Bitcoin Forum

Edit: Note that I did not make this graph, with the exception of the green arrow.


https://i.imgur.com/AScJ0yp.png


I see this image posted in a lot of threads, so here's why I think people mistake us for being after the "New Paradigm" stage.

Firstly, if we look at the background, the first sell-off happens in the midst of the Institutional Investors phase. Sounds about where we're at with institutional investors, doesn't it? Seeing as the institutional investor phase ends and the public phase begins after it, to say we are at the popping is to say that we have exhausted the institutional investors, which we clearly haven't (barely scratched the surface).

Secondly, you'll notice the pop happens after the Public phase ends. Even if you are going to argue we are past institutional investors, there is no way you could argue we are past the stage of Public awareness. I have spoken recently with many credible professionals in the field who haven't even heard of bitcoin, nevermind the general public. This solidifies my arrow because if you look at the X axis, the first sell-off happens during the awareness phase, clearly where we're at now.

All of this, of course, is assuming we give credibility to the graph within the world of bitcoin, which it may very well not have, thus rendering the whole thing meaningless.

We're at capitulation.

oh

How many institutional investors do you know (or heard of) that are invested in bitcoin ?

The Winklevosses are invested :)

Don't steal from them though; it's against the Harvard student handbook!

Exactly

What has happened is actually quite similar I must admit.

i'm going to take you seriously and answer you honestly, passing no judgment in between. it seems many here are incapable of that.

let's take your hypothesis for granted, and explore the possibilities:

your claim causes one to zoom way out on the price picture, meaning that the timescales that we are dealing with are huge. if you consider the time scale, the whole life of bitcoin amounts to one half of the total length of the time axis (conveniently unmarked). the (failed) double top formation occurs at about 3/4. this means that we may not see the biggest bitcoin bubble for an order of years.

while many expect to see serious price action tomorrow, the movement right now is much less vertical than the large 'knife' that fell from $266. this lends credence to your hypothesis because the 'bear trap' is a smooth slide. if we see more knives tomorrow, however, this would break your model and weigh the evidence back in favor of 'burst bubble'

further, even if your scaled-out vision is correct, the magnitude of that bear trap most certainly varies in practice as opposed to the ideal curve. depending on the resistance on the way down, we could even dip below the old high of $31.50 on the medium term and it would still fit your model. "mean growth" for bitcoin is minuscule compared to recent growth.

Remember, bitcoin has been worth single digits or less for about half of its lifetime. Before 2013, bitcoin had only ever been worth more than $20 for two brief weeks, during a period generally known to all as an aberration.

-arepo

https://en.wikipedia.org/wiki/Efficient_market_hypothesis (https://en.wikipedia.org/wiki/Efficient_market_hypothesis)

Thank you for the response, and perhaps im reading your reply incorrectly, but are you assuming that I created that graph?

I did not, I took it from one of the numerous threads I've seen it posted in (without the green arrow I drew over it), and it was not created for bitcoin, just bubbles in general. This is a thread essentially discrediting it.

We are somewhere around "Fear" and "Capitulation" - mostly closer to "Fear" - long way down.

Absolutely right. First institutional investors are just beginning to come into BTC just read the new Techcrunch article. Almost nobody has even heard about Bitcoin yet, it is just so easy to loose perspective in a forum like this. Bitcoin price will be 500$/BTC by the end of year, probably higher.

Colas & convergex group are clearly invested & telling their clients to invest a % of their portfolio. This is just one guy on TV (bloomberg). Its pretty clear this is not an isolated case...

+ The malta hedge fund investors as well, they have 80,000 coins.

This, more strong hands joining the market.

if anything, you're stupid holding on to imaginary profits and fame

Fame? Who is talking about fame?

well he wanted to be a multimillionaire so much so his mom could be proud of him and his friends would be soooo jaleous and praise him for his wisdom for the rest of his life

Who are you referring to, and what exactly are you talking about?

Someone's bitter over selling at a loss. Did you dump those $230 coins yet?

You most certainly are reading it incorrectly, that Graph is known as the Gartner hype cycle and is very well known around here. It is not meant to correlate with anything, rather serve as a hypothetical example of an technology life cycle. It shouldn't be taken literally, hence it can't really be discredited, rather those trying to superimpose it on the current market graphs are discrediting themselves.

Thanks, I figured the last sentence in the OP was the most applicable (though i'm sure the graph can serve some purposes in relation to bitcoin). Also when i said "this is a thread essentially discrediting it", i meant "discrediting relating bitcoin to being at the point of fear in the graph", which a lot of people here seem to be doing, and you seem to agree is inappropriate (correct me if I'm wrong).

