Topic: How much of a bubble is this? (Read 5579 times)

I think you may have missed my point.  People who mine btc can buy all kinds of things with it.  At the moment they have to do so by buying local currency first, but this probably won't always be the case. 

I had some US dollars that I wasn't planning to buy anything with in the near future, and since I was getting very little interest on them I decided to sell them.  When I need to buy something, I'll either buy it directly with btc or buy some of whatever local currency is desired by the seller.

otherwise you face the certainty of your USD depreciating every day you hold it by a constant %. I'd rather take a risk of (temporary) price dive.

You miss the point, why would people buy BTC as a currency, just so they can sell it again when they need to spend it.....and face two transaction costs and also the risk of it going down while they hold it.

It's weird that everyone keeps saying you can't buy anything with bitcoins.  As of now, you can buy most of the major currencies in the world with bitcoins.  The only people for whom that would be a problem is people like me that didn't mine them, but instead got btc by selling some of their USD.  But if I can't spend btc directly when the time comes, I'll just buy some local currency and use that instead.

The main reason this is a terrible argument, is that you just assume mary has $500.

Either she has both BTC and Dollars. Or she has none. Either way all your scenarios become a lot less polar.

if I was a webshop I wouldn't be able to accept btc with the large fluctuation in price. it would have to be imediant conversion into cash or I could lose my ass. purchase a product at 3 a lb and then sell at 3.75 just a few points moving puts me at a loss.

Anyway it is nice to have few next places to spend Bitcoins on. I was worrying the price rise is just pure speculation, but it can drive the Bitcoin useability at web shops as well

how many other threads are you going to repeat this in?

This is excellent to hear! Congrats and let us know when you have your shops open.

I wish I could hold my money bit I have to cash out . I invested when the coins where 120 dollars . Now I can start my dream job finally. I'm opening few webshops wich I will accept bitcoins! Thanks bitcoin to start my life

Exactly.

What about for making payments and money transfers abroad? Banks charge very high fees for wire transfers. There are also high fees if you use Western Union. And with both of those methods, there is usually a significant delay before the recipient gets their money. With bitcoin, you can transfer money instantaneously and with only a tiny fee or no fee at all.

Also, the reason there is not much commerce yet using bitcoin is because it's still in the phase of being used as a high-growth investment vehicle. That phase isn't going to last forever. The growth rate will gradually decrease until eventually the price levels off at some kind of an equilibrium with fiat currencies -- maybe only some very small annual increase after that, because bitcoin will still have a lower inflation rate than most government-issued money. At that stage, people won't just hoard it anymore, because other investments will have a greater ROI. Maybe that point will be reached in 3 to 5 years, at a MUCH higher price than today.

Coinseeker, your example is completely invalid considering "Mary" could purchase 10 btc INSTANTLY using Coinbase. Mary could purchase her TV and refurnish most of her home with that 10 btc if she wanted to.

Coinbase has always had the instant buy option, did you just happen to forget that for a better argument? You do have a point in the current state that BTC is in, but you're comparing a young, developing, 4 year old BTC system to the financial system that has taken 100+ years to build. Of course BTC is not going to be there 100% yet. GET REAL

Or depreciate 20%.   

You leave out...

During those 2 weeks, bitcoin appreciates 20%

Total cost: $505
Time: 2 weeks
Left with $100 in extra bitcoins.

+1 and also because this http://www.youtube.com/watch?v=HX0fIi3H-es

at the end of the day, if you want to know what bitcoins true ultimate number one utility is, the one utility that makes it so that even if it had not one single other use case than it would still be valuable, this news article makes it pretty obvious.

http://autos.aol.com/article/gold-bars-hidden-car/

THIS is why bitcoin changes everything.

Better pocket radio than nothing.
No seriously, Bitcoin is risky investment as some stocks are

Says the guy with incorrect grammar and whose ignore button glows ever brighter

And what happens if when she wants to buy her TV the value of Bitcoins have crashed such that the same coins can now only buy her a pocket radio?

