So where exactly are we in the bubble?

[magneto]

I know y'all have seen this diagram before, and with BTC just crossing $3,800 as I type, where do you think we are in the bubble?



Aw man so cuz I'm a noob it won't post the image... Oh well. Its basically that "main stages of a bubble" chart. Which crypto most definitely is in. But are we just beginning the true ascent, or have we reached the peak? Thoughts?

We are close to, if not already at the new paradigm level. The correction from yesterday could potentially be the first sell off, and the next pump may be the bull trap coming in. Obviously it is hard to judge but this is what i think is happening.

People are saying that this is not a bubble and others are predicting crazy growth for next year. I think this is a very clear indicator that people are extremely greedy right now, and when the mania ends the price will correct down to at least $3.5k.

Also, for anyone interested, goldman sachs predicted that the price of bitcoin would top at around $4800. They seem to be reasonably accurate looking at it right now. I think that the prediction by goldman sachs caused the sell-off at near $5k, rather than the other way round.

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[cpfreeplz]

We are close to, if not already at the new paradigm level. The correction from yesterday could potentially be the first sell off, and the next pump may be the bull trap coming in. Obviously it is hard to judge but this is what i think is happening.

People are saying that this is not a bubble and others are predicting crazy growth for next year. I think this is a very clear indicator that people are extremely greedy right now, and when the mania ends the price will correct down to at least $3.5k.

Also, for anyone interested, goldman sachs predicted that the price of bitcoin would top at around $4800. They seem to be reasonably accurate looking at it right now. I think that the prediction by goldman sachs caused the sell-off at near $5k, rather than the other way round.

We're not even remotely close to mainstream. Care to explain how we're already in a phase that we're literally too small of a market cap to be in? Does 1 in every thousand people in the world own some bitcoins? How about 1/ 1 million? Lol.

[CryptoBry]

People are really loves of speculations...they bought some Bitcoin because of its speculative value and they keep on speculating again when Bitcoin can go bust. Maybe it is really part of our human nature to be thinking of the days ahead even if we know that we are essentially powerless to know for sure.

Are we in the bubble? Of course not, we are seeing here is correction and we know that Bitcoin has so many corrections precisely because it wants to avoid the BIG BUBBLE.

[btcney]

People are really loves of speculations...they bought some Bitcoin because of its speculative value and they keep on speculating again when Bitcoin can go bust. Maybe it is really part of our human nature to be thinking of the days ahead even if we know that we are essentially powerless to know for sure.

Are we in the bubble? Of course not, we are seeing here is correction and we know that Bitcoin has so many corrections precisely because it wants to avoid the BIG BUBBLE.

But we are already in the bubble, and we are continuing to go up.

We really haven't had any major corrections until this one, from the start of August. And we are almost at double the price that we have seen a month ago right now. And that price at the start of august was already very very high.

How is this not a bubble? Please explain to me.

It's always hard to predict where we are exactly in a bubble, but i think that we are nearing the mid to late stages of the bubble. Definitely near mania phase.

[Proton2233]

Partially for a long time bitcoin is a bubble. The only positive effect on the economy from bitcoin is to stimulate the production of computer equipment. It's good, but this is very small in order to be able to say that bitcoin the currency is reliable and has support. Fixed capital investment in bitcoin is speculative. This is a typical sign of a bubble.

[d5000]

The only bitcoin bubble whose crash lasted for more than a few months was from Mt Gox dying. That was the most catastrophic thing to happen to bitcoin, so unless you think a similar event is going to happen soon, what you are predicting is extremely unlikely. Without a catastrophic catalyst like that, we're probably not gonna have any bubble pops that last for more than a few months. The buy pressure and increasing userbase/adoption is just too damn strong to possibly allow a down period of a year or more.

The problem is that the "adoption" we think to see now, in reality, is only speculation. And, at least in part, speculation of the worst kind. A significant part of the demand is based on MLM schemes in many parts of the world and other scams.

When these schemes pop, then we'll have disappointed "potential customers" all over the world.

No, I'm not saying "it already popped". What's presently happening is a normal correction/downmove. But I don't think we'll go steady up to 10K and more from now. My prediction is that the large crash is still before us - when the price increases are too slow to feed the MLM schemes (maybe we have already seen 2017's high at ~4950) and they pop.

I wouldn't even call this a bubble at all. Look at past bitcoin bubbles. The price increased 10-fold or 30-fold or whatever in a couple of months. This has been a gradual increase, up 10-fold in over a year, not in two months. That suggests steady solid growth, not a frenzy induced bubble that will pop.

I have heard this argument many times, but I don't agree. With a higher market cap, it becomes increasingly more difficult for the price to increase drastically. With a low market cap, you put in a few million dollars and the price doubles or triples. In the present situation, that's not longer true.

Bitcoin has now a market cap that's more similar to major stocks. Every stock that almost doubled in a month will be considered in a bubble if it's not justified by some big achievement.

[Paycoinzzz]

Partially for a long time bitcoin is a bubble. The only positive effect on the economy from bitcoin is to stimulate the production of computer equipment. It's good, but this is very small in order to be able to say that bitcoin the currency is reliable and has support. Fixed capital investment in bitcoin is speculative. This is a typical sign of a bubble.

However, if you can understand this is bubble growht of Bitcoin while you can earn profit from it, it still well.
For me, the bubble growth of Bitcoin never breakdown in this year, it just getting started and have not reason make that worst future become true.

[bobitza]

That's right, we're all in a bubble, but this bubble can continue to continue if it is not punctured. In other words, if it is stable, it will last forever, but if it is affected badly, it can break down at any time.

[Solarbankers]

7k USD by the end of the year, my two cents. Bubble or not, that is where we are heading...

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[mast3rm1nd]

I don't think we are at the public phase yet; people aren't talking about btc as they should.

[BunnyShibe]

That's right, we're all in a bubble, but this bubble can continue to continue if it is not punctured. In other words, if it is stable, it will last forever, but if it is affected badly, it can break down at any time.

but i do not think that we are in bubble because i think that the it is the actual  price of bitcoin which has more potential to increase its price. i am sure that the price of bitcoin will very soon recover its price therefore i think we do not need to worry about the price of bitcoin and should invest more and more money in bitcoin because the price of bitcoin will still continue to increase.

[d5000]

I don't think we are at the public phase yet; people aren't talking about btc as they should.

You are confusing the "adoption curve" (the usage of Bitcoin by real people, a "real-world economy" topic) with a "bubble curve" (the speculation on future usage, a "financial economy" topic).
It's the same if some people say "Bitcoin IS a bubble" and not "Bitcoin [sometimes] HAS (experiences) bubbles".

Mainstream adoption in Bitcoin can be also achieved after many, many bubble cycles. And we had bubbles even much before of any mainstream adoption (2011/13, when Bitcoin almost only existed on one single website - MtGox!).

[Zenithar]

That's right, we're all in a bubble, but this bubble can continue to continue if it is not punctured. In other words, if it is stable, it will last forever, but if it is affected badly, it can break down at any time.

but i do not think that we are in bubble because i think that the it is the actual  price of bitcoin which has more potential to increase its price.

i also do not think that we are in the bubble, because i think that still there is more potential in the price of bitcoin to increase. i think bitcoin price will even continue increasing and still i consider that it will be a very safe investment if a person will invest money in bitcoin right now, because i have fully trust on bitcoin that its price will continue increasing.

[thecodebear]

The only bitcoin bubble whose crash lasted for more than a few months was from Mt Gox dying. That was the most catastrophic thing to happen to bitcoin, so unless you think a similar event is going to happen soon, what you are predicting is extremely unlikely. Without a catastrophic catalyst like that, we're probably not gonna have any bubble pops that last for more than a few months. The buy pressure and increasing userbase/adoption is just too damn strong to possibly allow a down period of a year or more.

The problem is that the "adoption" we think to see now, in reality, is only speculation. And, at least in part, speculation of the worst kind. A significant part of the demand is based on MLM schemes in many parts of the world and other scams.

When these schemes pop, then we'll have disappointed "potential customers" all over the world.

No, I'm not saying "it already popped". What's presently happening is a normal correction/downmove. But I don't think we'll go steady up to 10K and more from now. My prediction is that the large crash is still before us - when the price increases are too slow to feed the MLM schemes (maybe we have already seen 2017's high at ~4950) and they pop.

I wouldn't even call this a bubble at all. Look at past bitcoin bubbles. The price increased 10-fold or 30-fold or whatever in a couple of months. This has been a gradual increase, up 10-fold in over a year, not in two months. That suggests steady solid growth, not a frenzy induced bubble that will pop.

I have heard this argument many times, but I don't agree. With a higher market cap, it becomes increasingly more difficult for the price to increase drastically. With a low market cap, you put in a few million dollars and the price doubles or triples. In the present situation, that's not longer true.

