
Serious Money Is Warming to Bitcoin - otoburb
https://www.wired.com/story/serious-money-warming-bitcoin/
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joeyrideout
My understanding of this appeal to institutional investors is that it's simply
a good risk-reward macro speculation play. A decent amount of macro folks are
forecasting some sort of monetary crisis or at least significant inflation in
the years ahead.

In the scenario that there is a full-blown crisis that requires a currency
reset rather than just restructuring, what are we resetting to? Assign
probabilities to gold, silver, a new fiat currency, or cryptocurrency. Given
the small market cap of Bitcoin, a small investment would pay off incredibly
well if that's where the chips fall down the line.

At a market cap of ~180 Billion USD, Bitcoin has a market cap similar to Pepsi
Co. The USD monetary base is something like $4000 Billion and all gold ever
mined is worth about $7500 Billion. Of the three, Bitcoin is a growth play
plain and simple. Even if it's the least likely system of the future, a
probability above 0 means institutions will likely buy some as a hedge. (Edit:
That is, if institutions are ever allowed to. Many pension funds in Europe are
forced to buy negative-yielding government bonds... sigh.)

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CPLX
This article talks about “the crypto industry” and mentions things like
“institutional investment in crypto” and so on.

It’s odd that in an article so detailed there’s just no mention of the fact
that there are no fundamentals whatsoever to any of these things, and they’ve
been used almost entirely for speculation since inception.

Where’s the actual industry? In what are these institutions investing?

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javert
Bitcoin was designed to be honest and sound money. In the way that gold once
was. Contrary to the way fiat money is.

For now, the fundamentals are simple: supply side is fixed and known, and
demand is speculation.

In the ideal case for bitcoin, over time, people will gradually use bitcoin
more for actual commerce. As this adoption increases, liquidity increases, and
price becomes less volatile. The speculation we have now is the necessary
first step on that road, because it gives bitcoin a price (i.e. props it up)
and gives it some liquidity.

People complaining that bitcoin is just for crime are slandering it.

People complaining that it has no intrinsic value don't understand that
nothing in the world has intrinsic value, including gold. Intrinsic value is
bad monetary theory derived from bad philosophy.

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CPLX
> nothing in the world has intrinsic value, including gold

This is incorrect. Both Western Europe and uncontacted pre-Colombian America
considered gold extremely valuable for use as jewelry. That’s what intrinsic
value means, people value it for what it actually is.

And nobody says bitcoin is exclusively used for crime. In practice it is used
both for crime and financial speculation.

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scotty79
> ... considered gold extremely valuable for use as jewelry. That’s what
> intrinsic value means, people value it for what it actually is.

Oh. So that's why most gold in the world was made into jewlery and is held by
jewlery afficiandos. /s

Yes. Gold has some intrinsic value but to determine how much that intrinsic
value influences the price it is enough to look at how much of gold is used
for its intrinsic value.

Intrinsic value of bitcoin is its ability to transfer value to any place on
earth through internet in reasonable time at affordable price without trusted
third party.

You can see how much value of bitcoin comes from that by looking at how much
bitcoin is used for this purpose. The rest comes from the same place that the
rest of gold value comes from, scarcity and durability.

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lazylizard
I thought india n china , especially india, really bought gold as jewellery.

[https://www.gold.org/goldhub/data/gold-supply-and-demand-
sta...](https://www.gold.org/goldhub/data/gold-supply-and-demand-statistics)

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Forge36
I'm not sure where the sentiment came from (I probably read the article to
quickly?) It sounds as if coinbase now had a larger share because a major
company switch moved their existing assets.

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xiphias2
Retail is serious money. I'm actually quite happy that Bitcoin has more retail
investors than institutional, and I hope it stays that way (a few billion
dollars of institutional money at this point is not important).

