Bitcoin now the largest quantifiable bubble in history?

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HomerJ
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Re: Bitcoin now the largest quantifiable bubble in history?

Post by HomerJ » Fri Dec 08, 2017 10:46 am

peterinjapan wrote:
Thu Dec 07, 2017 11:07 pm
There are some use cases. People in Europe are working and sending money home via BTC to their families. I bought some meds I want to keep private using BTC just because it seemed like a fun thing to do in 2017.
Private from whom? Who would have known about the medication you bought if you had paid cash or used a credit card?

Thesaints
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Re: Bitcoin now the largest quantifiable bubble in history?

Post by Thesaints » Fri Dec 08, 2017 11:00 am

technovelist wrote:
Fri Dec 08, 2017 2:01 am
I agree with most of this, but the strong version of the efficient market hypothesis cannot be correct. For if it were, it would be impossible ever to identify a bubble while it was in progress.

This is clearly incorrect because quite a few people identified the NASDAQ dotcom bubble while it was in progress.
To be precise, the EMH states that markets are efficient on average, not that every single participant is.

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telemark
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Re: Bitcoin now the largest quantifiable bubble in history?

Post by telemark » Fri Dec 08, 2017 11:15 am

peterinjapan wrote:
Thu Dec 07, 2017 11:07 pm
There are some use cases. People in Europe are working and sending money home via BTC to their families. I bought some meds I want to keep private using BTC just because it seemed like a fun thing to do in 2017.
Sure, but you don't need a whole bitcoin to do something like that. As long as you buy immediately before the transaction, anything you can with one bitcoin you can do just as well with 0.01 bitcoin, or 0.0001, etc. Increased application for bitcoin does not increase its value as a speculative asset. To put it another way, the normal rules of supply and demand don't apply here.

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steve50
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Re: Bitcoin now the largest quantifiable bubble in history?

Post by steve50 » Fri Dec 08, 2017 11:20 am

I could easily pop this bubble by buying into Bitcoins (still looking into it and have not done it yet). Every individual stock that I thought was a sure bet (outside of index funds) has gone down after I made the purchase, so have a pretty good track record :happy

lazydavid
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Re: Bitcoin now the largest quantifiable bubble in history?

Post by lazydavid » Fri Dec 08, 2017 11:47 am

It's definitely a bubble, but likely not the largest in history. I do think it's bigger than either RE in 2007/2008 or oil in 2013 though. Here's my reasoning:

Bubbles are all about overvaluing a thing. The closest thing Bitcoin has to an intrinsic value is the cost of production. Right now, one of the best mining rigs you can purchase costs around $3700, and should produce one bitcoin per year. Add in a year's worth of electricity, and you're at about $5k/coin. So this week we've been at 3-4x production cost. That's the bubble. Next week when futures contracts become available, we should start seeing arbitrageurs leveraging them to make "guaranteed" profit on this gap, and I would expect that to drop the price over time.

rkhusky
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Re: Bitcoin now the largest quantifiable bubble in history?

Post by rkhusky » Fri Dec 08, 2017 11:58 am

lazydavid wrote:
Fri Dec 08, 2017 11:47 am
It's definitely a bubble, but likely not the largest in history. I do think it's bigger than either RE in 2007/2008 or oil in 2013 though. Here's my reasoning:

Bubbles are all about overvaluing a thing. The closest thing Bitcoin has to an intrinsic value is the cost of production. Right now, one of the best mining rigs you can purchase costs around $3700, and should produce one bitcoin per year. Add in a year's worth of electricity, and you're at about $5k/coin. So this week we've been at 3-4x production cost. That's the bubble. Next week when futures contracts become available, we should start seeing arbitrageurs leveraging them to make "guaranteed" profit on this gap, and I would expect that to drop the price over time.
If this is a valid way to estimate "bubbleness," how does it work for things like diamonds and gold?

zeugmite
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Re: Bitcoin now the largest quantifiable bubble in history?

Post by zeugmite » Fri Dec 08, 2017 12:02 pm

lazydavid wrote:
Fri Dec 08, 2017 11:47 am
It's definitely a bubble, but likely not the largest in history. I do think it's bigger than either RE in 2007/2008 or oil in 2013 though. Here's my reasoning:

Bubbles are all about overvaluing a thing. The closest thing Bitcoin has to an intrinsic value is the cost of production. Right now, one of the best mining rigs you can purchase costs around $3700, and should produce one bitcoin per year. Add in a year's worth of electricity, and you're at about $5k/coin. So this week we've been at 3-4x production cost. That's the bubble. Next week when futures contracts become available, we should start seeing arbitrageurs leveraging them to make "guaranteed" profit on this gap, and I would expect that to drop the price over time.
Mining can just catch up to the point where it costs $15k or whatever to mine one coin. The production cost is not fixed but adjusts with hashing difficulty. The gap between $5k and $15k though is an indication of the uncertainty/spread over the time horizon of mining-to-selling. I guess at least miners (the relatively more rational ones in this whole thing) are only willing to bet on $5k/coin at the moment -- using your numbers.

