Bitcoin Forum

So many people have predicted that bitcoin is in a bubble and is doomed to death.
There are most often the same people who push stocks up into bubble territory.

Now let's get to the bottom of this:

1) Is Bitcoin in a bubble?
Look at that longterm chart. Where is the bubble? I can't see it.
The uptrend is healthy.

2) What are REAL bubbles?
The NASDAQ bubble has already popped 13 years ago
There are some new bubble stocks in there that either have already popped or will do soon (LNKD, PCLN, etc.)

these are the real bubbles

how do other see that?

Bubbles are artificial  ;)

yes, like the stock market is pumped up by the QE from the fed.

Bitcoin is real.

Saying it how it is

yes, I wonder what the media says when bitcoin hits 1000$. perhaps they will again call a bubble or they say that next target is 10000$.
If they say the latter, I'd be wary about a bubble. If it is the former, there is more upside.

And on stocks, we can wait until the financial media calls for "sell stocks", because this will be close to the actual bottom. This may be around 400 for the dow jones industrials.

$1000... when?? Stop lyin bro

this is not a forecast.

I said that if/when BTC would hit 1000$ we should carefully watch the public sentiment to judge whether there is more upside or whether we will see  a big correction first.

Right there:
http://bitcoincharts.com/charts/chart.png?width=800&m=mtgoxUSD&SubmitButton=Draw&r=&i=&c=0&s=&e=&Prev=&Next=&t=&b=&a1=&m1=10&a2=SMA&m2=25&x=0&i1=&i2=&i3=&i4=&v=0&cv=0&ps=0&l=0&p=0&
for reference:
http://upload.wikimedia.org/wikipedia/commons/4/4b/Stages_of_a_bubble.png

This is possible when looking at the nominal chart but the log chart shows something different

So?

So in despair Bitcoin will dip into negative value?
Sounds right.

How do you define what is a Bubble?

If you consider the average bitcoin would represent an amount of a defaulted bank loan it is.

That would be a really stupid assumption ^^
Unless the USA declares Bitcoin illegal/goes on grand scale attack against Bitcoin or some serious protocol bug I doubt the price will fall under $50 again.

Not really, it's stupid to buy Bitcoins on credit.

I've always wondered about nominal charts.  The linear scale is by far the most popular scale for fiat/BTC graphs here and is the default scale on some chart-drawing sites such as bitcoincharts.com.  However, for comparing the relative market value of two commodities, the logarithmic scale makes things much easier to see (trend lines become straight for example).

Is there some reason people prefer linear-scale charts for value comparisons?  Do professional traders use them?  What am I missing?

It's easier to scare newbies with the nominal price charts since all price movement is exaggerated, especially after the recent order-of-magnitude growth

Nominal charts make sense if there is an overall constant demand and fluctuations within a magnitude around it. This illustration has a nominal range in mind, we shall see if it applies.

there was no bubble, we are rocketing to the oort cloud. hold on

There is something peculiar with your comments - did you spill ink on the keyboard?

He has a papa smurf complex.

Although both bitcoin and a stock have limited supply, they have fundamental differences

Stocks represent the value of a company, if the underlying company go broke, the company worth nothing, then stocks will worth nothing, no one will accept it in exchange for fiat money

But bitcoin represent the value of its underlying math/network infrastructure and people's trust, merchants' support. It is also possible those things were destroyed, but the possibility is very small

Most stocks' price will crash when central banks tighten the money supply. And central banks will always try to cool down the market when stock price rose too high, so bubble and burst cycle is a norm

But for bitcoins, unless all the central banks in the world tightens at the same time, there will not be a liquidity problem, thus price will not crash

If all the central banks tighten at the same time, there will be a huge liquidity problem everywhere and people will search for an alternative currency that can satisfy the transaction need, it will be bitcoin, so actually bitcoin's demand will eventually rise and price will be higher

Within 5 years, possibly within 2.

That is an excellent reasoning.
Fundamentally, there are high chances that bitcoin can further grow for another number of years - sometimes exponentially, sometimes linear, with corrections / consolidations along the way.

Lol
It's simple , my favorite color is blue and it is available here

All im gonna saying is a many will suffer painful loses before any fuckin $1000 day.

Only the whales come out victorious...

