Oil will not play a large part of energy generation for electric cars. As it is right now, oil hardly generates any electricity in the US; only 0.6% of all generation. 34% comes from natural gas, another 30% from coal, 20% from nuclear, and 15% from renewables. Oil is not a factor for electricity generation, and will not become one. The fastest growing segment is solar. When cars go electric, oil will lose a very large consumption factor and there will be nothing to replace it.

The price has fallen quite far. I'm highlighting the above quote because it's still true. The market has been intensely irrational and people's expectations have been irrational. A stable price is a far more useful attribute than a Bitcoin that fluctuates wildly, or drops from 19,000 to 12,000 in a week but sometimes also goes up that much too. That type of volatility makes it useless, and utility ultimately will determine value once the mania runs out. But the reason so many people are buying is because of the mania, and because they think you can get rich; that Bitcoin can't drop permanently. Read these boards, everyone seems to think any drop is temporary.

That's not how anything works. Anyone who says "Bitcoin is risky, but anytime it goes down is just an opportunity to buy more" is not recognizing the first thing they said: THAT BITCOIN IS RISKY. It's not risky because sometimes it can go down, it's risky because it can go down and never go back up. If you don't accept that as a possibility, or better yet, as a likelihood, then you shouldn't be buying Bitcoin.

Ah, I understand a little better now, however an exchange that isn't charging commissions... what aspect of their business plan is being affected that would necessitate charging commissions now? In the other examples you listed, the tax is imposed on the business owner who passes them on to consumers.  (Raising gas taxes means the station has to pay more based on what they sell, which means they pass the cost along to maintain their margins.) In this case however, the tax is imposed on the consumers directly and bypasses the exchange. It's the same as if in your example of consumers who buy gas, their income taxes were increased. That's a tax directly on the consumer that doesn't involve the station owner, so there's no extra cost to pass along.

Many startups were considered bubbles in the 90s, and guess what... many were. First, you're certainly right that it's too soon to call this the bubble bursting. It's also probably too soon to conclude it was a bubble. If Bitcoin is going to go right back up, then it's hard to conclude the bubble burst, but it doesn't say anything about the overall mania not being a bubble. This market is intensely irrational. We will only know with the benefit of hindsight and ample distance whether this was a bubble. But seeing how irrational the market is, I'm not betting on Bitcoin. There are plenty of cryptos that are better suited to being Bitcoin than Bitcoin itself, so if crypto adoption continues, it seems more likely to me that it will be all the better, more useful cryptos getting the attention than Bitcoin.

Well, Bitcoin was $19,000 earlier this week, and is currently below $12,000 and still falling (along with just about every other crypto asset). While it's too early to call this a bubble popping (it could just be a correction, or it could be a temporary moment of sanity inside the overall mania surrounding crypto that will just see prices go right back up to bubble territory), the rationality seeping into the market at the moment certainly seems to indicate that calling Bitcoin and crypto as a whole a bubble to be more accurate than not. Time will tell.

The economies of the US, Europe, China, India, and Japan (you know, just to name of few) are all growing presently. You can't have a global recession when all the biggest economies are growing. A recession is a technical classification meaning two straight quarters of economic retraction. Any growth means it's not a recession, and wide-spread growth as we are currently experiencing means even less so. That's not to say one can't start, and recessions are a natural part of the expansion cycle. It's actually interesting to consider if the losses of late crypto buyers (especially institutional investors who just got into Bitcoin) could help along a recession.

Currently, nobody is shifting to alts. Everyone is fleeing everything. If people were shifting to alts, you would see a drop in bitcoin and alts either rising or remaining constant on a USD basis (thus, gaining vs. bitcoin). That's not what is going on. At the present moment, 46 of the top 50 cryptos by market cap are down at least 25% on a USD basis, with the vast majority of them being down a brutal 30-45% in the last 24 hours. Only 1 crypto is actually up out of the top 50.

It's too soon to say this is the bubble bursting. That will depend on if it just inflates again afterward. This market is irrational, and the people buying have irrational expectations. Knowing that alone is enough to make me anti-HODL. On top of that, Bitcoin is a terrible network. We're up to 300k unconfirmed transactions and it just can't scale. I expect if Bitcoin keeps dropping and taking everything with it, it will either be the end of the bubble, or if/when money starts flowing back in, it will go to alts at that time more than Bitcoin.

There's quite a difference between a sound investment and a bubble. Knowing something is a bubble should automatically mean you don't want to be invested in it, because otherwise you're acknowledging that the price is irrational but think that you can profit off it before it pops, which comes without warning. If people could get out of bubbles before they popped, there'd be no such thing as bubbles. The nature of a bubble is the unpredictable nature of the collapse. A sound investment probably doesn't appreciate as quickly as a bubble, but it doesn't crash like it either, and is a stable investment rather than an irrational, unpredictable one.

There are two bubbles, and don't confuse them. Crypto as a whole is definitely in a bubble as everyone has lost their minds over blockchain and anything crypto-related (see all the public companies invoking blockchain without real business plans and their stocks explode anyway). Bitcoin itself is a bubble within the world of crypto. The Bitcoin bubble can pop without the over all crypto bubble popping, for example if everyone decides to "diversify" out of Bitcoin and into alts, the crypto bubble itself can still grow while the Bitcoin bubble pops.

The mempool has been congested for the better part this entire year. I think you'd have to differentiate between congestion at 100k unconfirmed transactions (which it rarely ever seems to dip below now) and the most recent levels of 200k unconfirmed transactions. Either way, it's probably not very sound logic to infer causation between unconfirmed transaction level and the start of futures trading. The more likely explanation is the network remains under spam attack from people trying to artificially elevate the utility of Bitcoin Cash in comparison to Bitcoin.

Now that CBOE and CME are trading Bitcoin futures, there was hope it would push the price of Bitcoin higher. There is, however, no direct link between the futures being traded and the Bitcoin price. The reason for this is Bitcoin futures are cash settled. There is never a point where the expiration of a contract will ever involve the exchange of Bitcoin, so the trading of futures is an artificial tracking of the Bitcoin, just in a more regulated setting. This may give institutional investors more confidence than dealing with unregulated crypto exchanges, but it doesn't mean anything for the price of Bitcoin (directly).

It remains to be seen if Bitcoin futures can indirectly affect the price of Bitcoin. Because there is no settlement in Bitcoin, futures contracts cannot affect supply for sale and demand directly, but if futures traders bid the one-month futures settlement price up $5,000 above the Bitcoin price, it remains to be seen if this will translate into increased confidence for the actual Bitcoin market and lead people to buy more and also push the price up. This is the only way futures can affect the price, indirectly.

My expectation is that because there is no settlement in Bitcoin and settlement has no direct ability to influence price, the futures will not trade wildly differently from the actual price at any given time, and any indirect affect will be negligible. With the volatility of Bitcoin, futures traders will never be able to speculate too far ahead of the actual price because of the speed at which the price can change and leave them on the hook for settlement of an asset they won't even be able to take control of if they bet wrong, but must simply settle in cash for a loss.

It's pretty easy for someone with a superficial understanding of something to dismiss it as insignificant as you've done with the Nobel prize. The question as to why a Nobel prize winner in economics is different from random commenters on the internet is laughable in its simple-mindedness. Even your presentation of deflation as a benefit of crypto shows a basic non-understanding of economics, as no credible economist will ever say deflation is a goal of monetary or national policy because of its tendency to disincentivze economic activity and cause recessions as economies stagnate and decline.

Without a chart to back this up, I'm going to challenge this first part as not accurate. Growth (as in usage?) is not the same as growth in the value of an asset. Same for computer usage. Cars as an asset class I would venture to say have never increased 70x in value (inflation-adjusted, due to the long time frame the automobile has been around) and adjusted for how much more tech is in cars than when the Model T debuted.

