Seriously, some time ago you could debate if you're an early adopter (winning from a raise in the bubble even if it pops later) or a laggard who'll only lose in it; but if you're investing after a random taxi driver has taken a mortgage to do so, then (hint-hint) you're not one of the early ones.
Someone that owns a substantial sum of coins recently put it to me this way: there are ~16 million millionaires in the US. If each one of them wants 1 Bitcoin... I'm long again.
Sure - think of it more as a thought experiment rather than a forecast and this from a professional trader that's been long since 2013. Either way, I thought I would share it, and we'll see which way it goes.
Right, but the fact that demand for something can make the price go up isn't useful investment advice. Gold hasn't been doing well against the USD recently, but yes, it's conceivable that it could shoot up if more people decided they want some.
1001101's person is betting that it will, and I agree that it's a possible outcome. Wouldn't put all my eggs in that particular basket, but hey, maybe I'm wrong.
That's why it's such a big deal that Bitcoin (derivatives) are now trading on regulated exchanges in Chicago and New York.
Whereas before those millionaires may have been reluctant to open an account with (i.e., send all their identity documents to) some unregulated crypto exchange, they already have brokerage accounts that can now or will soon be able to trade them.
I'm becoming more convinced that Bitcoin must be in a bubble. The transaction fees are so high now that it's not really usable for actual transactions. For instance Steam just dropped support for that reason and because it's so volatile[1]. The power consumption to process those transactions has gotten similarly insane, and there's no sign of a move to proof-of-stake or anything less intensive. I don't think cryptocurrency is a bad idea in itself but Bitcoin really doesn't seem like a good currency right now, and there's little sign of it heading to a good place.
This is what I've been thinking lately too. Crytocurrencies are likely to prove useful, but Bitcoin's limitations make it much less useful than it's competitors. It's big right now because it was the first one. That won't keep the value high forever.
Bitcoin is useless as a currency. It is naturally deflationary, which makes for a terrible currency as no one wants to spend a unit of currency that is going to be worth more tomorrow in real terms.
What bitcoin is useful for is simply as a store of value -- as digital gold. In that regard it is working perfectly. It is a well defined property right on a good with limited quantity.
Given that there will be way fewer transactions for a store of value than for a currency, I am not as concerned.
Further, it makes sense for its value to soar as more demand increases for it as a store of value. I'm not saying it isn't a bubble -- it will likely correct at some point. But long term I think it will still hit $100K to 200K per coin given the limited supply and still increasing group of people who will use it as a store of value.
Let's assume you're already invested in Bitcoin and you're sure it's a bubble. What's the best strategy going forward? I've been convinced that it's a bubble since 2011 or so so if I'd sold everything because of that I'd sold it at a fraction of the current price. On the other hand you don't want to hold it forever, as you assume it's going to crash at some future point.
I think slowly selling on the way up is a good strategy. For example everytime it doubles you sell 10% or 20% (depending on the risk you are willing to take). At https://bitcointalk.org/index.php?topic=345065.0 there's a better description of this approach and at http://bitcoinsavingsplan.com/ there's a calculator to check scenarios with different numbers.
I went out 3 times completely and went in with the starting amount ( 3% of my savings, so not much). The last rebuy was lower, i think the bubble will almost pop ( banks are investing, they will let it drop when they want). I truelly regret people going all-in, once it collapses. They won't get their money out because of time-outs on the exchanges.
If I lose the current amount, i won't care and every time it goes to high, so I would care. I just go out. I don't need to stress about it and I don't have FOMO, because I have some.
Also, I set/adjust my limit orders every 3-4 days and hope one hits.
>> They won't get their money out because of time-outs on the exchanges.
Timeouts and software glitches are hardly the point here. You can't sell it, unless you have a buyer. And you won't have a buyer because every one is trying to sell it. You are forced to hold it, because what else can you do?
