There's always pros and cons for these types of decisions @GazD.

If you go back to the forum post I started titled "BTC Banking Transfer Limits" you will come across one of the definite cons. I.e. all 4 major banks limiting any money transfers to Bitaroo or any other BTC or Crypto Traders.

Re tax ramifications, you might be best to discuss with your accountant before unloading your current holdings. I'm assuming that any capital gain you have made in your personal name is still able to get a 50% deductions with the remainder simply added to your taxable income in the year of sale. I'm also assuming that holding them in the family trust would mean any profits made in a FY (say when you sell in the future) would need to be distributed amongst the nominated trust beneficiaries in the same FY, in line with the Trust's Deed.

It probably comes down to your long term view on BTC. Is it a simple entity designed to be traded for profit (hopefully), in other words trying to time the market. Or is it something more intangible with signification upside if it gets genuine global recognition for not just being another "store of wealth" , but another form of currency or hedging against other currencies one day.

Who knows is the best guess!!

I've decided to use my SMSF as the holding entity, for what is worth, as it is in Pension mode and (for now at least) is a tax free zone for capital gains.

Hey @Magneto, I would be somewhat shocked and horrified if there was anything resembling hate mail aimed at you (or anyone) on the SM site. I sure you only meant that statement tongue-in-cheek, our at least I hope so.

I've been patiently watching BTC for 2 years now and somewhat procrastinating about major the leap, which I have now done in the last few weeks.

So for me, I don't necessarily look at BTC as a new currency that I'll use to immediately purchase products, etc. Nor do I view it as a pure store of wealth (in the same vein as gold.....pardon the pun).

I just think it had the potential to be a great asymmetrical investment that could go to the moon....or not. I'm also of the belief that i should ride this investment for a long as I can (and I've got some stocks that I've held for 20+ years). So for those reasons, I really don't want the ETF in order to make a fast buck, so I've gone down the path of an air-gapped hardware wallet utilising Bitaroo.

I'm really looking forward to the open conversation organised by @Strawman in early December and hope to glean a little more info about who clicks the tickets (makes the money/fees) on the way through the block chain, etc and any other snippets that will help me get my head around this whole new world. BTW, I'm only talking small percentage investment here, at least for the foreseeable future.

What's your thoughts on MSTR, I've watched these QuantBros episodes twice over and it makes so much sense.

OK. Just for fun @Strawman I'll play ball. I have no idea whether BTC is a bubble and where it will be in say 10 years...no one does. However as a comparison here is a nice chart of the Nasdaq and the .com bubble. And the difference here is that the Nasdaq was full of well known assets and was mainstream, unlike the first 5 or so years of the BTC chart when hardly anyone had heard of it.

As you can see the market more than 5 x over about 6 years...then crashed...and didn't get back to the bubble high for another 13 years. That would have been a pretty painful wait if you stayed the course. The good news is the Nasdaq is much higher again 20 + years later but I don't personally know anyone who had just bought the index and stayed invested that whole time (that takes some special patience..or maybe to have been in a coma!)

I have no idea whether the BTC price just keeps going up or whether something we don't expect could see it fall from here but this is an interesting example to compare.

Just noting @Strawman’s chart appears to have a logarithmic scale on the Y axis which is why the bitcoin in latter years flattens off. I haven’t seen asset bubbles expressed logarithmically before so it’s difficult to compare.

When it comes to identifying an asset bubble it is worth noting that one of the most intelligent men in the history of mankind, and the inventor of modern day mathematical calculus lost his entire fortune in the south sea asset bubble. https://www.linkedin.com/pulse/market-trivia-south-sea-bubble-entrapped-even-sir-isaac-vivek-waman?utm_source=share&utm_medium=member_ios&utm_campaign=share_via

Yes agreed @Rick

I'm cherry picking dates here of course. If you exclude the first 6 or 7 years of BTC when few people had heard of it or were at least taking it seriously (a period which included previous cynic @Strawman!!!), you get it going from $10 or $20k depending where you choose, to $100k now. That's pretty similar to the explosive growth of the Nasdaq index during the .com mania and over a similar period of time.

All good points.

