Crash coming?

[btmstr]

keep in mind that bitcoin started out at 1300 BTC = 1USD. every year bitcoin dramatically gains (and retains) its value. this is not the first "bubble". The value of bitcoin has gone up more than 1000% every year. If the price does go back down, it wont stay there very long.

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[WilderedB]

Well I sell a writing service at $1500 a pop - and I've already decided to take part payment in BTC, say $500 worth, at whatever the rate is at the time.

So there's that?




AC

[miyamoto]

I've watched "bubbles" in Real Estate for years.  Never seen the "crash" everyone talks about, yet anyways.  

Wha?!

Ummm... take a look at the number of foreclosures on the market and home values after 2008 to a year ago... or even to this day. Where do you live? maybe not in the US?

Total poor analogy on my part; I was referring to the Canadian RE market, which people have been saying is in a bubble for 10 years now.  It is starting to look like we are heading in the same the direction the US did in 2007/08, but the point I am trying to make is that the valuation of an asset can rise for a long time before landing, hard or soft, or not at all.  There are always people who say "the sky is falling" when there may be much more room to grow

[yefi]

What goes up, must come down.

Somebody tell that to Voyager 1. Bitch thinks it can just disregard our gravity.

Still - Voyager will most likely crash and burn at some point. Rather as soon as it comes close enough to something else with enough gravity.

The fate of the Milky Way does not involve more than half the stars colliding with one another...

[bdamm]

When the people will start understanding that you can not do anything with a bitcoin they will probably massively sell it.
I can't see any utility to that actually.

What's so hard to understand?  Send money from anywhere, to anywhere, from anyone, to anyone, in any amount, at any time, for free.

Seems to me there is great utility in that.

True, you have to exchange in and out, but that is ultimately a small price to pay when you consider how much banks charge for wire transfers, or even how much Western Union charges for transfers.

[Pangia]

In this present time, nothing is a "bubble" until Wall Street gets its claws into it.  We haven't seen  "real" exponential growth yet. This in my opinion, is because we're missing 2 fundamental components of a "bubble". Those components being credit + the feed-back loop.  We don't have either one of those YET.

We will get credit infused into the BTC market when Wall Street jumps in.  They have to jump in, because there is no way that they're going to miss out on an opportunity to fleece the masses.  They will pump BTC up through hedge funds and the likes and then as the price soars, they'll publicize BTC's greatness to the masses. There will be BTC experts on CNBC spewing rhetoric as to why this is the new paradigm for commerce. 

Once the press gets rolling on BTC then the feed-back loop will go into full swing.  Your taxi driver will be telling you how great an investment BTC is. Let's face the facts, who outside of the IT world really knows what BTC is and how it works? Very few! Once the feed-back loop goes into effect, word of the price ascensions of BTC's will spread like wild fire. BTC will be the talk at the dinner table. Then a true "bubble" will begin to form (credit + feed-back loop). This will be unlike any "bubble" ever seen before because BTC transcends national boundaries. EVERYONE will be attempting to get rich. This will truly be a global "bubble".
 
What will the price of 1 BTC be then? $1,000 - $100,000 - $1,000,000

The price of a BTC when the true "bubble" emerges will be much much higher than it is today and when it is sufficiently high enough for Wall Street, that's when they will pull the plug and that's when the "bubble" will burst.  Until Wall Street gets involved, there is no "bubble".

[bitfreier]

In this present time, nothing is a "bubble" until Wall Street gets its claws into it.  We haven't seen  "real" exponential growth yet. This in my opinion, is because we're missing 2 fundamental components of a "bubble". Those components being credit + the feed-back loop.  We don't have either one of those YET.

We will get credit infused into the BTC market when Wall Street jumps in.  They have to jump in, because there is no way that they're going to miss out on an opportunity to fleece the masses.  They will pump BTC up through hedge funds and the likes and then as the price soars, they'll publicize BTC's greatness to the masses. There will be BTC experts on CNBC spewing rhetoric as to why this is the new paradigm for commerce. 

Once the press gets rolling on BTC then the feed-back loop will go into full swing.  Your taxi driver will be telling you how great an investment BTC is. Let's face the facts, who outside of the IT world really knows what BTC is and how it works? Very few! Once the feed-back loop goes into effect, word of the price ascensions of BTC's will spread like wild fire. BTC will be the talk at the dinner table. Then a true "bubble" will begin to form (credit + feed-back loop). This will be unlike any "bubble" ever seen before because BTC transcends national boundaries. EVERYONE will be attempting to get rich. This will truly be a global "bubble".
 
What will the price of 1 BTC be then? $1,000 - $100,000 - $1,000,000

The price of a BTC when the true "bubble" emerges will be much much higher than it is today and when it is sufficiently high enough for Wall Street, that's when they will pull the plug and that's when the "bubble" will burst.  Until Wall Street gets involved, there is no "bubble".

As someone who knows an actual portfolio manager back in London, I can say this:

  Everyone in the buy-side knows about bitcoins, and they've known about them for quite some time.

