Topic: SlipperySlope's Bubble Collapse Journal - page 7. (Read 24795 times)

Well, some people play percentage game and they rather have 10k coins than 5k. Cause the former means a place among the 80 wealthiest, and the latter is only a G160 ticket 

Who cares if  a coin will be worth 1M $ ? 

Supply, demand.  The potential demand is staggering.


If only 0.1% of the estimated $19 trillion in US retirement assets http://www.ici.org/research/stats/retirement/ret_12_q4 moved into Bitcoin that would be $19 billion and all else being equal the Bitcoin exchange rate would climb x10.

The US population is over 311,000,000 http://www.google.com/publicdata/explore?ds=kf7tgg1uo9ude_&met_y=population&idim=country:US&dl=en&hl=en&q=us%20population.  How many of them own/control that $19 trillion?  Roughly speaking there are ~1% people of each age (by year).  So, for example, there are maybe some 31,000,000 under the age of 10 years -- I bet they don't own/control much IRA yet.  Let's say at least half of the IRA money is in the hands of 30 to 60 year olds -- let's call it $10 trillion.  $10 trillion in the hands of about 100,000,000 Americans; only $100,000 each on average (so my math isn't totally off).

All, we need is 1% of them to take an interest in self-directed IRAs investing in Bitcoin.  Enough interest to move only 10% into Bitcoin and we still get x5.

Mt. Gox claims to be having 20,000 new accounts/day.  At that rate, if even just 10% bring in just $1,000 that's $700,000,000 per year and I bet we'll get close x2 with speculator amplification.

The speculators can bubble and bust Bitcoin again and again but the wave of new money coming in will fundamentally drive up the exchange rate.

I wouldn't bet on that.

We never were even going to breach $100. Banks are open again, trading will be in full swing.... And this is just Tuesday morning.

I can't even begin to imagine the stupidity of rashly selling off at these current prices at this point in the game.

If we do not breach 95, we have a bullish pattern. If we do breach it, then we will go sub-79.

If we do not breach 66, then we are heading up. If we do breach it, then we crash to 50.

If 50 holds, it is very bullish. If not, I am puzzled. 50 is the line of defence that should hold.

Conclusion: everything that can realistically happen is bullish now. Only "problem" is that if you buy at 100 and you could have bought next week at 50, you net half the amount of coins + feel stupid in the process.

Evidence disputing the direct comparison of this bubble to the one in 2011.

To which I responded ...

24 days after the April 11 peak



Has the Great Capitulation of 2013 ended? Did we reach bottom at $80 two days ago?

The retracement to $115 is an impressive recovery, albeit low volume which suggests less significance within containing patterns.

My entire analysis of the price action after April 10 as recorded in this thread, depends on whether, and to what extent, bitcoin bubble 1 provides insight when viewed from the framework of speculative financial bubble theory. And by the latter, I mean mostly the common predictable behaviors that bubbles have.  And in particular, the part of the theory that pertains to my analysis is a very simple rule: From the peak of the bubble, prices decline all the way back to the underlying trend in approximately the same duration as it took for the bubble to rise to its peak.

Therefore my primary bitcoin analysis constraint - the outermost technical pattern - is that prices will very likely collapse from the peak at $266 to somewhere between $13.50, which was a price in January, and the current post-peak low of $50. The price bias is thus strongly downwards.

In the accompanying chart, the smaller blue line indicates the current retracement. The larger downtrend appears to collide with it soon, and one trend will prevail.

I believe that conditions will soon enable the initiation of another down leg to this capitulation. To me, it has not gone deep enough when compared to the corresponding capitulation from August 2011.

I humorously described on the wall thread a scenario from among those I think likely.


My lowest bid got filled at $82 and my highest ask got filled at $104.

I commend your goals and I applaud your efforts. A dealer network should not only secure more bitcoin investments, it will as you say permit large-order trades in the network even if blinded by lag at Mt.Gox plus you could have robust order routing among all the exchanges. These things will help mediate the factors in the bitcoin economy that lead to price bubbles.

Most traders here have little knowledge about the size and global scope of the client-facing precious metals market, which I assume that you are actually addressing. I think that your pitch to them should be irresistible - simply a very attractive hot new financial product to add to their hard money business.

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I fear that the very infrastructure you are creating will be the foundation for the next, and order-of-magnitude larger bitcoin bubble 3. In two years, the next flood of new bitcoin adopters, merchants, users, traders and investors will be, say 10-20x more than what we have now.

LOL.

OK, but a great bubble was only in 2011, and the one that takes bitcoin to more than its long term value will be named the greatest bubble.

A bubble that is forgotten in 2 weeks is not a bubble in my vocabulary but maybe in yours, i am fine with it.

The only time I net sold bitcoin was over $200 (except some trades that I plan to buy back in max 6 hours, and some OTC trades that are wildly profitable marginwise, and I delay buyback max 72 hours; sometimes for the reason that it takes such long time to get the money to Bitstamp, other times I little bit play with my anticipation of a negative price action).

After dealer network, bubbles will be pretty much a thing of the past, so after June, no bubbles.

Yeah, me too. Put your money where your mouth is. Willing to buy 500BTC at $120 in this precise moment?

By bubble, I mean the commonly accepted notion of speculative financial bubble as used by the press, traders, financiers and economists. I am not so much interested in your definition of bubble, but rather how you would characterize the price action from January 1 to present, and how to profit from it.

Namely, could you recognize the next bubble when it comes? And if you did, what actions would you take? If you do not accept that prices will be lower after a bitcoin bubble collapse then how can you execute a sell-high, buy-back-low trade - you would not have the preconditions to make the trade!

You believe that the underlying bitcoin economy is growing very very rapidly. I believe that it is growing very rapidly. My belief allows for bubbles.

I'll sell you bitcoins for $120 now.  How many would you like?

There was no bubble in April, 2013, since there was no negative month. Oh yes, and if you think we will be at $120 at the end of this month (to score a wash), you can as well sell all your bitcoins to me now 

+1

the great doubling of my portfolio

I named this bear market The Great Dollar Extraction.

Perhaps it should be called The Great Bitcoin Expansion, but it just doesn't have the same ring to it.

Good point. It is useful to give proper names to instance concepts that are frequently referred to, e.g everyone knows what the Great Depression, and Great Recession are. The bubble collapse of 2011 featured six selling capitulations. I named the first and most significant one the Great Capitulation of 2011.

I believe, and will not know for sure until this bubble collapse is complete, that the current capitulation will be the most significant one this time around - we have already dropped a crushing 45% in three days, and many traders now realize that the bubble is over.

Is this the Great Capitulation of 2013? I think so, and I think too that it is not over, and will not be the bottom of the bubble collapse.

Why is this capitulation Great rather than just you know capitulation?

If it went from 70 to 10 in two days then you might be justified in calling it Great.