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

[Hydrogen]

Equity value is tied to a balance sheet of ______.

Currency value is tied to the balance sheet of a nation.

The USA being $20 trillion in debt can be a case for the US dollar being a bubble.

The european union being $12 trillion in debt can be a case for the euro being a bubble.

Currency bubbles do exist similar to equity bubbles.

That said he made a very good point about the unlikelihood of sellers outnumbering buyers due to many btc users being long term buy & hold.

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[pitham1]

Equity value is tied to a balance sheet of ______.
Currency value is tied to the balance sheet of a nation.
The USA being $20 trillion in debt can be a case for the US dollar being a bubble.
The european union being $12 trillion in debt can be a case for the euro being a bubble.
Currency bubbles do exist similar to equity bubbles.
That said he made a very good point about the unlikelihood of sellers outnumbering buyers due to many btc users being long term buy & hold.

The number of sellers and buyers depends on the price. When the price of Bitcoin hit $1300 in 2013, the number of sellers easily outnumbered the buyers. If the price hits $10k this year, I am sure you will see truckloads of sellers.

[pinkflower]

Not quite, he is saying that it depends on # of buyers vs. # of sellers at any given moment.  Speculation creates value, and this in turn creates more demand, mainstream media attention, etc. A fast run-up in price doesn't make a bubble. Bitcoin has and will continue to attract media attention and more of the general population.  It's healthy to have these waves of price increases, it means that the media is influencing a larger number of people and turning them into buyers aka demand-creators

So meaning all that value comes from speculation, like the dotcom bubble. Thats a very dangerous spot to be in because it could all start going south. What we would rather much be seeing is the growth of unique users and the growth of transactions or usage instead of the growth in price

That's why Bitcoin can hardly be called an investment

I guess many would disagree with that statement but is there anyone who would call pouring your money into a Ponzy scheme or HYIP shebang an investment? Unless Bitcoin becomes a currency in its own right, it will remain in the state of a "financial pyramid" mainly. As long as it expands, its price could rise as well, but it can't expand indefinitely if it is set to remain only that, i.e. a highly speculative asset. That's likely another reason why we see so much confrontation in the Bitcoin camp right now

Thats true but BTC is already a currency in its own right. There are already many people using it in the darknet. All the commerce happening in there could only expand with the help of cryptocurrencies. But having said that, theres still a lot more speculators in the market speculating and making BTC overpriced

Most people care only for the speculative value of Bitcoin

Apart from that, Bitcoin is most likely already crowded out from the DarkNet transactions. Many genuinely anonymous currencies have appeared since Bitcoin had been actively used in the dark web at the dawn of its life. Obviously, Bitcoin won't be able to make it back into the DarkNet. The throne is never empty, and it's already taken. So if Bitcoin speculative part is removed, how much will remain of its price? Even with respect to merchants, Litecoin is ready to take Bitcoin's place, and if Bitcoin becomes toxic thanks to disagreements and confrontations in its camp, merchants will likely stop using it

What are the many anonymous currencies that are currently used in the darknet besides BTC? I also want to know how much transaction volume those anonymous currencies have and if they are eating a large part of BTC's market in the darknet.

On the clear web you say LTC is ready to replace BTC. I also want to know how much transaction volume LTC and compare it to BTC's transaction volume. I think if there are merchants ready to accept LTC, they will but side by side with BTC. They will not replace it.

[ladydark]

Personally, Bitcoin is not actually a bubble because as we see now there is that mechanism involved which corrects the price of Bitcoin when it reached a certain level. Bitcoin is self-regulating  itself and this can be verified in its history. Now, when Bitcoin will soon new heights we will see what can happen by then. A bubble will usually burst leaving many people holding empty bags.

Definitely,if an asset is worthless and its price still rises due to speculation,then definitely the bubble will burst quickly and will not last for a long time.But this is not the case with bitcoin.Its a product of worth and thats why more people are willing to buy bitcoins at any cost.