  I tried structuring a trade to go long bitcoins / short some argentine stuff as a pair trade, but I ran into TWO major problems:

  1) bitcoins have no custody:  who owns it?  The person with the key.  Ok, and so how does a HF "control" a BTC?  On a scrap of paper, like that Malta "fund"?  I think custody remains the key problem for massive BTC adoption/speculation by big money.

  2)  Because of #1, banks WILL NOT TOUCH THIS:  NO!  If the banks don't touch it, and the banks provide the liquidity to the brokers, then how will the custodian at DB hold BTC's?  What if some desperate intern gets his hands on $100m of Bloomberg's BTC's at the bank and sends them to his cousins in Almaty?  They're gone: poof.

  Please feel free to savage my response, but this is my understanding, as of now.

  I still believe, with metaphysical certainty, that BTC's and other crypto-currencies are here to stay and will revolutionize, for the better, commerce and banking.  I especially hope it bankrupts Paypal and all the smug assholes who made their billions from it!

[winnate]

With the price of these ASIC systems going upwards of $30,000 the people invested wont be willing to take a loss after the difficulty corrects itself.  We'll see a short spike in BTC production until all units are shipped, but it will VERY quickly correct itself because of the enormous hash rate.  The fact that so much money was thrown behind these miners will cause the price to increase dramatically, because while no more than usual bitcoins are found, everyone will seek a profit from their investments, and that alone will cause the market to spike.  This isn't some huge economy here, Bitcoins are still alot smaller than you think when compared to the population of even one US state.  These small markets are much more predictable but you really have to think about all aspects and piece it together, its not just a one factor deal.

Summary - ASICS= short spike until correction -> network will resume normal bitcoin output -> people not willing to lose on huge miner investments -> huge spike in BTC price to compensate.

I would love constructive criticism, this is just my personal opinion and im in no way an expert.  I've been following for quite some time, since BTC was a baby in the $2 range.

[Keimoasd]

This is gonna be interesting.

[btcminer021]

If you have a nice stash of coins now you'd be wise to sell. Take your profits, mine, and wait for the drop. It's coming in a few months max.

[iAmTheWhale]

From a technical analysis standpoint, this graph does not inspire much confidence that a rally can continue without a correction / profit taking:
http://anonymouse.org/cgi-bin/anon-www.cgi/http://img259.imageshack.us/img259/6773/70211563.png

If this were a stock chart, I might agree with you, but it's not. It's a new medium of exchange, the likes of which we have never seen before. Why, then, does it follow that this is also a bubble? Sure, some folks will want to take profits, but consider:

1) Speculators want the exchange rate to increase, and to increase for as long as possible. Speculators will hold as long as the price trends higher.
2) Merchants want the exchange rate to increase. They will take new approaches (for instance, sell products for lower than their value in anticipation of an exchange rate increase).
3) New users want the exchange rate to increase. The higher the price, the more interest, the more users of the new currency.
4) As the market cap rises the rate eventually reaches a balancing point. It won't fluctuate by many dollars per day, but instead by fractions of a cent. When its stable, more merchants will enter the market, and users have less incentive to cash out since they can finally take advantage of the true benefits of the new currency: anonymous, global, simple payment processes. And all this without the tax implications.

I anticipate corrections but an upward trend until some (much higher) market cap is reached.

[LaCosaNostra549]

If anyone out there is interested in swapping their BTC for my Vanilla Visa Prepaid Gift Card, Please let me know! I very much need to buy some BTC as soon as possible. If anyone has any idea where I can do this, please let me know ASAP!

[Testarossa]

Homo economicus speaking here
Listen to him...

(It's not that I'm not happy about my money being worth so much more, it is I'm afraid it will crash and ill lose it all

You shouldn't take a risk that you can't afford to lose. At the current price point, Bitcoin is highly speculative.

If you're afraid to lose your investment, why not take some profit now?

From a technical analysis standpoint, this graph does not inspire much confidence that a rally can continue without a correction / profit taking:

http://anonymouse.org/cgi-bin/anon-www.cgi/http://img259.imageshack.us/img259/6773/70211563.png

[Stampbit]

In this present time, nothing is a "bubble" until Wall Street gets its claws into it.  We haven't seen  "real" exponential growth yet. This in my opinion, is because we're missing 2 fundamental components of a "bubble". Those components being credit + the feed-back loop.  We don't have either one of those YET.

We will get credit infused into the BTC market when Wall Street jumps in.  They have to jump in, because there is no way that they're going to miss out on an opportunity to fleece the masses.  They will pump BTC up through hedge funds and the likes and then as the price soars, they'll publicize BTC's greatness to the masses. There will be BTC experts on CNBC spewing rhetoric as to why this is the new paradigm for commerce. 

Once the press gets rolling on BTC then the feed-back loop will go into full swing.  Your taxi driver will be telling you how great an investment BTC is. Let's face the facts, who outside of the IT world really knows what BTC is and how it works? Very few! Once the feed-back loop goes into effect, word of the price ascensions of BTC's will spread like wild fire. BTC will be the talk at the dinner table. Then a true "bubble" will begin to form (credit + feed-back loop). This will be unlike any "bubble" ever seen before because BTC transcends national boundaries. EVERYONE will be attempting to get rich. This will truly be a global "bubble".
 
