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Author Topic: Proof bitcoin is NOT a bubble (w/hopefully laughs included)  (Read 114 times)
Hydrogen
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March 09, 2018, 10:31:41 AM
 #1

We have all seen doom & glooming™®© experts in the media proclaim: "bitcoin's growth is too high, it is a bubble".   Smiley

Today I visited http://fool.com/ an investment website I have not visited in years and saw this interesting infographic.



(Link to image: https://i.imgur.com/XWmqLzA.jpg )

It says...

  • Netflix Up nearly 13,488% since recommended in 2004 in Motley Fool Stock Advisor
  • Disney Up nearly 5,498% since recommended (as Marvel) in 2002 in Motley Fool Stock Advisor
  • Tesla Up nearly 946% since recommended in 2011 in Motley Fool Rule Breakers

With Netflix being up 13,488%!!! Will Jamie Dimon or Warren Buffett bashing netflix as being the next big bubble to rival the dot com bust and tulip mania? I admit that might represent a non sequitor on my part, the stock market after all is a tried and tested means of investment while bitcoin and crypto altcoins are not. There is a fundamental difference which separates bitcoin from stocks, equities, commodities, precious metls and other traditional forms of investment after all. This could make the job of analysts and experts very difficult as they attempt to quantify new cryto assets which may be sailing in uncharted waters.

However, might it be safe to say that the type of price growth as exhibited by bitcoin over the past 20 months can be sustainable under certain conditions, and that it may not be as unlikely or rare an event as many talking pundits in the media claim?

Also does it make people feel better to know that the type of high growth potential exhibited by bitcoin might be found on the stock market or in other investments which are accessible to average and ordinary people?   Wink

Disclaimer: Should mention that while fool.com was once a good investment website containing good investment advice, the same may not be said of their content today. Some of their recent picks look bad, in my humble opinion. The quality of their articles may have declined significantly over the past 10 years. I don't know if I would recommend them today although their content is probably much better than CNN or any of the other mainstream sites.

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March 09, 2018, 10:55:09 AM
 #2

The name of the website tells us much about the prople that invest in those companies. Personaly I've got the biggest doubts about Tesla. That's the company that work for 15 years and still don't show any profits (and it happens with the huge amount of direct and indirect governmental subsides)! They still have big problems with manufacture and they don't pay dividents.  Their typical investor is an average houswife that don't know anything about this company and investing but she is sure that Tesla will moon. if someone is advicing you to buy this type of stocks then you should avoid this person at all costs.
It is a popular opinion that stock market is in a bubble right now (especially the mentioned companies). But all stock investors that I've seen are sure that it won't blow up for at least some more years. It looks like complete hypocrisy and ignorance when mature stock investors say that BTC will blow up soon.
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March 09, 2018, 11:21:35 AM
 #3

Many times I heard and view about bitcoin characteristics, and a lots of people says that bitcoin is really a bubble. However, a lots of people also like the bubble system of bitcoin, and mostly are those investors, because once price going down, they automatilly or immediately invest a big amount of capital. And mostly big investors are very wise and smart in this kind of business, and I  idolized that kind of people, because I am planning soon to be a investor.
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March 09, 2018, 11:27:42 AM
 #4

Tesla is the biggest bubble ever.Electromobiles have no future,when it comes to mass production.They will continue to be too expensive and too uncomfortable.The only reason behind the Tesla bubble is the hidden government support for this industry.I don`t wanna write about Netflix and Disney,becasue I don`t watch TV or movies.Anyway,like i said many times,it`s wrong to compare bitcoin with stocks,but i assume  that you made that post only for fun purposes.


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alyssa85
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March 09, 2018, 11:39:00 AM
 #5


With Netflix being up 13,488%!!! Will Jamie Dimon or Warren Buffett bashing netflix as being the next big bubble to rival the dot com bust and tulip mania? I admit that might represent a non sequitor on my part, the stock market after all is a tried and tested means of investment while bitcoin and crypto altcoins are not. There is a fundamental difference which separates bitcoin from stocks, equities, commodities, precious metls and other traditional forms of investment after all. This could make the job of analysts and experts very difficult as they attempt to quantify new cryto assets which may be sailing in uncharted waters.

However, might it be safe to say that the type of price growth as exhibited by bitcoin over the past 20 months can be sustainable under certain conditions, and that it may not be as unlikely or rare an event as many talking pundits in the media claim?



