There were "crashes" on the way up to $32 in 2011, too.

Obviously we'll reach complete mainstream adoption by next week

No, it has to slow down - that is an absolute fact. It simply isn't possible for all the people who have never heard of Bitcoin to be fully convinced and fully invested over the coming week. That would be insane. Why am I even having to say this?

I'm a hyperbull, expecting a decent chance that each bitcoin will be worth zillions. But this double exponential growth ends this by next week. We all agree on that.

So what this really means is all bets are off. We may be in a bubble, but even if we are it could still rise another tenfold. Maybe even in a single week. But after that it must cool its jets to some degree at least.

Luckily the learning curve and Gox verification cue smoothe things out a bit and we might not have a crazy selloff when things slow down as they mathematically must.

Notice how the slope of the exponential is only just now reaching the 2011 bubble slope. That bubble took us up over another order of magnitude before popping. So if this is a short-term bubble there is at least a precedent that it would pop near $1,000.

^True.

Yeah might as well, right? Go hog wild while still knowing you'll have a secure nest egg waiting for you on the other side of the Bitcoin singularity, whatever happens.

Who said anything about banks? Gold, silver, oil, food, land, businesses, or whatever. It's simple: Bitcoin has a substantial chance of going to $0. You can very easily arrange other assets so that they do not have a substantial chance of falling very much at all. Even dollars in a wobbly bank + BTC, which is just about the worst possible diversification strategy, is nevertheless much safer than only BTC.

Diversification doesn't make you money, but it does help lock in your newfound wealth. This shouldn't be controversial as it's merely basic statistics that if you have $10 million and spread the risk around it reduces the chance you will ever not be a millionaire anymore. To me the value of being a millionaire is not that much less than being a billionaire. I'd much rather be a millionaire than have to wonder whether I will be a billionaire *OR* have to return to a normal middle-class existence. YMMV, and your diversification strategy should vary accordingly. Let's not get all ridiculous here.

Besides, if Bitcoin succeeds in reaching full mainstream adoption you can probably still be a billionaire even if you diversify on the way up. If you really believe in the potential, one bitcoin should be enough to ensure a lavish lifestyle in the scenario where Bitcoin succeeds.

Holding but will be nervous if we go toward $1000 and will diversify a small percent of BTC.

Everyone should have a diversification plan. When you reach $1 million net worth, will you really keep ALL your money in BTC? Think about what percent you will diversify out on the way up, based on the famous Bitcoin assymetric bet (Hudreds of thousands of dollars per coin or more vs. $0).

For example, taking out 20% of your BTC at each order of magnitude increase and putting them into other assets might make sense.

Example: You invested $10,000. When you reach $100,000 you sell $20,000 worth and keep the rest. When the rest reaches $1,000,000 you sell $200,000 and keep the rest. Etc. Seems well balanced given the risks, and you will still be filthy rich if Bitcoin succeeds.

For some people 10% will make sense, for some 5%, and for some 30-50% might even make sense (such as anon_bitcoin_gambler on reddit).

By "indicators" I mean continued EXPONENTIAL increase in Google trends, expansion into new countries, media coverage, merchant adoption (and size of adopting merchants), Bitcoin subreddit subscribers, etc.

We have actually had that so far, which is why I wasn't worried. Now I'm mild-to-moderately worried. That probably means we will go much higher still even short term, but now is the time to take a step back and review the fundamentals soberly to see if they not only justify exponential but "exponential x exponential" growth, not to get swept up in celebration.

If things are bubbling up, some people depending on their basic financial situation may want to consider taking a SMALL percentage off the table just in case. Better that than panic selling into a bear trap.

Basically just take whatever you need in order to stay relaxed during big selloffs. Could you hold through an 80% drop? Good. If you can't, diversify now so that you don't contribute to that panic.

The main reason I post this warning is just because it looks like former bears and other likely weak hands are piling in. That kind of volatility should be dampened if possible.

Last week it kind of started.

