Bitcoin Forum
October 20, 2018, 01:51:00 PM *
News: Make sure you are not using versions of Bitcoin Core other than 0.17.0 [Torrent], 0.16.3, 0.15.2, or 0.14.3. More info.
 
   Home   Help Search Donate Login Register  
Pages: « 1 [2]  All
  Print  
Author Topic: WTF is a bubble anyway?  (Read 1690 times)
johnyj
Legendary
*
Offline Offline

Activity: 1848
Merit: 1000


Beyond Imagination


View Profile
April 03, 2013, 01:23:33 AM
 #21


I'll say it. For the bitcoin has built in link between the price and the downward pressure on the price.

Currently, ($115) miners create around $400.000 daily in new bitcoin, and when the ASIC sellers get their production in order, a large percentage of that money will be sold on the exchanges every day.  This means that you would need $200k to $300k every day, just to prop up the bitcoin price.

That's about double what Bitpay, the largest processor does each day.  

So, for each $1 in Bitpay volume (not profit), you need $2 to $3 in "sucker" money.  Sure, the price will come down.


Bitcoin players are mostly middle class IT people, they don't have an urgent need to cash out

Suppose that most people have a motivation to cash out after 100-1000x price appreciation (a historical scale for 2011 price bubble), before that, there won't be any major sell off

If more and more new adopters enter the game, and each of them waiting for a 1000x price appreciation, there will never be a crash unless the available USD is not enough

FED is going to tighten sooner or later, that will generate some downward pressure due to reduced USD supply, but that's still 1-2 years away

Like NGZhang said, valuation is about trust. Currently bitcoin has not reached a deserved value because people are still doubt about it, but more and more people are starting to lose their trust of fiat money, sooner or later they will realize that it is better to trust mathematics and networks instead of a bunch of politicians and bankers

Advertised sites are not endorsed by the Bitcoin Forum. They may be unsafe, untrustworthy, or illegal in your jurisdiction. Advertise here.
1540043460
Hero Member
*
Offline Offline

Posts: 1540043460

View Profile Personal Message (Offline)

Ignore
1540043460
Reply with quote  #2

1540043460
Report to moderator
mestar
Sr. Member
****
Offline Offline

Activity: 407
Merit: 250


View Profile
April 03, 2013, 02:44:55 AM
 #22

Bitcoin players are mostly middle class IT people, they don't have an urgent need to cash out

Suppose that most people have a motivation to cash out after 100-1000x price appreciation (a historical scale for 2011 price bubble), before that, there won't be any major sell off

If more and more new adopters enter the game, and each of them waiting for a 1000x price appreciation, there will never be a crash unless the available USD is not enough

As long as there are new people are entering, the price can seemingly rise forever. 

Yet, speculation is a zero-sum game.  Everybody's gain must come from somebody's loss. 


FED is going to tighten sooner or later, that will generate some downward pressure due to reduced USD supply, but that's still 1-2 years away

Like NGZhang said, valuation is about trust. Currently bitcoin has not reached a deserved value because people are still doubt about it, but more and more people are starting to lose their trust of fiat money, sooner or later they will realize that it is better to trust mathematics and networks instead of a bunch of politicians and bankers

So, what's the bitcoin's deserved value?

WinVery.com
Full Member
***
Offline Offline

Activity: 235
Merit: 100



View Profile
April 03, 2013, 03:04:45 AM
 #23

Alas comprehension  Wink
Pages: « 1 [2]  All
  Print  
 
Jump to:  

Sponsored by , a Bitcoin-accepting VPN.
Powered by MySQL Powered by PHP Powered by SMF 1.1.19 | SMF © 2006-2009, Simple Machines Valid XHTML 1.0! Valid CSS!