No it will be the terminators.

https://i.imgur.com/grH2rQY.jpg

The REAL bubble is the U.S. Treasury Bond market, that is the backbone of the financial system that's been inflating since 1982 and when that bursts, well, I hope ya'll  have a lot of gold, silver and bitcoins.

Yes.
That's a good one.

The Bitcoin bubbles in November 2010 and February 2011 actually look very real to me. http://bitcoincharts.com/charts/mtgoxUSD#rg60zczsg2010-09-01zeg2011-04-03ztgSzm1g10zm2g25zxzi1gMACDzi2gRSIzv

+1

good thread!

me i say 3000$ is the next target

its not hard to see bitcoin worth +1000$....

 :D :D :D :D :D :D

now we are onto something interesting..

We never discussed about a SPLIT.

Stocks are split regularly, but in BTC this does not really work. Any idea?
If there is no split, BTCUSD will be like Warren Buffet's stock. Berkshire Hathaway (BRK.A). Current price 173,220.00 $

huh? bond burst results from rising interest rates... If that happens, virtually all assets including gold, houses, BITCOIN, etc, should go down, no?

bond bubble is not good for bitcoin, unless you intend to sell before rates go up and re-buy at bottom. good luck timing that.

here an overlay (with different axis, still needed :-))
https://www.tradingview.com/x/zUBhXLFB/

there are two effects with different impacts:
1) the overall deflation of all assets which can also impact BTC as you suggested above
2) bitcoins infancy with still huge potential. just imagine every citizen of the world would have 0.001 BTC...

Yea, ok. bitcoin has lots of potential, agree. but why on earth would you buy pre-crash? rising interest rates = mad dash towards dollars. everything else tanks.

imho: save your dollars and buy tons more bitcoins post-burst. then sit around and wait for inevitable wave of inflation.

bottom line, stupid to buy and hold right now if you KNOW a bond collapse is coming. be patient. noobs

you have a great point, definitely.

However, it all depends on your time horizon.
One thing I learned painfully over the first years of analyses and trading is that you should not assume certain market correlations hold forever. Instead you need to analyze each market separately, and only use the correlations with other assets as one out of many indicators.

when it comes to the Bitcoin forecast I do not want to get into specifics here as this would be unfair to paying subscribers ( a new report will come out in the next 24 hours and I am sure it will be very interesting as something happens with BTCUSD).

Net, there are different time frames and some of them warrant to be long bitcoins , even if in some point a bigger correction could come. But you can still sell then..

so what you are saying without saying is btc will be immune, at least partially, to general asset depreciation when key interest rates go up? dunno... that's a risky proposition, if that is indeed what you maintain

for significant periods of time, yes.
but I am also referring to the BTCUSD rate only at this stage, and in some point the USD will be far weaker. Net, even if both fall, as the USD should fall harder, BTCUSD will rise.

But again, we will analyse all this on a daily / weekly basis as noone can predict the next years exactly today. some things will change along the way that require to verify / adjust the forecast frequently.

i dont know what you are saying, but i know i won this argument and the discussion is now over

thanks for your participation

LOL HAHAHAH, I just laughed out loud for real.  :D

thats too easy... come on

Personally, I believe that BTC will outperform most assets in the next 12 months. Is this clear enough?

I think chances are high that bitcoin will find a low around $60 the coming months. If this materializes that means a drop of -40% from the current $100 on bitstamp. That's called a crash in traditional markets. So I think one can say bitcoin is still in a bubble today.

However, I agree that price will likely be higher than the current $100 in 1 year and have surpassed the all time high of $266 in 2 years. In a traditional market it takes decades for bubbles that deflated to reach new all time highs so from that perspective bitcoin is not in a bubble today.

I agree that gov bond market is likely close to default. Before that however interest rates of gov bonds should go up strongly, just like in Greece happened. Like in Greece stocks and to a lesser extend real estate will go down in such event. Gold may, in contrast to 2008, not go down and just like in Greece go to a strong premium as people flee banks and gov bonds. But agreed, chances are 50/50 gold will first go down too.

However waiting for the above event to buy bitcoin seems unwise to me since it can take years before it starts unfolding, as Japan proved, and in such time bitcoin has easily 10 times more users and a 10 times higher price, in contrast to gold.