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Re: Bitcoin now the largest quantifiable bubble in history?

Post by Valuethinker » Fri Dec 08, 2017 12:06 pm

Thesaints wrote:
Fri Dec 08, 2017 11:00 am
technovelist wrote:
Fri Dec 08, 2017 2:01 am
I agree with most of this, but the strong version of the efficient market hypothesis cannot be correct. For if it were, it would be impossible ever to identify a bubble while it was in progress.

This is clearly incorrect because quite a few people identified the NASDAQ dotcom bubble while it was in progress.
To be precise, the EMH states that markets are efficient on average, not that every single participant is.
https://johnhcochrane.blogspot.co.uk/20 ... bbles.html

courtesy Larry Swedroe, is the closest thing I know of to a "rational bubble" explanation of what is going on. And John Cochrane for sure is a semi strong EMH believer.

I don't know of any finance academic who thinks that the stock market is strong form efficient (cannot outperform even in possession of inside information).

EMH is a hypothesis, not a theory, and it simply states (in the Type II form) that you cannot outperform the stock market sustainably without access to inside information.

A corollary would be that asset markets are efficiently priced on the risk-return spectrum. On average, higher return requires higher risk. No free lunches.

Valuethinker
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Re: Bitcoin now the largest quantifiable bubble in history?

Post by Valuethinker » Fri Dec 08, 2017 12:09 pm

rkhusky wrote:
Fri Dec 08, 2017 8:13 am
Is Salvator Mundi at $450M in a bubble?
Quite possibly, given the identity of the purchaser.

Remember it was the purchase of the Van Gogh "Sunflowers" for a record $37 million dollars in 1987 to a Japanese purchaser that nearly called the peak of their bubble.

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Re: Bitcoin now the largest quantifiable bubble in history?

Post by Valuethinker » Fri Dec 08, 2017 12:11 pm

Tallis wrote:
Fri Dec 08, 2017 10:22 am
rkhusky wrote:
Fri Dec 08, 2017 8:13 am
Is Salvator Mundi at $450M in a bubble?
One painting can't be a bubble. What is the market in Old Masters paintings doing in general?
Well the Hedge Funds were driving up the price of modern art-- you weren't a proper HF if you didn't have some Damien Hirst or something, let alone an Andy Warhol.

I believe the Old Masters market has been quieter. The problem is steadily declining liquidity as paintings move into public museum and gallery hands. That would contribute to price spikes, though.

https://en.wikipedia.org/wiki/List_of_m ... _paintings

wikipedia provides at least some guide.

This is what happens when you have negative cost of carry-- adjusted for inflation, the cost of borrowing is negative for at least some market participants. Every asset market gets inflated.
Last edited by Valuethinker on Fri Dec 08, 2017 12:18 pm, edited 2 times in total.

Valuethinker
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Re: Bitcoin now the largest quantifiable bubble in history?

Post by Valuethinker » Fri Dec 08, 2017 12:16 pm

lazydavid wrote:
Fri Dec 08, 2017 11:47 am
It's definitely a bubble, but likely not the largest in history. I do think it's bigger than either RE in 2007/2008 or oil in 2013 though. Here's my reasoning:

Bubbles are all about overvaluing a thing. The closest thing Bitcoin has to an intrinsic value is the cost of production. Right now, one of the best mining rigs you can purchase costs around $3700, and should produce one bitcoin per year. Add in a year's worth of electricity, and you're at about $5k/coin. So this week we've been at 3-4x production cost. That's the bubble. Next week when futures contracts become available, we should start seeing arbitrageurs leveraging them to make "guaranteed" profit on this gap, and I would expect that to drop the price over time.
There's a reductio ad absurdum danger in that line of argument ... we could create "Boglecoins" here, and maybe 10 of them, and BH's could wind up driving them up to $10k each when their intrinsic value is $1. So... bigger bubble than US Real Estate? Oil? Bitcoin?

I think you have to look at market size as well.

The US housing bubble was the biggest in history because US housing fell 40% on a value of stock of say $20 trillion? (I'd have to look up, but there were c. $8 trillion of US mortgage backed securities).

Oil again would be say 27 billion barrels pa so from 100 to 40 is a loss of say $1.7 trillion (the stock loss would be larger, the problem is the "stock" of oil is near infinite *at the right price* ie changes with price-- Canada has bigger reserves than Saudi Arabia (say 250 bn barrels) but would need well north of $100/bl to make economic extraction of much of it).

On this metric bitcoin is pretty small fry. $300bn? That's not the market cap of a leading tech stock.

Nate79
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Re: Bitcoin now the largest quantifiable bubble in history?