I dont have any coins ruski buddy, you know that <333333

IM BUYING BUY BUY BUY fundamentals is STRONG BUYYYYY

No, we are really at Fear/Capitulation.

This was probably one of the quickest bubbles in history.

Media attention phase was pretty obvious. I had a Google Alert for Press About Bitcoin. It was usually triggered 1-2 Times a day. In the last 2 Weeks, I had to turn it off because there were 100ts of articles every day.

Hell, even I had an TV Interview (was due to air yesterday, but they canceled it for obvious reasons)

But don't worry, Bitcoin is not ready yet to go Mainstream. This will give us a little more time to build an actual working Bitcoin economy and the next Time the Speculators will have a lot harder time to get our coins.Because more people will have realized what their potential is.

That many of the people here didn't want to part with their coins, is IMO one of the reasons the Bubble did go up so fast in the first place.

I am on the fence, I think we are either in a bear trap or a bull trap. I just haven't figured out which yet :p

Proudhon is permantly stuck in despair though XD

Yep, very much so. There are lot's of thoughts out there on how industries/technologies mature, of which the hype cycle is a more specific one. I wish I was more knowledgeable to point you to specific studies, but suffice to say that in most cases, the time period for it all to play out is over decades as opposed to days hence why the gartner hype cycle is so inappropriate in the current context.

A good example outside of bitcoin would be the growth of the web, the dot com boom being akin to the bitcoin bubbles. It still took ten years and a lot of work after the dot com boom to bring the web to where it is today, and now there is no gold rush toward web companies despite them being extremely mature and profitable. Prior to dot com, there were other iterations of IT bubbles, and it's worth considering what it has taken to get computing to such a mature stage. People chase the dream of getting rich quickly resulting in bubbles just as the one we've seen, it's only those who seek riches slowly that truly profit. Early adopters, Dell and Microsoft shareholders are effectively statistical aberrations akin to winning the lottery and as such shouldn't really be held up as examples of how to get ahead, but merely an acknowledgement of the random probability of being in the right place at the right time.

We are still at bull trap, just look at the posts if you sold already. (I know you can't think straight if you don't)
http://bitcoincharts.com/charts/chart.png?width=940&m=mtgoxUSD&SubmitButton=Draw&r=&i=Daily&c=0&s=&e=&Prev=&Next=&t=T&b=&a1=&m1=10&a2=&m2=25&x=0&i1=&i2=&i3=&i4=&v=0&cv=0&ps=0&l=0&p=0&

Bitcoin was just on CNN talking about the crash for a short while.

Oh I think the next stop is Despair.

It's a nice chart, one every student should study at some point in their education as it relates to a lot more schools of thought than mere economic ones.

The thing is, it's fractal -- it repeats itself on different scales.

You can beat it to fit almost anything but yes of course we're seeing it live, it's fun.

Well, this is your captain speaking, if we make it out alive I do hope you choose to fly BitAir again :)

That's right, we're both in bear trap and in bull trap, we're everywhere and nowhere, everything is fractal.  :)

I see this as fractal as well; really depends on what time scale you look at.  Long term -- bear trap is now.

I think the despair phase is yet to come, but given how fast this bubble popped, we could reach despair by early next week.

There was $10,000,0000 to $20,000,0000 of trading daily for a month. That probably isn't the average neighbor that heard about bitcoin.
Also, there were many narrow times (i.e. 5 to 15 minutes windows) where a $1 million trade would occur in the positive direction.

Bitcoin Magazine (excerpt):

---

And how about the recent frontpage article in the Financial Times? The relevant passage: ”Some finance industry entrepreneurs have leapt at the opportunity. Exante, a Malta-based asset manager, set up a Bitcoin fund last year that was largely intended as a fun punt. Wealthy investors each put in $1,000 when Bitcoins were trading at $13 on the understanding they could lose the original investment. Exante predicted that public and media interest would take off when Bitcoins were trading at $100. Managing partner Gatis Eglitis claims they are now getting 20 calls a day from large asset managers looking to invest up to $100m.
- source: http://bitcoinmagazine.com/trace-mayer-on-fox-business-why-bitcoin-is-just-getting-started/ (http://bitcoinmagazine.com/trace-mayer-on-fox-business-why-bitcoin-is-just-getting-started/)

---

....and consider the Winklevoss twins (FaceBook money) prior/continued involvement:

http://dealbook.nytimes.com/2013/04/11/as-big-investors-emerge-bitcoin-gets-ready-for-its-close-up/