So I would say biggest bubble is gov bonds, then stocks, then real estate in many areas, and although gold is certainly priced on the higher end historically, it will likely be the next great bubble the coming years. What seems most undervalued to me today is bitcoin considering it's market cap is still only $1 billion.

this makes a lot of sense

thanks :)

Great question too :)

These effects are mostly money-flow based and are not entirely pure of other corresponding price impacts.
For example: Bond interest tends to track inflation


http://4.bp.blogspot.com/-XoY_kZ1oT_M/TdFaLYxx0yI/AAAAAAAAE_8/mkuphCv6sVc/s400/10-yr+vs+CPI.jpg


Prices that are linked to inflation (hard assets) should rise with the inflation rate.

yes.. and the should fall with the deflation rate.

We are in deflation or soon will be globally.

There is currently not enough evidence to point bitcoin is in bubble as there are many buyers, not only the mtgox, but may be dangerous as the market is not fully ready to use mathematical being to count.

I currently notice three major players, two in my place and the btc-e. The btc-e has been doing better than gox at the panic time.

It does not really look like a bubble.

You still haven't told us how you think a bubble does look like.

ok. here we go:

Tulip bubble http://upload.wikimedia.org/wikipedia/commons/thumb/a/ac/Tulip_price_index1.svg/800px-Tulip_price_index1.svg.png

Japan housing bubble http://homeguide123.com/cimages/multimages/45/japan_housing_bubble.jpg

South sea stock http://media.efinancialnews.com/share/media/images/2011/01/4067918874_c300,200,50,50,100.gif

Basically, a bubble is a irrational, exuberant rise and a crash to where it started.

Bitcoin instead started at 0.01-0.06 $ and is still 1,000 - 10,000x higher today.

i wonder where bitcoin would be if there were no difficulties extracting fiat from Gox? do you think charts showing the April and 2011 crashes would overlap better?

Which 2011 "crash"? The one from the peak in February 2011 or the one from the peak in June 2011? I actually believe April 2013 chart is a better fit to the February 2011 one.

june

To answer this question lets compare the June 2011 market on MTGox to the April 2013 market on an exchange that is not only not having withdrawal problems but may have some minor deposit issues Virtex in Canada. See this thread https://bitcointalk.org/index.php?topic=273286.0

MT Gox  May - October 2011: http://bitcoincharts.com/charts/mtgoxUSD#rg60zczsg2011-05-01zeg2011-10-31ztgSzm1g10zm2g25zv
Virtex February 22 - August 21 2013: http://bitcoincharts.com/charts/virtexCAD#rg180zczsg2013-02-22zeg2013-08-21ztgSzm1g10zm2g25zv

This market is very different from the aftermath of the 2011 June crash. It may have more in common with the aftermath of the February 2011 crash. As for the impact of the MTGox withdrawal problems it may turn out to temporally depress the price on other exchanges in an otherwise bullish recovery.

So in your opinion a bubble is only a bubble after it popped? In common sense that's a contradiction.

A bubble is only confirmed to be a bubble after it has popped.  Labeling it a bubble before it meets the definition of bubble is premature.

Interesting, I guess the pirate ponzi wasn't a ponzi until it collapsed either.

Bubbles can easily exist, but on a baseline of an exponential appreciation, based on the sum of the holding preferences of all users. You can't really decide where that baseline is, but you can have some assumption. Then when the speculators get ahead of themselves there is a rise, followed by a slump that can go under the baseline. In the long run, at least before the user base starts to saturate, it will deviate from the baseline only in short lived bubbles (or antibubbles (what is an antibubble)).

...or I should say, the baseline is also modified by the long time speculators.

The thing about april 2013.. its never gone anywhere near back to baseline, let alone below. Sure everyone and their uncle saw the exponential rise was unsustainable, but back out a year and the original long term trend seems to be solid.

The low after the ATH was $50?

Does that mean it was only in bubble territory around mid march when we hit $50 for the first time, or maybe even higher.

That would imply that the push from $12 at the backend of last year was fairly legit growth.

I'm about as permabull as you can get but even i cashed out a little on the way up to $200+ cos it seemed overblown.

I think we have reverted, and the past few weeks growth are a resumption of that first phase of growth that took us past the previous ATH of ~$30 not rushing to buy more. Just happy to be a part of it.

As ever it all depends on whether the protocol fails. If it doesn't then all these peaks and troughs are just going to end up looking like the normal gyrations of a typical growth stock in its early days. See you at $1m guys ;)

If you think that 13 in jan was on the base and 130 in july also, that means the parameters for the exponential baseline is 10x per half year, which means 100 x per year. Sounds a bit too high. 10x per year will still take us to world domination rather quickly. That means 130 by year end.