As for your strategy, if it really keeps doubling, and you only take out 10-20% per doubling, you'll end up with 90% of your net worth in bitcoin, which seems unreasonable. But that comes down to a question: even if you give it high odds that it will continue to go up, if you're not certain of it, then you should probably want to accept some risk of losing future gains to avoid some risk of losing what you have.
If you are certain it will go up...you have bad judgment.
I had somewhat the same situation when my employer granted me some stock options, and the stock was going up. Do I sell now and take the money, but miss future gains? Do I wait and get the future gains, if any, but also face the risk of future losses?
I decided to try to minimize my future regret. So I sold some, and kept more, and as it kept going up I sold more.
There's only one thing I regret: It reached a price that I thought was really sweet at the start of December (I don't remember which year). It was a really tempting price, but I didn't sell because I would pay too much of the gains in taxes. I wanted to wait until next year, when more of the profit would be in a lower tax bracket. Two days after I decided that, the price dropped dramatically.
I looked at this the other day. There is about one recorded Bitcoin blockchain transaction, ever, for every $1000 of current valuation.
The early transactions were at a much lower conversion rate so they would be of larger BTC that tended to raise the average $/txn. But if Bitcoin as a payment network were growing exponentially, we would expect a large proportion of transactions to be relatively recent and at recent valuations.
So either:
A. Bitcoin is used for transactions of over $1000 on average, or
B. speculation is driving up the valuation far beyond its utility.
In either case, it's clearly not about frictionless microtransactions anymore.
Could it maybe be about getting 8-10 figures of dirty money out of <insert country here> and into Switzerland?
I mean, if I had made a killing out of the various petty crimes available to public officials and wanted to retire on that, what's my other option? Trying to ferry precious gemstones through customs?
I'd take the transaction fee, the challenge would probably be finding an exchange that would let you cash out that kind of money.
"I thought of how Henry Ford called his broker and instructed him to 'sell everything' when his doorman or elevator-operator (anecdotes differ in detail) started telling him about stocks in 1929."
I have yet to hear of anyone outside of tech bring up Bitcoin. We might be at 1927, but I don't think we're at 1929. Either way, I stupidly got out of almost all of my Bitcoin between $200 and $1000.
Yes, I think we're about to enter the final stage before the bubble bursts. My uncle had one of his retired friends ask about bitcoin. It's on CNBC every morning now, and seems like it's starting to go mainstream.
I got into Bitcoin back in 2010.
Unfortunately I only have a small percentage of my Bitcoin "fortune" intact, having cashed out most of it below $100.
My mom, who I won't let have admin rights on her own laptop, wants bitcoins for Christmas. She told me "it's like a giftcard for the internet, and people are getting rich from them."
I'd buy them for shits and giggles but the transaction costs are ridiculous.
Wrong question. When everyone is invested is it a bubble? When everyone is invested in bitcoin going up, it will keep increasing.
Stop calling them tulips. The most “educated” answer is that you don’t understand them. Stop pretending you do. A thing like this is the first off, many rules of economics don’t apply.
> When everyone is invested in bitcoin going up, it will keep increasing.
Tragedy of the commons. Even if I "want" the price of bitcoin to go up, any dollar I invest in Bitcoin will only increase the value that I actually capture by an infinitesimal amount.
Bubbles are generally about Human psychology not about the underlying asset. Tulips, student loans, homes, internet domains, websites etc etc.
The problem there is really Human psychology. For that matter people still continue to take student loans, buy homes, buy tulips or whatever. Its just not at the bubble prices.
How do you take out a mortgage and spend it on something other than a property? That has to be fraud regardless of what you purchase, right? This worthless article didn't explain much.
Lets say you own a 200k house outright. You take out a mortgage for 200k. You now have 200k debt on the house on 200k cash which you could spend however you want with no responsibility to the bank beside your monthly payment
A mortgage is just a loan secured against an asset like a property. If you already own the property you can secure a loan against it and spend the money on whatever you want. Even if you already have a mortgage you can take out a second one for the value of what the property is worth in excess of the value of the first mortgage ("unlocking" the equity).
