The Efficient Market Hypotheses doesn't apply, because it's not an efficient market.
It's too cumbersome to get funds in and out (for many people), and even where it is possible the time delays mess with the market.
More importantly, the future value of Bitcoins depends almost entirely on the presence or absence of future coercive government action. That must be one of the hardest things (if not the hardest thing) for any market to predict.
Topic: Efficient Market Hypothesis - page 2. (Read 4074 times)
The EMH says that market prices are approximately "correct" and you can't expect large gains.
"You can't expect large gains" means that the expectation value of your investment is approx. zero. But that doesn't mean large gains aren't probable.
The EMH is only anywhere near correct when all possible valuers know about and have access to the a free market.
If I invent a lighter than balsa wood stronger than titanium alloy in my basement and sell some to my neighbor for $1/oz it isn't right to say that that is it's value. I don't know how long it will take to get the word out about this material, probably not as long as explaining and spreading bitcoin though. As someone mentioned, "tends towards" is a lot more accurate.
If I invent a lighter than balsa wood stronger than titanium alloy in my basement and sell some to my neighbor for $1/oz it isn't right to say that that is it's value. I don't know how long it will take to get the word out about this material, probably not as long as explaining and spreading bitcoin though. As someone mentioned, "tends towards" is a lot more accurate.
A market can't predict the future, but it can see a general trend. The fact that people are spending btc is disproving the deflationary spiral myth, and if it's not being spent now, it will later, which will fuel growth as accumulated capital.
So true! I am accumulating as much bitcoin as I possibly can right now. I already sold advertising, writings, programming, drawing, etc. I even got tipped!
And the lack of a general stock market does not help, not being able to trade across with various currencies and commodities and meta-trading.
The btc market is as efficient as it can be at the moment, and the price is the correct one, even taking into account the expectation of an increase in value. The only issue is that the market does not know by how much the value will increase or when, if it did then btc would already be at that point.
A market can't predict the future, but it can see a general trend. The fact that people are spending btc is disproving the deflationary spiral myth, and if it's not being spent now, it will later, which will fuel growth as accumulated capital.
The btc market is as efficient as it can be at the moment, and the price is the correct one, even taking into account the expectation of an increase in value. The only issue is that the market does not know by how much the value will increase or when, if it did then btc would already be at that point.
A market can't predict the future, but it can see a general trend. The fact that people are spending btc is disproving the deflationary spiral myth, and if it's not being spent now, it will later, which will fuel growth as accumulated capital.
Thus there is an imbalance between the supply of one commodity (bitcoins) and the supply of the exchange medium (LRUSD)
At this phase, insufficient access to LRUSD (the common denominator for trading) is Bitcoin's Achilles' heel.
https://bitcointalksearch.org/topic/m.32962
At this phase, insufficient access to LRUSD (the common denominator for trading) is Bitcoin's Achilles' heel.
https://bitcointalksearch.org/topic/m.32962
I think it's "tend toward".
The reason why this is because, as the market get larger, the more way we can send individuals to try and solve all kind of problem.
Lot of those individuals are going to fail, but somebody will figure out something and gain a profit.
We have an extremely small economy, worth only about 1.97 million USD.
The reason why this is because, as the market get larger, the more way we can send individuals to try and solve all kind of problem.
Lot of those individuals are going to fail, but somebody will figure out something and gain a profit.
We have an extremely small economy, worth only about 1.97 million USD.
IMO the BTC market is currently skewed because so many participants have coins that they got for "free". In that sense it's all free lunch and the actual market value hasn't been established yet. Throw in the fact that widespread adoption (ie: demand) hasn't even begun to occur yet and there are just too many uncertainties for the market to decide what a BTC is really worth.
I wouldn't say the EMH has failed, it just hasn't had enough time to arrive at a conclusion yet.
The market is still too small to have truly achieved efficiency is maybe one way to think of it.
I wouldn't say the EMH has failed, it just hasn't had enough time to arrive at a conclusion yet.
The market is still too small to have truly achieved efficiency is maybe one way to think of it.
The EMH says that market prices are approximately "correct" and you can't expect large gains. Yet many Bitcoiners expect large increases in the price of bitcoins. Is the EMH failing in the Bitcoin market, giving us a true free lunch? Or are Bitcoin investors deluding themselves by not recognizing the likelihood of loss?
Jump to: