Demand is increasing rapidly.. hash rate is increasing rapidly.. and yet the market cap is still relatively small, and a very, very small percentage of the population is in the game. I would not call the current valuation a "bubble" at all.
If BTC were a public company, most people wouldn't even consider investing. That's because a $600M market cap is miniscule in size, and would be likely to offer substantial risk. Of course this type of comparison isn't totally fair, since BTC is much more than just something to invest in -- it is a currency with unique and highly-desirable properties. There will certainly be some corrections along the way, but I do think the chances of a massive sell-off down to single digits is just out of the question (barring some unforeseen catastrophe). Could we see $30s or $40s again? Absolutely. There will be volatility. However, long-term prospects look very rosey, indeed.
Topic: Will the bubble burst? - page 6. (Read 4925 times)
All bubbles eventually burst. They usually revert back to wherever the bubble started and at about the same time interval that the bubble grew. Pretty symmetrical.
In the long run a $60 bitcoin might not be a bubble at all. More and more businesses might accept it, drug money might be poured into. Money from hedge funds might drive up the price just like investment firms are driving up housing prices in place hit hard by the real estate bubble.
However a glitch here, a bug there and a virus there can send prices tumbling.
Perhaps a bit coin might be priced where gold is in the near future.
However a glitch here, a bug there and a virus there can send prices tumbling.
Perhaps a bit coin might be priced where gold is in the near future.
If you fancy yourself a speculator then prepare to periodically loose your shirt.
Ha ha - I love the concept of Bitcoin AND I am a speculator - tried to buy when it was down in $5 - but my bank could only transfer yen to jp - and I kinda forgot the idea for 8 months. So much for laziness!
I read about digital currency with facination in my studying time (the same time Gopher browser was the only decent browser) LOL
I lost so much money on speculation before - but what the hack, this time its for a good idea also! I get a new shirt.
oh by the way, i have been checking almost non stop twitter for "bitcoin" and always appear a tweet from "The economist" saying that the graph looks like a bubble. Seems there are many players out there that are quite worried of bitcoin.
My two cents, take with grain of salt -- I do not see anything on the horizon that could burst this bubble (if it is a bubble) anytime soon. There are too many people still getting introduced to BTC for new buyers to dry up. It would take a seriously detrimental piece of bad news to crash BTC and the good news will continue.
My take is that this run-up is part of a second Hype Cycle. At some point we will sell-off ($100, $200, ??). One key to BTC success is Joe Consumer. Joe Consumer, for the most part, has no need for BTC. The market is pricing in a great deal of future acceptance - so much that it will certainly be letdown when Joe Consumer doesn't widely adopt BTC as quickly as many would have hoped. Speculation will succumb to correction. If/when BTC does come back down it will still be higher than the lows of the past because there is an underlying magic to the genius concept of BTC.
And then this cycle will likely repeat at a higher level, perhaps. Unless, of course, the idea of BTC as an alternative asset never quites catches on completely. Really, BTC has two threads of success -- consumer adoption and the potential as an alternative asset -- and they feed on each other.
These hype cycles are normal for groundbreaking technologies. The solar industry ebbed and flowed over decades in a similar fashion. Full adoption was always right around the corner. Things always take longer to gel and there is almost always letdown in the meantime.
To believe in BTC, one has to value the network effect and popularity that makes BTC tradable as a virtual commodity/currency. Yes, BTC provides other benefits but those benefits can be found in other virtual commodity/currencies (LTC, PPC, etc.). It is this network effect that makes BTC the Coca-Cola of virtual currency. IMO there is value in this.....the only reason gold has value is because we all believe it does.
My take is that this run-up is part of a second Hype Cycle. At some point we will sell-off ($100, $200, ??). One key to BTC success is Joe Consumer. Joe Consumer, for the most part, has no need for BTC. The market is pricing in a great deal of future acceptance - so much that it will certainly be letdown when Joe Consumer doesn't widely adopt BTC as quickly as many would have hoped. Speculation will succumb to correction. If/when BTC does come back down it will still be higher than the lows of the past because there is an underlying magic to the genius concept of BTC.
And then this cycle will likely repeat at a higher level, perhaps. Unless, of course, the idea of BTC as an alternative asset never quites catches on completely. Really, BTC has two threads of success -- consumer adoption and the potential as an alternative asset -- and they feed on each other.
These hype cycles are normal for groundbreaking technologies. The solar industry ebbed and flowed over decades in a similar fashion. Full adoption was always right around the corner. Things always take longer to gel and there is almost always letdown in the meantime.
To believe in BTC, one has to value the network effect and popularity that makes BTC tradable as a virtual commodity/currency. Yes, BTC provides other benefits but those benefits can be found in other virtual commodity/currencies (LTC, PPC, etc.). It is this network effect that makes BTC the Coca-Cola of virtual currency. IMO there is value in this.....the only reason gold has value is because we all believe it does.
Why should we care? Oh, wait. You're playing games with switching back and forth between currencies? Good luck with that.
If you just use it as a currency, as intended, this is a non issue. If you fancy yourself a speculator then prepare to periodically loose your shirt.
But to seriously answer your question, if it is a bubble then it will pop. That is what all bubbles do.
If you just use it as a currency, as intended, this is a non issue. If you fancy yourself a speculator then prepare to periodically loose your shirt.
But to seriously answer your question, if it is a bubble then it will pop. That is what all bubbles do.
You are so right
If you believe in the bitcoin as a future currency you shouldnt care if its a bubble
I don't think it is a bubble. If we value the bitcoin economy in 500 mill $, that is nothing compared to the international transactions of money or forex. Just in the case bitcoin in 5 years gets a 10% of the international transactions of money due to it's inherent advantages over let's say mastercard, we would be talking of a bitcoin economy 10.000 times bigger and that in just 5 years would mean bitcoin valuation still has to climb a lot of numbers. Not a bubble on my opinion.
Cheers,
Cheers,
Why should we care? Oh, wait. You're playing games with switching back and forth between currencies? Good luck with that.
If you just use it as a currency, as intended, this is a non issue. If you fancy yourself a speculator then prepare to periodically loose your shirt.
But to seriously answer your question, if it is a bubble then it will pop. That is what all bubbles do.
If you just use it as a currency, as intended, this is a non issue. If you fancy yourself a speculator then prepare to periodically loose your shirt.
But to seriously answer your question, if it is a bubble then it will pop. That is what all bubbles do.
I'm not saying it's never going to drop below the 60s again, but long term it will only keep increasing as adaptation becomes more widespread.
I'll just add this:
1. New technology adoption is typically growing exponentially.
2. BTC value is linearly proportional to Bitcoin adoption.
It's not a bubble, it's the price adjusting to reflect the increase in demand. If demand decreases... say for example the influx of new websites accepting Bitcoin slows or reverses, the silk road shuts down, or some government(s) outlaw or restrict the use of BTC, the price will decrease accordingly. There is exponentially less speculation involved with the recent price increases than there was in previous years. Bitcoin is stabilizing as a useable currency. Even the Silk Road dying wouldn't hurt too badly at this point.
I'm not saying it's never going to drop below the 60s again, but long term it will only keep increasing as adaptation becomes more widespread.
I'm not saying it's never going to drop below the 60s again, but long term it will only keep increasing as adaptation becomes more widespread.
June 2011 was obviously, with hindsight, a bubble.
This looks a bit bubbleish, but may or may not be. Actually, I don't feel this rise is a bubble in the sense of BTC being overvalued. But a short-term downward correction is quite likely to occur (severity of which unknown) before the rocket relaunches. To replicate the 2011 bubble proportionally, we'd have to be seeing $1000+ prices in the near future, though.
This looks a bit bubbleish, but may or may not be. Actually, I don't feel this rise is a bubble in the sense of BTC being overvalued. But a short-term downward correction is quite likely to occur (severity of which unknown) before the rocket relaunches. To replicate the 2011 bubble proportionally, we'd have to be seeing $1000+ prices in the near future, though.
If so many refer to it as a bubble, it is not a bubble. Once everyone and the shoeshine boy refers to it as a "new paradigm" and "permanently high plateau" then maybe it is a bubble. For this to happen BTCs gotta be above 1mil$ a pop.
I would also guess part of the reason for the big rise in value is the small "crash" on March 12th. My theory is that this kind of negative event actually create a psychologically positive outcome.
I.e. many people were sort of expecting, and a bit afraid, that some kind of bug may be discovered in Bitcoin which compromises it. Then when it occured, but wasn't as bad as many had feared, it kind of felt positive and reassuring. Also looking at the chart, the price didn't fall incredibly far, which suggests there were many people buying when others were selling, and it had a lot of 'support' regardless.
Personally I think this might have more to do with the recent rise than the Cyprus situation.
I.e. many people were sort of expecting, and a bit afraid, that some kind of bug may be discovered in Bitcoin which compromises it. Then when it occured, but wasn't as bad as many had feared, it kind of felt positive and reassuring. Also looking at the chart, the price didn't fall incredibly far, which suggests there were many people buying when others were selling, and it had a lot of 'support' regardless.
Personally I think this might have more to do with the recent rise than the Cyprus situation.
To me its not a bubble, price is just catching up BTCs value.
If you think we're in a bubble, you shouldn't be buying.
I'm not so sure the term "bubble" is a good one.
Since Bitcoin is so many things - currency, commodity, payment system, protocol, internet money - you can't make direct comparisons with say; the real estate market or the gold and silver markets.
IMO Bitcoin has several of the qualities of an Internet startup company with new/revolutionary technology. And some startups just keep gaining value until they are multi-billion dollar companies...
The fact that valuation is rising fast does not necessarily imply that there is a bubble.
Since Bitcoin is so many things - currency, commodity, payment system, protocol, internet money - you can't make direct comparisons with say; the real estate market or the gold and silver markets.
IMO Bitcoin has several of the qualities of an Internet startup company with new/revolutionary technology. And some startups just keep gaining value until they are multi-billion dollar companies...
The fact that valuation is rising fast does not necessarily imply that there is a bubble.
The price should be going up as long as ppl have confidence in market.
It's been pretty crazy watching it climb this past month.
It will burst but not to rock bottom levels
Jump to: