full title (edited to fit requirements): The historic crypto bubble: Bitcoin is now the fifth-biggest wipeout of all time, BofA says, with a shocking chart of the last 50 years in finance
The dot com bubble is mentioned. Despite the mania leading up to the crash, I think all here would agree that ultimately the attention was justified, it was just perhaps a little premature.
Dropping precipitously in value isn't actually a sufficient condition for a bubble. Something highly valued initially but undermined completely by a tech revolution comes to mind. Bound encyclopedias come to mind, post-internet.
Because in July 2013, the total market cap of all Bitcoins was less than one billion dollars. One year ago, the market cap of all Bitcoins was over one trillion dollars. That's why we don't consider previous wipeouts.
I can say some trash in a garbage can is worth not $70k, but $75k. I can even make good on that, and more than once. I may even find another sucker, or suckers who will pay this much for trash as well. Eventually this Ponzi scheme, like all Ponzi schemes, will blow up. With the stock market down, and interest rates hiked, it's hard to find people who want to put a lot of money into RTX and Dogecoin.
Whenever someone states with seemingly absolute certainty that Bitcoin is a Ponzi scheme and also appears to assume that it will never be anything but a Ponzi scheme I ask myself: am I too optimistic or are they too pessimistic and non-imaginative?
I think Bitcoin does (right now) indeed partially show the characteristics of a Ponzi scheme.
But I also think that it's absolutely possible for it to evolve away from that (Ponzi characteristic) and instead become a reliable store-of-value-over-time asset (more reliable than USD on a bank account as an example) that millions to billions of people use.
Now before you say "store-of-value is bullsh*, Bitcoin just lost x % YoY". Sure, it did. But it always depends on the timeframe you're looking at.
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[ 3.6 ms ] story [ 30.8 ms ] thread2011: $36 to $1 (97% Drop)
2014: $1,000 to $150 (85% Drop)
2018: $20K to $3K (85% Drop)
vs.
2022: $70K to $16.5K (76% Drop)
I can say some trash in a garbage can is worth not $70k, but $75k. I can even make good on that, and more than once. I may even find another sucker, or suckers who will pay this much for trash as well. Eventually this Ponzi scheme, like all Ponzi schemes, will blow up. With the stock market down, and interest rates hiked, it's hard to find people who want to put a lot of money into RTX and Dogecoin.
I think Bitcoin does (right now) indeed partially show the characteristics of a Ponzi scheme.
But I also think that it's absolutely possible for it to evolve away from that (Ponzi characteristic) and instead become a reliable store-of-value-over-time asset (more reliable than USD on a bank account as an example) that millions to billions of people use.
Now before you say "store-of-value is bullsh*, Bitcoin just lost x % YoY". Sure, it did. But it always depends on the timeframe you're looking at.
Half the stuff on the chart has to do with government action. Gold is on there too? I'm not getting it.
In inflation-adjusted terms, it never got back to that level. Today that amount would be around $3,200. The current price of gold is about $1,800.