Bitcoin Forum

Understandably there's quite a few bitcoiners here and there who (and those who don't have any bitcoin) who keep preaching that bitcoin is a 'bubble' and that it's going to 'pop', and stuff like "hahahaha, silly bitcoiners, won't you feel silly when it pops." etc, etc

So, my question to you (if you are of this mindset) is - At what value will you finally say "ohhh, I better stay quiet now cause bitcoin really IS the future." or "oops, I best apologise cause I was wrong all along."

When it reaches $200? $1,000? $100,000? or more? Will there still be people screaming "bubble bubble" when it reaches $1 mil?

at 100k, id say its not a bubble ;)

There is proven history (Tulip mania) that i can reach at least $ 500 000 per bitcoin (10 years of annual wage for bob the builder) There is no reason that that figure can not be surpassed tenfold or more.

The value doesn't matter.

What matters to bitcoin a bubble or not is NOT the price. What matters is how much they are used by the wider public.
Today, the price is relatively high, and this is based on the -expectation- that bitcoins will be the common internet money of the future. Then, the current price is low. If mass usage never happens, or bitcoins dissapears and is forgotten about in the next decade, the current price is high (a bubble).

I think we will see large scale use but not a monopoly on internet payments by the bitcoin platform, supporting a price of $1000 to several $1000 within a decade. Ofcourse, we will take time and fluctuations to arrive at the 'final' price. We will overshoot it a couple of times, and dive below it.

With these prices, what good is Bitcoin? What can you use it for in such times of volatility?

The assumption of a bubble is generally based on Paul Krugman's neo-keynesian fantasy world where people don't spend deflationary currencies. But people do - when their need for something in the immediate present surpasses the potential future value of the currency they will spend, and this is why we see record numbers of merchants signing up with bitpay. They're not signing up based on speculation, they're signing up because regular customers are emailing them and requesting that they accept bitcoins.

We don't need to pop the bitcoin bubble, we need to pop the fantasy bubble in these peoples' heads that convince them that bitcoin is a fad based on neo-keynesian "spend spend spend" bullshit. Bitcoin (or at least cryptocurrencies in general) are here to stay. And yes, it can be both a deflationary store of value and a currency. Perhaps it doesn't encourage unsustainable levels of consumption like the USD - the dollar is like a hot potato. I get rid of USD as quick as I can, either into deflationary alternatives or goods/services that I can't yet buy with deflationary decentralized currencies.

To play devil's advocate, how many of these are genuine requests because people want to spend bitcoin? How many are those with a vested interest trying to sustain the price growth with no real interest in actually spending their bitcoins?

That'd be falling into the very same fallacy Ashley was just talking about. If the bitcoin price rises and there are plentiful bitcoin stores, people will spend their bitcoin. I'd consider buying a nice new laptop from Bitcoinstore right now if international shipping were practical and I could get a good system for less than, say, 2 BTC.

Until this year it was quite hard to perform actual transactions - buying BTC in the first place was hard, and not that many places accepted them. That is starting to change though. I've done about half a dozen small BTC transactions in the past couple of months.

The massive amount of recent press coverage aside, the total number of users can't be more than a few tens of thousands of people (see blockchain.info), which is very small indeed.

We'll know that it has hit the mainstream when you can buy groceries or pay your utility bill using BTC.

I would actually agree with you that far. But then:
No, it is based on speculators' belief that the value of this commodity will go up. No assumption as to their beliefs about why (if they even have any) can be made. Most of them are most likely uninterested in any vision of future digital money; they just see a get-rich-quick opportunity, and that is that.

There are some that say that all economic activity is a bubble of some sort.

The question is whether there is residual value left over after 'x' pops.

Well, look, c'mon, bunch of 'nay sayers', and you're all to scared to give an amount that would make you go "ohh, I was wrong.."

http://www.youtube.com/watch?v=_G-K7-QOaA4

Like this dude here  :P

For many people that will be true initially. They buy their first bitcoins to make a quick profit. But I think that once they have bought a few, they will start watching the price, read about it, talk to others about it, begin to notice bitcoin in the news/magazines etc and gradually gain the insight of what is so great about the whole concept. And I hope that will convert a lot of them into true bitcoin enthousiasts.

