Is Bitcoin A Bubble? Why many people are looking at this through the wrong lens

[Hydrogen]

Actually USD and EUR are not bubbles.

USD and EUR are bubbles.

They're bubbles as there has been no price correction to account for the magnificent amounts of debt accumulated by both EU and USA governments.

I hope you're learning something. Many patently false things said on this forum.

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[szpalata]

I don't think that was a bubble but minor corrections that will result in the stability of the Bitcoin network. It needs constant sensitization and checking.

[pinkflower]

Actually USD and EUR are not bubbles.

USD and EUR are bubbles.

They're bubbles as there has been no price correction to account for the magnificent amounts of debt accumulated by both EU and USA governments.

I hope you're learning something. Many patently false things said on this forum.

Lets focus on USD. But USD is currently backed by the US government who has a monopoly in law enforcement and military protection of the United States of America. No matter what you say about the USD, you are forced to use it whether you like it or not. Its what funds the military to function. You wont be happy without it believe it or not.

[deisik]

As to me, this looks more like an inverse bubble. Here's the real bubble for your viewing pleasure:

Other than that, without the curve showing the rise in average wages, the chart you posted is pretty meaningless on its own. If the wages rose as fast the dollar depreciated, that would amount to 0 as a net effect. Further, as you have been already told, out of 20T dollars of the US national debt, only around 5T dollars are held to foreign holders, and this is in fact not a debt as such but rather a tribute paid by the holders of the debt to the US, or a payment that US itself charged the world for using the US dollar as a global currency

If you think bitcoin is a bubble, sell all the BTC you have & buy fiat or gold

You won't believe me

They're bubbles as there has been no price correction

As to me, that's one of the most shitty arguments that I've read here recently

It is like saying that if something had been growing and we hadn't seen a price correction for it, it should necessarily be a bubble. It is like claiming that if you didn't find a proof of something, then you can safely conclude that it doesn't exist (I rephrase the old maxim that the absence of proof is not proof of absence). Anyway, people didn't believe in black swans at first either



Until they were actually discovered

[Hydrogen]

Lets focus on USD. But USD is currently backed by the US government who has a monopoly in law enforcement and military protection of the United States of America. No matter what you say about the USD, you are forced to use it whether you like it or not. Its what funds the military to function. You wont be happy without it believe it or not.

The fall of the USSR & end of the Cold War demonstrates how even superpowers are not immune to basic laws of economic disaster.

The USA being $20 trillion in debt could end in a similar fashion to the downfall of the USSR.

Although the media doesn't discuss it, the deficit could be the greatest threat to the united states in this day and age.

For these reasons the US dollar could be a bubble. It could be overvalued far more than bitcoin is.

You won't believe me

They're bubbles as there has been no price correction

As to me, that's one of the most shitty arguments that I've read here recently

It is like saying that if something had been growing and we hadn't seen a price correction for it, it should necessarily be a bubble. It is like claiming that if you didn't find a proof of something, then you can safely conclude that it doesn't exist (I rephrase the old maxim that the absence of proof is not proof of absence). Anyway, people didn't believe in black swans at first either



Until they were actually discovered

The media loves to talk about china engaging in "currency manipulation". Its a question of whether you believe china is the only country in the world that engages in currency manipulation the way the media claims. Or whether the united states & other countries also manipulate the value of their currency to avoid the types of massive price corrections that should naturally follow countries adding trillions of dollars of deficit and debt to their balance sheet.

Its also a question of the double standard people have where they believe governments are exempt from basic rules of economics and that $20 trillion dollars of debt shouldn't affect a state the way it would affect a corporation or private sector entity.

[panju1]

Actually USD and EUR are not bubbles.

USD and EUR are bubbles.

They're bubbles as there has been no price correction to account for the magnificent amounts of debt accumulated by both EU and USA governments.

I hope you're learning something. Many patently false things said on this forum.

Lets focus on USD. But USD is currently backed by the US government who has a monopoly in law enforcement and military protection of the United States of America. No matter what you say about the USD, you are forced to use it whether you like it or not. Its what funds the military to function. You wont be happy without it believe it or not.