Fair point on the evolution of technology, but with the absolute mania surrounding Bitcoin, I'd say it's far more likely it's a bubble than a fair representation of an evolving technology that is valued based on utility. Bitcoin is pretty useless as a payment mechanism due to the transaction ceiling it currently faces and the cost of transactions because of it.  The utility of crypto as a whole and the price of Bitcoin itself are not necessarily the same thing, and it's quite unlikely Bitcoin will even be the main crypto in the future at this rate, which means the price of Bitcoin is almost certainly too high. 

Crypto is in a mania phase. Everyone has a fear of missing out on all the money they think every one is making. People counting on hyperinflation are going to end up sorely disappointed. If QE didn't cause it, there's no foreseeable catalyst that can cause it. QE has now wrapped up, there's been hardly even regular inflation, and nothing above the long term target inflation rate. So like you said, Bitcoin is extremely unlikely to replace or improve upon fiat, and it remains only a speculative vehicle with no inherent value. The price level is supported with unbridled enthusiasm. Everyone believes it can't go down, or if it does, it'll just pop right back up. It's not like that's never burned a market, right? [/sarcasm]

Numbers 1-4 on the list are all the same bubble. You don't take a temporary fall and use it as evidence a "bubble" has "popped." Just as a temporary drop doesn't evidence a bubble has popped, nor does the period after it has dropped indicate a new bubble. Bitcoin has a whole is all part of the same bubble, and it's still in the inflationary period. There have been no bubbles burst here, as a burst bubble indicates a permanent impairment in the price, or at least one that lasts far longer than anything that has been seen in this market.

The Dutch Tulip Mania is one of the most famous bubbles of all time, for the scale of the bubble, the scale of the collapse, and probably including the seemingly obvious nature of the bubble considering the extremely limited functional utility of tulips. Bitcoin has now surpassed the multiples of value appreciation at the height of the Tulip Bubble (and by a wide margin). While this itself is not proof that Bitcoin is a bubble or that a collapse is imminent, it's worth considering if there's a lot more risk buying at this price (currently bouncing around $17,000) than anyone on these boards seems willing or able to recognize.




Thoughts?

"Value" is the whole point. Bitcoins and everything else in the economy are priced in dollars, so if the price of bitcoin crashes, you still have 1 bitcoin, but you have significantly less "value" in your asset and can trade it for significantly less dollars or goods/services. The fact that everyone believes a bubble popping is a temporary hiccup and the price will go right back up are the perfect illustration that this is a bubble. The only way you're going to learn unfortunately is to live through a bubble bursting, and then coming to the slow realization that your expectations of a recovery are not going to be met.

There are things that can be done, like wealth redistribution. The question is whether those activities solve more problems than they cause. Socialism has a long history of requiring oppressive violence to enforce, and results in a lot of corruption as the people tasked with redistributing the wealth often don't abide by the laws they create, thereby breeding resentment. I don't believe there is any purely capitalist, free-market nation, all the richest countries have some form of socialist tendencies with redistributive policies, the question is just finding the sweet spot between what is too much to be destructive and what is too little to perpetuate suffering.

Imposing taxes on capital gains from crypto for traders ostensibly would not affect whether or not an exchange charges commissions. However regulating the exchanges and requiring proper capitalization could. And in that case, I'm all for it. Every financial exchange is regulated and required to meet minimum capitalization requirements to protect investors, why should crypto be different? We've already seen the types of scams and failures that are common with a lack of regulation or oversight. My inkling is this news will be complained about by people with very little practical knowledge of how financial regulations work, but overall it's a good move.

Bitcoin Cash has spent more time going up than down, just like Bitcoin, so while there may be people who are currently down on their investment, there are probably many more who are up on it. In this, it is no different than Bitcoin. There's a tendency for people to take wide, sweeping generalizations based on a particular moment in time. That's not wise for any number of obvious reasons, but it is even more of an obvious folly in crypto, where things tend to move in a much more volatile fashion. Any momentary generalization can quickly be outdated and proven wrong, like the person up in this thread saying that people who bought in at $800 have lost money and probably learned their lesson. Well, if they held, they're sitting on a clean double from that point, so perhaps the only lesson to be learned is patience.