Agreed with the claim (WS is coming), or perhaps even, WS has been here for a while (maybe as a training field or playground for traders).

However, I think many here are under a misconception what it means once classical finance is entering the game. I personally think that, aside from a much needed correction, part of the reason we're seeing this drawn out bear market is that more traditionally oriented traders are making good use of margin trading to skim profits off of speculative (mini) rallies that aren't driven by a sustained inflow of new capital.

tl;dr IMO, Wall Street (or something close to it) is already here, but it's naive to think the only conclusion from that could be that it'll lead to new price highs.

Interesting approach, BTCtrader71. Thoughtful analysis, much appreciated.

That said, you're throwing out the baby with the bath water a bit here. I did my own estimation of the 'transaction-based minimum valuation of the network' in a thread a while ago (link), and I understand that probably the most crucial (and difficult to estimate) parameter is the velocity.

Your solution, mathematically at least, basically boils down to setting the parameter to 'infinite', then grating some 'friction' that supports the network minimum valuation you derive in the end.

Problem is, like any currency, Bitcoin does have some velocity of money, even if it is harder to estimate, and it almost certainly isn't unbounded, i.e. transactions that involve actual goods or services are almost certainly /not/ completely instantaneous like you treat them.

So in my opinion, the conclusion to draw from your 'friction' analysis is providing an absolute lower bound to valuation, on top which the next level of valuation (derived from an estimate of velocity of money on the network) has to be placed. Agreed with that view?

Which ties in with my own request from a few days ago...



As a long-term customer of Bitstamp, I'd really appreciate an answer from someone in charge to this simple question:

Do you have an ETA for the next financial audit? (That were once promised to be held quarter yearly).

How dare you? Comparing cutting edge blockchain technology (with a built in currency-like token to secure the network) to a has-been producer of overpriced hardware on the last leg of a fad that started about 10 years ago.

Surely you can't be serious  

Right. Only difference between our points of view: the NASDAQ company that is equal to Bitcoin in the analogy could be WorldCom, or it could be Microsoft, Apple or any of the other major players that we take for granted now but that saw huge valuation slumps in the aftermath of the "bubble" pop.

Fun fact:

AAPL fell from ~5$ to ~1$ in the early 2000s. Surely Apple must have been dead back then.


Fun fact 2: Both of those sound like a good entry price now that it's trading at above $100, huh?

If thou treatest Satoshi's words as gospel, thou shalt at least read thy fucking white paper more carefully...


Title, abstract, and first paragraph:






Note the curious absence of mentioning Bitcoin's purpose being a 'rock solid store of wealth with the sole desire to overthrow the JEWISH SHAPESHIFTERS' & SPACE LIZARDS' FINANCIAL OLIGARCHY' - ahem - I meant to act as "semi fungible high limit poker chips". I like that one.

@NotLambchop

Why do you think I posted a NASDAQ graph? Just now, we're almost back to the peak level (+/- a few percent).

Sure, if you put all your kid's college money into stocks of pets.com, your investment failed.

Or if you bought some index following fund at peak valuation, then sold a year later.


The point is, tech is doing fine. NASDAQ is doing fine.

Sure, I get it, you think Bitcoin is pets.com. Can't prove to you that you're wrong. Just don't bring up the "dotcom craze" as a whole as an argument against crypto: there was sharp correction, but the industry as a whole went on to change the world.

Who cares that pets.com went down when there is Google, Facebook, Apple and Microsoft running the show now?

Hm? That was my point, no? From $32 back to $2 made almost everyone on the outside, and even plenty of the "early adopters" declare Bitcoin dead and hopeless.

$1100 to $200 is not even close to that decline, but here we go again with the "WorldCom" comparisons... 

No such 'point of no return' estimate from me, I'm sure.

In my opinion, there is no clear cut point from which it "will never recover".

$2 in 2011 was almost certainly well below any such limit if you would have asked, and here we are: up by a factor 100 from then within about 3 years.

Name one, really, just one large company (other than the producer) investing in Beanie Babies infrastructure - one of your favorite analogies for Bitcoin.


I'm sure Coinbase investors are opportunistic. But they're not entirely stupid either: you don't pour money into something that you expect to go away next year.