Post by Nate79 » Fri Dec 08, 2017 12:25 pm

To me the biggest misunderstanding that I see of bitcoin proponents is that understanding how it works and having a bright future somehow translates into understanding the future market price. This is the same for stock picking, that somehow fundamental analysis of a company's financials somehow gives you the ability to project future stock price. If it was that easy then active management would easily outperform passive index funds.

The other major problem is the thinking that just because the supply of bitcoin is limited to 21 million somehow means that the price of bitcoin will reach some astronomical level. The problem with this is that the supply of cryptocurrency is unlimited, even if the supply of bitcoin is limited. As we have seen over 1000 cryptocurrencies come along there is an unlimited supply of crypto coins potentially.

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Epsilon Delta
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Re: Bitcoin now the largest quantifiable bubble in history?

Post by Epsilon Delta » Fri Dec 08, 2017 1:33 pm

technovelist wrote:
Fri Dec 08, 2017 2:01 am

I agree with most of this, but the strong version of the efficient market hypothesis cannot be correct. For if it were, it would be impossible ever to identify a bubble while it was in progress.

This is clearly incorrect because quite a few people identified the NASDAQ dotcom bubble while it was in progress.
Disproving the efficient market hypothesis takes a bit more than that. You have to show that they predict bubbles with useful (exploitable) accuracy not just luck.

For example consider a perma-bear. When asked "Is X in a bubble?" the perma-bear responds "Yes, X is in a bubble." A perma-bear "predicts" every single bubble, but the existence of perma-bears does not disprove the EMH.

There are also people who when asked "Is X in a bubble?" produce a random answer. Some technical analysts probably fall in this class. They will sometimes be right but again it does not disprove EMH.

Proving the EMH would be even harder. That's why it's a hypothesis, rather than a theory or a fact or on the ash heap of history.

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buccimane
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Re: Bitcoin now the largest quantifiable bubble in history?

Post by buccimane » Fri Dec 08, 2017 4:28 pm

lazydavid wrote:
Thu Dec 07, 2017 7:50 pm
telemark wrote:
Thu Dec 07, 2017 7:03 pm
But the coin got away from me, rolled away, and disappeared down a sewer grate :(
Did it float? We all float down here.... :twisted:
+1
underappreciated comment :twisted:
A man convinced against his will is of the same opinion still

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Re: Bitcoin now the largest quantifiable bubble in history?

Post by randomguy » Fri Dec 08, 2017 4:43 pm

TomCat96 wrote:
Fri Dec 08, 2017 2:39 am
Somewhere back I read that evidence seems to support the semi-strong form as the most reflective of current stock markets.
It's definitely not strong form.

at any rate, is bitcoin now the largest quantifiable bubble in history?
I don't think that's even close to remotely true, either in real or nominal form.

You had a bigger bubble in 2008, resulting from the global real estate bubble, with mortgages that were securitized, tranched, and sold the world over into pension funds, money markets, and bank portfolios, creating a massive systemic risk. Even in nominal terms, that something at least ten times the size of bitcoin today, considering it was a global real estate bubble. Yes Im saying the bubble in global real estate exceeded 2.7T nominal. Today in nominal it would be far more. (I dont particular like either the CPI or PCE. I think inflation is considerably higher if you look at the monetary expansion...but I digress)

If you want to consider things in real terms, which is the real question we ought to be asking, bitcoin is just too small considering it is a single asset class with exposure distributed globally, with few systemic ties to the actual global financial system.

To be frank Oil in 2013 was probably a bigger bubble than bitcoin is today. I will say one thing. For an asset of its size, bitcoin truly commands a disproportionate amount of attention and media. This forum is one example. Of course all these numbers may change in the future, but I just don't see it yet.
Bitcoin is something like 50 billion. Compare that to the losses that world, exxon, AOL (granted this is a bit trickey with the mergers), AIG, Lucent, and it is just noise

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Re: Bitcoin now the largest quantifiable bubble in history?

Post by Valuethinker » Fri Dec 08, 2017 5:41 pm

randomguy wrote:
Fri Dec 08, 2017 4:43 pm
TomCat96 wrote:
Fri Dec 08, 2017 2:39 am
Somewhere back I read that evidence seems to support the semi-strong form as the most reflective of current stock markets.
It's definitely not strong form.

at any rate, is bitcoin now the largest quantifiable bubble in history?
I don't think that's even close to remotely true, either in real or nominal form.

You had a bigger bubble in 2008, resulting from the global real estate bubble, with mortgages that were securitized, tranched, and sold the world over into pension funds, money markets, and bank portfolios, creating a massive systemic risk. Even in nominal terms, that something at least ten times the size of bitcoin today, considering it was a global real estate bubble. Yes Im saying the bubble in global real estate exceeded 2.7T nominal. Today in nominal it would be far more. (I dont particular like either the CPI or PCE. I think inflation is considerably higher if you look at the monetary expansion...but I digress)

If you want to consider things in real terms, which is the real question we ought to be asking, bitcoin is just too small considering it is a single asset class with exposure distributed globally, with few systemic ties to the actual global financial system.