But it’s worth noting how this contrasts with tulips, Beanie Babies, NFTs, Gamestop, the South Sea Bubble, or Bernie Madoff. Scams and hype-driven bubbles don’t typically reinflate multiple times, each time reaching higher highs and higher lows.

This isn’t to say, “Bitcoin is definitely not a bubble,” but rather that it differs fundamentally in character from what you’d usually define as one. Back in 2012 or 2017, it may have been more reasonable to call it a bubble. Now, less so. That doesn’t necessarily make it investable for everyone, but dismissing it outright as “tulips” or similar is intellectually lazy. (Not directed at anyone here, but many finance experts still cling to 10-year-old talking points that seem increasingly out of touch with everything that has transpired since.)

The dot-com bubble is probably the most apt comparison. Valuations certainly ran ahead of reality, and it took time to recover. But the underlying asset class (technology stocks) was legitimate. It changed the world and created enormous value over time, even though many companies failed and valuations became unsustainable for a while.

I fully expect Bitcoin to follow a similar pattern. It will likely surge beyond what’s sensible again, only to crash back down—but these “crashes” consistently settle at levels higher than the previous cycle's peaks. It’s an ultra-volatile ride, swinging between euphoria and capitulation, but with a generally upward trajectory. Much like the stock market, but amplified.

The key insight for me is that Bitcoin, as a monetary network, derives its value directly from its utility—and that utility is proportional to the number of users. Importantly, the relationship is non-linear.

That’s the thing to watch.

Right now, the network is significantly larger than it was even a few years ago. More users, more value stored, more transactions processed. Naturally, that increases its value. It’s still not competing seriously with the AUD, but it’s clearly trending in that direction. Maybe growth slows and plateaus, which would limit its value proposition. But maybe it doesn’t— and there’s no evidence in the data to suggest a slowdown. If anything, the opposite seems true.

So, my challenge to skeptics is this: determine now what threshold Bitcoin would need to cross for you to consider participating in the network.

For example, would it take the RBA holding Bitcoin on its balance sheet? Acceptance on platforms like Google Play? Super funds allocating 1–3% of their portfolios? Not opting in today is entirely justifiable—but at some point, refusing to engage could be like trying to ride a horse on the freeway while everyone else is in cars.

In 1994, it was easy to dismiss the internet. By 2004, doing so was unthinkable. My only encouragement is to stay open-minded and continue informing yourself before drawing firm conclusions.

This is not the same beast it was in the early years.

Still trying to form a view on MSTR @Saasquatch

I suspect Saylor is doing something very smart, but I've yet to fully digest things.

This is an interesting article by Russell Napier on the potential creation of two monetary systems and the expectation of financial repression: https://americanaffairsjournal.org/2024/11/america-china-and-the-death-of-the-international-monetary-non-system/

I do hold some BTC which I've held for about 7 years but it was very, very speculative for me (and remains so). I very much view it as a lottery ticket and if it reaches a certain level I would sell.

However, I do think there are some structural issues that need to be resolved. I know AI and tech is all the rage these days, but if the West is truly to decouple from China, even if it's 20% decouping and create its own goods and services, there's a lot of capital that is going to shift into tangible, physical assets again. I would say this might ultimately create a divergence away from crypto for a period of time. But there is no fundamental reason why it cannot continue to increase from this perspective.

@Strawman firstly I’d like to say that I don’t have anything against cryptocurrency or Bitcoin. Blockchain makes sense as a way of securely tracing assets and currency. Particularly if this can be done cost effectively and without environmental impacts.

Secondly nothing I say here will affect what Bitcoin does in future. I don't want to upset anyone who holds it. It has been a spectacular investment. No one can deny that. Anyone who holds Bitcoin has done exceptionally well.

To answer your question about what is the threshold for me. What I would be looking for in Bitcoin is “Stability”. What makes fiat currency useful is that it remains reasonably stable from day to day and from month to month, even though the long term result has been deflationary. The value of Bitcoin in relational to fiat currency has been erratic until more recently where it has been meteoritic. Is this how currency should behave in relation to the goods and services we are providing or seeking?