And it's to a degree true that in exponential growth situations euphoria need not indicate a bubble at all...but we are experiencing FASTER than exponential growth. Perhaps even double exponential. Keep in mind that merely keeping with the exponential trend itself would have been impossible for more than a few months or seasons. Now we are griwing even faster, becoming accustomed to bi-monthly doublings, weekly doublings, etc.

Bottom line: if we go much further in this manner, eventually any old 30% percent pullback will FEEL like a huge crash to many people because of their euphoric expectations, which could precipitate a major setback for Bitcoin that could last a while. That's what I'd like to avoid. There's no need for it.

Okay guys, I'm a hyper-bull, but I'm feeling some euphoria here. It is simply a fact that growth will slow very soon (else we'd be at mainstream adoption by summer, and we all know the infrastructure simply isn't ready for that).

We can keep going up at staggering speeds on average, long-term, but if the exponential doesn't curve straighter again soon I may have to part with 5% - for the first time ever - just in case there's a big correction (almost definitely temporary, but still). I'd just be doing my part to smooth any panic drop that might happen. If we can slow down just a tad that would be perfect.

Bubble-o-meter was at 15% last week, now 25%. Time to start being just a little cautious, just a little suspicious of your premises. Check everything once again with no emotion. Are all the exponential indicators still there? I still expect us to hit at least $300 (or even $500 or possibly $1,000) before a cooldown.

The mood here has remained collected and cool up to just this week or so, even through such dramatic increases. That was very bullish. Now it just might be changing. I'm not saying it is for sure, but watch sentiment closely.

So the arrogance we are feeling (myself included) is another small bubble indicator. Just a mild one. Just keeping track so people aren't overly surprised at future price swings.

♪Dun, dun, dun





Another one bites the dust♪


Another TA came and went, paying dearly for their cognitive biases. What happened to Arepo?

Finally caught up to this thread. I'll admit I skipped a few pages.

So.....anyone have any advice on how not to become an asshole when you get rich?

I'm guessing the actual printing was just done to print the amounts necessary to keep up with people needing more (if they print too slow the whole charade ends that much earlier), so I assume the real action is in why merchants raise their prices at a double- or higher-order exponential rate.

Hyperinflation (inverted) looks like this on a log chart, which means it is double-exponential or more:






...Meanwhile we are starting to see curving up on a log-scale chart of BTC price - note how similar the patterns are, with the little bump first and then the huge run up to total collapse of fiat...in fact the two charts align almost uncannily well if you look at the bumps, though of course Bitcoin's chart has yet to complete:





My theory is that regular exponential growth (straight line on a log chart) is from the viral effect of the Bitcoin "meme," while higher order exponential growth - that is, exponentially faster doubling times - is the viral effect + a herd-instinct-based stampede. This latter one is where bubbly-ness can be introduced. However, it seems to still be mild. Here is the best Bitcoin economist I've seen, arguing against a bubble right now:

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

One thing he misses, though, is that the store of value function of Bitcoin is probably the main reason for the price rise now, even though it is ultimately backstopped by currency usage.

Jesus H

I still say it's proper to call it "the IPO of the Internet" because Bitcoin is essentially the Wall Street (the financial arm or center) of the Internet.

This is just one sentence, and it's not catchy, but it is a simple truth that all by itself would make Bitcoin worth trillions if wealthy people all understood it: There's simply nowhere else a billionaire can really hide or transport his money with impunity anywhere near as effectively as Bitcoin. Every billionaire must invest a significant portion of their assets; it is inevitable if Bitcoin sticks around, and is a very attractive option even right now, in the face of uncertain capital controls and leaks. The Rothschilds will do Bitcoin!

And another thing everyone seems to miss: the actual value potential is in the quadrillions, because the economy fueled by Bitcoin will be far, far more efficient than the current one, so everyone will be far wealthier and each bitcoin will have to cover that much more.

This is excellent. Everything this guy has written about Bitcoin seems top-notch, best I've seen anywhere in terms of lucid analysis.

I think Trace may be personally responsible for at least $5 of the current BTC price.