To be frank Oil in 2013 was probably a bigger bubble than bitcoin is today. I will say one thing. For an asset of its size, bitcoin truly commands a disproportionate amount of attention and media. This forum is one example. Of course all these numbers may change in the future, but I just don't see it yet.
Bitcoin is something like 50 billion. Compare that to the losses that world, exxon, AOL (granted this is a bit trickey with the mergers), AIG, Lucent, and it is just noise
I would not put Exxon into that category. Dependence on an oil price, and big swings in the stock price, are in no sense a bubble. Oil may have been a bubble, but the market was fairly rational about Exxon-- the best managed of the big publicly listed multi-national oil companies (MNOCs) which are, in fact, small relative to the state-owned National Oil Companies (Saudi Aramco is the biggest of that ilk, followed by the Iranian State oil company I believe).

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Re: Bitcoin now the largest quantifiable bubble in history?

Post by technovelist » Fri Dec 08, 2017 7:00 pm

Valuethinker wrote:
Fri Dec 08, 2017 5:41 pm
randomguy wrote:
Fri Dec 08, 2017 4:43 pm
TomCat96 wrote:
Fri Dec 08, 2017 2:39 am
Somewhere back I read that evidence seems to support the semi-strong form as the most reflective of current stock markets.
It's definitely not strong form.

at any rate, is bitcoin now the largest quantifiable bubble in history?
I don't think that's even close to remotely true, either in real or nominal form.

You had a bigger bubble in 2008, resulting from the global real estate bubble, with mortgages that were securitized, tranched, and sold the world over into pension funds, money markets, and bank portfolios, creating a massive systemic risk. Even in nominal terms, that something at least ten times the size of bitcoin today, considering it was a global real estate bubble. Yes Im saying the bubble in global real estate exceeded 2.7T nominal. Today in nominal it would be far more. (I dont particular like either the CPI or PCE. I think inflation is considerably higher if you look at the monetary expansion...but I digress)

If you want to consider things in real terms, which is the real question we ought to be asking, bitcoin is just too small considering it is a single asset class with exposure distributed globally, with few systemic ties to the actual global financial system.

To be frank Oil in 2013 was probably a bigger bubble than bitcoin is today. I will say one thing. For an asset of its size, bitcoin truly commands a disproportionate amount of attention and media. This forum is one example. Of course all these numbers may change in the future, but I just don't see it yet.
Bitcoin is something like 50 billion. Compare that to the losses that world, exxon, AOL (granted this is a bit trickey with the mergers), AIG, Lucent, and it is just noise
I would not put Exxon into that category. Dependence on an oil price, and big swings in the stock price, are in no sense a bubble. Oil may have been a bubble, but the market was fairly rational about Exxon-- the best managed of the big publicly listed multi-national oil companies (MNOCs) which are, in fact, small relative to the state-owned National Oil Companies (Saudi Aramco is the biggest of that ilk, followed by the Iranian State oil company I believe).
I'm going to guess that he meant "Enron".
In theory, theory and practice are identical. In practice, they often differ.

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tadamsmar
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Re: Bitcoin now the largest quantifiable bubble in history?

Post by tadamsmar » Fri Dec 08, 2017 7:49 pm

Epsilon Delta wrote:
Fri Dec 08, 2017 1:33 pm
technovelist wrote:
Fri Dec 08, 2017 2:01 am

I agree with most of this, but the strong version of the efficient market hypothesis cannot be correct. For if it were, it would be impossible ever to identify a bubble while it was in progress.

This is clearly incorrect because quite a few people identified the NASDAQ dotcom bubble while it was in progress.
Disproving the efficient market hypothesis takes a bit more than that. You have to show that they predict bubbles with useful (exploitable) accuracy not just luck.

For example consider a perma-bear. When asked "Is X in a bubble?" the perma-bear responds "Yes, X is in a bubble." A perma-bear "predicts" every single bubble, but the existence of perma-bears does not disprove the EMH.

There are also people who when asked "Is X in a bubble?" produce a random answer. Some technical analysts probably fall in this class. They will sometimes be right but again it does not disprove EMH.

Proving the EMH would be even harder. That's why it's a hypothesis, rather than a theory or a fact or on the ash heap of history.
The EMH has been disproved numerous times. The various behavioral finance Noble Economics Prize winners did it multiple times over. Andrew Metrick proved that the NCAA Tournament bracket pool was not efficient. Probably some others.

Fama says that the proofs are not on a grand enough scale, not sufficient losses involved in those proofs.

As long as most Bogleheads are not having to eat dog food, there is no proof!

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Re: Bitcoin now the largest quantifiable bubble in history?

