Everyone is running around looking for either a) Bitcoin's killer app, or b) the next big cryptocurrency/ICO/dapp/whatever
Funny thing is, though:
Bitcoin IS THE KILLER APP. It's the answer staring everyone in the face.
The debt-fueled fiat banking system is the problem. Bitcoin itself is the solution.
Topic: Bitcoin is forming a bubble and that is an indisputable fact - page 2. (Read 1179 times)
Bitcoin's price has tripled in less than 3 months.
3 months ago price was $1250 and 3 times means $3750you are looking at a wrong price, you are considering the very bottom of the massive FUD/panic/correction dip as the real price of bitcoin which has tripled!!!
that doesn't make sense.
this is still a big rise though.
It doesn't really matter exactly how much it rose, I think you got the point I was making... but for the record, it did triple. The time frame isin't exactly 3 months but from about 2.5 months ago to like a week ago, it went from under $900 to $2800. So right now it is a bit lower, but the overall point being made here is that Bitcoin has risen extremely fast over the past several months, and even year.
Have these factors that affect bitcoin's price changed accordingly? No, they have not.
yes they have!you just missed a couple huge news!
- Japan accepted bitcoin as a legal way of payment. because of that a lot of businesses in their country started accepting bitcoin > huge increase in adoption.
a lot of traders came in and started trading bitcoin because now it is regulated.
a couple of the biggest Forex brokers in their country added bitcoin trading for their users > a huge increase in adoption.
- Russia, a big country finally changed their mind about bitcoin and showed some green light about doing the same as Japan.
- a couple of other countries also did this or at least said their are considering it such as Australia and a couple of European countries.
- Chinese central bank finally stopped their investigation of Chinese exchanges and allowed them to come back and under regulations. this means a lot of money came back and also a lot more will continue to come in just because it is not legal and regulated.
You are right that these points are good for Bitcoin, but I do not believe that they merit the rise that we have seen. Clearly you believe they do. The only evidence I can offer you that they do not merit the rise is that we can say with 100% certainty that the price will rise by an amount more than warranted by this news, and we know that the greater the media hype, the larger this disparity will be. News events ALWAYS push the price of an asset too far to one side before it corrects. Sometimes it is only by a small amount, but investors never hit the nail on the head. When an asset's price rises on good news, it always spikes a little too high and then corrects back down - same with when prices fall. We did see this with bitcoin hitting $2800, but I believe it is not done rising and we will see it to an even larger degree soon.
This is the basic principal of Warren Buffet's value investing, and it always happens. The fact that bitcoin's investors are mostly retail investors with weak hands, who jump on board with buying and selling frenzies easily, suggests that the disparity between price and value will be even larger.
As is the case with all bubbles, investors have fallen into a buying frenzy fueled by media hype and a snowball effect which has pushed the price up far faster than the value has risen. The larger this gap grows, the more likely it breaks and crashes. It's like stretching a rubber band. There will be a tipping point when it comes crashing back down.
All that being said, I am bullish on Bitcoin long term. However, it does have some hurdles to overcome before it can really be taken seriously.
All that being said, I am bullish on Bitcoin long term. However, it does have some hurdles to overcome before it can really be taken seriously.
to be honest, i don't think so
there is a lot of new money coming in and the world's view about bitcoin is changing. what Japanese did may seem small in words but it actually is a huge deal. they are the first country to fully adopt bitcoin and legally!
and don't forget that it has been 8 years. bitcoin has already proven its power and usefulness despite all the drama and internal fights that are going on.
The reason I disagree with this is because even though new money is coming in, it is not institutional money. It is not smart money, it is more people who want to get rich quick. When hedge funds and other institutional investors start buying into bitcoin, then it can see sustained long term growth. Right now though, it is still just a rollercoaster of bubbles and manias.
For bitcoin to really become useful as a currency, it needs to stabilize. It can't be rising like crazy the way we are seeing today. Ironically, the more it is adopted, the more volatile it becomes, and therefore the less valuable it becomes (it would be more valuable if it were stable). I wrote a post discussing this conundrum if you are interested: http://www.demoinvestor.com/articles/00000001
"The intrinsic value is the actual value of a company or an asset based on an underlying perception of its true value including all aspects of the business, in terms of both tangible and intangible factors. This value may or may not be the same as the current market value."
the problem is this definition doesn't match a cryptocurrency, or better said a new technology that is still in its adoption phase. and as the demand increases the price also increases since the supply is going to be always fixed.
you are looking at a wrong price, you are considering the very bottom of the massive FUD/panic/correction dip as the real price of bitcoin which has tripled!!!
that doesn't make sense.
this is still a big rise though.
you just missed a couple huge news!
- Japan accepted bitcoin as a legal way of payment. because of that a lot of businesses in their country started accepting bitcoin > huge increase in adoption.
a lot of traders came in and started trading bitcoin because now it is regulated.
a couple of the biggest Forex brokers in their country added bitcoin trading for their users > a huge increase in adoption.