Bitcoin has now a market cap that's more similar to major stocks. Every stock that almost doubled in a month will be considered in a bubble if it's not justified by some big achievement.

KEY difference here: bitcoin is not a stock!!!

It is not a single company's shares, it is an entire global payment platform and currency. Yes its market cap is now the size of pretty big companies, and yet bitcoin's global adoption is absolutely microscopic still. You can't compare bitcoin's market cap to the stock of a single company. A better comparison is gold. Bitcoin is about 1% the size of the gold market cap. So it terms of bitcoin's potential it is in fact still a very very low market cap, which is why it can grow a lot and simply get a correction, like it is currently getting, and then keep growing, without collapsing in a bubble pop as long as adoption continues to grow.

People really shouldn't even be talking about bitcoin being in a bubble unless it gets into the 6-digits but isn't actually used for payments much, that would tell you that there is a ton of investor money in it without it actually being used much. So talking about a bitcoin bubble at $5000 is just a complete joke.

[Bitcoinaire]

The only bitcoin bubble whose crash lasted for more than a few months was from Mt Gox dying. That was the most catastrophic thing to happen to bitcoin, so unless you think a similar event is going to happen soon, what you are predicting is extremely unlikely. Without a catastrophic catalyst like that, we're probably not gonna have any bubble pops that last for more than a few months. The buy pressure and increasing userbase/adoption is just too damn strong to possibly allow a down period of a year or more.

The problem is that the "adoption" we think to see now, in reality, is only speculation. And, at least in part, speculation of the worst kind. A significant part of the demand is based on MLM schemes in many parts of the world and other scams.

When these schemes pop, then we'll have disappointed "potential customers" all over the world.

No, I'm not saying "it already popped". What's presently happening is a normal correction/downmove. But I don't think we'll go steady up to 10K and more from now. My prediction is that the large crash is still before us - when the price increases are too slow to feed the MLM schemes (maybe we have already seen 2017's high at ~4950) and they pop.

I wouldn't even call this a bubble at all. Look at past bitcoin bubbles. The price increased 10-fold or 30-fold or whatever in a couple of months. This has been a gradual increase, up 10-fold in over a year, not in two months. That suggests steady solid growth, not a frenzy induced bubble that will pop.

I have heard this argument many times, but I don't agree. With a higher market cap, it becomes increasingly more difficult for the price to increase drastically. With a low market cap, you put in a few million dollars and the price doubles or triples. In the present situation, that's not longer true.

Bitcoin has now a market cap that's more similar to major stocks. Every stock that almost doubled in a month will be considered in a bubble if it's not justified by some big achievement.

KEY difference here: bitcoin is not a stock!!!

It is not a single company's shares, it is an entire global payment platform and currency. Yes its market cap is now the size of pretty big companies, and yet bitcoin's global adoption is absolutely microscopic still. You can't compare bitcoin's market cap to the stock of a single company. A better comparison is gold. Bitcoin is about 1% the size of the gold market cap. So it terms of bitcoin's potential it is in fact still a very very low market cap, which is why it can grow a lot and simply get a correction, like it is currently getting, and then keep growing, without collapsing in a bubble pop as long as adoption continues to grow.

People really shouldn't even be talking about bitcoin being in a bubble unless it gets into the 6-digits but isn't actually used for payments much, that would tell you that there is a ton of investor money in it without it actually being used much. So talking about a bitcoin bubble at $5000 is just a complete joke.

That was very well said. I believe we hit $5,000 and people took some profits, then China came out with the ICO ban and then the bottom went out and theres a big selloff. This will be similar to the Jan 2017 selloff and the ETF selloff in March.

[d5000]

KEY difference here: bitcoin is not a stock!!!

What has this to do with the difficulty to rise its market cap? Nothing.

You can't compare bitcoin's market cap to the stock of a single company. A better comparison is gold. Bitcoin is about 1% the size of the gold market cap.

False. That's what bitcoin permabulls will tell you to buy in and get burned. But Bitcoin is in fact much more similar to a company than to gold. Gold is a really scarce resource. Bitcoin is only scarce on a superficial level, because of the 21 million coins limit. But it has 1000+ similar competitors - only the first mover advantage, which resulted until now in a more extensive network, protects it from the "Flippening" (another coin taking the lead).