@NotLambchop Noice... So you discovered the reason why financial markets exist (other than that they're kinda hard to ban entirely )

Whether Bitcoin (or crypto) will be "tech" / NASDAQ, i.e. a long term success with a major dip in between, or WorldCom, a total failure ultimately, is a question impossible to answer with any sort of rigor, therefore: answered by markets.

Sure, 2014 mostly confirmed your point. But we should probably wait until we're back to single digits per coin before declaring Bitcoin bankrupt like Worldcom, right?

Guess we're in agreement then mostly. There are some signs that the (2013) 2014 (2015) bear market is, if not ending, getting closer to an end, but your guess is as good as mine if we already reached bottom or not.

Here's what I think:

I don't buy the bullshit of extending a line running through historic price on a log chart arriving at ONE MILLION DOLLAR per bitcoin by the end of next Thursday, but I also don't buy the bearshit of declaring Bitcoin dead and failed when VC money pours in like it did this year.

The latter doesn't mean we're going to rally now, not even this year or the next necessarily, but I do take it as another milestone for crypto becoming entrenched as a part of human society.

Which sounds good enough for me. The rest is a matter of your investment time horizon, your risk profile, and your ability to control risk.

Now that I think of it... funny that you mention the "dotcom bubble", as a placeholder for all those broken dreams of investors, huh.

Let's take NASDAQ as a proxy for "dotcom performance"⁽¹⁾: except for the poor suckers who bought in at the very peak, then panic sold at the bottom, I'd say the technology sector is doing mighty fine:



Took about 14 years to get back to peak level. But by the looks of it, crypto moves a lot faster


⁽¹⁾ Yeah, yeah, "Bitcoin =/= NASDAQ". So diversify a small amount into alts and Ripple, and keep your eyes open for possible successors to Bitcoin, as judged by their total mcap. For now, Bitcoin does more or less equal crypto, by the analogy above, where NASDAQ equals "tech".

Aww, second time you accuse me of becoming a "cultist". You'll note that there are no "$10k coin in summer" predictions coming from me.

But when the retardo troll crowd tries to spin another major investment by the legacy finance world as further signs that crypto is doomed... well, it's getting a bit transparent.

If it's run by some happily insider trading French dudes, I'll call it Western no matter where it's registered...

The French really seem to have some knack for running well maintained exchanges, don't they

Quite marked change of tone lately, tarmi. Hoping to re-buy cheaper, huh?

Anyway, Miz4r made a completely valid point: China seems more "bearish" than the big Western exchanges, with signs that the latter are accumulating and the former are distributing. Nothing to do with "bagholders" or other troll-y terms: it's an observation - BS and BF seem to be accumulating again. Bid/Ask confirms this. Plausible conclusion is that the influence of the Chinese trading on the market is (gradually) fading, though I wouldn't go as far as saying Chinese trading volume isn't important anymore.

Awww, you lil' trolls are totally adorbs :3

Here, I'll quote myself, from the wall thread. Ain't nobody got time to respond to the FUD individually...

I still read your main account, you put quite a bit of effort into that one, but your alts go on ignore

The evolution of the cryptocritic slowpoke:


"Bitcoin will never be worth more than a few cent".

=> 2011: $32

==> "Ha! Price dropped from $32 to $2. Bitcoin is dead!"

===> 2013: $260, $1100

====> "Ha! Price dropped from $1100 to $200. Surely now Bitcoin must be dead."


"Nobody has any interest in using Bitcoin"

=> Network grows exponentially, 5 years in a row

==> "Okay, nobody other than a few nerds and libertards is ever going to use or accept Bitcoin"

===> Microsoft online, Overstock, Dell, Newegg

====> "They don't really accept Bitcoin, they convert most of it to USD immediately. Big money despises Bitcoin."

======> $75 million investment in Coinbase, by New York Stock exchange, among others

=======> "They don't actually think Bitcoin is useful or is going to stick around. Didn't you know the only guys who made money during the gold rush where the sellers of shovels?! That's exactly how they see Bitcoin."


And so on, and so forth.

There's a big premium to be had in this market, and you guys are the reason. Never change, please. ^_^

Good Guy NYSE, amirite?