Hey, people took their beanie babies seriously back in the day I expect that in a few years, the word "bitcoin" will be in the same league as beanie babies, as a failed investment vehicle that people latched onto in hopes of a huge ROI that fizzled out. I don`t think bitcoins will go away entirely, and they very welll could be used for similar utility as today (ie. engaging in illegal online activities such as drugs and crimes against children). There will be online articles about how people paid $500 for one "coin", believing that it was the dawn of a new era, but eventually people realized that there was no good reason to obtain them, and many people lost their shirts as a result when values fell back down to a few dollars per coin. People will wonder... what the hell were they thinking?

Mary has some savings.  She can put them on the bank, and earn less than inflation, or she can put them in bitcoin, losing 1% one-time.
After a few years, Mary decides she wants to buy a TV.  In a freak occurrence, in contrasts to all previous years, bitcoin didn't return massive gains, but gained only a few percent to compensate for inflation.  Mary happily buys the TV with her bitcoin.  She then decides to receive her future paychecks in bitcoin, negating the conversion fees.

This bubble keep inflating and inflating. I wonder how it will pop. Oh, I know. Hard and violent!

It does seem to me that the vast majority of money flowing into bitcoin right now is not to be spent on the current selection of good and services.

However...how much does day to day spending using as a currency/the bitcoin economy etc. REALLY matter?

The parallel between bitcoin and gold is often drawn. Nobody buys gold to spend it on a coffee. It has value despite the fact you can't use it to buy things off Amazon...so perhaps although bitcoin is technologically capable to be used as a day to day currency (with quite a bit of  additional infrastructure development and merchant acceptance) it may warrant a high value even if it is not being used in this way.

As a few smart people have wisely pointed out, people are not buying Bitcoins to spend them.  I mean, how stupid do you have to be to believe that.  Let's look at it:

Scenario A:

Mary wants to buy a new TV.  That TV costs $500.  She goes to her favorite online store, types in her debit card number and her debit card is charged. TV arrives in about a week.

Total Cost:  $500
Total Time:  ~ 1 week

Scenario B:

Mary wants to buy a new TV.  That TV costs $500.  Mary also heard the hype on a new technology called Bitcoin and figured this is the best payment method for her.  So, Mary goes on Coinbase and purchases $500 worth of Bitcoin and pays 1%.  Then she waits a week.  When the Bitcoin's finally arrive, she goes to her favorite online store, only to find that they don't accept Bitcoin.  

Scenario C:

But lets assume her favorite store does take Bitcoin.    Mary wants to buy a new TV.  That TV costs $500.  Mary also heard the hype on a new technology called Bitcoin and figured this is the best payment method for her.  So, Mary goes on Coinbase and purchases $500 worth of Bitcoin and pays 1%.  Then she waits a week to get her Bitcoins.  And it's a good thing because it will take Mary at least that to figure out how to safely store her new Bitcoins and download the blockchain.  Or, maybe she just stores them on Coinbase, which is the ideal way to store Bitcoins anyway.    When the Bitcoin's finally arrive, she goes to her favorite online store, pays for the TV with her $500 worth of Bitcoins and the TV arrives in about a week.

Total Cost:  $505
Total Time:  ~ 2 weeks

Moral of the story.  GET REAL!  There is no Bitcoin "adoption" because there is almost nothing to adopt.  You can barely use them.  Cash and debit cards are FAR superior to Bitcoin's, as it relates to making everyday transactions. The day may come where this is no longer true, but that day is not today, nor any day during this bubble inflation.  The is pure speculative buying.  People are simply looking to get a high ROI.  If you believe anything contrary to that, you are delusional and I would NEVER take advice from you because you simply do not live in reality.

Right, because beanies babies are useful, like a censorship resistant digital currency with a hard supply limit and bounded inflation.

We are at the dawn of a new era. Bitcoin needs to stabilize which it will someday but maybe not soon.
Every currency, every stock starts off volatile and stabilizes at some point.

That said people having fiat money need to spend it fast before it gets worthless whereas with bitcoin spending less will give you more.

I`m sure a beanie baby collector in 1996 would have said the same thing. 

Nobody who has held for 18 months or more has taken a loss.