People really shouldn't even be talking about bitcoin being in a bubble unless it gets into the 6-digits but isn't actually used for payments much, that would tell you that there is a ton of investor money in it without it actually being used much. So talking about a bitcoin bubble at $5000 is just a complete joke.

Have you read my previous answer? It doesn't seem so, because I addressed this point. We had already two bubbles (or three, if we say that in 2013 there were two bubbles) where the price needed more than a year to recover. 2011 and 2013. Again: I'm talking about bubbles as a temporary overheating, where the price takes longer than a few months to recover. Not about the absolute peak BTC will reach in his lifetime.

And another think I want to remark: There is no obligation for the Bitcoin price to go to $5000, or $10000. Things can change rapidly: a better competitor can emerge and take over the lead, Bitcoin exchanges and other services can be banned by governments (look at China) or even crypto currencies can disappear because of a better technology. And "some investors" are not that important. In 2013 the Winklevii and even Al Gore were already in.

[alyssa85]

Regarding Bubbles, here is an interesting article:

https://qz.com/1067557/robert-shiller-wrote-the-book-on-bubbles-he-says-the-best-example-right-now-is-bitcoin/

Yale economics professor Robert Shiller won the Nobel prize for his work on bubbles. He wrote a seminal book on speculative manias, Irrational Exuberance, a deep analysis of the dramas over the centuries when otherwise sane people drove prices for tulips, stocks, and houses to inexplicable heights.

Shiller developed some of the tools that are considered vital for taking a sober look at markets. He helped create indexes for measuring real estate prices and his stock market valuation indicator, the cyclically adjusted price-earnings ratio, or CAPE ratio, is seen as one of the best forecasting models for stock returns.

As Shiller sees it, “big things happen if someone invents the right story and promulgates it.” Quartz spoke with him about some of the frothiest assets today, from bitcoin to tech stocks.

Quartz: What are the best examples now of irrational exuberance or speculative bubbles?

Shiller: The best example right now is bitcoin. And I think that has to do with the motivating quality of the bitcoin story. And I’ve seen it in my students at Yale. You start talking about bitcoin and they’re excited! And I think, what’s so exciting? You have to think like humanities people. What is this bitcoin story?

It starts with Satoshi Nakamoto—remember him? The mysterious figure who may or may not be real. He’s never been found. That has a nice mystery quality to it. And then he has this clever idea about encryption and blockchain and public ledgers, and somehow the idea is so powerful that governments can’t even stop it. You can’t regulate this. It kind of fits in with the angst of this time in history.

If you look at the third edition of Irrational Exuberance, I’m arguing that there’s a fundamental deep angst of our digitization and computers, that people wonder what their place is in this new world. What’s it going to be like in 10, 20, or 30 years, and will I have a job? Will I have anything?

Somehow bitcoin fits into that and it gives a sense of empowerment: I understand what’s happening! I can speculate and I can be rich from understanding this! That kind of is a solution to the fundamental angst.

So I’m trying to deconstruct the bitcoin story. Big things happen if someone invents the right story and promulgates it.

[aeternus]

I think there is a legitimate reason for the growth but like always the market is trading at a value higher than it should so in my opinion we are on the bull trap, people are going to keep buying, the price is going to go up once again and in a few months they are going to realize the mistake they made.

[Stedsm]

I think we have already seen the correction mode being turned on atm and bitcoin is getting down slowly but according to support levels, it has already reached its least and it should start getting back upwards. I don't know why these Chinese are wasting too much time to take Bitcoins above 5k, maybe because they want more hype being spread around.

[d5000]

I think we have already seen the correction mode being turned on atm and bitcoin is getting down slowly but according to support levels, it has already reached its least and it should start getting back upwards.

For now, it seems so, but I wouldn't bet on it. It could easily be the well-known "dead cat bounce". Or the price could form a double top some days from now.

We have three fundamental reasons for a bear market in the coming months:

- China's strict ICO regulation or even prohibition (that should hit altcoins more, but also affect Bitcoin a bit)
- The November fork.
- The extremely bullish market in August, when price almost doubled, making me believe that the market overheated.

We can see several days or even weeks above $4000 from now on. But I only will believe the bull market continues if the September 1 high is sustainably broken (=not just by 10 or 30 dollars/BTC).

@alyssa85: Would be interesting to apply the CAPE ratio to Bitcoin. I read it's the current price divided by its 10-year moving average, adjusted by inflation. In Bitcoin I think the CAPE ratio would be insanely high, although we probably should modify it to include only the years when a real market was available (2010 onwards).