[weggie]

Bubble does not need to go up to moon, then crash by free fall. Bear market can last up to decades (Japan)

But I think, if BTC would be used for black or just even grey market, it can do 10fold, because 40 or 400billion market cap, thats a like one inch ice cube in the ocean. Imagine if politicians use BTC for their grey trades (eg: government paying double, triple or more to friends company to finish some state work (roads, rails, any other public stuff). Speculators would sell at 5-8K for sure, but more speculators would buy, so it would be even.

[AK47-]

I think the bitcoin price is going up because of the increase of genuine buyers. Only 0.1% of world population is into it. There is such a huge market still available to bitcoin. Bitcoin was in limelight recently due to that ransomware attack and Japan legalizing it finally. People are getting to know about it. Earlier bitcoin was known as a currency for deep web and illegal market. But now that thought is changing. People are calling it a bubble because whenever charts shows such a hike as shown by bitcoin recently, in other commodities, they usually end up in tears. But I don't think the hike in price is due to speculation. I think it is genuine increase in buying activity

[olubams]

For those who see bitcoin as a bubble, they are entitled to their opinion and no amount of convincing argument can make them change their mind. However, their thinking is actually valid but its one sided looking at it only from the price alone ignoring other potentials in the blockchain technology itself which is the backbone of bitcoin that would solve several problems that have existed for long in the world and this alone will continue to provide support for bitcoin price.

[magneto]

Bitcoin in the long term will never be a bubble but in the short term there will be times that it resembles very close to a bubble. Right now is possibly one. I would have said with certainty that this was a bubble a few weeks ago but we saw the correction of over $600 come but we've bounced back up again. It's best to not speculate with your coins if you are just a newbie, sell off at least a chunk and keep the rest.

For those who see bitcoin as a bubble, they are entitled to their opinion and no amount of convincing argument can make them change their mind. However, their thinking is actually valid but its one sided looking at it only from the price alone ignoring other potentials in the blockchain technology itself which is the backbone of bitcoin that would solve several problems that have existed for long in the world and this alone will continue to provide support for bitcoin price.

As I said, bitcoin can definitely be in a bubble sometimes.

How else would you justify a $1000 increase over 1-2 weeks? No way the amount of bitcoin users just magically doubled or fiat currency just lost half its value. In the long term, btc is generally a good investment.

[weggie]

"Earlier bitcoin was known as a currency for deep web and illegal market."

FCK
once again, those lucky bastards who was dealing cocaine is again those lucky bastards,who did own BTC only by PURE LUCK, now 100foldetheir assets, therefore no need to sell any cocaine anymore
thats what I call luck.

and again, who do the hard work (police, fireman, doctor, cleaning lady, teacher!) is BEHIND.

this World sucks

[Dudeperfect]

The people who are calling it a bubble are either who lost their funds in real bubble or they have not understood the background of the bitcoin system architecture. Even few of the friends tried to warn me not to waste my time in bitcoin as they read the negative coverage from the media portals. Bubble is something that happens in alt coin trading chart (pump and dump schemes) and I don't think bill gates or other billionaires are willing to spend time in making a bitcoin bubble (as considering the market cap, ordinary investors has no capacity to create a bubble like bitcoin).

[freebutcaged]

Have you seen the recent difficulty increase? you are getting averagely 12.5 new Bitcoins every 10 minutes, no matter who and no matter how many they

Want the supply is limited and major coin holders are hodling like they mean it, so in a world where the most promising and legit digital currency was

Designed in such a clever way to make it scarce and valuable, do you know of another crypto currency with the backbone and a global industry behind

It like Bitcoin? if you know then where is it show me so I could engage with it as well. if people talk about ETH, how'd you know if they are not mining

ETH by ASIC miners without even telling people and sell to the public, is ETH even open source code? this isn't a bubble just accept it, there are no

Comparable alternatives for Bitcoin.

[krisnt80]

There would be a bubble if there werent any reasons under the current bitcoin price, but well we all know the news made price jump, legalization is making good to bitcoin value, the demand has raised a lot, and i dont see any bubble, just a purchasing power bigger then before. There are risks at bitcoin as any other altcoin, but the thing is i doubt bitcoin will touch again 1500 dollars, but i might be wrong.

