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How soon until Bitcoin crashes?

Liar Loan

Well-known member
Bitcoin just gained another $1,000 in price hitting $11,000 this morning, before investors started cashing in their gains and driving the price lower.  The currency has gone up about 10x in value this year.

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Similarly, in the year 1637 tulip bulb mania swept Holland and the price of bulbs increased by 10x or more before crashing spectacularly:

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Here's how insane the Dutch tulip bubble was according to Investopedia:

Soon, prices were rising so fast and high that people were trading their land, life savings, and anything else they could liquidate to get more tulip bulbs. Many Dutch persisted in believing they would sell their hoard to hapless and unenlightened foreigners, thereby reaping enormous profits.

The part about selling to hapless foreigners reminds me of Irvine a little bit, but my question is how high does Bitcoin go before experiencing a similar crash?
 

morekaos

Well-known member
This has every call sign of a mania.  True believers, no fundamentals, new and ingenious ways of justifying astronomical valuations, amateurs making zillions and tempting other fools into the greater fool loop.  It will last longer that people expect and the nay-sayers have to start questioning themselves...then it will collapse spectacularly!!!
 

usctrojancpa

Well-known member
morekaos said:
This has every call sign of a mania.  True believers, no fundamentals, new and ingenious ways of justifying astronomical valuations, amateurs making zillions and tempting other fools into the greater fool loop.  It will last longer that people expect and the nay-sayers have to start questioning themselves...then it will collapse spectacularly!!!

When you start seeing it on the news and everywhere on Facebook then you'll know the time is near.  When it crashes, it'll be a show to see.
 

Liar Loan

Well-known member
Once you see the Bitcoin naysayers being ridiculed as fools in the mainstream financial press, that's when I think the crash will occur.  At that point, when even the naysayers begin questioning their understanding of reality, there really are no buyers left.
 

morekaos

Well-known member
You really can look at the real estate wave from IHB.  It was more slow motion but even there some nay-sayers were weakening when the collapse finally came.
 

eyephone

Well-known member

Irvinecommuter

New member
Well...this isn't a problem.

Bitcoin is in the "mania" phase, with some people even borrowing money to get in on the action, securities regulator Joseph Borg told CNBC on Monday.

"We've seen mortgages being taken out to buy bitcoin. ? People do credit cards, equity lines," said Borg, president of the North American Securities Administrators Association, a voluntary organization devoted to investor protection. Borg is also director of the Alabama Securities Commission.

"This is not something a guy who's making $100,000 a year, who's got a mortgage and two kids in college ought to be invested in."
https://www.cnbc.com/2017/12/11/people-are-taking-out-mortgages-to-buy-bitcoin-says-joseph-borg.html
 

nosuchreality

Well-known member
First you need to define crash.

Is going from 13,000 to 6000 a crash?    13,000 back to 1000?

It's solidly the currency of choice (granted a lot of choices popping up) of the anti-goverment/blackmarket/prepper/hide your stuff from your having money unfriendly governments types.

Let's be honest, the local Ferrari dealer will take bitcoin. Well, used to at least, the volatility, like some well known game platforms may have lost their taste for being a platform of exchange for it.

So crash to nothing?  Only if an actual hack shows up, however if a hack shows up, suspect global ecommerce is in for a total sh*tstorm along with credit cards, debit cards.

Nutshell, there's a max of 21 million bitcoins (currently only around 16 million) and a rather large number of people that want to move money around via that channel such that only 16 million pieces of exchange is a rather nasty bottleneck.



 

Liar Loan

Well-known member
nosuchreality said:
Nutshell, there's a max of 21 million bitcoins (currently only around 16 million) and a rather large number of people that want to move money around via that channel such that only 16 million pieces of exchange is a rather nasty bottleneck.

I hear these numbers thrown around a lot by my friends that are into Bitcoin, but currently there are 800 different crypto-currencies in "circulation" so really the number of digital "coins" that can be mined is infinite.  These are just digital sets of 1's and 0's after all. 

Bitcoin's only real advantage is being first to market, as far as I can tell.
 

daedalus

Well-known member
The end is near.

