Topic: [2017-06-22] The Bitcoin Bubble Will Turn Into Mania Before It Bursts (Read 2673 times)

At every point some analyst will tell you it can't go any further, but media outlets are just looking for some clickbait.  I bet the majority of analysts are fairly neutral.

That said, the negative analysts' predictions can easily be right.  People like to be excessively positive about the Bitcoin price as if they have to when they're posting on a Bitcoin forum, but while these analysts >5 year predictions are most likely wrong, their short term predictions are often considered properly.

Bitcoin is overbought.  It's either headed for a bubble post-SegWit or it'll relax for a while.

It has always been like this. I have been reading through plenty of articles back in the days how "experts" literally break down Bitcoin and explain how it will never reach $100 for the first time. And if it would touch the $100 level, it would directly be Bitcoin's highest ever price. Guess what? It did hit $100 and it literally demolished all other levels after that as well. Just look where we stand right now, never pay attention to all those bubble suckers. If we had to believe these "experts", Bitcoin's entire existence is one big bubble...

We've already been through a few very decent corrections, just look at how the price went down from +$2700 to sub $1900 in a matter of days. We managed to recover from that all the way to nearly the $3000 level, where we had to swallow another pull back, this time to just over the $2100 level. It's the demand that keeps holding the price up.

Long story short, the price is somewhat overbought, no doubt about, but this in no way comes even close to a bubble.

My mind is having a hard time digesting so many predictions and opinions about the Bitcoin Bubble. While there are so many self-proclaimed analysts determining that soon we can lose our money because Bitcoin can burst at the seams, there are also those who are defending the Bitcoin telling us that it will not be a bubble due to many factors like this and like that.

Personally, who would not want Bitcoin to continue on surging but I also understand that things can get unsustainable and if speculative Bitcoin buyers can be disappointed then they can easily left Bitcoin hanging in the air. Should this happen then there can be a burst indeed.

Now, with Bitcoin, compared to other bubbles in the past, they say that it can defend itself because it is primarily a store of value and though speculations are always around, Bitcoin can stand on its own just like the safe haven called gold.

Anyway, what will be will be so instead of thinking the details of what can happen in the future as might as well enjoy the Bitcoin ride and maybe take back my main capital first so bubble or no bubble I won't hobble.

For the last nine months, the Bitcoin rally that took the digital currency from a few hundred dollars to close to $3000 had all the elements of a bubble that has yet to turn into a mania before it bursts.

Every asset bubble is different, and can be easily confused with healthy bull markets. But they all follow a certain pattern. They begin with ‘investor hype’ over a popular theme – an emerging industry or an exotic product that promises to change the world and make many people rich in the process.

Somewhere down the road Wall Street develops the vehicles that make broad investor participation in this theme easier, like a mutual fund or an ETF—turning investor hype into market contagion, and pushing the price of the underlying assets ever higher.

Then comes easy money by accommodative central banks to provide ‘the air’ -- financing for the bubble to grow bigger and bigger. Bold predictions by market gurus and talk in the mass and social media create buzz that help prices double or even quadruple in a matter of days, even hours—turning market contagion into mania. Investing in this theme reaches a cascade, as no investor wants to be left behind.

Finally, the bubble bursts, as early investors have already cashed out, and there are no more investors to join the party.

Apparently, the ongoing run up in Bitcoin and other digital currencies has most of the elements of a bubble. It’s an exotic asset that comes with big advantages—a better hedge against global uncertainties than conventional hedges like gold; a convenient medium of payment around the globe; and a limited supply--21 million.

Meanwhile, there’s investor hype. More and more investors are becoming familiar with the digital currency, and can use investment trusts like GBTC to conveniently participate in the market.

Adding to the hype is an ultra-low interest rate environment (which has lowered the cost of holding all these four-digit trading Bitcoins).

But there’s one thing still missing to turn the bubble into mania: a broad participation beyond the “pioneers” and the “early adopters,” to “early majority--” along the Rogers curve.

That’s when the demand for Bitcoin reaches a cascade and turns into mania, as a critical mass of investors rush to buy “hot” Bitcoins for the promise they hold -- rather than for the fundamentals they display.

Investors who have been around Wall Street long enough know all too well that when money becomes tight and investment promises aren’t fulfilled, bubbles and manias end; and millions made are lost much faster than they were made. And then some.

https://www.forbes.com/sites/panosmourdoukoutas/2017/06/22/the-bitcoin-bubble-will-turn-into-mania-before-it-bursts/#511063f97945