Topic: Bitcoin gonna burst? (Read 11942 times)

I went to the alpaca sock website linked to from the Bitcoin wiki's alpaca page and here is what it said:

“Each pair of socks is 2.5 BTC delivered to your door, no extra fees for shipping within the U.S. This price may fluctuate in the future depending on the current BTC exchange rate.”

The fact that the “price may fluctuate” means bitcoins are not backed by alpaca socks. There is not a promise but only a temporary promise to exchange alpaca socks for 2.5 BTC and that temporary promise can change at any time.

Did someone say, Alpaca Socks?

I made another chart from 2011-03-18 to 2011-06-18 using a log scale to try and get an idea where this might go if it happens to be a bursting bubble of some symmetry. With bitcoin over $15 it seems difficult to believe that it may go below $1, but the only other time bitcoin ever went above $1 was in February.

http://bitcoincharts.com/charts/chart.png?width=505&m=mtgoxUSD&k=&r=60&i=&c=1&s=2011-03-18&e=2011-06-18&Prev=&Next=&v=0&cv=0&ps=0&l=1&p=0&t=C&b=&a1=&m1=10&a2=&m2=25&x=0&i1=&i2=&i3=&i4=&SubmitButton=Draw&

Could this whole spike to $30 really be just a bubble? Bitcoin is open source software of a digital currency backed by nothing of physical value. It is a new technology with a number of unknowns about wallet security, government reactions, price stability, merchant usage, and Bitcoin's ability to compete with future Bitcoin-like currencies which may be backed by things of physical value. As far as I know, there hasn't been enough positive change in these unknowns over the past couple months to justify the 30-fold run-up in Bitcoin price so it isn't too much of a stretch to consider this recent spike to be a media driven bubble of people who don't care much about Bitcoin as a revolutionary new currency and instead primarily view Bitcoin as a way to get rich, which is the driver of bubbles.

That's the interesting question. Bitcoin is still small; it could cancel out of the crash and form an even larger bubble.

I hope people will hurry up with the spikes so I get a clearer view. What's with those low-volume phases... seller staring contest.

If it continues onto a rising trend again, it will become a battle of speculators. I can't imagine it would end well for everyone; but the best might make a nice profit -- and the early adopters that didn't sell yet most of all. But I can see it doing a classical crash just as well. Gotta figure out what the buying folk is thinking right now -- that's the most important question.

The second chart shows one month. What happens after the burst? The dotCOM stuff makes me think of Facebook ant Twitter. Especially Twitter has lots of investors. Does this mean it repeats over and over after the burst? Then it'd be a good idea to wait until the next bubble emerges.

Also couldn't we be at some point after 1980?

This thread is beautiful. It should be read in economics class by schoolchildren to understand bubble dynamics.

I especially love the denial phase as soon as an upwards spike happened. It's EXACTLY as the economists say. Doubts are drowned by one over-riding fact: the price is still rising. As long as the price shows a higher number, people are satisfied. Even though everybody should know it crumbles the moment the stream of new money stops, they all just take that risk.

No matter what happens from now on, the chaos and drop were unavoidable after the spike to 30, and there were people who knew that. But everybody ignored them until it was too late! It was just unreasonable to rise that fast, even with the exponential media attention.

I hope this will teach Bitcoiners a lesson; we don't want this to happen again. It's a crazy kind of game that disrupts normal trading. At least keep the price roughly close to actual trading market size.



Edit: Oh wow, I just saw the link to the bubble article, including the quote "The voices of the wise are ignored by the greedy who justify the now insane prices with the euphoric claim that the world has fundamentally changed and this new world means higher prices."

And someone answered "You have to go way outside the box to find economic analysis of the monetisation of a newly discovered form of commodity currency.". And another "how can you compare BTC to anything? There has never been anything like it"

Priceless. Pun intended.

I've sold father's day presents, external hard drives, coupons to a restaurant in Iceland, cash, and more...all for bitcoins

I've sold tarot card readings for bitcoins.

Micro transactions to pay for what exactly? So far bitcoin has been used for: drugs, cheap way to make money (mining, which is dying soon), and speculation.  Not even that restaurant in NYC that started accepting bitcoins has conducted a single transaction using bitcoins (as of 6/17/2011). The only reason it will stay alive is for Silk Road, and even that use is now dubious due to the fact that you have to be tech savvy and go way out of your way to use it and still be anonymous. I like bitcoin as a decentralized currency, but not as a tool for drug and smut peddlers.

If anyone really wants to see bitcoin succeed they need to put efforts into enacting more trade using bitcoins. Mining doesn't help the bitcoin world because even if there were only 3 guys doing CPU mining, the difficulty would adjust so they could produce all the bitcoins at the same rate they are being produced today (with the most power aggregate super computer in the world).

I think this graph comparison may be the most simplified understanding of what is going on...even with the information given.

And this conclusion which has been drawn from it seems ridiculous!

kwh, solid graph.

I will be looking to buy once it dips back down below $10/coin, since it is pretty easy to eyeball your chart and see the linear price should be $10/coin.

That chart is scary similar. I think that is exactly what happened with the bitcoin, the reason it happened so fast is because it is all digital and the bitcoin has no substance to it really.

Here is a chart I made today at bitcoincharts.com that I felt the need to share.
http://bitcoincharts.com/charts/chart.png?width=506&m=mtgoxUSD&k=&r=60&i=Daily&c=1&s=2011-04-22&e=2011-06-17&Prev=&Next=&v=0&cv=0&ps=0&l=0&p=0&t=C&b=&a1=&m1=10&a2=&m2=25&x=0&i1=&i2=&i3=&i4=&SubmitButton=Draw&
A more pessimistic comparison of your bubble graph to the 2011-04-22 to 2011-06-17 Bitcoin graph might be that we are entering the "fear" portion of the "Blow off Phase". It may be that the current Bitcoin price fluctuations become speed bumps towards your "7 digit territory" prediction, but it may also be that the striking similarities between the two graphs is telling us something.

my thoughts exactly

I wouldn't say the drop from 31.8 to 22.9 is a popped bubble. Due to the enormous increase earlier, it would be normal for it to drop down a bit, but it will make another sharp rise again shortly.

Actually, it's just crashing upwards.

You're delusional... the bubble has popped... it is accelerating downwards and will reach -10 BTC per dollar by Saturday.

so much for bursting its back up to $33. Untill the influx of new buyers stops there will always be people ready to pick up the scraps for cheap. Whoever brought now just made an extra $5 per coin

Thats not a bubble, thats impatient fools getting rid of coins cause they are scared! There was a rally which needs levelling out... expected... all is good

It's popping!! Sell everything! Delete your wallets!!