The devil makes a good point - either way we have to assume that people spend deflationary currencies (at least enough to sustain economic activity) or assume that they don't.
I can only speak for myself; I spend my bitcoins on stuff, and I know plenty of other people that do. I think the stores making bitcoin sales would tell you that the deflationary hoarding theory is bullshit based on their sales records, but who knows. I don't have figures, I just have a seive in my hand leaking water at an alarming rate, and it's labeled "theory that bitcoins are not spent because deflation because Krugman and the mass media said..."

I'm sick of the silly posts linking the bitcoin's price to the success of bitcoin. They are two completely separate things.

You can think "Wow, bitcoin is the future" a day after a massive crash where it's worth $1.
It can reach $1,000,000 a coin and think "Wow, this is totally a bubble".
It can reach $1,000,000 a coin and think "Wow, bitcoin is undervalued".


Bubble or not is determined by whether you believe the value is derived from core principles (people wishing to use it as a currency - trading / receiving / using BTC) or if you believe the value is derived from people speculating (I'm going to buy now because the price will rise, then I can sell and make money).

These are two independent things. The value of bitcoin could be rising by an uptake in people using it as a currency, but at the same time even more people could be speculating causing a bubble. That doesn't mean bitcoin isn't getting stronger and showing it's a currency of the future.

Personally I think you're silly if you think that the vast majority of people at the moment aren't purchasing for speculative reasons.

I can only speak for myself but in my opinion the Bitcoins impact on the market will be impressive when the price goes to $1000 or even $5000 for one BTC.

Bitcoin itself is not a bubble, however, I do think the price is in for a correction.

You mean the one we had like a week ago?  ;D ;D ;D

Time for another rally. Looks like it's started....

We have a 20%-40% flash crash about every once or week or so. NBD.

Think we'll hit $200 in the next 24 hours?

Or will some idiot DDOS MtGox first?

As I said in another thread, £200 by the end of this week. But recently I learned some new things, and can fairly say if this pace continues then on Thursday/Friday we should see some very interesting things with price/spike increase.

I was already wrong about today though, was saying to a friend £120 at least.. and i wake up and it's already £124 .. and climbing.

So, ye, the evolutionary cross over is probably more likely Thursday than Friday.

That was short term uncertainty. I mean a large correction to at least around $90.

This is insane. I bought a few bitcoins two weeks ago and they have now doubled in value.

Bubble or not, this extreme quick rise in price doesn't look sustainable to me.

At least part of this is driven by market uncertainty. There's somewhat of a negative correlation between global stock markets and BTC's price at the moment.

A Bitcoin bubble is the least of the problems to come, which could elevate Bitcoin to the top in a hurry.

Go look at http://www.thebubblebubble.com/ (one of the same that predicted with accuracy the 2008 disaster), the world's economy is at the brink of a complete and total meltdown, in what could very well be the Great World Depression of 2015 (or so) where China finally melts and takes the commodities market with it that it has only sustained by faking it economically, rife with corruption and no plan to fix it. The US will soon be bankrupted by out of control medical expense, and most top nations including the US in the world can look forward to a massive housing bust at the same time.

The US is also poised to see its out of control college system burn down as a result of a complete default on over $1 Trillion in rising student debt, making it pretty much impossible for anyone of lower class to go to school after that. Add to the massive layoffs and budget cuts of the medical system once pops, they will be joined in the unemployment line with college professors and support staff. Way to many glut industries exist where trained workers outsupply the demand for them.  The unemployment rise world wide will be detrimental.

 I am convinced it is only a matter of time before the entire world suffers and starts looking for a fast way out, and there is no hope to save our current financial model. How can we with the same idiots in charge when the last bubble burst. These new ones make the 2008 Housing Crash look like a trip to Space Mountain in comparison.

The 2008 Recession was only a taster of whats to come as the US and the rest of the world ride out the current bubblecovery before an epic world financial crush.


Bitcoin could very well be the last hope as the only viable alternative when all others fail. We are right on the forefront of a fire storm that will be unprecedented in history. Bitcoin may just save the world afterall as a chance to reset our entire economy to a new system, and we'll be ready for it when it does.

Yeah except Bitcoins aren't tulips. They're not comparable like that.

If Satoshi decided there would be 42M Bitcoin then the value of each Bitcoin would be half of what it is right now. It's totally arbitrary.