Post by MindBogler » Fri Dec 08, 2017 7:50 pm

HomerJ wrote:
Fri Dec 08, 2017 10:46 am
peterinjapan wrote:
Thu Dec 07, 2017 11:07 pm
There are some use cases. People in Europe are working and sending money home via BTC to their families. I bought some meds I want to keep private using BTC just because it seemed like a fun thing to do in 2017.
Private from whom? Who would have known about the medication you bought if you had paid cash or used a credit card?
Right? :confused

I hope the poster to whom you are referring isn't discussing his purchase of illegal narcotics using bitcoin. Either way, the black market nature and the inability to enforce taxation will eventually cause these nascent currencies to be banned. Any cryptocurrency that succeeds will do so at the pleasure of established governments or not at all. These things are like beanie babies and no one understands them. It's the 00's all over again.
Last edited by MindBogler on Fri Dec 08, 2017 7:50 pm, edited 1 time in total.

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tadamsmar
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Re: Bitcoin now the largest quantifiable bubble in history?

Post by tadamsmar » Fri Dec 08, 2017 7:50 pm

Epsilon Delta wrote:
Fri Dec 08, 2017 1:33 pm
technovelist wrote:
Fri Dec 08, 2017 2:01 am

I agree with most of this, but the strong version of the efficient market hypothesis cannot be correct. For if it were, it would be impossible ever to identify a bubble while it was in progress.

This is clearly incorrect because quite a few people identified the NASDAQ dotcom bubble while it was in progress.
Disproving the efficient market hypothesis takes a bit more than that. You have to show that they predict bubbles with useful (exploitable) accuracy not just luck.

For example consider a perma-bear. When asked "Is X in a bubble?" the perma-bear responds "Yes, X is in a bubble." A perma-bear "predicts" every single bubble, but the existence of perma-bears does not disprove the EMH.

There are also people who when asked "Is X in a bubble?" produce a random answer. Some technical analysts probably fall in this class. They will sometimes be right but again it does not disprove EMH.

Proving the EMH would be even harder. That's why it's a hypothesis, rather than a theory or a fact or on the ash heap of history.
The EMH has been disproved numerous times. The various behavioral finance Noble Economics Prize winners did it multiple times over. Andrew Metrick proved that the NCAA Tournament bracket pool was not efficient. Probably some others.

Fama says that the proofs are not on a grand enough scale, not sufficient losses involved in those proofs.

As long as most Bogleheads are not having to eat dog food, there is no proof!

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Re: Bitcoin now the largest quantifiable bubble in history?

Post by bovineplane » Fri Dec 08, 2017 7:53 pm

Many of you are new to Bitcoins. Check out the charts since it was created. It has 'bubbled' before and popped. Not quite this big but it still blew up in short order before tumbling back to relative obscurity. It will tumble again before muddling along for a bit and blow up again and repeat. The last big bubble was end of 2013. There have been 4-5 run-ups though on a much smaller scale. The last 6 months though have really broken that mold.

Not an investor. I did send 200 bitcoins to buy my wife some flowers in mid 2012 or 13 during a Christmas holiday with the family. BIL told me about it and showed me how it worked. We bought the coins together (~$50) and sent them to a third party 'business' that simply called 1800flowers and sent the roses. Best ~$3 million dollar flowers (at today's market) that I ever bought. I have never owned Bitcoin since. At one time I think he had 1000 bitcoin or so. Didnt keep any of them.

I did get into Litecoin mining in 2014. Still have those coins and forgot about them until June when my BIL told me about the run-up. Glad I never recycled that laptop that I stored the coins on. It is now 'worth' ~mid 5 figures. For tax reasons and complication I will likely never sell them unless it becomes life changing money.

This bubble will burst. Only question is how many will consider 'investing' when it drops significantly for the next run?

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Re: Bitcoin now the largest quantifiable bubble in history?

Post by technovelist » Fri Dec 08, 2017 7:59 pm

MindBogler wrote:
Fri Dec 08, 2017 7:50 pm
HomerJ wrote:
Fri Dec 08, 2017 10:46 am
peterinjapan wrote:
Thu Dec 07, 2017 11:07 pm
There are some use cases. People in Europe are working and sending money home via BTC to their families. I bought some meds I want to keep private using BTC just because it seemed like a fun thing to do in 2017.
Private from whom? Who would have known about the medication you bought if you had paid cash or used a credit card?
Right? :confused

I hope the poster to whom you are referring isn't discussing his purchase of illegal narcotics using bitcoin. Either way, the black market nature and the inability to enforce taxation will eventually cause these nascent currencies to be banned. Any cryptocurrency that succeeds will do so at the pleasure of established governments or not at all. These things are like beanie babies and no one understands them. It's the 00's all over again.
This is obvious to anyone who has been paying attention, but it is lost on those with :moneybag blocking their vision.