What will the price of 1 BTC be then? $1,000 - $100,000 - $1,000,000

The price of a BTC when the true "bubble" emerges will be much much higher than it is today and when it is sufficiently high enough for Wall Street, that's when they will pull the plug and that's when the "bubble" will burst.  Until Wall Street gets involved, there is no "bubble".

As someone who knows an actual portfolio manager back in London, I can say this:

  Everyone in the buy-side knows about bitcoins, and they've known about them for quite some time.

  I tried structuring a trade to go long bitcoins / short some argentine stuff as a pair trade, but I ran into TWO major problems:

  1) bitcoins have no custody:  who owns it?  The person with the key.  Ok, and so how does a HF "control" a BTC?  On a scrap of paper, like that Malta "fund"?  I think custody remains the key problem for massive BTC adoption/speculation by big money.

  2)  Because of #1, banks WILL NOT TOUCH THIS:  NO!  If the banks don't touch it, and the banks provide the liquidity to the brokers, then how will the custodian at DB hold BTC's?  What if some desperate intern gets his hands on $100m of Bloomberg's BTC's at the bank and sends them to his cousins in Almaty?  They're gone: poof.

  Please feel free to savage my response, but this is my understanding, as of now.

  I still believe, with metaphysical certainty, that BTC's and other crypto-currencies are here to stay and will revolutionize, for the better, commerce and banking.  I especially hope it bankrupts Paypal and all the smug assholes who made their billions from it!

Basically this, btc does not jive with the top down trust based structure of traditional trading and banking. Theres simply too much power in the hands of whomever holds the key. Without some sort of fallback for theft or misuse there is really no way any traditional structure is going to mess with it. And without there being more utility to it other than buying drugs and hosting, the value of btc is just hype. I for one hope this bubble bursts and some sort of order comes back to the market as this volatility, however positive it may seem, will ultimately create distrust when it breaks.

[PachucoBro]

If you have a nice stash of coins now you'd be wise to sell. Take your profits, mine, and wait for the drop. It's coming in a few months max.

I will buy your BTC right now if you like, so you can cash out.

[PachucoBro]

Basically this, btc does not jive with the top down trust based structure of traditional trading and banking. Theres simply too much power in the hands of whomever holds the key. Without some sort of fallback for theft or misuse there is really no way any traditional structure is going to mess with it. And without there being more utility to it other than buying drugs and hosting, the value of btc is just hype. I for one hope this bubble bursts and some sort of order comes back to the market as this volatility, however positive it may seem, will ultimately create distrust when it breaks.

First... Boooooo...

Second... Whale is correct. Things are different about BitCoin compared to any other financial instrument that has ever been. The points you make are valid, but they are not as big of a deal in the near term as you might think.

Whale actually said some things I hadnt' thought of before. Merchants ... I always said they won't want to take it because it is so volatile. But some might actually take a chance on it due to the fact it just hasn't gone DOWN yet. Besides drugs and hosting the kind of merchants that will want to take up BitCoin will be products and services that already have a HUGE markup. Like beverages, item rentals, labor services like massages, nails, hair...

These kinds of items don't exactly tie a monetary cost to them... just time or maintenance.

There are actually alot of possibilities which will come in time and during that time more people will finally get their money into the mix and figure out how to use wallets etc. BitCoin is still in it's infancy and is only now tarting to 'grow up' with all the recent media attention and money influx.

[btcminer021]

If you have a nice stash of coins now you'd be wise to sell. Take your profits, mine, and wait for the drop. It's coming in a few months max.

I will buy your BTC right now if you like, so you can cash out.

Look at the charts. And the arguments everyone uses that it's "not like the money being printed" is BS. BTC cannot be made in jewelry, it cannot be held, it has not bee used as "money" before. You might be able to use the for gold/silver since they have been used in trade for thousands of years, but BTC is new, more of an idea than anything else, and is probably only so high because of:

1. Hacking
2. Speculation
3. Money laundering
4. Fraud/ID theives buying on credit...

It will DROP no doubt. Take your profits and mine for a while.

[btchaver]

If anyone out there is interested in swapping their BTC for my Vanilla Visa Prepaid Gift Card, Please let me know! I very much need to buy some BTC as soon as possible. If anyone has any idea where I can do this, please let me know ASAP!

Can i get some hot chocolate on top and some nuts too with some of those colorful sprinkly things for like birthday cakes and a few candles to blow out please.

[btchaver]

If you have a nice stash of coins now you'd be wise to sell. Take your profits, mine, and wait for the drop. It's coming in a few months max.

I will buy your BTC right now if you like, so you can cash out.

Yeah mee too.

[ferda2mx]

If you have a nice stash of coins now you'd be wise to sell. Take your profits, mine, and wait for the drop. It's coming in a few months max.

Good advice. I always preffer to buy cheaper bitcoins. I like it.