Row 10292

Content Data

This page contains data entry 10292 from the Axioma AXP content repository. The structured data below represents the complete record for this entry.

Raw Record

{
  "text": "So for one that’s not some deep dive in to the mathematics.  That’s a thing everyone knows.  And a finite source doesn’t make something a good inflation hedge.  We could sit here all day listing things with finite supplies that have not kept pace with inflation.  \n\nAre you able to answer the question?\n\nE: OK I guess they decided to bail on that question lol.  \n\nThe problem is this - lots of people in the bitcoin space seem to be enamored with the technological side of it, which is interesting if very imperfect.  But what technology certainly does not do is translate to economic success.  In order for something to be an effective inflation hedge you'd need at the very least a macroeconomic thesis as to why that thing would keep pace with inflationary spikes.  For instance, equities tend to be a strong long run inflation hedge, because inflation is the price of stuff going up and stocks are owning the company that sells the stuff that's going up in price.  Obviously macroeconomic phenomena are far more complex than that, but for a reddit comment this will do.  \n\nBitcoin does not yet have any sort of economic model or even the beginnings of a thesis as to why demand would exist over time.  There's no underlying cashflows, there's no inherent industrial use or need for it to exist, etc.  That doesn't mean it'll necessarily be a poor investment, it may very well go up in price.  However, there's nothing inherent to it that would necessarily make it a good inflation hedge - /u/viewmodeonly started their comment alluding to the hash algorithms and immediately jumped to it being an inflation hedge.  Now, I'm not a PhD in mathematics, my background is in finance and economics.  But I am highly suspicious that these algorithms are pertinent at all in a conversation surrounding it's economic use case or future values (homie shied away from that  association pretty quickly so I'd guess they know that).  \n\nThe truth is that bitcoin as of right now is really just a supply/demand dynamic based on no real discernable fundamentals.  That's not necessarily a negative, outside of jewelry and some very limited industrial use Gold has very little fundamental value yet it's been parts of an investment conversation for centuries.  That said, if one were to draw a comparison the public often thinks of Gold as a good inflation hedge, which goes to show you how few people question their assumptions because [this](https://www.tandfonline.com/doi/full/10.1080/0015198X.2020.1817698) idea [has not](https://scholars.unh.edu/cgi/viewcontent.cgi?article=1744&context=honors) heald [up to](https://www.sciencedirect.com/science/article/abs/pii/S0301420722004524) the [historic record](https://caia.org/blog/2023/01/01/inflation-hedging-strategic-asset-allocations-gold-or-something-else).\n\nWhile bitcoin is not gold, it is useful to examine items that have similar investment theses - and if we are billing this online coin as a digital store of value that will hedge against inflation then it sure sounds a lot like the thesis behind precious metals.  Ultimately only time will tell, however in the current environment we have one noteworthy bout of inflation where bitcoin did exist, and what we are able to plainly observe is that bitcoin was an exceptionally poor store of value through that period.  \n\nI think in general online discussion of bitcoin is mostly crap, people are too emotional and the fact of the matter is most of the people posting comments on reddit couldn't tell the difference between a DCF and a 12 year old vomiting on their keyboard even if Ana De Armas promised to fuck them if they got it right.  What you typically end up with is one end of the spectrum yelling and screaming about ponzi schemes and fake internet money while the other side does what /u/viewmodeonly did and throw some vague allusion to mathematical complexities that you obviously don't understand and therefore your opinion on like \"Are people going to use this\" is wrong.  Because you just don't get the technology, and if you did you'd know it's god's gift to money or something.\n\nBitcoin itself may be a good investment in the long run, or it may not be, I don't think anyone has the requisite information to make such a calculation or thesis at this time given that so much rests on future demand, and this is effectively unknowable.  What I can say with full confidence is that 99% of the discussion I see online surrounding crypto, and I mean specifically the \"experts\" on the subject, is riddled with such a deep misunderstanding of basic economic and financial principles that it's laughable.",
  "label": "r/investing",
  "dataType": "comment",
  "communityName": "r/investing",
  "datetime": "2024-05-20",
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}

Entry Information

• Entry ID: 10292
• Repository: Axioma AXP
• Dataset: arrmlet/reddit_dataset_36
• Total Entries: 100,000