I've been wondering this too. Its price is obviously not supported by anything, but that was always the case. My bet is the price naturally starts to come down as someone with lots of bitcoins tries to cash out, then others panic trying to cash out as the price declines and the price rapidly crashes after that.
Why not just the same way as any other bubble? People start selling in vast quantities, other people see the selling and panic, the currency devalues, and the selling snowballs until it's a small fraction of its former value.
The big questions are if that's ever going to happen, and if so, when?
Unless you've got a time machine or have cornered the market, though, I'm not sure how you could ever know.
Well here, let me explain: if gold is a bubble someone comes up and says, gold is overvalued, here's x, y, z that explain why it's overvalued. That idea spreads, people stop buying and start selling, boom bubble popped.
With bitcoin though, I don't see a good way to say bitcoin "is overvalued, here's x, y, z that explain why it's overvalued." There's really no explanation for it's value at all, that's the aspect of bitcoin that resembles a currency.
No, like GP said, all it takes is for some people to sell large amounts of BTC, and for other people to notice and panic. That's it. IMO you're really overthinking things.
I suppose you're trying to guess why those first sellers would sell? Seems like a pointless exercise. There could be any number of reasons. A mysterious authority figure convincing them that BTC is overvalued is just one (unlikely) possibility.
There hasn't actually been a reason for gold's value since 1933, when FDR took the U.S. off the gold standard. And gold has exhibited similar bubble behavior as Bitcoin since, eg. the 1980 bubble when it went up 5x in a year and then crashed 50% the next year, or the 2005-2011 bubble where it went up 4x and crashed by 40% over the next couple years.
It really is as simple as other posters are saying: when there are more buyers than sellers, the price goes up, and when there are more sellers than buyers, the price goes down. The reason for there being more sellers than buyers could be as simple as people losing interest and moving onto the next shiny thing. You can't eat either gold or bitcoin, so in the absence of continued attention, there's natural selling pressure.
my theory is that one day soon china will crack down even more on bitcoin to combat tax evasion and clear the field for their own cryptocurrency. once it becomes a serious risk that major players could ban it outright, confidence might never recover.
A lot of the dumb money coming in now can’t actually afford to lose the money they’re ‘investing’ and will sell at the first sign of weakness.
There are already problems withdrawing from exchanges, if a mass of people panic and want out, it could trigger a run on the exchanges, some of which are rumored to be running some kind of fractional reserve.
All it’s going to take is a few grannies losing their retirements for the congressional hearings to start, etc.
I think it can probably still double or triple from here, so I’m not gonna try and call the top, but chronologically, I don’t think it’s too far off—6-9 months is my guess.
At some point in time. The price of one single coin will be bonkers to the point of disbelief. Round about the same time, there won't the next set of greater fools to drive the prices any more up.
Then a good deal of people will want out. Demands comes down, supply goes up and prices come crash down.
At the end people just sit down and realize along the way it generally never was a good idea to be playing this game at all.
Also, funny how these regulators seem to magically disappear when it comes to white collar crime, but they sure have a lot of time to discuss protecting everyone from themselves buying bitcoin.
Not that this is going to stop anyone, but those who are considering investing a lot of their net worth in something so speculative should do themselves a favor and read up on the so-called Tulip Craze (aka Tulip Mania) in the 17th century.
For decades, economists have pointed to 17th-century tulipmania as a warning about the perils of the free market. Writers and historians have reveled in the absurdity of the event. The incident even provides the backdrop for the new film Tulip Fever, based on a novel of the same name by Deborah Moggach.
An interesting article, though even its author admits:
"That’s not to say that everything about the story is wrong; merchants really did engage in a frantic tulip trade, and they paid incredibly high prices for some bulbs. And when a number of buyers announced they couldn’t pay the high price previously agreed upon, the market did fall apart and cause a small crisis--but only because it undermined social expectations."