Every fiat currency is backed by a government which has a monopoly in law enforcement and military protection in that country. 
The US however acts as the world's policeman. Since we have a toothless UN, the USA deems it fit to intervene in countries across the world. But I sincerely doubt whether the US military will go to war to protect the US dollar.

[pinkflower]

Lets focus on USD. But USD is currently backed by the US government who has a monopoly in law enforcement and military protection of the United States of America. No matter what you say about the USD, you are forced to use it whether you like it or not. Its what funds the military to function. You wont be happy without it believe it or not.

The fall of the USSR & end of the Cold War demonstrates how even superpowers are not immune to basic laws of economic disaster.

The USA being $20 trillion in debt could end in a similar fashion to the downfall of the USSR.

Although the media doesn't discuss it, the deficit could be the greatest threat to the united states in this day and age.

For these reasons the US dollar could be a bubble. It could be overvalued far more than bitcoin is.

My friend. The United States of America will rather go start a war than fall like the USSR and East Germany did. In fact, they dont have to, because it is in the very interest of countries like China and Japan that America stays afloat. If they go down, theyre taking everyone with them.

[deisik]

You won't believe me

They're bubbles as there has been no price correction

As to me, that's one of the most shitty arguments that I've read here recently

It is like saying that if something had been growing and we hadn't seen a price correction for it, it should necessarily be a bubble. It is like claiming that if you didn't find a proof of something, then you can safely conclude that it doesn't exist (I rephrase the old maxim that the absence of proof is not proof of absence). Anyway, people didn't believe in black swans at first either

Until they were actually discovered

The media loves to talk about china engaging in "currency manipulation". Its a question of whether you believe china is the only country in the world that engages in currency manipulation the way the media claims. Or whether the united states & other countries also manipulate the value of their currency to avoid the types of massive price corrections that should naturally follow countries adding trillions of dollars of deficit and debt to their balance sheet

I don't need to believe in that

What you call "currency manipulation" is one of the tools that central banks (like the Fed) use to regulate the financial (currency) markets, i.e. the currencies they happen to issue. And this is not something that that they do covertly, this is one of their major tasks written in their policies, i.e. to support the stability of the national currency including but certainly not limited to direct currency interventions. Whether they are good at it or not is another question. Sometimes they lose massively (see George Soros versus British pound affair). Regarding economic rules and laws, if they can override these, they will. If they can't, the rules will override them eventually. As simple as it gets

[Hydrogen]

My friend. The United States of America will rather go start a war than fall like the USSR and East Germany did. In fact, they dont have to, because it is in the very interest of countries like China and Japan that America stays afloat. If they go down, theyre taking everyone with them.

The last time the united states went to "war" it spent in excess of $6.5 trillion and only succeeded in making its terrorist enemies more powerful. USA went to war and ISIS for example went from being a small organization to being a large, powerful, organization which encompasses near to the entire world? Spending $6.5 tril to achieve that, seems like a bad deal?

America is not equipped to wage war efficiently or cost effectively. It routinely inflicts a higher dollar damage amount to itself whenever it goes to war, than it manages to inflict on its enemies. I'm not certain what "war" is supposed to achieve? It would exacerbate the deficit and cause the united states to implode economically at a faster rate?

I don't need to believe in that

What you call "currency manipulation" is one of the tools that central banks (like the Fed) use to regulate the financial (currency) markets, i.e. the currencies they happen to issue. And this is not something that that they do covertly, this is one of their major tasks written in their policies, i.e. to support the stability of the national currency including but certainly not limited to direct currency interventions. Whether they are good at it or not is another question. Sometimes they lose massively (see George Soros versus British pound affair). Regarding economic rules and laws, if they can override these, they will. If they can't, the rules will override them eventually. As simple as it gets

I think a big fault of this involves economic analysis not being very advanced or reliable in regard to recognizing or predicting economic failure.

Maybe that is deliberate as it makes it easier to unload toxic assets upon the unsuspecting.

[wilson_bitbybit]

I don't believe Bitcoin is in a bubble, but I'm pretty sure altcoins are. Even if Bitcoin is in a bubble, when altcoins crash, part of the capital will go back to Bitcoin. So it's almost a win-win situation.

[pinkflower]

My friend. The United States of America will rather go start a war than fall like the USSR and East Germany did. In fact, they dont have to, because it is in the very interest of countries like China and Japan that America stays afloat. If they go down, theyre taking everyone with them.

The last time the united states went to "war" it spent in excess of $6.5 trillion and only succeeded in making its terrorist enemies more powerful. USA went to war and ISIS for example went from being a small organization to being a large, powerful, organization which encompasses near to the entire world? Spending $6.5 tril to achieve that, seems like a bad deal?

America is not equipped to wage war efficiently or cost effectively. It routinely inflicts a higher dollar damage amount to itself whenever it goes to war, than it manages to inflict on its enemies. I'm not certain what "war" is supposed to achieve? It would exacerbate the deficit and cause the united states to implode economically at a faster rate?

Yeah exactly. America wants an ongoing and never ending war that will make them manufacture more weapons and print more money. They are not there in the middle east to win the war. That is not profitable for them. They are there to keep sure the war doesnt end, my friend. America has an economy that needs there to be a war.

[deisik]

I don't need to believe in that

What you call "currency manipulation" is one of the tools that central banks (like the Fed) use to regulate the financial (currency) markets, i.e. the currencies they happen to issue. And this is not something that that they do covertly, this is one of their major tasks written in their policies, i.e. to support the stability of the national currency including but certainly not limited to direct currency interventions. Whether they are good at it or not is another question. Sometimes they lose massively (see George Soros versus British pound affair). Regarding economic rules and laws, if they can override these, they will. If they can't, the rules will override them eventually. As simple as it gets

I think a big fault of this involves economic analysis not being very advanced or reliable in regard to recognizing or predicting economic failure.

Maybe that is deliberate as it makes it easier to unload toxic assets upon the unsuspecting.

A big fault of what exactly?

What economic analysis which is not being very advanced as well as reliable are you talking about? Whether the US dollar is a bubble or not is questionable, but so far we haven't seen it burst in the way like stock markets crash. Therefore, you can't possibly say that "economic analysis" (whatever you might mean by that) was not very good at "predicting economic failure". You may want to clarify what your reply is about

[Bluengold341]

I personally don't think it is. If you assume these statements are facts about bitcoin I think the price is just bound to go up as one poster very astutely pointed out in the thread https://bitcointalk.org/index.php?topic=1951431.0 that I think it (the market cap. getting to 80.9 Billion USD) will take less because there is a "learning curve" associated with using Bitcoin.

I've been eyeballing and analyzing the year, monthly, etc.. interest rate. I understand there was a steep curve at first, but Bitcoin is now transitioning in the upward direction.

In the biological sciences, there is something called a doubling rate. This relates mostly to bacteria and other microorganisms. Bitcoin is like a biological pathogen (coinmap.org) in that it has an epidemological aspect to it (it's growing like a biological organism). The doubling rate is getting faster (4 months now?).

The interest rates are going to be ridiculous (up and away). Social change is going to be ridiculous. I've read the power behind it is greed (I'll argue people want to see changes THIS--right here and now--lifetime). As such, the here-and-now desire for social change is propelling Bitcoin. Given that there is so much technological output (ability to track how this thing is moving), it's growing at a very popular rate now.

Society is learning to use Bitcoin. Simple as that.

From my background in studying psychology and learning, it appears that the curve is taking the form of a learning curve, whereby exponential learning is occurring: Market psychology--people are taking to Bitcoin. Also, the methodology that Bitcoin uses is pretty legit and works with the law of entropy: The thing is that the whole system resides on Earth making it really easy to manage.

Furthermore, I've read of Bitcoin fitting onto an S-curve (source: http://woobull.com/woos-law-of-bitcoin-user-growth-bitcoins-adoption-curve/).

Bitcoin isn't moving like a stock market ticker. It's kind of like a stock but only a very, very, very small amount.

I however, in so many words tried to point out that the sample size just isn't big enough yet to know for certain whether or not we are seeing this exponential growth but while I totally think that "social change is going to be ridiculous" is a little bit of an overstatement. Exponential growth is a function in math and seen all throughout nature and the physical world.

While I agree the price of btc is bound to do nothing but steadily go up over time I do think there are possibly some real parallels between what we're seeing and https://en.wikipedia.org/wiki/Exponential_learning . When I first saw the market during that huge jump it did seem to be exponential and it happened in a fairly quick type of way and then stabilized again except at the above price. Does anyone know the biggest decline as well as increase in price per BTC over it's 8ish so history? That was also my first reaction when I saw a visual representation of the value of btc over this few month period was that of an exponential curve.

While I agree with the poster quoted here that we are seeing some ASPECTS of exponential learning affecting the market price of btc it's hard to tell when this will stop as people MIGHT lose interest or go with other forms of currency. However, I am seeing some serious growth potential here with btc's value if you assume that it's positively correlated with people's ability to use the currency. A bubble implies some error in speculation (which drives market forces) from people at large in the value of a commodity such as with derivatives and housing lending in the late 2000s but from my understanding bitcoin's entire function of exist and creation (of decentralized e-currency) is the thing that's bound to drive it up. It's meant to work more effectively with more users and people are only bound to learn more of it over time. I know that I personally wished I could have seen how valuable a resource such as btc was and I was even shown by someone pretty savvy at IT when it first came out. (him using his wallet only on a USB drive on ubuntu).

I also do see a correlation here between moore's law (another exponential growth curve) and bitcoin as tech becomes more available and more cheaply distributed people's ability to learn the system becomes even greater thus increasing the value of bitcoin. This is why I don't see it as a BUBBLE per say I just dont know when it will level off (could have already).

Right now as a newbie "investor" and purchaser of bitcoins I am personally worried about the volatility of the market and how secure transactions truly can be. The world's primary exchange currencies are time-tested and have safe-guards automatically in place for the protection of the ignorance of the general public such as a very robust legal framework for the handling of large sums of money such as insurance and protection against scammers, theft and hacking. Not to mention regulations against crimes such as fraud, corruption, insider-trading, etc. With bitcoins I don't see any built-in safeguards outside of the transaction history which is just logged onto a single IP, and who is stopping anyone from hacking into your IP or using a proxy while making purchases? Not to mention who's stopping private companies such as exchanges and gambling sites from defrauding investors by blaming some outside cause or simply withdrawing all the funds from their clients' accounts and skipping town? This is not even mentioning obvious threats by phishing sites and hackers to simply empty your entire wallet.

In the end I believe if you believe bitcoin will become more and more an accepted medium of exchange, especially for larger transactions, such as buying larger EQUITY such as a nice home, business or other valuable property than the price will most definitely go up. The only question is how soon will this happen. I also made a thread wondering also if government regulation and taxation of bitcoins will drive up or down the price?

[Hydrogen]

A big fault of what exactly?

What economic analysis which is not being very advanced as well as reliable are you talking about? Whether the US dollar is a bubble or not is questionable, but so far we haven't seen it burst in the way like stock markets crash. Therefore, you can't possibly say that "economic analysis" (whatever you might mean by that) was not very good at "predicting economic failure". You may want to clarify what your reply is about

I'll give you an example of how analysts and the media stranglehold over information can contribute towards denial of economic fact.

There were indications was early as 2005 that the 2008 economic crisis was coming. In the following clip you can see how the media used its power to deny the evidence ensuring the public would follow the "no one could have predicted this disaster" denialist campaign.

https://www.youtube.com/watch?v=HQ79Pt2GNJo

Officially there was only 24 hours warning for the 2008 economic crisis, despite this example of there being evidence years in advance.

Some have the idea that its normal for weatherman to have superior predictive ability and for tsunamis to be easier to predict than bubbles in markets or the economy.

I don't think that's normal at all. Matters are arranged that way for many reasons. Russia, china and other countries abandoning the dollar and replacing it with bitcoin could be considered evidence fiat dollar is a bubble and bitcoin is not. Of course we will not know for certain until maybe 5-10 years in the future. It could be accurate to say the dollar is a bubble today, for reasons discussed previously even if the hard evidence isn't available yet.

With Trump there is hope of him turning things around & the dollar not being a bubble.

If Hillary was in office the dollar would definitely be a bubble and there would be no hope at all.