Indeed.

stock market = debt based equity. Bitcoin has no debt.

wrong post, but since Im here and the topic is bubbles I will speculate that we are at the start of the next one now

That's exactly the point.
And even if all central banks have as number one priority to keep the stock market bubble alive, they can't prevent the bubble from popping big time eventually.
And it will be very nasty.

Dow jones 400 we are coming.

That's like saying 80s fuel prices are coming back. They're not.
The debt based money supply has as much to do with the stock market as it has with any other sector.

The solution is simple: Periodic remittance of loans, be it in the private sector or the financial sector.  And this is happening all the time, cyprus was just one of the more visible ones.
This is something no Libertairan Doomsday Cheerleader is willing to admit: The system actually has mechanisms which can keep it sustainable. You just can't profit from it individually.

That is your very valid opinion.

I agree to disagree with you.

The system that they have build is not sustainable and will burst dramatically in the next years.

The system requires perpetual economic growth. This is not possible, even at a rate of 0.01%, unless the universe expands at least as fast and we are capable of occupying every empty space.^fn1


nothing grows forever. then the void consumes it all.  :D :D :D

-a parable, by sir Walz


¹ see: the magic of compound interest

It only requires exponential growth if loans are expected to be paid back. Compound interest stops compounding in case of a default or in case of a remittance.

lulz

ps, economy must grow. loans must grow to make possible. difficulty in repayment will scale with increasing loans.

People accept the default of other people, deal with it. That includes banks and central banks.

Competition among nation-states guarantees an unrelenting drive to grow perpetually. This is unsustainable and economic suicide. Refusing to participate in this unhealthy competition among nations is also suicide, as the winners indirectly oppress and devastate the non-participant's economies.

The goal of every viable economy is to endlessly harm itself just enough restart the growth machine. See Orwell's 1984 plz.

deal with it. i am right, you are wrong.

Just like nuclear war is inevitable, and nuclear proliferation won't happen, the cold war gonna kill you all.

Wait, nuclear stockpiles are decreasing since over a decade? Unfathomable! ;D

FTFY

Paranoid much?

So you're claiming there aren't more countries with nukes than a few decades ago?  Sure, overall numbers are down, but the number of countries capable of destroying a continent has increased.

I don't really know. My opinion about this subject goes like this:
There are piles of nukes and there are piles of idiots, and the probability of nuclear war is directly proportional to the number of piles of nukes times the number of piles of idiots times the discrepancy between the size of the piles. Both of the latter has been decreasing, and I wouldn't argue that the number of idiots gonna come down any time soon.

It could be that I went a bit more optimistic about the current state of affairs since I noticed that the most popular critics of the system do not have the answer either. What I do believe is that most of the time people get along. In the case of nations in economic competition I do think that ultimately the local economies will become relevant again, simply because at a certain point transportation becomes prohibitively expensive.

many will suffer painful losses after fuckin $1000 day, too

We can just split 1 Bitcoin into 1000 bits.

yes, or prices need to be quoted in satoshis.
still, there needs to be some sort of "agreement" to be able to show prices differently in charts software, financial media, etc..
who decides on the "split"?

I hope for a diversity of scales to be used via metric prefixes.

A hope which is realized in the past!
https://en.bitcoin.it/wiki/Units
1 BTC = 1000 mBTC = μ1000000

"the crowd". It's not time yet. When the "bit" or "mBTC" or "milli" or whatever comes close or surpasses USD paritiy people will move their minds, not before. So: next year ;)

I can almost guarantee you people will not use "mBTC" in day-to-day usage. Some slang term will emerge. I vote for "bits". It's not consistent with anything, but rolls off the tongue easily. "That's twenty bits for that beer & burger, please".

I agree. With "bits" this might get traction, but definitely not "milibits"
"bits" parity to USD? Lets find out.. heh

Ente

Shave and a haircut? 2 bits.

Will be interesting to order bitburgers...

artificially grown bitburgers are the future. i am ready.

great meal:
artificial bitburgers + Bitburger beer (German brand) http://www.dasgastroportal.de/fileadmin/user_upload/bitburger_international/Produktabbildungen/Produkte_Bitburger/Produktuebersicht/Bitburger_Pils_Fassdose_103Prozent.png

The REAL bubbles