Topic: Bitcoins vast overvaluation - page 4. (Read 4917 times)

I think he's making a whole lot of assumptions here that you just can't make.

First of all, let's not forget that there is a large degree of automation in bitcoin trading since, you know, there's an awful lot of programmers around. You can also look back and see all trading robots that have been posted to the forums alone where people literally download and let it run so you have a large population of users who don't know what they're doing just letting the bot do its thing. Since this is the same exact bot over many different accounts, they will all notice the same things and make the same decisions.

In fact, I used to use this knowledge to predict what the bots would do in a certain situation. When I saw that scenario playing out, I would take advantage of the bot's mindlessness and it was making me some pretty good profit. The bots have gotten pretty sophisticated now, and the market is large enough that the risk to me is too great. I wouldn't put it past a bigger player to be taking the same sort of reactionary trades against a programmed hive mind.

The best part

"As of this writing, one bitcoin is trading for 142 US Dollars. Readers of this blog will remember that I estimated the endgame value of one bitcoin, if the currency succeeds, to be between 100,000 and 1,000,000 US Dollars. That estimation still holds."

But it's "vastly overvalued"   

You say "reality will set in at some point."  Well, what point will that be exactly?

You think bitcoin miners who have owned bitcoins for years and seen the price go from <$1 to <$265 are going to "wake up" and sell their coins and walk away?

Or perhaps the growing ecosystem fueled by tens of millions of Venture Capital dollars being invested in bitcoin based companies will suddenly just dry up and vanish in the wind?

Or how about the continual increase of global bitcoin transactions in "legal" sectors fueled by companies like Bitpay?

Or is it just the idea that a world ever more influenced, created and led by technology will never give birth to a true technology based currency that will find its way into the global economy in some permanent way?

But, instead you compare a 4 year old Bitcoin market to a 100+ year old bond market and a 200+ year old real estate market?

Do you ever consider that Bitcoin's current "inflated" price might just be the soil it needs to grow an underlying market, by igniting the press, global interest and potential monetary gain to inspire the very investment any currency needs to become a conscious, and ultimately, useful part of society?

I won't argue that Bitcoin's are currently heavily valued in speculation. Or that the US dollar is dying soon (or in our grandchildren's lifetimes). However, as long as the price of Bitcoin is enticing enough for you to be trading it for "fat stacks," it's also attractive enough to be creating an economic infrastructure and ecosystem for true economic utility.

I agree with Falkvinge in general, but I think even he is overvaluing bitcoins and underestimating the extent of manipulation.

 

of course Aunt Jemima. 

I dont hold coins I make money whether the market goes up or down.

The point to me is something he just glosses over and that is that there is not an underlying market supporting the bitcoin price. Basically the whole bitcoin market is speculators with no real demand for coins other than drugs and gamblers and they dont need enough coins to justify the price. I dont really care about the other aspects of the artical.

It is like the housing market and the feds bond buying, The real market is not there for homes so they have to create artificial scarcity and use fed bond buying to prop up the price.  

Reality will set in at some point, but i guess the saying goes the market can stay irrational longer than you can stay solvent.

http://en.wikipedia.org/wiki/Rickard_Falkvinge

He's decently intelligent in his areas of expertise, but he knows shit about markets.

From this link he seems to be an idiot who has no idea what he is talking about. Is there any reason you have to believe anything he says?

No.

Who cares? We are all happy if the price goes up, no?

http://falkvinge.net/2013/09/13/bitcoins-vast-overvaluation-seems-to-be-caused-by-usually-illegal-price-fixing/

If you dont know we are still heading down.