[matuson]

There would be a bubble if there werent any reasons under the current bitcoin price, but well we all know the news made price jump, legalization is making good to bitcoin value, the demand has raised a lot, and i dont see any bubble, just a purchasing power bigger then before. There are risks at bitcoin as any other altcoin, but the thing is i doubt bitcoin will touch again 1500 dollars, but i might be wrong.

The bubble is the United States dollar 1926 issue when they ceased to be secured by assets of the state. Now it's just a piece of paper for collectors who at any moment may lose value. I do not see the bitcoin in addition to advertising the company and it seems to me that bitcoin is also a bubble.

[bouren]

There would be a bubble if there werent any reasons under the current bitcoin price, but well we all know the news made price jump, legalization is making good to bitcoin value, the demand has raised a lot, and i dont see any bubble, just a purchasing power bigger then before. There are risks at bitcoin as any other altcoin, but the thing is i doubt bitcoin will touch again 1500 dollars, but i might be wrong.

Very well said. It used to happen that bitcoin prices were inflated in past. But considering present situation I don't feel the whole rise is just inflated. It is pretty due to real increase as you said increased purchasing power (real income). People are increasingly entering the BTC world which is ultimate reason for this rise especially in Asian countries. 

[Hydrogen]

This is the real bubble.



This currency is issued by a government that is $20 trillion in debt.

Its value has not corrected for the amount of debt and danger present.

If "experts", "analysts", "journalists" weren't paid shills & charlatans they would be discussing this right now.

The euro/EU is also a bubble. The pound may also be one.

Russia, china, australia and other nations are getting rid of the US dollar(and adopting bitcoin) knowing USD is a bubble.

[deisik]

This is the real bubble.



This currency is issued by a government that is $20 trillion in debt

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

[olushakes]

For me I see the bitcoin bubble as a myth and to those who are still harbouring that idea are either I'll informed or does not want to be relevant with reality in the sense that they only try to compare on how price have increase over the years without even taking  into consideration the various downs that have been witnessed in between those comparing times and at the same time not understanding the basis for the increase in price ie the factors behind it.

[bitcoindusts]

For me I see the bitcoin bubble as a myth and to those who are still harbouring that idea are either I'll informed or does not want to be relevant with reality in the sense that they only try to compare on how price have increase over the years without even taking  into consideration the various downs that have been witnessed in between those comparing times and at the same time not understanding the basis for the increase in price ie the factors behind it.

So you are removing bubbles from the scene?  What do we call this now, if we remove bubbles, should we removed corrections too?  Since these two is always present in pairs.  Anyway, I think the recent run of Bitcoin price is not a bubble because there is a reason for it to increase and there is a reason for people to demand for Bitcoins.  News, acceptance, projects of companies, this brings fresh funds to Bitcoin economy.  Aside from that, I believe there is still a huge market to be saturated.  So I guess this uptrend is normal.

[Hydrogen]

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 do it: even you don't believe the things you're saying.

 

Russia, australia and japan are adopting bitcoin as they know fiat is a bubble and bitcoin is not.

For me I see the bitcoin bubble as a myth and to those who are still harbouring that idea are either I'll informed or does not want to be relevant with reality in the sense that they only try to compare on how price have increase over the years without even taking  into consideration the various downs that have been witnessed in between those comparing times and at the same time not understanding the basis for the increase in price ie the factors behind it.

EXACTLY.

Bitcoin isn't a bubble because its price movement can be explained and verified via increased trading volume and demand.

[ppc.pt]

Equity value is tied to a balance sheet of ______.

Currency value is tied to the balance sheet of a nation.

The USA being $20 trillion in debt can be a case for the US dollar being a bubble.

The european union being $12 trillion in debt can be a case for the euro being a bubble.

Currency bubbles do exist similar to equity bubbles.

That said he made a very good point about the unlikelihood of sellers outnumbering buyers due to many btc users being long term buy & hold.

Actually USD and EUR are not bubbles. They just have no value.

Or to be fair, paper money has value. The value of the paper and ink. So you can say that a 500€ bill has pratically the same value of a 5€ bill

And the worst thing is that this is actually true