A currency that fluctuates anywhere from 10% to 80% in one day is a horrible store of value. It`s far too voiltile now to have any confidence in future valuations. In order for it to stabilize, people need to actually use it to purchase goods and services, not just speculate. I just don`t see the need for people to convert their fiat to bitcoin, costing them fees, so they can buy Subway sandwiches.

I believe that speculation solves a catch-22, notably, how do you get people on board a currency and use it, when there is nothing to use it on? Well...the speculators get on board first, whether it's driven by greed, or a dream, or whatever. But now that early speculators, or even investors that have produced large profits, have some wealth, they will begin to want to spend it. Why? Because, you have the choice of either cashing out your winnings and paying a hefty gains tax on it, or directly spending the coins into something you want.  And the market will respond by offering items for those speculators that they can pay in bitcoins directly. And we're already seeing this happen: it's cumbersome, for the most part, at least for now, but remember, you can't solve the catch-22 otherwise.

So because there are speculators in bitcoin driving up the price you aren't for bitcoin? Did I misunderstand this?

To be honest, until you prove you donated your fiat from those exchanged coins to good causes, it is basically the cheapest commodity to date (pretty much): TALK.

I've learned one huge truth in life, is that TALK IS CHEAP.

I have to agree, new price will be set around 200. But with more merchants accepting BTC, the price can rise with time

Oh so your claims are still baseless then right? You admit it by the fact that you still have no proof to share with all of us.

If you had access to such information you would be able to make a boat load on knowing exactly when prices would go up and down.

Just because  Chinese person buys bitcoins for a profit does not mean that it isn't "adoption". In fact I could claim that it is temporary adoption if we want to get technical. AS they have possession of the coin(s) and thus have "adopted" it even if for a short period (in your presumed scenario that ALL the chinese are doing this and not just some LOL).

Your definition of adoption is clearly different than what the market's believe that means.

That is what your argument boils down to: a difference in definition of a word. Period.  

I think btc is going to glow red hot through $1000 reaching $1200 with a retrace back to $950.

i do get tired of repeating this, pehaps I should put it in a signature.


I sold all my Bitcoins at 200ish and donated the resultant fiat to good causes. I did not get involved with Bitcoin to make money for doing nothing, I was interested in a genuine alternative currency model, not the speculation which has taken over.

Do you have any bitcoins? If the exchanges are supposed to be providing fraudulent prices then how much would you say 1 BTC should go for? I may be interested in obtaining some from you. Maybe we could form our own exchange together and broadcast the REAL price to all of the internet. Maybe our real exchange with real prices will set all the others straight.

I will publish my research soon, there are just a few things I need to finish off, and also provide each of the exchanges mentioned and opportunity to address the findings prior to my going public with them.

Prove it.

That's right you can't. Your claims are baseless.

May be, may be not...

Assuming that it is a bubble , it is still in its infancy . Each " financial bubble inflated " at least 2 years. Bitcoin at this " inflation " (assuming that the bubble ) started when the price for the first time crossed $ 200 .

And when all your friends start talking about Bitcoin , when every newscast on television reports of how Bitcoin has risen in the last day , when the taxi driver who rides you boasted that he invested in Bitcoin .... only then we can talk for " financial bubble", and only then is the right time to sell your Bitcoin.

no this is the market pricing in the future. its not a bubble, its a dream.

This is a bubble, and if you think otherwise you are an idiot to be frank.  This is no 'organic growth'.  Bitcoins rise is fuelled by media driven newbie buying who think they can get rich.  The crash will come.  

Each instrument has so on "psychological resistance". In Bitcoin, it was $ 100, then $ 200, then $ 500, ... now is $ 1,000. I guess will break it soon and then will follow a more serious correction (at least 30% correction). Up to $ 1,000 but do not expect correction greater than 10%.
This is just my opinion and should not be taken into account regarding the buying or selling of *coins.

+1 There's some true believers out there. Most are just in it for the profit though.

I totally agree with this. I buy Bitcoins because I think they'll go up not because they're any use to me. I totally believe that 99% of the bitcoin buyers are like this, does anyone really believe that all the people buying BTC through exchanges and forcing the price up are doing so because they want to spend it - really, how, where.