I expect the first realization of how vulnerable cryptocurrencies are to government action will come in 2018 when the IRS starts auditing people who have had Bitcoin transactions.

And to those on other boards who have told me that "they can't find out who has them", my answer was "that's what everyone thought about Swiss bank accounts too".
In theory, theory and practice are identical. In practice, they often differ.

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Epsilon Delta
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Re: Bitcoin now the largest quantifiable bubble in history?

Post by Epsilon Delta » Fri Dec 08, 2017 9:07 pm

technovelist wrote:
Fri Dec 08, 2017 7:59 pm
And to those on other boards who have told me that "they can't find out who has them", my answer was "that's what everyone thought about Swiss bank accounts too".
There are lots of people who think Bitcoin is not anonymous. A simple google of "are bitcoin transactions anonymous" shows that at the very best using bitcoin anonymously requires a lot of extra effort by the user.


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Re: Bitcoin now the largest quantifiable bubble in history?

Post by technovelist » Sat Dec 09, 2017 12:55 am

What a world we live in that the Onion would provide such a good explanation!
In theory, theory and practice are identical. In practice, they often differ.

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Re: Bitcoin now the largest quantifiable bubble in history?

Post by technovelist » Sat Dec 09, 2017 12:56 am

Epsilon Delta wrote:
Fri Dec 08, 2017 9:07 pm
technovelist wrote:
Fri Dec 08, 2017 7:59 pm
And to those on other boards who have told me that "they can't find out who has them", my answer was "that's what everyone thought about Swiss bank accounts too".
There are lots of people who think Bitcoin is not anonymous. A simple google of "are bitcoin transactions anonymous" shows that at the very best using bitcoin anonymously requires a lot of extra effort by the user.
Which I'm sure a lot of people aren't bothering with.

But even if they did, there is always a weak link somewhere that can be pressured to turn over information.
In theory, theory and practice are identical. In practice, they often differ.

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Re: Bitcoin now the largest quantifiable bubble in history?

Post by Valuethinker » Sat Dec 09, 2017 5:41 pm

technovelist wrote:
Sat Dec 09, 2017 12:55 am
What a world we live in that the Onion would provide such a good explanation!
The Onion has almost ceased to be funny the last 2-3 years because reality has paced it. In fact, sometimes I have to check whether I am reading the Onion, or the actual news pages.

The issue after 9-11 remains one of my all time favourite pieces of satire, in any country. And this comes from someone whose country invented Monty Python, Not the Nine O'Clock News, Blackadder (especially the last one set in WW1 on the Western Front), Peter Cook & Dudley Moore, etc. etc.

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Re: Bitcoin now the largest quantifiable bubble in history?

Post by Evie » Sat Dec 09, 2017 7:43 pm

I find this quote entertaining:

"Tulips are not durable, not scarce, not programmable, not fungible, not verifiable, not divisible, and hard to transfer. But tell me more about your analogy..."

Cryptocurrency and blockchain technology aren't going anywhere. Bitcoin may eventually fall, but others will take it's place and the cumulative market value will eventually be in the trillions.

I would advise everyone here to do some research on blockchain technologies while we are still in the early phase. Yes, this is the early phase. Bitcoin is old and outdated but many technologies with real-world utility are coming soon. Big things are happening in 2018.

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Re: Bitcoin now the largest quantifiable bubble in history?

Post by WanderingDoc » Sat Dec 09, 2017 8:21 pm

I have cash out all of my initial capital in Bitcoin.

Price per BTC reached ~$18,500 two days ago, and today it is precipitously dropping and is now under $14,000. I wouldn't be surprised if it is under $10,000 by weekends end. I just cashed out around ~$15,000 per BTC and now hold a little Bitcoin, Ethereum, Litecoin, and some smaller ones.

I realized that the time I spent following this last few days, while fun, was also anxiety inducing. Not enough money to be made, plus Bitcoin didn't pay me any INCOME. "And for that reason ... I'm out!" :)

I will stick to what I know - real estate. That will be ~80% of my assets, and will sprinkle in equities via the TSP and Roth IRA.

G'luck y'all!
Rent where you live, buy where others pay your mortgage for you. | I'm not looking to get rich quick, I'm not looking to get rich slow (indexing}, I'm looking to get rich.. for sure {real estate}.

technovelist
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Re: Bitcoin now the largest quantifiable bubble in history?

Post by technovelist » Sat Dec 09, 2017 10:33 pm

Evie wrote:
Sat Dec 09, 2017 7:43 pm
I find this quote entertaining:

"Tulips are not durable, not scarce, not programmable, not fungible, not verifiable, not divisible, and hard to transfer. But tell me more about your analogy..."

Cryptocurrency and blockchain technology aren't going anywhere. Bitcoin may eventually fall, but others will take it's place and the cumulative market value will eventually be in the trillions.