Netflix might be up by 13.488% - but the likelihood that it will keep going up at that rate in the future is small.

The same goes for bitcoin. What people are really pushing back against is the idea that just because bitcoin had a spectacular 2017, it is guaranteed to do the same in 2018. Nothing is guaranteed, and teh bigger something gets the harder it is to sustain big percentage increases.

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March 09, 2018, 01:57:13 PM
Merited by Hydrogen (2)
 #6

Amazon's unconventional business model of using supply-chain management software to create a virtual book warehouse and factory outlet mall synthesized into a single website was a bit unusual and since then it's business model has been criticized and called a bubble, even though a $474 company now.

If it was unconventional business model for Amazon, it is Bitcoin's lack of intrinsic value due to it being structurally built to remove any third party mediators and authorities is the ungraspable bubble theory for analysts.

Yeah, there is a fundamental difference so not comparing a company with a cryptocurrency, but in terms of technology, more about technology dependent on the Internet/online, there is a slight parallel between Amazon and Bitcoin.

I guess the growth is sustainable, but likely there would be periods when investors would get overexcited Grin

Quote
Amara’s Law: We tend to overestimate the effect of a technology in the short run and underestimate the effect in the long run. This is part of the reason we get bubbles. We get overexcited about a new technology and we drive up prices beyond any reasonable valuation. Bubbles can go on for years. I guess the growth is sustainable, but guess there would be periods when investors get overexcited.

https://hackernoon.com/with-greater-perspective-the-crypto-bubble-isnt-a-bubble-it-s-a-bc8de7b55f30

PS: Guess it was for fun's sake post, got a bit carried away Grin
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March 09, 2018, 05:01:31 PM
Merited by Hydrogen (2)
 #7

The growth of Netflix is quite reasonable, given that even cable companies (Bell, Rogers etc.) have already integrated Netflix streaming service into their Fiber television. Add to that fact that the viewers watching on their televisions are slowly transitioning into online streaming services. IMO the growth of Netflix stocks is justifiable. However in the case of Tesla, I don't see if electric-powered cars would have a huge slot in the motorspace in the coming years, but since they're the only known company to push such a tech, it might explain the rise.

Quote
Amara’s Law: We tend to overestimate the effect of a technology in the short run and underestimate the effect in the long run. This is part of the reason we get bubbles. We get overexcited about a new technology and we drive up prices beyond any reasonable valuation. Bubbles can go on for years. I guess the growth is sustainable, but guess there would be periods when investors get overexcited.

Overexcitement and FOMO is what happened largely in 2017's insane run, and IMO bitcoin's valuation is on a sweet spot @ $10k, and anything beyond that is pure speculation.




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March 09, 2018, 05:16:35 PM
 #8

Tesla is the biggest bubble ever.Electromobiles have no future,when it comes to mass production.They will continue to be too expensive and too uncomfortable.The only reason behind the Tesla bubble is the hidden government support for this industry.I don`t wanna write about Netflix and Disney,becasue I don`t watch TV or movies.Anyway,like i said many times,it`s wrong to compare bitcoin with stocks,but i assume  that you made that post only for fun purposes.

I guess they are supporting him because of the possible use of any technology that might be advanced during the project. Besides people are genuinely hoping electric cars would become a norm.

Overexcitement and FOMO is what happened largely in 2017's insane run, and IMO bitcoin's valuation is on a sweet spot @ $10k, and anything beyond that is pure speculation.

Can't even stay above $12k. There were certainly fortunes made (and lost) during the last rally though.

<|°_°|>
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March 09, 2018, 06:06:49 PM
 #9

Amazing proof!
I will save this picture and will show everyone who says to me next time that Bitcoin is a bubble or a pyramid!
Thanks!

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March 09, 2018, 06:31:34 PM
 #10

I did get a good chuckle out of this, thanks ya. Of course the conditions we saw the last couple of years are sustainable (disregarding the huge bull run in December obviously) granted adoption keeps growing. If adoption somehow stops, then obviously we are in for a world of hurt and a bear market will ensue. Don't care about the stock market at all, never have and never will besides that 13,000% is in over 10 years time whereas one could achieve that in crypto in one solid pump under a month. Worlds apart if you ask me Wink

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March 09, 2018, 06:50:13 PM
 #11

I think that the argument of growth being too high is a fairly flawed argument and you've pretty much just proved why. These are only some of the most well known stocks as well, there would be some very obscure stocks which have probably enjoyed even greater returns.