I’d like to see currency as a “stable promise”. The currency you receive for your goods and services provided today should hold its value when exchanged for what you desire to use it for tomorrow, or next week, or next month. Can Bitcoin promise that? Not yet. Perhaps never? There’s no sign of stabilty. Is the meteoritic rise of the value of Bitcoin a good thing for the economy as a whole. What does it mean when 1 Bitcoin buys a mansion overlooking Sydney harbour. Will it be a case of the “haves”, and the “have nots”. When can Bitcoin be trusted as a stable form of currency? Or perhaps it’s not a currency and it’s just speculation?

Is currency supposed to have huge swings in its purchasing power in short spaces of time. I don’t think so.

I’m not sure if “More users, more value stored, more transactions processed. Naturally, that increases its value” is a valid statement. Does this apply to fiat currency? Should it apply to a currency?

So yes, stability is the threshold I’d be looking for before I start using/exchanging AUD for Bitcoin. I don’t really see currency as an investment and it shouldn’t be either. It produces nothing and should be treated as a “stable promise” for an exchange of goods and services at a future time.

That’s how I think about it. Probably wrong!

That's a banger of an article @SebastianG. The kind of thing you need to read more than once and really think through, but Napier connects the dots nicely. It seems to make sense to me at any rate.

Also good to get your perspective @Rick. And I actually agree with you that it is a long way off being an ideal currency and unit of account.

In fact. So too does Michael Saylor, who holds more Bitcoin than almost anyone. In a recent pod he distinguished between digital capital and digital currency. Long term Store of wealth is the main use case, as he sees it. Yeah. It's volatile. But so are stocks, and we all store a good chunk of our wealth in that. There's a bit of nuance. But you can dive into it here:

https://youtu.be/pQ7fjpqzUS4?si=-7yxnjlE_WtmHXnP

That's a good question about thresholds of acceptance @Strawman

The threshold for me was when the ATO determined crypto was an investment and would be subject to capital gains tax (CGT). Call me cynical but that was them acknowledging the gains outweighed the losses and they were missing out. They put up the white flag.

It's the very same self-interest they apply it determining that gambling windfalls are not taxable. They'll argue that one is a 'hobby' and the other is not, but that sounds very convenient. They don't want gambling windfalls to be assessable because if they were, gambling losses would be deductible and there are more losses than gains.

Now where did I leave my tin foil hat...

Lol, following the incentives is usually a good approach @Noddy74

Thoroughly enjoyed that @SebastianG

shades of Lyn Alden.

the last two paragraphs were the ones that have me struggling for answers:

This greater government action will make it very difficult for savers to preserve the purchasing power of their wealth. For those who wish to attempt to do so, it is time to take the radical step of preparing to benefit from a fixed-asset investment boom in the United States and across the “friend-shoring” world, which is the antithesis of what has come before.

Few investors can correctly anticipate future returns. In a time of structural change, many investors, however, do not even begin by asking the right questions to assess likely future returns. Today, the key question is whether China is already moving away from its managed exchange rate regime and thus destroying the current international monetary system. Those who ask that question have a radically different outlook for the future of credit, money, asset prices, and the economy.

you have posted this in a BTC forum. I’m assuming that you see BTC as a natural winner from the break down of the non-system? Yet, the author states exposure to the fixed asset investment boom in the west aligned countries is where our money should be.

Anyone have any thoughts about the best options?

thanks for a thought provoking read.

C

@Rick "What makes fiat currency useful is that it remains reasonably stable from day to day and from month to month, even though the long term result has been deflationary." I think you can remove the "even though" from that statement, as the long term deflation of fiat currency is main reason it is useful. A modest, steady deflation of a currency brings forward consumer spending (one person's spending is another person's income) and encourages productive investment as people look to offset the loss of purchasing power over time.

Yes, the last few years have been a reminder that high and unpredictable inflation is a horrible thing, but the answer is not to shift to an inflationary currency that would break the capitalist economic system that has created the best/fastest increases in living standards in human history.

But Bitcoin as a digital store of value? Sure, it's not for me but why not!

Look forward to the discussion next Monday 2nd Dec

Personally remain Bullish and over the medium to long term and my portfolio in RL reflects this in terms of weighting.

In positioning my capital this way it not only reflects the performance of Bitcoin but my conviction. I feel fortunate to be alive to witness the release of the Bitcoin protocal via the white paper by Satoshi Nakamoto and my sense is that more and more of humanity is steadily moving in that direction.