"In this case it was very difficult to deal with the fact that almost all of your relationships are based on trust, and people said, ‘I don’t care that I said I’m going to buy this thing, I don’t want it anymore and I’m not going to pay for it.’ There was really no mechanism to make people pay because the courts were unwilling to get
involved," Goldgar says.
> That’s not to say that everything about the story is wrong; merchants really did engage in a frantic tulip trade, and they paid incredibly high prices for some bulbs. And when a number of buyers announced they couldn’t pay the high price previously agreed upon, the market did fall apart and cause a small crisis—but only because it undermined social expectations.
The tulip craze was real, it just didn't cause society to crumble.
Bitcoin: my answer to the repeated questions. No, there is NO way to properly short the bitcoin "bubble". Any strategy that doesn't entail options is nonergodic (subjected to blowup). Just as one couldn't rule out 5K, then 10K, one can't rule out 100K. Gabish?
It is indeed probable that some are using these mortgages on the new Futures market (or other means) to short Bitcoin. IANAFiduciary - I think going short and long have equal risk. The most easily defensible position is to have thrown a small amount of spare cash into several coins a month or more ago, and watch the roller coaster.
At this point, the market's too hot - there's too much going on. And Bitcoin itself isn't seeing the meteoric growth today that it has over the past 2 weeks - where is the growth from the Futures exchange?
I love Bitcoin and other crypto currencies but driving yourself into debt to buy in is grossly irresponsible. Worst of all these will be the same people clamoring for regulation when they lose all their things.
This doesn't surprise me. My Facebook feed has three kinds of people on it: family, people I went to grade school and high school with, and security industry people I've met at conferences.
Over the last few months, it's gotten to the point where I can't snark about Bitcoin (to my security industry friends) without getting aggressive pushback from the people I went to grade school with, none of whom are in the technology industry, many of whom are cheerleading their social circles into investing in Bitcoin.
None of them are transacting in Bitcoin (to a first approximation: nobody is transacting in Bitcoin). They're buying for the same reason people bought into Pets.com.
Here's an example:
November 29 at 11:03am: Bitcoin just topped 11k! That's a 77% gain in just the last 30 days. Who wants in??? [21 likes, 19 comments].
This is from a home mortgage loan officer I went to grade school with. The comments are all variants of "Me, I want in."
I don't know what weird threshold we crossed in the middle of this year, but cross it we did.
Social media is fueling this pyramid scheme. #fakenews was bad, now we have #headsinthesand. Don't rain on people's parade, the will be shooting the messengers.
I normally wouldn't buy a foreclosure for ethical reasons that I'm sure fail to hold water. But if there's a wave following the collapse of Bitcoin, count me in. I have zero sympathy for somebody who loses their shirt speculating on fucking Bitcoin.
Why? It's a manifestly crazy investment, but why is a mortgage broker on the south side of Chicago expected to have enough innate technical knowledge to qualify Bitcoin as an investment, but not for an NYSE-listed stock? To the overwhelming majority of investors, both are fundamentally opaque instruments; you buy because other people are buying.
To me, this indicts Bitcoin's most aggressive promoters, not the investors.
I guess what I mean is that I can feel for people who got duped into taking out a risky loan for a house they can't really afford. Shelter is something anybody can appreciate. I can't explain going all in on Bitcoin except by a combination of greed and stupidity.
>>why is a mortgage broker on the south side of Chicago expected to have enough innate technical knowledge to qualify Bitcoin as an investment, but not for an NYSE-listed stock?
Nobody should do risky things with systems they don't understand. Accidents can and will happen in these cases. And besides these sort of things happen enough number of times that most people can easily see the 'scary action at a distance' thingy happening here.
The other day I saw a post on Facebook from a grade school friend saying that if I buy $X in btc on coinbase that he and I both get some for free via some incentive program. That's not what you want for some investment system.
Interesting that everyone seems to be in consensus that this is a bubble. If you're so sure, why not short it? That's free money you're leaving on the table.
I agree folks should put up or shut up, but it can be both true that it will go to 100K and be a bubble. And if you short it now, you'll go broke even if it later crashes to 0.
