me how i can put in x amount some years ago and withdraw 100x now for example and that everyone involved since 2003 has made a healthy profit.
Not everyone can do this surely within the context of bitcoin going forward. . The staggering gains of the last few weeks will surely lead to a correction like all the other times it has gone through this cycle.
My point i suppose is that in may ways this behaves like a pyramid scheme with early adopters making a packet, a culture of HODL which ensures not everyone cashes in at once, and the last person at the party will be out of pocket.

will be interesting to watch it from afar and see what happens, YMMV indeed.

beachhead

The Irish Gov is printing money at the moment with European Central Bank connivance.What will the cost of that be in the near future to the citizens.Bitcoin etc is airy fairy for most people as is the M2 supply.I suggest that Uncle Sam will have a more immediate effect than the crypto currencies collapse

Whelo79

topdecko wrote: »

Thanks and i get the notion of central banks printing insane amounts of money and how that is reflected in ever increasing price bitcoin and that lots of that money flowing in there and to stocks in general which are in a obvious bubble.
Still doesn't explain to me how i can put in x amount some years ago and withdraw 100x now for example and that everyone involved since 2003 has made a healthy profit.
Not everyone can do this surely within the context of bitcoin going forward. . The staggering gains of the last few weeks will surely lead to a correction like all the other times it has gone through this cycle.
My point i suppose is that in may ways this behaves like a pyramid scheme with early adopters making a packet, a culture of HODL which ensures not everyone cashes in at once, and the last person at the party will be out of pocket.

will be interesting to watch it from afar and see what happens, YMMV indeed.

You make a profit because somebody else is willing to pay you more for your BTC than you paid for it. Simple as that.

There have been many losers along the way. Every person who sold their BTC for less than the purchase price was a 'loser'. Their loss was someone else's profit.

grindle

topdecko wrote: »

Not everyone can do this surely within the context of bitcoin going forward. . The staggering gains of the last few weeks will surely lead to a correction like all the other times it has gone through this cycle.

It'll move slower and become less parabolic over time, there won't be able to be enough money pushed in to affect the price so much at some stage (unless the US wants to change the nomenclature of Quantitative Easing to Hyper-Quantative Easing), coupled with more liquidity on the lower end of it's price.

On Binance right now you could sell 600 BTC into stablecoins and the value would drop ~5% for a brief moment and be arbitraged back to a higher midpoint in seconds, so there needs to be somebody willing to sell tens of thousands across many exchanges for it to be calamitous for moonbois - which will probably happen.

The gains of the last few weeks will probably see a correction but I don't think this is the 2018-like bear some here are thinking, I think it'll be the testing of a new higher low and then the 2021 rally begins.
We only have 2 previous timeframes to go off of so far so maybe it changes this year (I'd be fecking delighted if so, crash the price newbies!) but at least two large funds in recent months have had no problem buying the entirety of the mining supply and more at an average spot price of $17k with one still buying 29,646BTC @ $21,925 so the price sinking beneath $20k for anything but a flashcrash looks unlikely to me nowadays.

mickdw

Whelo79 wrote: »

You make a profit because somebody else is willing to pay you more for your BTC than you paid for it. Simple as that.

There have been many losers along the way. Every person who sold their BTC for less than the purchase price was a 'loser'. Their loss was someone else's profit.

Exactly. No mater how big it goes, its only work what it can trade at. If everyone wanted to cash their bitcoin today, it would likely become worth about zero.
Thousands of people will have lost money on bitcoin. Im sure loads buy in near the end of a major run and then crap themselves when it starts dropping and sell off losing major chunks of cash.

Irish_rat

topdecko wrote: »

Thanks and i get the notion of central banks printing insane amounts of money and how that is reflected in ever increasing price bitcoin and that lots of that money flowing in there and to stocks in general which are in a obvious bubble.
Still doesn't explain to me how i can put in x amount some years ago and withdraw 100x now for example and that everyone involved since 2003 has made a healthy profit.
Not everyone can do this surely within the context of bitcoin going forward. . The staggering gains of the last few weeks will surely lead to a correction like all the other times it has gone through this cycle.
My point i suppose is that in may ways this behaves like a pyramid scheme with early adopters making a packet, a culture of HODL which ensures not everyone cashes in at once, and the last person at the party will be out of pocket.

will be interesting to watch it from afar and see what happens, YMMV indeed.

Having money in the bank is being eaten away as that sweet fiat supply is getting larger and larger.

Bitcoin supply is going in the opposite direction, I know which one I'd choose.

GazzaL

Irish_rat wrote: »

Having money in the bank is being eaten away as that sweet fiat supply is getting larger and larger.

Bitcoin supply is going in the opposite direction, I know which one I'd choose.

So rather than allocating capital to productive assets, you allocate it to a non-productive, non-correlated asset as a hedge against inflation.