- Russia, a big country finally changed their mind about bitcoin and showed some green light about doing the same as Japan.
- a couple of other countries also did this or at least said their are considering it such as Australia and a couple of European countries.
- Chinese central bank finally stopped their investigation of Chinese exchanges and allowed them to come back and under regulations. this means a lot of money came back and also a lot more will continue to come in just because it is not legal and regulated.
to be honest, i don't think so
there is a lot of new money coming in and the world's view about bitcoin is changing. what Japanese did may seem small in words but it actually is a huge deal. they are the first country to fully adopt bitcoin and legally!
and don't forget that it has been 8 years. bitcoin has already proven its power and usefulness despite all the drama and internal fights that are going on.
the problem is this definition doesn't match a cryptocurrency, or better said a new technology that is still in its adoption phase. and as the demand increases the price also increases since the supply is going to be always fixed.
Bitcoin's price has tripled in less than 3 months.
3 months ago price was $1250 and 3 times means $3750you are looking at a wrong price, you are considering the very bottom of the massive FUD/panic/correction dip as the real price of bitcoin which has tripled!!!
that doesn't make sense.
this is still a big rise though.
Quote
Have these factors that affect bitcoin's price changed accordingly? No, they have not.
yes they have!you just missed a couple huge news!
- Japan accepted bitcoin as a legal way of payment. because of that a lot of businesses in their country started accepting bitcoin > huge increase in adoption.
a lot of traders came in and started trading bitcoin because now it is regulated.
a couple of the biggest Forex brokers in their country added bitcoin trading for their users > a huge increase in adoption.
- Russia, a big country finally changed their mind about bitcoin and showed some green light about doing the same as Japan.
- a couple of other countries also did this or at least said their are considering it such as Australia and a couple of European countries.
- Chinese central bank finally stopped their investigation of Chinese exchanges and allowed them to come back and under regulations. this means a lot of money came back and also a lot more will continue to come in just because it is not legal and regulated.
Quote
As is the case with all bubbles, investors have fallen into a buying frenzy fueled by media hype and a snowball effect which has pushed the price up far faster than the value has risen. The larger this gap grows, the more likely it breaks and crashes. It's like stretching a rubber band. There will be a tipping point when it comes crashing back down.
All that being said, I am bullish on Bitcoin long term. However, it does have some hurdles to overcome before it can really be taken seriously.
All that being said, I am bullish on Bitcoin long term. However, it does have some hurdles to overcome before it can really be taken seriously.
to be honest, i don't think so
there is a lot of new money coming in and the world's view about bitcoin is changing. what Japanese did may seem small in words but it actually is a huge deal. they are the first country to fully adopt bitcoin and legally!
and don't forget that it has been 8 years. bitcoin has already proven its power and usefulness despite all the drama and internal fights that are going on.
Okay so maybe there is actually a little room for debate but at least I got your attention! That being said, I don't see how anybody could possibly argue that Bitcoin is not forming a bubble.
Financial bubbles form when there is a large disparity between an asset's market price and intrinsic value. It is easy to measure this with a stock by looking at fundamental stats like revenue and pe/ps ratios, but it is harder with Bitcoin. That being said, we can still identify the factors that affect Bitcoin's value and see how they have moved compared to bitcoin's price.
What factors affect the intrinsic value of Bitcoin?
1. Number of major vendors accepting Bitcoin payments.
2. Legality of Bitcoin across the world
3. Ease of use to buy, store, and spend Bitcoin
Bitcoin's price has tripled in less than 3 months. Have these factors that affect bitcoin's price changed accordingly? No, they have not. As is the case with all bubbles, investors have fallen into a buying frenzy fueled by media hype and a snowball effect which has pushed the price up far faster than the value has risen. The larger this gap grows, the more likely it breaks and crashes. It's like stretching a rubber band. There will be a tipping point when it comes crashing back down.
All that being said, I am bullish on Bitcoin long term. However, it does have some hurdles to overcome before it can really be taken seriously.
Financial bubbles form when there is a large disparity between an asset's market price and intrinsic value. It is easy to measure this with a stock by looking at fundamental stats like revenue and pe/ps ratios, but it is harder with Bitcoin. That being said, we can still identify the factors that affect Bitcoin's value and see how they have moved compared to bitcoin's price.
What factors affect the intrinsic value of Bitcoin?
1. Number of major vendors accepting Bitcoin payments.
2. Legality of Bitcoin across the world
3. Ease of use to buy, store, and spend Bitcoin
Bitcoin's price has tripled in less than 3 months. Have these factors that affect bitcoin's price changed accordingly? No, they have not. As is the case with all bubbles, investors have fallen into a buying frenzy fueled by media hype and a snowball effect which has pushed the price up far faster than the value has risen. The larger this gap grows, the more likely it breaks and crashes. It's like stretching a rubber band. There will be a tipping point when it comes crashing back down.
All that being said, I am bullish on Bitcoin long term. However, it does have some hurdles to overcome before it can really be taken seriously.
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