Topic: If no imminent financial Armageddon, Bitcoin fair value below $50? (Read 3277 times)

Why would there ever be a lack of money coming in, in the absence of something terrible occurring?  If price drops naturally, it just makes the long term enthusiasts more likely to buy up coin. 

If you look at the price curve, perhaps at a smoothed average, you will see that the growth is exponential. This means that the total bitcoin market capitalization will very soon grow beyond any attainable value.

Why would there ever be a lack of money coming in, in the absence of something terrible occurring?  If price drops naturally, it just makes the long term enthusiasts more likely to buy up coin.  

Bubbles do not pop when something bad happens, they pop when there is no more money pouring in to hold up the price.

How can you accurately predict it will not take several months?  I don't think you can.  I was worried this might be a bubble too, but if the bubble didn't "pop" when the blockchain forked, what is going to take to cause it to break? 

I don't think a mere lack of inflation will cause it to burst, it's going to take some serious negative event, something huge and difficult to fix.  I'm not sure such a thing even exists, bitcoin seems to be a lot more resilient now.

No, I mean from now. It will not take several more months from now until it bursts.

If bitcoin survives for another good number of years and does not get overtaken by something like a hypothetical bitcoin2, its prospects are, indeed, bright.

However, at the moment this rather extreme price bubble is about to severely damage its fair reputation.

Currently it is not the Cypriots or the Spaniards who buy bitcoin. It is only a growing bunch of newbie speculators and their mothers. The only reason why they buy bitcoin is because the price is rising. And the price is only rising because these people are buying bitcoin. This is how bubbles are made.

There has been no significant increase in real-world use of bitcoins. A few more companies are now accepting bitcoins, but very few customers actually pay in bitcoin. Therefore the price will sink back to pre-bubble levels within about half a year after this bubble bursts, which it may do within weeks.

As usual it is impossible to make any precise estimate about how high a bubble will go, because a single person can prick it by selling a lot of bitcoins and thus inciting a sell-off panic. If nobody does, such a bubble can grow to strange heights. But even then this one cannot grow to $1,000. As the Germans say, trees do not grow into heaven.

It is a bit difficult to say what the pre-bubble value is, because this one began before the previous one of 2011 was fully deflated. I am sure though that the bitcoin price will fall to some $20 level and quite possibly into the single digits. $50 is way out of reason. Let's talk again in half a year's time.

Why do you say that?  It has already been several months.

What do you think these people will do when they see the bitcoin price drop like a rock through their buying price? Look at the 2011 bubble.

Where do you see any evidence for that? I could just barely believe a doubling of real-world use, but please tell me who buys which goods or services for bitcoin? namecheap.com or wordpress.com? Reddit Gold? Have you ever heard of anybody paying a bitcoin there?

What we can easily predict is that it will not take several months to burst.

The rise is currently roughly exponential. Therefore it is easy to estimate for how long this can still go on.

All historic price bubbles I have seen have a pointed peak. This bitcoin bubble will be no different. The only difficulty is that nobody can predict the height of that peak. What we can easily predict is that it will not take several months to burst.

Say if this is all true and there is a huge excess bubble of speculation on top of the trade for goods/services, the bubble can get massively bigger, it can keep growing for years, most of the world still doesn't know about bitcoin.

What do you think these people will do when they see the bitcoin price drop like a rock through their buying price? Look at the 2011 bubble.


Where do you see any evidence for that? I could just barely believe a doubling of real-world use, but please tell me who buys which goods or services for bitcoin? namecheap.com or wordpress.com? Reddit Gold? Have you ever heard of anybody paying a bitcoin there?

I am actually a namecheap.com customer. I just filled up my account there from my credit card. That was before they started accepting bitcoin. Then I actually paid Ƀ1 to them, just to try it out. But I doubt that even I will do that again, because it needlessly complicates my bookkeeping.

There are plenty of people besides the Cypriots and Spaniards (who ARE buying Bitcoin, as we have heard in first hand accounts) who want to use Bitcoin as a store of value to protect them against theft through confiscation and hyper-inflation. Increased demand for this utility of Bitcoin has and will continue to increase the price.

As for the rest of the statement, I'm not going to hold your hand through the last year's worth of developments and stories. But you must have been living under a rock if you think "real-world use" of Bitcoin hasn't significantly increased. That is just plain ludicrous.

If bitcoin survives for another good number of years and does not get overtaken by something like a hypothetical bitcoin2, its prospects are, indeed, bright.

However, at the moment this rather extreme price bubble is about to severely damage its fair reputation.

Currently it is not the Cypriots or the Spaniards who buy bitcoin. It is only a growing bunch of newbie speculators and their mothers. The only reason why they buy bitcoin is because the price is rising. And the price is only rising because these people are buying bitcoin. This is how bubbles are made.

There has been no significant increase in real-world use of bitcoins. A few more companies are now accepting bitcoins, but very few customers actually pay in bitcoin. Therefore the price will sink back to pre-bubble levels within about half a year after this bubble bursts, which it may do within weeks.

As usual it is impossible to make any precise estimate about how high a bubble will go, because a single person can prick it by selling a lot of bitcoins and thus inciting a sell-off panic. If nobody does, such a bubble can grow to strange heights. But even then this one cannot grow to $1,000. As the Germans say, trees do not grow into heaven.

It is a bit difficult to say what the pre-bubble value is, because this one began before the previous one of 2011 was fully deflated. I am sure though that the bitcoin price will fall to some $20 level and quite possibly into the single digits. $50 is way out of reason. Let's talk again in half a year's time.