I’m fairly certain it’s a bubble but it’d be foolish to short. Altcoins are in a bubble as well—Potcoin being valued at $64mil is just one of many examples of coins with zero or close to zero utility valued at absurd levels merely due to their visibility as a cryptocurrency (much like dot coms in 1999).
Ultimately, the mania present in a bubble can persist longer than one can stay liquid, i.e. Bitcoin could double or triple before the bubble bursts, which would trigger a margin call on a short position.
There's not many places that offer options on Bitcoin and even less when you consider they need to be solvent enough you'll actually be able to cash them out.
What is curious is that it seems like there's a growing consensus with everyone with a real clue about it that this is a bubble, while the price keeps rising anyway.
We're already past the point where bitcoin could have any value as a currency, as the higher and higher transaction fees ensure the only remaining users are traders. I mean I can hardly see anyone using bitcoin today as anything but a store of value for speculative reasons. Any real users (which treat it as a currency) should have already left for cheaper currencies. It's going to fall, and fall hard, and it will be painful. When it will crash, it's going to take similar protocols (who can use the same setups / hardware / asics) down with it as miners try to reuse their hardware on more effective currency.
Isn’t this exactly what made the stock market crash of 1929 so devastating to the US? And which lead to the Great Depression our grandparents tell us about?
105 comments
[ 5.1 ms ] story [ 173 ms ] threadSeriously, some time ago you could debate if you're an early adopter (winning from a raise in the bubble even if it pops later) or a laggard who'll only lose in it; but if you're investing after a random taxi driver has taken a mortgage to do so, then (hint-hint) you're not one of the early ones.
It's not wrong, buuuuut....
1001101's person is betting that it will, and I agree that it's a possible outcome. Wouldn't put all my eggs in that particular basket, but hey, maybe I'm wrong.
Thanks for sharing.
Whereas before those millionaires may have been reluctant to open an account with (i.e., send all their identity documents to) some unregulated crypto exchange, they already have brokerage accounts that can now or will soon be able to trade them.
All just to make up for somebody's bad investments?
If you want to know how stingy people are with their money, you have to only look at how they think about paying taxes.
[1] https://steamcommunity.com/games/593110/announcements/detail...
What bitcoin is useful for is simply as a store of value -- as digital gold. In that regard it is working perfectly. It is a well defined property right on a good with limited quantity.
Given that there will be way fewer transactions for a store of value than for a currency, I am not as concerned.
Further, it makes sense for its value to soar as more demand increases for it as a store of value. I'm not saying it isn't a bubble -- it will likely correct at some point. But long term I think it will still hit $100K to 200K per coin given the limited supply and still increasing group of people who will use it as a store of value.
Investments have a 'Store of value' feature by default built into them.
For Bitcoin to be viable its value has to endlessly increase over time. Or you are simply better off storing your cash beneath your mattress.
Well, what else could it be?
I think slowly selling on the way up is a good strategy. For example everytime it doubles you sell 10% or 20% (depending on the risk you are willing to take). At https://bitcointalk.org/index.php?topic=345065.0 there's a better description of this approach and at http://bitcoinsavingsplan.com/ there's a calculator to check scenarios with different numbers.
Any other better approaches?
If I lose the current amount, i won't care and every time it goes to high, so I would care. I just go out. I don't need to stress about it and I don't have FOMO, because I have some.
Also, I set/adjust my limit orders every 3-4 days and hope one hits.
Timeouts and software glitches are hardly the point here. You can't sell it, unless you have a buyer. And you won't have a buyer because every one is trying to sell it. You are forced to hold it, because what else can you do?
As for your strategy, if it really keeps doubling, and you only take out 10-20% per doubling, you'll end up with 90% of your net worth in bitcoin, which seems unreasonable. But that comes down to a question: even if you give it high odds that it will continue to go up, if you're not certain of it, then you should probably want to accept some risk of losing future gains to avoid some risk of losing what you have.