I thinks it adoption not a bubble if its a bubble it has a long way to go before it bursts.  Still only 1 billion into it not enough money for it to be unstable or burst i think it can take a lot more money and traffic for it to be considered a bubble.

Didn't it hit 2 billions the other day? And how do you know when bitcoins gets unstable?

Of course you'd have to realise that in 16th century Holland tulips were traded by rich businessmen (merchants) and 90% of the population were peasants and paupers whose wage was the bare minimum to buy food and not die from starvation, while a merchant would easily make 1000 times the average wage from trade.

And there are plenty of reasons, it's just that bubble fanatics get blinded to any risks or bad news and become unrealistically optimistic. Although tenfold of $500.000 is by far the most outrageous claim I've seen so far.

It's like 2000 all over again "hey, pets.com/worldcom/infospace has gone from $2 to $100 in just months, if I put all my life savings in it I'll be a millionaire when it reaches $5000."

Of course they all failed or lost huge value. Take http://en.wikipedia.org/wiki/Inktomi (http://en.wikipedia.org/wiki/Inktomi) whose shares went up, split a few times, and reached $241 per share for a market cap of $35 billion in 2000. In 2002 it was bailed out by yahoo for $235 million, or $1.63 per share, less than a percent of its peak value.

But even if almost everyone knew $35 billion for a midsize company was too much, there were still many people that said "hey $220 per share, if it goes to $8000 I'm rich" and put their savings in it.

Interesting chart: http://oi48.tinypic.com/2e0plop.jpg

What do you want to say with that? That is rising and is getting adopted incredibly fast?

There are several separate things going on here.

1. Mt Gox has a backlog in the thousands. That will drive new money in for a while. All the press attention and negative market news elsewhere helps significantly, and may continue to help for a long while to come.

2. If you sit and watch one of the exchanges that has an open book, you can see that the price has support levels etc, just like a stock market. Implication is that the current price is a trade, like any other. Just let your winners run, and be prepared to back out if that ever changes.

3. Overall adoption level and transaction rate is going up. That - over time - makes the market more robust. That doesn't imply any specific price (as many others here have said), but it does mean that long term prospects for BTC are probably good.

4. Hypothetical economics stuff (deflationary, bad bad fiat currency, etc etc) - all nice on paper. Everyone has strong opinions. We'll see if any of them work out.

http://konradsgraf.squarespace.com/blog1/2013/4/6/hyper-monetization-questioning-the-bitcoin-bubble-bubble.html (http://konradsgraf.squarespace.com/blog1/2013/4/6/hyper-monetization-questioning-the-bitcoin-bubble-bubble.html)

Lol when people comment on ZeroHedge bitcoin articles and say "lol... tulip mania, anyone?" AS IF every single price rise on everything in history has the exact same fundamentals as a tulip and can be compared and then used to extrapolate similar results from historical events.

The current rise in bitcoin price can EASILY be justified if you
(1) Take some time to study the fundamentals and how bitcoin (and other cryptocurrencies and non-fiat stores and exchanges of value) works + it's many applications (and I mean REALLY study)
(2) Pay attention to what's going on around you... no, not the "official" inflation rates and Obama telling us we're in a recovery... look around the corner. Pay attention to the savings confiscation legislation slowly being introduced around the world, various manipulations of various markets, massive corruption in the fiat banking cartels and governments, alternative statistics from real economists rather than government shills...

There is not a doubt in my mind that cryptocurrencies are here to stay and if you think this is a bubble and Bitcoin will go back to $40 and sit quietly by the wayside for the next 25 years, you are deluding yourself. Wake up, kick the shepherd, leave your pasture, and become a world citizen.

The exchanges are risky since they're custom build amateur attempts, based purely on demand and supply provided by customers, without a marketmaker backing up

A few days ago someone sold 50 coins for euro on BTC-E, when there was less present in the total book. As a result it sweeped empty the total buy book, resulting in most of the coins being sold for 3 euro when the current price was 120 euro.
http://f.cl.ly/items/3d1c1V2E130E3C1M2H3A/Schermafbeelding%202013-04-08%20om%2001.28.10.png

Such things happen when amateurs program something from a programming perspective. Real exchanges would trigger a trading stop, pausing trades for 15 minutes after such a large price shift or deny trades that are outside a certain price range. But of course all mistakes and solutions that the real financial market have encountered the last 50 years have not yet reached these amateur exchanges, it's like starting all over in the 19th century.