The main difference comes back to the 'intrinsic' value argument. It's clear to see what these stocks are supported by because it's a company and their revenue and then the dividend that they'll pay out.

With bitcoin that is missing and that's why I think people make such an argument (I don't want to get in to the intrinsic value argument but I'll just quickly say that I don't believe in it because all values are intrinsic so it's not anything new to bitcoin).

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March 10, 2018, 10:03:04 AM
Last edit: March 11, 2018, 08:20:53 AM by Hydrogen
 #12

Disclaimer: Should mention that while fool.com was once a good investment website containing good investment advice, the same may not be said of their content today. Some of their recent picks look bad, in my humble opinion. The quality of their articles may have declined significantly over the past 10 years. I don't know if I would recommend them today although their content is probably much better than CNN or any of the other mainstream sites.

It is possible fool.com somehow IP banned me for posting the above negative opinion on their website, btw.

I've tried to load their site for the past 12 hours without success, however it is easily reachable via proxy and the site loads for everyone else it would seem.

IP ban?:



(image link: https://i.imgur.com/XVBH0OA.jpg )



(image link: https://i.imgur.com/p3fHqvJ.jpg )

One thing I noticed, imagine if there was a website which recommended investors buy bitcoin cash during its dump phase after being pumped. Some of fool.com's stock picks mirror that example in equities markets. They might recommend for casual investors to buy stocks that are likely to decline in price so that wealthier investors can dump their overvalued holdings.

If they did IP ban me it could confirm this is true and done deliberately.

Also is it scary if you post a negative opinion on a message board and are IP banned by the site you gave an opinion on within 24 hours?

Talk about an overreaction. Anyways. Food for thought.

edit: fool.com still not loading more than 24 hours later. Looks like they really did IP ban me for making this thread.

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March 10, 2018, 10:15:25 AM
 #13

I think bitcoin differs from these stocks in many ways but many people also call tesla and other ones as bubble so you need another proof showing that they are not bubble.

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March 10, 2018, 10:28:09 AM
 #14

I can understand why both Tesla and Netflix are doing very well. They are both offering new and innovative technologies, just like Bitcoin. Netflix have invested 1 Billion dollars into the development of their amazing video codec, which is revolutionary because it runs on very limited bandwidht.

Tesla is challenging the Oil monopolies, by offering a technology that might replace the need for oil/fuel.

Bitcoin is running in the same space, with it's disruptive innovation that might turn the financial world on it's head.

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March 10, 2018, 11:03:58 AM
 #15

I can understand why both Tesla and Netflix are doing very well. They are both offering new and innovative technologies, just like Bitcoin. Netflix have invested 1 Billion dollars into the development of their amazing video codec, which is revolutionary because it runs on very limited bandwidht.

Tesla is challenging the Oil monopolies, by offering a technology that might replace the need for oil/fuel.

Bitcoin is running in the same space, with it's disruptive innovation that might turn the financial world on it's head.

Yes they invested , they show us something new.
Bitcoin also showed to public new technology , but what next ?

For 10 year with bitcoin we did not see so much new technology with bitcoin .
Yes we saw ICO from ETH , but whats more ? for 10 year that is not enough.

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March 11, 2018, 04:24:15 PM
 #16

I can understand why both Tesla and Netflix are doing very well. They are both offering new and innovative technologies, just like Bitcoin. Netflix have invested 1 Billion dollars into the development of their amazing video codec, which is revolutionary because it runs on very limited bandwidht.

Tesla is challenging the Oil monopolies, by offering a technology that might replace the need for oil/fuel.

Bitcoin is running in the same space, with it's disruptive innovation that might turn the financial world on it's head.

Yes they invested , they show us something new.
Bitcoin also showed to public new technology , but what next ?

For 10 year with bitcoin we did not see so much new technology with bitcoin .
Yes we saw ICO from ETH , but whats more ? for 10 year that is not enough.
That's exactly my question.

What is the intrinsic value of Bitcoin? What is the basic utility? Bitcoin is struggling hard to be accepted as payment system in most of the countries. Countries are taxing it as property and isn't accepting it as a legal tender. Those stocks had the underlying potential to support that growth. But how will Bitcoin, which is highly manipulated by the bulk hodlers just for mere profit, is going to sustain its value in the long run? Speculation is what driving the price which isn't a sign of organic growth.
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