If you are certain it will go up...you have bad judgment.
I decided to try to minimize my future regret. So I sold some, and kept more, and as it kept going up I sold more.
There's only one thing I regret: It reached a price that I thought was really sweet at the start of December (I don't remember which year). It was a really tempting price, but I didn't sell because I would pay too much of the gains in taxes. I wanted to wait until next year, when more of the profit would be in a lower tax bracket. Two days after I decided that, the price dropped dramatically.
The early transactions were at a much lower conversion rate so they would be of larger BTC that tended to raise the average $/txn. But if Bitcoin as a payment network were growing exponentially, we would expect a large proportion of transactions to be relatively recent and at recent valuations.
So either: A. Bitcoin is used for transactions of over $1000 on average, or B. speculation is driving up the valuation far beyond its utility.
In either case, it's clearly not about frictionless microtransactions anymore.
I mean, if I had made a killing out of the various petty crimes available to public officials and wanted to retire on that, what's my other option? Trying to ferry precious gemstones through customs?
I'd take the transaction fee, the challenge would probably be finding an exchange that would let you cash out that kind of money.
This is something I just don't understand about Bitcoin's value proposition.
> what's my other option?
I hear Oriental rug import businesses are popular.
> the challenge would probably be finding an exchange that would let you cash out that kind of money.
Even if, I hear the IRS is requesting transaction records from the major exchanges.
What's involved in processing a transaction?
https://en.bitcoin.it/wiki/Proof_of_work
I'm not well-versed on any of this, so I might be wrong.
"I thought of how Henry Ford called his broker and instructed him to 'sell everything' when his doorman or elevator-operator (anecdotes differ in detail) started telling him about stocks in 1929."
I got into Bitcoin back in 2010. Unfortunately I only have a small percentage of my Bitcoin "fortune" intact, having cashed out most of it below $100.
I'd buy them for shits and giggles but the transaction costs are ridiculous.
Stop calling them tulips. The most “educated” answer is that you don’t understand them. Stop pretending you do. A thing like this is the first off, many rules of economics don’t apply.
"The price of land is solid, they aren't making more of it" - 2007
Tragedy of the commons. Even if I "want" the price of bitcoin to go up, any dollar I invest in Bitcoin will only increase the value that I actually capture by an infinitesimal amount.
No.
Once everyone is invested the pool of potential new investors has been exhausted and the bubble pops.
Bubbles are generally about Human psychology not about the underlying asset. Tulips, student loans, homes, internet domains, websites etc etc.
The problem there is really Human psychology. For that matter people still continue to take student loans, buy homes, buy tulips or whatever. Its just not at the bubble prices.
You already own property and take a loan with the property as security.
The big questions are if that's ever going to happen, and if so, when?
Unless you've got a time machine or have cornered the market, though, I'm not sure how you could ever know.
With bitcoin though, I don't see a good way to say bitcoin "is overvalued, here's x, y, z that explain why it's overvalued." There's really no explanation for it's value at all, that's the aspect of bitcoin that resembles a currency.
I suppose you're trying to guess why those first sellers would sell? Seems like a pointless exercise. There could be any number of reasons. A mysterious authority figure convincing them that BTC is overvalued is just one (unlikely) possibility.
It really is as simple as other posters are saying: when there are more buyers than sellers, the price goes up, and when there are more sellers than buyers, the price goes down. The reason for there being more sellers than buyers could be as simple as people losing interest and moving onto the next shiny thing. You can't eat either gold or bitcoin, so in the absence of continued attention, there's natural selling pressure.
There are already problems withdrawing from exchanges, if a mass of people panic and want out, it could trigger a run on the exchanges, some of which are rumored to be running some kind of fractional reserve.
All it’s going to take is a few grannies losing their retirements for the congressional hearings to start, etc.
I think it can probably still double or triple from here, so I’m not gonna try and call the top, but chronologically, I don’t think it’s too far off—6-9 months is my guess.