I would advise everyone here to do some research on blockchain technologies while we are still in the early phase. Yes, this is the early phase. Bitcoin is old and outdated but many technologies with real-world utility are coming soon. Big things are happening in 2018.
Cryptocurrencies are also not scarce, which alone makes them unsuitable for use as money. Thousands of them already exist and an unlimited number of them can be created.

Yes, blockchain technology may eventually be very important. But that doesn't mean that anyone is going to get rich investing in it. Did anyone get rich from investing in HTML?
In theory, theory and practice are identical. In practice, they often differ.

fatlever
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Re: Bitcoin now the largest quantifiable bubble in history?

Post by fatlever » Sat Dec 09, 2017 10:54 pm

WanderingDoc wrote:
Sat Dec 09, 2017 8:21 pm
I have cash out all of my initial capital in Bitcoin.

Price per BTC reached ~$18,500 two days ago, and today it is precipitously dropping and is now under $14,000. I wouldn't be surprised if it is under $10,000 by weekends end. I just cashed out around ~$15,000 per BTC and now hold a little Bitcoin, Ethereum, Litecoin, and some smaller ones.

I realized that the time I spent following this last few days, while fun, was also anxiety inducing. Not enough money to be made, plus Bitcoin didn't pay me any INCOME. "And for that reason ... I'm out!" :)

I will stick to what I know - real estate. That will be ~80% of my assets, and will sprinkle in equities via the TSP and Roth IRA.

G'luck y'all!

It certainly is interesting to see how this unfolds. :sharebeer

larryslocum1982
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Re: Bitcoin now the largest quantifiable bubble in history?

Post by larryslocum1982 » Sat Dec 09, 2017 11:05 pm

Expectation of the bitcoin buyers is that institutions will start buying bitcoin after bitcoin futures start trading on Cboe this Sunday. The people I know who bought bitcoin think institutional buying will push the price even higher and then they can sell to the institutions.

I can not see why an institution would bitcoin. Don't institutions have charters? Are they even allowed to buy bitcoin?
Does an one here has solid info on plans of institutions?

I think this is a big bubble.

EnjoyIt
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Re: Bitcoin now the largest quantifiable bubble in history?

Post by EnjoyIt » Sun Dec 10, 2017 2:12 am

technovelist wrote:
Sat Dec 09, 2017 10:33 pm
Evie wrote:
Sat Dec 09, 2017 7:43 pm
I find this quote entertaining:

"Tulips are not durable, not scarce, not programmable, not fungible, not verifiable, not divisible, and hard to transfer. But tell me more about your analogy..."

Cryptocurrency and blockchain technology aren't going anywhere. Bitcoin may eventually fall, but others will take it's place and the cumulative market value will eventually be in the trillions.

I would advise everyone here to do some research on blockchain technologies while we are still in the early phase. Yes, this is the early phase. Bitcoin is old and outdated but many technologies with real-world utility are coming soon. Big things are happening in 2018.
Cryptocurrencies are also not scarce, which alone makes them unsuitable for use as money. Thousands of them already exist and an unlimited number of them can be created.

Yes, blockchain technology may eventually be very important. But that doesn't mean that anyone is going to get rich investing in it. Did anyone get rich from investing in HTML?
Exactly. Owning a bitcoin, lite coin, etherium or whatever does not give you a piece of the blockchain technology. If some major industry starts using it, they will not be giving bitcoin owners royalties for that tech. Blockchain can be revolutionary but it has nothing to do with the value of the coins using it.

Chip
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Re: Bitcoin now the largest quantifiable bubble in history?

Post by Chip » Sun Dec 10, 2017 4:56 am

buccimane wrote:
Fri Dec 08, 2017 4:28 pm
lazydavid wrote:
Thu Dec 07, 2017 7:50 pm
telemark wrote:
Thu Dec 07, 2017 7:03 pm
But the coin got away from me, rolled away, and disappeared down a sewer grate :(
Did it float? We all float down here.... :twisted:
+1
underappreciated comment :twisted:
I was wondering how many readers got IT.

Valuethinker
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Re: Bitcoin now the largest quantifiable bubble in history?

Post by Valuethinker » Sun Dec 10, 2017 8:19 am

Evie wrote:
Sat Dec 09, 2017 7:43 pm
I find this quote entertaining:

"Tulips are not durable, not scarce, not programmable, not fungible, not verifiable, not divisible, and hard to transfer. But tell me more about your analogy..."

Cryptocurrency and blockchain technology aren't going anywhere. Bitcoin may eventually fall, but others will take it's place and the cumulative market value will eventually be in the trillions.

I would advise everyone here to do some research on blockchain technologies while we are still in the early phase. Yes, this is the early phase. Bitcoin is old and outdated but many technologies with real-world utility are coming soon. Big things are happening in 2018.
The mental analogy I come up with is investing in Netscape when it floated. They never actually managed to make any profit out of the internets, I don't think.

