Topic: Will the bubble burst? - page 5. (Read 4925 times)

Exactly. One can't stay parabolic forever. At some point, there will be a correction (very normal).....but IMO there is more room to run for the time being ($150+). A lot of the new money coming into this.....Probably a mix of hot-money (with little tech savvy) and perhaps high-risk fund money, as others have insinuated. In the fund management world, I assure you that only very high-risk money (small %'s of VC type funds) will be flowing into this......your typical hedge fund will not be investing in this in the near future. I seriously doubt event-driven funds even know what BTC is, and 95% of private equity is way way too conservative to invest directly into BTC. VCs will be much more interested in investing in start-ups associated with BTC. And we are farther from BTC as an 'everyman system' than everyone is thinking.

Sorry for the double-negative, but there can't not be over-exuberance with BTC. The potential is too big for people not to get too too excited in the short-term. This rise, which will likely continue, will end up pricing perfection. Nothing is perfect or guaranteed. But hey, If the network effect can give FB a $100B market cap, perhaps the network effect can give BTC something similar......I am a believer, but a realist in that nothing goes up forever and some point we will get way way over-extended (where, who knows?). That's just the nature of the game.....

Smart money was 2010/2011

While BTCINVESTOR is absolutely right that bitcoin is not stock, the way the market plays out with periods of panic buying and selling could still apply. I'm as much as, or almost as much as a bull as BTCINVESTOR but I know the bears will come out to play from time to time. This is not something to be feared, it is an opportunity to be revered.

Bitcoin.

The question clearly presupposes a bubble but we should not jump to this conclusion on the basis of a rapid price change alone. A bubble is when prices cannot be supported by fundamentals. The ultimate question is what is the fundamental value of Bitcoins? This will depend ultimately on what share of global transactions are made with Bitcoins. I don't know the answer to that, but as long as the integrity of the currency proves itself (still an "if"), its market potential could be much greater. Having said that, when there is panic momentum buying of Bitcoins, without regard to fundamentals, it is very reasonable to see the latecomers panic out again should prices begin to fall, exacerbating a decline. So regardless, Bitcoins are likely to continue to experience huge volatility, and a sensible approach would be fade intense episodes of buying or selling in the market.

One of the best analyses presented on this so far.

If you think this is going to act anything like the stock market, think again. I have been investing actively in the stock and options markets for over 20 years. I have never seen anything like what Bitcoin is doing. The forces acting on it and the nature of how it is bought and sold are entirely different and totally astounding. Some serious players are getting down with Bitcoin right now. I am constantly talking the back channels. The big money managers are going to be taking over the place soon, and that's when you will see the serious money. It's chump change right now.

Maybe it's just we have got a lot of working class miners out there that are not really experienced in finance. Not sure. But it seems to me that the market has been owned by amateurs up until now. These price multiples you are seeing are like raw ribeye in front of Lions. I'm lecturing some investors this month, with millions of dollars mobilized and they are ready to dump out of USD pegged plays. They want me to show them how it works and how to buy in. And I'm just one solitary fella. Every one I have told about the bitcoin market has pretty much gone bananas.

We are seeing an evolutionary progression from a nerd-owned system (no offense, im quite a nerd too) to a pro-owned and "everyman" owned system.

I highly exhort you to think about Bitcoin differently than what you may already think you know. It's not a stock. It's not a bond. It is entirely new and different, drastically different than anything that has come before.

 

At this point it just seems like panic buying

Do you read the news? Did you know the bitcoin reward was halved in December?
Did you know that bitpay is getting a lot of money from venture capitalists?
Did you know the government has created guidelines for bitcoin?
Did you know Cyprus is in the toilet? And so is Spain, New Zealand, Greece, Argentina, and others...?
Did you know about ASIC and the higher difficulty rates we will be experiencing soon?
There's no bubble, welcome to the real value of bitcoin, and this is just the beginning.

I dont think we will see the area below $50 again.

I had this thought too. I'm holding/watching the market right now - and I'm a big believer in buy-and-hold strategy when it comes to honest money like gold or bitcoin.

If BFL turns out to be vaporware, the bubble will burst like no other

We're still in the smart money phase of your chart.  The fact that I can buy more than 1 BTC is evidence.  Only 10M in circulation.  These little blips are nothing.  Accumulate and wait.  Buy some goods and services now and then on the way up, spread the joy.  Positively contribute to the community.  What happens when 1 out of 10 people in the worlds largest 10 cities, want in on bitcoin?  25M people chasing 10M bitcoins.  Just to get into the community.  Do you think the price of one btc will be $50/per?  Do you think the bitcoin economy will be $500m?  Try something like 100B, or 200x what it is today.  Can't know for sure.  What if, what if, what if.  1 out of 10 people in the world's top 100 cities?  1 Trillion economy.  2000x what it is today.  Amazing to think about.

Talk of a bubble this early on is absurd.

  

These cycles are part of the inherent flaws of capitalism; nothing is immune. The thing that will unmask this temporary over-exuberance, if that is indeed what is going on, is the fact that Bitcoin will take much longer for the consumer to adopt than everyone is anticipating. With such a small market cap, the new merchants that are accepting BTC won't see much additional business. Can it exist only as primarily a speculatory alternative asset if it is not being widely used for its primary purpose? If so, for how long.....

Because BTC is a longer term play, it will probably be subject to several of these up-down cycles (probably doubtful to get washed out like after the first cycle, barring the unforeseen). It's so unique in that it has characteristics of so many different types of assets. It's part tech stock (an incredible tech story), part currency, part commodity....it's even like a piece of fine art in the sense that the technology can be perfectly copied and replicated (LTC, PPC, etc) but only the original holds high value.

The network effect and popularity are ultimately giving BTC this value.....it has brand appeal, which is also quite interesting. A rose by any other name....

I don't think that the bubble will burst because of all the new users and business but if it burst it won't go under 30 dollars.

To be fair, you could say the same about the New York Stock Exchange right now.

All bubbles burst. Know the signs... I would say we're in the "Enthusiasm" or "Greed" stages.

Um... that might be taking it a bit far to say that the fiat currencies are crashing against Bitcoin, but right now BTC seems more solid than anything Fiat by far.

I agree with bitsil. It's the fiat currencies that are losing value in relation to bitcoin.

As you would know from experience; "buy the dip." 

The bubble isn't in BTC at all.  It's in fiat currencies.  Helicopters have been dropping paper all over the world for years now.  This is the bubble.  As paper purchasing power continues to erode, BTC holds/gains value against paper.  Since there is no underlying paper market (derivatives) in BTC (unlike gold), it cannot be manipulated and suppressed.  As everything else goes to shit, BTC remains the shining beacon of light.  And demand will continue for many years to come.  Sooner or later, noone will be able buy a whole BTC.  Only a fraction.  And the early adopters will be wholly rewarded for assuming most of the risks. 

Facebook, a fad website with a $100B market value?  Bubble.

I agree. However, there are many good small cap stocks that have sub $600MM market caps.

People are buying into the potential of "a currency with unique and highly-desirable properties"; it has not yet been widely adopted so it has not yet become a useable currency for most people. I think merchants will adopt it much more quickly than consumers because BTC is becoming du jour.

If BTC achieves what it is designed to achieve, the long-term outlook is beyond amazing.....it's unprecedented.