At some point in time. The price of one single coin will be bonkers to the point of disbelief. Round about the same time, there won't the next set of greater fools to drive the prices any more up.
Then a good deal of people will want out. Demands comes down, supply goes up and prices come crash down.
At the end people just sit down and realize along the way it generally never was a good idea to be playing this game at all.
Also, funny how these regulators seem to magically disappear when it comes to white collar crime, but they sure have a lot of time to discuss protecting everyone from themselves buying bitcoin.
https://en.wikipedia.org/wiki/Tulip_craze
The only problem: none of these stories are true.
https://www.smithsonianmag.com/history/there-never-was-real-...
"That’s not to say that everything about the story is wrong; merchants really did engage in a frantic tulip trade, and they paid incredibly high prices for some bulbs. And when a number of buyers announced they couldn’t pay the high price previously agreed upon, the market did fall apart and cause a small crisis--but only because it undermined social expectations."
"In this case it was very difficult to deal with the fact that almost all of your relationships are based on trust, and people said, ‘I don’t care that I said I’m going to buy this thing, I don’t want it anymore and I’m not going to pay for it.’ There was really no mechanism to make people pay because the courts were unwilling to get involved," Goldgar says.
> That’s not to say that everything about the story is wrong; merchants really did engage in a frantic tulip trade, and they paid incredibly high prices for some bulbs. And when a number of buyers announced they couldn’t pay the high price previously agreed upon, the market did fall apart and cause a small crisis—but only because it undermined social expectations.
The tulip craze was real, it just didn't cause society to crumble.
I see it mentioned at least 10 times a day.
Bitcoin: my answer to the repeated questions. No, there is NO way to properly short the bitcoin "bubble". Any strategy that doesn't entail options is nonergodic (subjected to blowup). Just as one couldn't rule out 5K, then 10K, one can't rule out 100K. Gabish?
https://twitter.com/nntaleb/status/939526347730407424
You will go broke first when the price first doubles.
Then them will go broke when the price crashes.
At this point, the market's too hot - there's too much going on. And Bitcoin itself isn't seeing the meteoric growth today that it has over the past 2 weeks - where is the growth from the Futures exchange?
I love Bitcoin and other crypto currencies but driving yourself into debt to buy in is grossly irresponsible. Worst of all these will be the same people clamoring for regulation when they lose all their things.
Over the last few months, it's gotten to the point where I can't snark about Bitcoin (to my security industry friends) without getting aggressive pushback from the people I went to grade school with, none of whom are in the technology industry, many of whom are cheerleading their social circles into investing in Bitcoin.
None of them are transacting in Bitcoin (to a first approximation: nobody is transacting in Bitcoin). They're buying for the same reason people bought into Pets.com.
Here's an example:
November 29 at 11:03am: Bitcoin just topped 11k! That's a 77% gain in just the last 30 days. Who wants in??? [21 likes, 19 comments].
This is from a home mortgage loan officer I went to grade school with. The comments are all variants of "Me, I want in."
I don't know what weird threshold we crossed in the middle of this year, but cross it we did.
To me, this indicts Bitcoin's most aggressive promoters, not the investors.
Nobody should do risky things with systems they don't understand. Accidents can and will happen in these cases. And besides these sort of things happen enough number of times that most people can easily see the 'scary action at a distance' thingy happening here.
Ultimately, the mania present in a bubble can persist longer than one can stay liquid, i.e. Bitcoin could double or triple before the bubble bursts, which would trigger a margin call on a short position.
We're already past the point where bitcoin could have any value as a currency, as the higher and higher transaction fees ensure the only remaining users are traders. I mean I can hardly see anyone using bitcoin today as anything but a store of value for speculative reasons. Any real users (which treat it as a currency) should have already left for cheaper currencies. It's going to fall, and fall hard, and it will be painful. When it will crash, it's going to take similar protocols (who can use the same setups / hardware / asics) down with it as miners try to reuse their hardware on more effective currency.
This information needs to be the first thing people learn about cryptocurrency.. long before putting any money in