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Author Topic: Will the bubble burst?  (Read 4675 times)
wingding
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March 20, 2013, 05:21:40 PM
 #1

Exponential growth in value! Get in while you can! Aaagh - 20% increase while I was waiting for the wire transfer to arrive!
Heard it before? Sure you have. So - will the bubble burst? Or is bitcoin just different? The exeption from the rule? The only true God this time?

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MadAlpha
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March 20, 2013, 05:34:16 PM
 #2

The same happened to me. I would have bought on Monday, but still don't have my money in the exchange due to slow bank transfer. Smiley

As for will the bubble burst, I would say almost certainly yes, as most speculative investment bubbles do. The problem is knowing when that correction will come, and how big will it be. For example it could come say at $200, and you'd still make a lot of money buying in now. That's the fun part of investing, or I should say speculation.

I am personally waiting right now, we will see if that was the right choice or not.

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wingding
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March 20, 2013, 05:50:00 PM
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As for will the bubble burst, I would say almost certainly yes, as most speculative investment bubbles do. The problem is knowing when that correction will come, and how big will it be. For example it could come say at $200, and you'd still make a lot of money buying in now. That's the fun part of investing, or I should say speculation.


Good points! As a matter of fact, loosing investment opportunity due to slow wire transfers is itself a good illustration of the need for a currency like bitcoin. How is it possible for banks to use 3-4 days on a transfer. Do the travel personally bringing the money over to Japan?? (no, that would have been faster)
 

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georgeu2000
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March 20, 2013, 05:52:24 PM
 #4

Yes, I felt that way when I first started buying a long time ago...

If it continues, then the bubble will pop. But until recently it has been growing linearly and not exponentially...
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March 20, 2013, 06:03:36 PM
 #5

I've been buying gold and silver for years and have heard of them being in a bubble many times. They go up and down, but go up overall. I think bitcoins will also have ups and downs. I'm sure there will be some that think a bubble has popped when the price adjusts down, before the next up, but it's down it's the best time to buy!
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March 20, 2013, 06:29:47 PM
 #6

It will burst but not to rock bottom levels
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March 20, 2013, 06:39:09 PM
 #7

It's been pretty crazy watching it climb this past month.

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March 20, 2013, 06:47:11 PM
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The price should be going up as long as ppl have confidence in market.

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March 20, 2013, 06:51:26 PM
 #9

I'm not so sure the term "bubble" is a good one.

Since Bitcoin is so many things - currency, commodity, payment system, protocol, internet money -  you can't make direct comparisons with say; the real estate market or the gold and silver markets.

IMO Bitcoin has several of the qualities of an Internet startup company with new/revolutionary technology. And some startups just keep gaining value until they are multi-billion dollar companies...

The fact that valuation is rising fast does not necessarily imply that there is a bubble.
jwzguy
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March 20, 2013, 06:55:11 PM
 #10

If you think we're in a bubble, you shouldn't be buying.
tutkarz
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March 20, 2013, 06:56:19 PM
 #11

To me its not a bubble, price is just catching up BTCs value.

MadAlpha
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March 20, 2013, 06:56:24 PM
 #12

I would also guess part of the reason for the big rise in value is the small "crash" on March 12th. My theory is that this kind of negative event actually create a psychologically positive outcome.

I.e. many people were sort of expecting, and a bit afraid, that some kind of bug may be discovered in Bitcoin which compromises it. Then when it occured, but wasn't as bad as many had feared, it kind of felt positive and reassuring. Also looking at the chart, the price didn't fall incredibly far, which suggests there were many people buying when others were selling, and it had a lot of 'support' regardless.

Personally I think this might have more to do with the recent rise than the Cyprus situation.

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Vladimir
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March 20, 2013, 06:58:11 PM
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If so many refer to it as a bubble, it is not a bubble. Once everyone and the shoeshine boy refers to it as a "new paradigm" and "permanently high plateau" then maybe it is a bubble. For this to happen BTCs gotta be above 1mil$ a pop.


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March 20, 2013, 07:02:38 PM
 #14

June 2011 was obviously, with hindsight, a bubble.