At the gym tonight there were 2 young guys discussing bit coin.  I know they were young because they were marveling at how much bit coin has gone up recently, saying nothing has ever gone up that much so fast before.  Clearly they were not around to make and lose fortunes daytrading the likes of BRCM, JNPR, NTAP, QCOM, GBLX and, my favorite, INFY. 

They went back and forth for a little bit, debating about whether it's some kind of bubble.  They finally agreed, more or less, that it was.  Then they started discussing the best way to invest in it.  One guy pondered how far it might fall and at what price might be the best place to jump in.  The other guy replied that the best way to get in is to start now and put a small amount in at regular intervals.  First guy objects, and asks, if it's a bubble, why get in now?  Second guy replies--and this is a direct quote--"well, that's how you're supposed to invest in other things, like risky stocks." 

He actually characterized stocks as "risky" in the context of a discussion about bitcoin.  I almost dropped a bar on my head.
 

nosuchreality

Well-known member
Liar Loan said:
nosuchreality said:
Nutshell, there's a max of 21 million bitcoins (currently only around 16 million) and a rather large number of people that want to move money around via that channel such that only 16 million pieces of exchange is a rather nasty bottleneck.

I hear these numbers thrown around a lot by my friends that are into Bitcoin, but currently there are 800 different crypto-currencies in "circulation" so really the number of digital "coins" that can be mined is infinite.  These are just digital sets of 1's and 0's after all. 

Bitcoin's only real advantage is being first to market, as far as I can tell.

Technically correct, but ask someone what Ethereum is and you'll get a blank stare let alone any of the others.  Frankly I won't touch any of them at this point because it seems like playing with stock back in the days of Rockfeller and Joe Kennedy before there was an SEC and regulations.  They're thinly traded and your bitcoin value upon liquidation depends on which trading platform you use.

I saw a stat for one of the exchanges that trades bitcoin, back in August when the coin split into bitcoin cash and bit coin, over half didn't deal with their accounts to get the bitcoin cash.

All that said, if it blows back to $600 it'll take the wind out, but I'm not sure it'll remove the mass of money that wants to move around without government intervention. 

Gold, silver, puka shells, pesos, dollar.  Money is only worth something if someone will agree to take it in exchange for products and services.
 

Liar Loan

Well-known member
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Noted investor Jeremy Grantham, who called the last two major market bubbles, said bitcoin is a bubble that may crash soon.

"This is a true, crazy mini-bubble of its own I expect," Grantham, co-founder of Boston-based investment management firm GMO, said in a Wednesday letter to clients.

In the letter, Grantham also included a chart illustrating how large and how rapid the bitcoin price surge has been in the last two years compared with other historical bubbles.

"As you can see, Bitcoin dwarfs even the legendary South Sea Bubble!" he said. "Having no clear fundamental value and largely unregulated markets, coupled with a storyline conducive to delusions of grandeur, makes this more than anything we can find in the history books the very essence of a bubble."

Other well-known investors have said for months that bitcoin is in a bubble, and compared it to the tulip bulb mania or speculation in Beanie Babies. J.P. Morgan Chase CEO Jamie Dimon called the digital currency a "fraud."

But none of the criticism has deterred bitcoin's surge so far, or prevented others from predicting further gains.

And although bitcoin has struggled in the last two weeks to stay above $15,000, prices of other cryptocurrencies have surged dramatically. The market value of all cryptocurrencies has multiplied roughly 38 times from this time last year to more than $770 billion Thursday, according to CoinMarketCap.

Former Fortress hedge fund manager Mike Novogratz has also said cryptocurrencies like bitcoin are the "biggest bubble of our lifetimes," with a lot of money to be made on the way up.
https://www.cnbc.com/2018/01/04/investor-who-called-two-market-crashes-says-bitcoin-is-a-bubble.html
 

Irvinecommuter

New member
Fundamentally, bitcoin undermines national sovereignty.  Why would any first or second world country ever allow cryptocurrency as it would undermine their own currencies?  It is not trackable, outside of the traditional banking industry, and used by criminals. 

You would need some sort of 3rd world revolt but the stakesholders in 3rd world uses US currencies and thus would not want the change anyways.
 
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