Is Bitcoin in a bubble?

Is Bitcoin in a Bubble?


  • Total voters
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Joined
Dec 2017
From
uk
Everyday that I go on CoinMarketCap and see the parabolic growth of bitcoin, I just think that a major correction is getting closer and closer. I am definitely not the only one who thinks this as the two words "Bitcoin" and "Bubble" are hot on google searches. Bitcoin is currently in the 16 thousands and at this rate it will probably hit 20,000 by next week. OR WILL IT?

This all encouraged me to make a video on it so please get back to me and let know what you think.
 
Joined
Nov 2017
From
US
Everyday that I go on CoinMarketCap and see the parabolic growth of bitcoin, I just think that a major correction is getting closer and closer. I am definitely not the only one who thinks this as the two words "Bitcoin" and "Bubble" are hot on google searches. Bitcoin is currently in the 16 thousands and at this rate it will probably hit 20,000 by next week. OR WILL IT?

This all encouraged me to make a video on it so please get back to me and let know what you think.
Is it crazy to buy into now and sell it off quick?
It's been pretty crazy how high it's going.
Probably being manipulated. Especially all these hacks and being stolen by who knows (cough govt or bankers and or both [emoji23]).
Buts it's a cat and mouse game at this point. I'm sure it will pop.

Sent from my ZTE A2017U using Tapatalk
 
Joined
Dec 2017
From
UK
Hey, CryptoAL.

Good video, well put together. Stick with it and grow your channel.

I wrote a lot more than I thought I would so tl;dr -

No, this is one asset in an entire market that's new and growing, we're in the hype/growth phase but watch out for a crash around 2020 and sell up beforehand.
-----

The main thought I have is the one you mentioned - we're just starting out on the crypto journey. Who can really say what these things should be worth? How can we know if $20k for a BTC is overpriced? Perhaps the correct price when crypto is established is $100k for BTC. We can't know. I'm sure that if I invented housing tomorrow no one would pay me $300k for it. Right now though, that's probably middle market price.

BTC, in fact I'd say ALL crypto, is on a price discovery path right now. They need to find their place in the market and settle on a value the market agrees with. That's going to come down to a few things such as what BTC can actually be used for and that isn't as a means of high speed (micro) transactions. That model is shot. People say BTC is the Gold of crypto, I see it more as the US dollar of crypto. The world en masse doesn't spend dollars, they use them as a medium of exchange and a store of value. They stockpile US dollars because everyone knows and accepts them. When needed they convert them to whatever fiat or goods are required, but slowly, that's how I see BTC.

As for BTC being a bubble, I'd say No - but be careful (see below). It does however feel over bought right now but that's no surprise. It was the first, the one with greatest liquidity, the one on most exchanges. The price may stall or dip but it's going up long term. I feel confident in saying that mainly because why would it be totally wiped at this point? The value of the entire crypto market is rising every day. Smaller cryptos will fail, we just don't need them all. But BTC will stay and it will rise. BTC is the world reserve crypto, like the US dollar is the world reserve currency. (even with the moves to break that model). A review point would be 3 to 5 years from now if the pattern of the housing crisis and Dot Com bubbles are anything to go by.

Regarding the Dot Com(~1997-2001) and housing crisis bubble (~2007-2010) - these were all compound events that were market wide, not a single thing or the result of a single cause.

The housing crisis was caused by a) outright fraud by the bankers and b) people's (understandable) ignorance / stupidity. Poor people defaulting on loans that were made available wasn't the cause of the housing crisis / housing bubble bursting. It was overly complex, exotically securitized and overly complex loans that made it appear there was more money and value around that didn't exist. It was companies that started to default first and squeeze consumers because liquidity started to dry up. (https://www.cbsnews.com/news/heres-what-really-caused-housing-crisis/)

The Dot Com bubble was also caused by a combination of things such as investment in businesses with no proven business model, low cost of debt/loans. What's more the people that pushed the IPOs of companies that had never made a profit and who hyped the whole thing were, you guessed it, pretty much the banks and investment houses that would make money off doing so.

And so this is the the 'see below' bit. Right now there's almost no quick-profit opportunity for big money. Crypto is that opportunity. A single crypto being over bought isn't a bubble, isn't a systemic, market wide, bubble like we saw in the Dot Com or Housing Crisis era. However, if we start seeing a rush of cryptos leaping up and stupid behaviour around the market where people are betting the farm and future on crypto, start paying attention. Spookily, we're (in my opinion) a good way through year 1 of the crypto craze and there's a nasty urban myth about 10 year boom bust cycles (1997, 2007, 2017...) where the bust happens 3 to 4 years in. (https://www.investopedia.com/ask/an...age-length-boom-and-bust-cycle-us-economy.asp). So plan accordingly for a bust around 2020 / 2021!

Concerns:
  • I absolutely expect a few engineered flash crashes by institutional investors to shake out the smaller owners. If that happens, for seemingly no clear reason, HODL.
  • Keep an eye on legislation around crypto. It will come and the effect could be notable.
  • Most of the cryptos will fail, 80% to 90%. Picking the winners in the next 3 to 5 years is the challenge.
Of course, I could be putting 2 and 2 together and coming up with 5. As they say, Do Your Own Research.

Cy
 
Joined
Dec 2017
From
US
I read about this issues like a few days ago on The Wall Street Journal website.. as far as I concern, the article said.. about 96% of economist say YES.. mean the bitcoin is bubble
 

V4Vendetta

Moderator
Joined
Apr 2017
From
Texas
I read about this issues like a few days ago on The Wall Street Journal website.. as far as I concern, the article said.. about 96% of economist say YES.. mean the bitcoin is bubble
If Bitcoin is a bubble then everything is a bubble. The point is 1) do your own research, 2) never invest in anything that you aren't okay losing, 3) conventional "wisdom" is often decades behind innovation and reality.
 
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