This looks a bit bubbleish, but may or may not be. Actually, I don't feel this rise is a bubble in the sense of BTC being overvalued. But a short-term downward correction is quite likely to occur (severity of which unknown) before the rocket relaunches. To replicate the 2011 bubble proportionally, we'd have to be seeing $1000+ prices in the near future, though.

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JordanL
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March 20, 2013, 07:10:42 PM
 #15

It's not a bubble, it's the price adjusting to reflect the increase in demand. If demand decreases... say for example the influx of new websites accepting Bitcoin slows or reverses, the silk road shuts down, or some government(s) outlaw or restrict the use of BTC, the price will decrease accordingly. There is exponentially less speculation involved with the recent price increases than there was in previous years. Bitcoin is stabilizing as a useable currency. Even the Silk Road dying wouldn't hurt too badly at this point.

I'm not saying it's never going to drop below the 60s again, but long term it will only keep increasing as adaptation becomes more widespread.
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March 20, 2013, 07:14:29 PM
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I'm not saying it's never going to drop below the 60s again, but long term it will only keep increasing as adaptation becomes more widespread.

I'll just add this:

1. New technology adoption is typically growing exponentially.
2. BTC value is linearly proportional to Bitcoin adoption.
 

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March 20, 2013, 07:15:22 PM
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Why should we care? Oh, wait. You're playing games with switching back and forth between currencies? Good luck with that.
If you just use it as a currency, as intended, this is a non issue. If you fancy yourself a speculator then prepare to periodically loose your shirt.  

But to seriously answer your question, if it is a bubble then it will pop. That is what all bubbles do.

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March 20, 2013, 07:25:30 PM
 #18

I don't think it is a bubble. If we value the bitcoin economy in 500 mill $, that is nothing compared to the international transactions of money or forex. Just in the case bitcoin in 5 years gets a 10% of the international transactions of money due to it's inherent advantages over let's say mastercard, we would be talking of a bitcoin economy 10.000 times bigger and that in just 5 years would mean bitcoin valuation still has to climb a lot of numbers. Not a bubble on my opinion.

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March 20, 2013, 07:26:45 PM
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Why should we care? Oh, wait. You're playing games with switching back and forth between currencies? Good luck with that.
If you just use it as a currency, as intended, this is a non issue. If you fancy yourself a speculator then prepare to periodically loose your shirt.  

But to seriously answer your question, if it is a bubble then it will pop. That is what all bubbles do.

You are so right

If you believe in the bitcoin as a future currency you shouldnt care if its a bubble
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March 20, 2013, 07:29:51 PM
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My two cents, take with grain of salt -- I do not see anything on the horizon that could burst this bubble (if it is a bubble) anytime soon. There are too many people still getting introduced to BTC for new buyers to dry up. It would take a seriously detrimental piece of bad news to crash BTC and the good news will continue.

My take is that this run-up is part of a second Hype Cycle. At some point we will sell-off ($100, $200, ??). One key to BTC success is Joe Consumer. Joe Consumer, for the most part, has no need for BTC. The market is pricing in a great deal of future acceptance - so much that it will certainly be letdown when Joe Consumer doesn't widely adopt BTC as quickly as many would have hoped. Speculation will succumb to correction. If/when BTC does come back down it will still be higher than the lows of the past because there is an underlying magic to the genius concept of BTC.

And then this cycle will likely repeat at a higher level, perhaps. Unless, of course, the idea of BTC as an alternative asset never quites catches on completely. Really, BTC has two threads of success -- consumer adoption and the potential as an alternative asset -- and they feed on each other.

These hype cycles are normal for groundbreaking technologies. The solar industry ebbed and flowed over decades in a similar fashion. Full adoption was always right around the corner. Things always take longer to gel and there is almost always letdown in the meantime.

To believe in BTC, one has to value the network effect and popularity that makes BTC tradable as a virtual commodity/currency. Yes, BTC provides other benefits but those benefits can be found in other virtual commodity/currencies (LTC, PPC, etc.). It is this network effect that makes BTC the Coca-Cola of virtual currency. IMO there is value in this.....the only reason gold has value is because we all believe it does.
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