Trading without market makers with only customers doing the trading is extremely risky. One network outage where the buy side of the book gets depleted and they will just lower the price to whatever is still in the book, even if that's a buy order for $0.01, and execute those out of bounds trades anyway.

Not many people seem to be considering that Mt Gox's AML queue may also consist of miners waiting to cash out, imagine a small time miner who sells small amounts occasionally which means they've never had to think about the AML verification before and haven't set it up. The way things are looking now they are in a position to take their family on a nice holiday or pay off some student debt, whatever, without massively denting their holdings. Cashing out through an exchange would be a safe, legal option to raise the funds, which means joining the AML verification queue.....

@jerkoff - totally agree with you regarding the exchanges.

When do you think we'll see BTC trading on EBS? :)

I keep hearing this one but I think the backlog is what we in the start up industry call a "vanity metric". Sure it might be an indicator, but until people buy their coin, it doesn't guarantee anything.

When I got approved I didn't transfer a significant amount of FIAT straight away and watched the market closely before buying any coin. I started small and once I had some confidence, I made a bigger move. This was back in the days of $50 per coin and even then rapid rises scared the hell out of me. I wonder how I'd have felt about trying to buy in today given the exponential growth?

Price doesnt matter, volatility matters, and in those terms bitcoin is doing worse than ever before.

What do you mean? It's undervalued and hasn't reached its potential. Barely any sites take bitcoins today - so imagine its complete future potential! Of course it will have a incredibly high growth rate considering the huge adoption rate, therefore bitcoin is doing better than ever.

Somebody should compile something like ^VIX for BTC. Would be interesting measure.

I do not believe a crash will happen anytime soon. From the market data it appears there is substantial demand and flash crashes are not causing panic selling on a large scale.  The small dips are leading to alot of bids, or people trying to get a discount to short term average.

There is a demand from the hoarders. The value bitcoin once had is more or less gone. It has turned into roller coaster for greedy speculators. When they realize that their imaginary, digital numbers isn't worth anything than for trading I predict it will crash.

This. Early adopters fleecing late adopters, creating volatility and undermining the bitcoin economy.

For a full on crash to happen, EVERY speculator would want to dump all at the same time. There'd have to be a specific reason for this. Like major exchanges getting hacked, or a difficulty spike prevents blocks from being made... as it stands now, a flash crash down to 25 or even 50% would be bought back up by additional speculators easily. You couldn't even call a 50% dip a crash right now, hoarders won't be phased by it and will continue hoarding. The only thing that can create enough of a panic to crash the price is news of a fundamental or potential flaw in bitcoin.

The 0.8.1 required upgrade coming in May could possibly have a bug that would cause this. That's where I'd put my money on the first sign of a crash happening.

It's disgusting. I was attracted by the technology behind bitcoin, but it obviously had to get exploited.

It's enough with a few people starting to sell. When the rest see that the price is dipping they will get uneasy, considering all the money they put into the system. Then will not much be needed for a panic to break loose.

ITT: People who make grand assumptions about what other people do with their bitcoins.

Like "greedy speculators" and "newcomers" and "old timers" and "hoarders" and "spenders"

The 5000th thread just like this... gets old. Why don't you look around and see what people are actually doing with their bitcoins.....

There are people with 500000000 USDs just sitting around. Hoarding. Yet the USD is used for millions of purchases every single day. How could a currency with OMGHOARDERS actually let people OMGSPEND? OMG did I just make MaTachi's BRAIN explode? Lol. Can a quasi-commodity function simultaneously as an exchange of value and a store of value? That functionality isn't just limited to fiat.

Next thing you know we're going to start talking about the big 1%er bitcoiners fleecing the 99%er new adopters with their greedy speculations. Did the Occupy Wall St crowd just join BitCoinTalk when they heard about the latest rally?

Whatever. Carry on... BTW I just saw a bug in your dreads, might want to take care of that...

I've seen this tulip bubble equivalence around a lot... A big contributor to it was the fact that the government at the time allowed people to void any contracts they made for a fee, so people could freely make very risky transactions without much actual risk

There's no price it has to hit to not be a bubble. But if Bitcoin stays at the same price more or less for, say, three months, I'll declare it "not a bubble".