The real truth that no-one wants to acknowledge is that the actual Bitcoin economy i.e. not gambling, mining or speculation is still virtually non-existent. If it were growing someone would be shouting about it, yet all I hear is silence....

Its because the Chinese don't count, obviously.

evidence please

At best the Chinese are doing what everyone else in the bubble is doing; buy Bitcoins in the hope they make a profit. It is not adoption as a currency.

At worst, well I have a paper I'm finishing on this topic. Synopsis: The Bitcoin 'exchanges' and the 'market' they supposedly create are a fraud. Price action is driven by non existent trades on the platforms. The manipulation is now so rampant across competing exchanges that the entire legitimate trading activity of the exchanges is drowned by a sea of fakery. There isn't a single exchange I examined for this research that isn't engaged in this activity.

Which only works if you can

a) get more retailers to accept Bitcoin

b) Find a greater fool so you can cashout into state fiat.


Not much meaningful progress on point a) despite a lot of hyperbole, and b) is only going to get harder as regulators start to turn the screw

This times 100.

And that makes sense because?

Chinese adopt it but there is no adoption...lol 

future buying power as a tool against moneary inflation

Usefulness to... invest and make quick money?

School me on what else people are buying for atm...

Its not a bubble.

I repeat.

Its not a bubble.

Bitcoin is NOT A STOCK.

People need to stop comparing it to stock behavior.

Bitcoin is increasing in value as its adoption around the world increases.

The adoption by China caused a $200 jump. 

As other large groups adopt, the value will increase.

Bitcoins "inherent value" is its usefulness around the world.

The more people who use it, the higher the value goes.

This is not a "pretend" stock exhange with "monopoly money" like the financial guys keep babbling about (tulips, beanie babies, etc).

This is a new technology that is about 2% of the way towards worldwide adoption, and its already valued at $500.

Do the math.

Once exchanges start going up $100+ a day, then we are is serious bubble mode.  If it gets to that point I would seriously consider selling.  But, then again I'm just trading on EMA's so it doesn't really matter either way.

Who cares if anyway you have your btc value at least doubled in a year, even if you buy at the very peak of the "bubble".

Nobody really knows where is the top and where is the bottom.

It means that 80% of people who sells btc during rally will regret it in the next 12 months. Of course, the lucky 20% of sellers will re-buy cheap and gain more btc.

In Las Vegas you have more chances to win just betting on red or black than while speculating bitcoin.

Still want to gamble?


P.S. I'm talking about assets denominated in bitcoin. If you looks for gaining USD/EUR, just sell now and buy your extra big mac as a prize.

October 10 to June 11 we saw a 500-fold price increase. The actual bubble is still very small in relation to that one.

Watch the timeline. Today chinese started buying and immediately all other exchanges went up. I was watching the charts today and a minute after a chinese rise there was immediate rush of other exchanges.

Yeah, though I dunno what else there is to say to be honest.

Yes, all indications show we are in a bubble. Nobody knows when it will pop.
Yes, there will be corrections upcoming, possibly steep ones. No one knows when or how steep.
Historically, bubbles have lasted longer than this one before popping. No one knows if that will be the case for this one.

What are they saying exactly in that article, besides "there's a bubble and investors should be cautious."?

This might help give an idea: http://lpplmarketwatch.blogspot.de/2013/11/the-bubble-index-bitcoin-november-16.html

Coinbase and mtgox are both above btcchina, I'm not sure how they're following china.  If anything currently china is following the usd/btc.

since we are breaking psychological barriers day by day i think the rise will continue for at least a while. a crash would be fine but i don't think we'll see much of it in the next weeks.

I opt for a crash. Price is purely dictated by chinese market. There was no adoption, no major company support and still the price trippled in just a month. China goes up and sudenly all other markets follow without thought. If they decide to sell, for whatever reason, whole world will sell in panic.

Hey there. I've had my coins locked away for a long time. But yesterday I happened to stumble upon the current Bitcoin price and I was amazed by the sudden rise in value.

However, I do remember the very steep drop that happened half a year ago in April.


So, what do you think? Is the bitcoin going to crash down as fast again this time? Or will it keep on rising, at least for a little while? And why?