Why Bubbles Can Be Good - Using Bitcoin's 2011 Bubble

[Marma Kalari]

So about this here bitcoin bubble we're inflating.  It is a bubble in the making, but I see this as people playing with monopoly money.  Bitcoin isn't a stock, and hopefully people aren't mortgaging their houses to buy crypto.  If we crash back down to $420 tomorrow, I won't have lost much money and it will have been a good ride.  But if the stock market crashed, I'm a bit screwed, as are millions of people who own stocks or have 401(k)s.

And for this very simple reason the SEC wont approve bitcoin ETF this time around.But you have to take note that it has become a parallel economy which is into billions of dollars and it might create a ripple effect in the entire financial sector at one point,i am not telling that we are seeing that now,but in the future we might feel the consequence.

[mersmerizer]

So about this here bitcoin bubble we're inflating.  It is a bubble in the making, but I see this as people playing with monopoly money.  Bitcoin isn't a stock, and hopefully people aren't mortgaging their houses to buy crypto.  If we crash back down to $420 tomorrow, I won't have lost much money and it will have been a good ride.  But if the stock market crashed, I'm a bit screwed, as are millions of people who own stocks or have 401(k)s.

And for this very simple reason the SEC wont approve bitcoin ETF this time around.But you have to take note that it has become a parallel economy which is into billions of dollars and it might create a ripple effect in the entire financial sector at one point,i am not telling that we are seeing that now,but in the future we might feel the consequence.

The SEC won't approve BTC ETFs because it can't control BTC. Bitcoin price variability does still seem to be susceptible to manipulation by organizations who control a large portion of the mining machines, or people who have very large stockpiles of bitcoins.

[cryp24x]

In general, a bubble creates a feeling of success and prosperity, even though it's only temporary.  Like we saw in bitcoin's 2011 bubble, people overlook reality and give projects and ideas a feeling of success, even though it cannot last because it won't be able to sustain the momentum.  The good projects and ideas ignore this, knowing its temporary; the bad projects do not.  Bad projects become caught up in the bubble, but when it pops and shown to be the fake players they were all along.

The dot com bubble, which people tend to act like was so destructive actually invalidated a lot of bad ideas.  We'll always be richer when bad ideas fail because it makes room for good ideas.  The last thing we want is bad ideas to survive because of low or negative interest rates, or because institutions try to create perfect stability, which keeps bad ideas in existence.  Can bubbles be painful?  Yes, but the pain is only temporary and by removing bad players, it's a temporary pain that increases wealth (Hebrews 12:11).

The only positive thing about bubble is that the made the stuff popular across the land.  Some people getting profit but definitely more people lose when the bubble burst.  It does not remove bad player but rather remove unexperience player.  Bad player will always stay.

[ashuawei]

bubbles can be good because Americans can be misunderstood the frenzies, manias, and stapedes that periodically seize us. In that magical world known only to a few economists were resources are allocated efficiently and evestors and consumers behave rationally.

[Marma Kalari]

The SEC won't approve BTC ETFs because it can't control BTC. Bitcoin price variability does still seem to be susceptible to manipulation by organizations who control a large portion of the mining machines, or people who have very large stockpiles of bitcoins.

looking by your logic ,It can be the exact case when it comes to allowing foreign investments in a country,one country could rip another by pumping more money into their stock exchange and rip everyone off and move away with a huge amount of money when they make a successful trade, so what precautions can the government take in that case and cannot be taken when it comes to bitcoin.