Greater fool theory: The bitcoin bubble - page 2.

Virtual miner

sr. member

Activity: 728

Merit: 275

Quote from: stompix on November 06, 2017, 07:30:01 AM

When you read the blogs in the economist you really have to be prepared for everything....
Almost everyone there expresses more their frustration rather than a real analysis on the matter.

Check this one:
https://www.economist.com/blogs/schumpeter/2013/12/bitcoins-collapse

Quote

It has been clear for weeks the currency is in the midst of a huge speculative bubble. Speak to Bitcoin enthusiasts and it soon becomes clear that they while they think that Bitcoin will revolutionise online payments, they are mostly buying it in the hope of selling it off for a profit later. A few drug users aside, no one appears to be buying it as a way to buy things. Such demand could only reverse.

These guys are just humans, and humans are known to say lots of stupid things all day long.
Too bad some are getting paid for this.

I dont support what these big economist keep on saying but neither do I defy their thougths and credit them as stupid. I mean we all know that they have achieved something through their wisdom in the economic field. If they are saying this there might be some reason to it. People say that they dont want to change the world as they earn from fiat but think for a second they have a lot more fiat than all of us and can buy lots of bitcoins to get some great return. I think this whole bitcoin theory need to be redesigned and readdressed considering the world economic scenario.

pawanjain

hero member

Activity: 2702

Merit: 716

Nothing lasts forever

There are always somebody who buy Bitcoin at current price. One a person thinks that the cost it too expensive to buy Bitcoin right now and on the other side another person thinks that it is a good time to buy Bitcoin now. The person who buys BTC holds it while the others buy more. This is how the price of BTC has been rising all these years. Everybody knows its worth will be more in future. The crash will happen only if all the people try to sell all their coins at the same time which is more unlikely to happen. As more people comes to know about BTC more people will buy it and that will increase the price further more. To exit at the right time will depend on the individual. The sooner you buy the safer you will be.

intelligent.investor

newbie

Activity: 42

Merit: 0

Quote from: ashler on November 06, 2017, 07:09:46 AM

Quote

If everyone tried to realise their Bitcoin wealth for millions, the market would dry up and the price would crash

Quote

Have you seen every people selling all their gold at once.....and again who will pay for all those gold....who is the buyer.... Huh

Still people buy and hold gold, don't they?? Same thing applies with Stocks and also with Bitcoin.

farhaan

sr. member

Activity: 392

Merit: 250

We have already come across such theories.

People don't buy with the expectation that others would buy at higher price from them.This explanation totally seems to be stupid.People buy it as an asset which has the potential to give high returns and at the same time,their investments also would be safe.

We could not expect all the people to sell off their bitcoins at the same time.Every one may have different ideas about their holdings.Some may hold it for an year and others may hold it as a long term investment and some my even have an idea of selling their bitcoins within two or three months.

muhammad-adnanzain

full member

Activity: 137

Merit: 100

all can have their opinion and have own theory but the important thing when the demand of bitcoin still high people will add hope get earn from bitcoin trading.

gentlemand

legendary

Activity: 2590

Merit: 3014

Welt Am Draht

Depending on how things pan out, someone selling at $7500 may turn out to be by far the greater fool than the person who buys it.

There's no denying that tons of people here have bought with the intention of doing nothing but selling for more, but it's likely that selling becomes an increasingly irrelevant idea as the years go on.

My own hopes are to spend it where necessary and never sell, and who I spent it with won't have any desire to sell either.

And the market drying up thing applies to every single market in the entirety of human history. I can't believe this penis thinks Bitcoin is somehow different.

BillCoin

sr. member

Activity: 476

Merit: 259

I disagree with the statement that says that people buys bitcoin because they expect other people to buy it at a higher price.
Most of the people buy bitcoins because they believe in the technology that behind it, and not because they are interested in the speculation that behind it.

About the 2nd statement, it is correct, but it is right to almost every stock in the stock market.
If a large holder will be interested to sell a large percent of his holding, it will make the price to surge low, because liquidity at the spot price is lower then the market cap.

cryptocrusher

full member

Activity: 420

Merit: 136

I am not convinced that buying something with the intention to sell at a higher price is greater fool theory, perhaps buying something with no idea what is a good entry and exit point could fall under that category. If you buy rice in China and know you can sell it in the UK for a profit, that is not greater fool theory, that is good sound logic.

hase0278

hero member

Activity: 882

Merit: 544

Quote from: Theb on November 06, 2017, 07:45:42 AM

Let us save some time that the greater fool theory will only apply to people who just buy Bitcoin without even a strategy. I am not against buying Bitcoin at a higher price but there is always a right time to buy it, if the high price is justified by the price chart then you will know that buying Bitcoin now is good. But if the price chart is not clear then you better just sit the price action down until it settles.

That is right although if no one will buy when the price is high then like OP said no one can convert their bitcoin to fiat at their desired price. Even if that is the case, the greater fool theory is somehow flawed. They didn't consider the fact that bitcoin is a new innovative tech that brought about the ease in online transactions, without ever needing a middlemen and it is just natural that innovative technologies will always have a rising value on the society. Another example of innovative technologies are facebook and today's smartphones.

Theb

hero member

Activity: 1680

Merit: 655

Let us save some time that the greater fool theory will only apply to people who just buy Bitcoin without even a strategy. I am not against buying Bitcoin at a higher price but there is always a right time to buy it, if the high price is justified by the price chart then you will know that buying Bitcoin now is good. But if the price chart is not clear then you better just sit the price action down until it settles.

stompix

legendary

Activity: 2912

Merit: 6403

Blackjack.fun

When you read the blogs in the economist you really have to be prepared for everything....
Almost everyone there expresses more their frustration rather than a real analysis on the matter.

Check this one:
https://www.economist.com/blogs/schumpeter/2013/12/bitcoins-collapse

Quote

It has been clear for weeks the currency is in the midst of a huge speculative bubble. Speak to Bitcoin enthusiasts and it soon becomes clear that they while they think that Bitcoin will revolutionise online payments, they are mostly buying it in the hope of selling it off for a profit later. A few drug users aside, no one appears to be buying it as a way to buy things. Such demand could only reverse.

These guys are just humans, and humans are known to say lots of stupid things all day long.
Too bad some are getting paid for this.

ashler

jr. member

Activity: 51

Merit: 2

Quote

People are buying Bitcoin because they expect other people to buy it from them at a higher price; the definition of the greater fool theory.

Quote

If everyone tried to realise their Bitcoin wealth for millions, the market would dry up and the price would crash; that is what happened with the Mississippi and the contemporaneous South Sea bubbles. And because investors know that could happen, there is every incentive to sell first. When the crash comes, and it cannot be too far away, it will be dramatic.

https://www.economist.com/blogs/buttonwood/2017/11/greater-fool-theory-0

Topic: Greater fool theory: The bitcoin bubble - page 2. (Read 574 times)