Influences for me on my journey have been Lyn Alden, Saifedean Ammous, Jeff Booth as well as broadly the Austrian Economics train of thought. I would also add Fred Krueger to the list of Bitcoin Maxis as his content and information is of high quality.

Call out to Andrew Page himself for championing the open minded approach when re examining Bitcoin.

Key factors when looking forward for me in amongst many :

• The 7-10% monetary debasement that has occurred each year for the past 70 years across USA and Australia plays into the hands of Bitcoin which has fixed supply. Don't see this changing with both governments running larger and larger budget deficits.This liquidity injection has historically seen upward price movement for Bitcoin price.
• Tailwinds for Bitcoin have never been so positive comparative to the past. AS a result i see this enabling more and more mainstream adoption. Whether this be with the Trump Presidency and so many Bitcoin / Cypto supporters in the administration or company adoption and influence by the likes of Larry Fink at Blackrock.

Where Bitcoin can go ultimately in terms of price isn't clear and not something i am willing to predict especially when you add consider timing.

What i feel is important for us all to recognise is that as the price rises demand rises and draws larger sums and players. This in turn spurs further investment into the field and development which in turn spurs on higher demand thus price.

On a final point the adoption of Bitcoin as legal tender by El-Salvadore three years ago has been a fascinating case in point in terms of nation state adoption.

The move and accumulation of Bitcoin by the Bukele government has seen not only the restoration of law and order within the country but the investment and talent into the country. Add to this is the financial improvement made by El-Salvadore and it is likely El- Salvadore will be able to pay off debt to IMF and world bank over the coming years and in doing so be the first to break the debt cycle.

Hope this provides some of my thinking ahead of the discussion

I've been negative on BTC since my brother tried to talk me into it at around $2k. I convinced him to take profits on half his BTC at that point, too. So what the heck do I know? I'd be in for a call if one goes ahead, and appreciate insights from those in the community to get my head around this (reluctant) "asset class"

Definitely keen to be part a call about this if one was put on

Count me in also Andrew....thanks

Keen to get your thoughts on MicroStrategy (MSTR) activity - their recent buying seems to be adding to the rally. The convertible bond and options reads like a Ponzi scheme but clearly people are investing - I can't get my head around why you wouldn't just buy bitcoin direct.

Yes @Strawman a call would be greatly appreciated from this BTC novice!!

@trabs76

Try these:

https://youtu.be/8U1JqBQ82b4?si=n5E43TqXc3TkI9ai

https://open.spotify.com/episode/2LHNMfNsAGtMV0ZqnMn0g9?si=2VqV6V1QQ8ibvhJtW6N_Yg&context=spotify:playlist:37i9dQZF1FgnTBfUlzkeKt

I'm Interested @Strawman

https://auscryptocon.com/

For those interested, Aus Crypto convention is on this weekend at the ICC Sydney.

Not to tarnish all with the same brush, but there are some very unsavoury types featured at this conference @Kayy . (eg. Charles Hoskinson -- i wont put anything in writing, but it's worth examining his past).

There are a lot of failed projects represented that are desperate to find some exit liquidity. No use case (aside from gambling tokens), declining adoption, decentralized in name only (DINO). All of them have been trending to zero against BTC.

Effectively, in my humble opinion, most of these are affinity scams. An easy grift a few years ago, but it looks like they'll try again this cycle.

There's probably some good speakers there too -- just be careful of anyone touting BTC 2.0, or "XYZ on blockchain" or anything that offers yield or faster transactions etc etc. Some of these narratives were plausible at one point, but are thoroughly debunked in 2024. But they do sound convincing to the uninformed.

@Strawman You are 100% correct!

A strong view of skepticism is my approach for a lot of these crypto fellas.

Even more reason for you to hold a meeting for members.

A good policy @Kayy, a healthy dose of skepticism can go a long way (just as true for equities btw!!)

I've scheduled a Zoom catch up for Monday the 2nd of December at 6.30pm AEDT (details on Meetings page).

DINO. Love it! :D

Looking forward to it. I’m guessing you will talk about vbtc as well.