Goods and services using blockchain may become big. But you can't invest in the algorithm, per se, any more than you can invest in the HTTPS algorithm. And Sir Tim Berners-Lee, who invented the www. construct, deliberately did not patent it, to encourage its use.

Valuethinker
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Re: Bitcoin now the largest quantifiable bubble in history?

Post by Valuethinker » Sun Dec 10, 2017 8:19 am

EnjoyIt wrote:
Sun Dec 10, 2017 2:12 am
technovelist wrote:
Sat Dec 09, 2017 10:33 pm
Evie wrote:
Sat Dec 09, 2017 7:43 pm
I find this quote entertaining:

"Tulips are not durable, not scarce, not programmable, not fungible, not verifiable, not divisible, and hard to transfer. But tell me more about your analogy..."

Cryptocurrency and blockchain technology aren't going anywhere. Bitcoin may eventually fall, but others will take it's place and the cumulative market value will eventually be in the trillions.

I would advise everyone here to do some research on blockchain technologies while we are still in the early phase. Yes, this is the early phase. Bitcoin is old and outdated but many technologies with real-world utility are coming soon. Big things are happening in 2018.
Cryptocurrencies are also not scarce, which alone makes them unsuitable for use as money. Thousands of them already exist and an unlimited number of them can be created.

Yes, blockchain technology may eventually be very important. But that doesn't mean that anyone is going to get rich investing in it. Did anyone get rich from investing in HTML?
Exactly. Owning a bitcoin, lite coin, etherium or whatever does not give you a piece of the blockchain technology. If some major industry starts using it, they will not be giving bitcoin owners royalties for that tech. Blockchain can be revolutionary but it has nothing to do with the value of the coins using it.
Don't spoil the fun. People here are going to be rich, rich! I tell you!

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Veiled
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Re: Bitcoin now the largest quantifiable bubble in history?

Post by Veiled » Sun Dec 10, 2017 1:59 pm

EnjoyIt wrote:
Sun Dec 10, 2017 2:12 am
technovelist wrote:
Sat Dec 09, 2017 10:33 pm
Yes, blockchain technology may eventually be very important. But that doesn't mean that anyone is going to get rich investing in it. Did anyone get rich from investing in HTML?
Exactly. Owning a bitcoin, lite coin, etherium or whatever does not give you a piece of the blockchain technology. If some major industry starts using it, they will not be giving bitcoin owners royalties for that tech. Blockchain can be revolutionary but it has nothing to do with the value of the coins using it.
This makes me confused about what we should do when the bubble bursts. I guess I'll buy low, but despite learning a little about bitcoin, I still am not sure I'm owning something productive.
Pardon me as I read these one hundred and fifty-seven SP vs LLC vs Scorp threads...

Evie
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Re: Bitcoin now the largest quantifiable bubble in history?

Post by Evie » Sun Dec 10, 2017 3:49 pm

I think HTML is an apt comparison so let's go with that. Blockchain is like HTML - it's a platform with many uses. Anyone can make a coin just like anyone can make a website. Most coins aren't intended to be a currency. Bitcoin has first mover advantage and name recognition but is weak on fundamentals, just like some of the first websites (pets.com). Bitcoin doesn't have a real use case - transactions are too slow and expensive, it's a poor store of value because it fluctuates way too much, and the technology is just outdated.

My point is that anyone who writes off all cryptocurrencies as a bubble would be selling themselves short. Just take a look at some companies that survived the dot com crash.

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vitaflo
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Re: Bitcoin now the largest quantifiable bubble in history?

Post by vitaflo » Sun Dec 10, 2017 5:55 pm

Evie wrote:
Sat Dec 09, 2017 7:43 pm
Cryptocurrency and blockchain technology aren't going anywhere. Bitcoin may eventually fall, but others will take it's place and the cumulative market value will eventually be in the trillions.

I would advise everyone here to do some research on blockchain technologies while we are still in the early phase. Yes, this is the early phase. Bitcoin is old and outdated but many technologies with real-world utility are coming soon. Big things are happening in 2018.
You are confusing a technology (blockchain) with a product built on it (cryptocurrencies). Cryptocurrencies are only one product of blockchain tech. And because cryptocurrenceis are so easily reproducible/copyable, I would say they are the least interesting of all blockchain products. There are many more that have nothing to do with currency or finance. If you believe in blockchain as much as you say you do, I would start looking at investing in those other products, or build one yourself.

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fortyofforty
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Re: Bitcoin now the largest quantifiable bubble in history?

Post by fortyofforty » Sat Feb 10, 2018 3:16 pm

I still see little difference between Bitcoin and Tulipbulb. They seem much more similar than different.
"In a time of universal deceit, telling the truth becomes a revolutionary act." - George Orwell | There are many roads to doublin'. | Original Vanguard Diehard

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