Bubble?

[Lauda]

Do you guys think this is a start of another bubble or will it be a lasting upward trend?

Yes.

How can one answer a choice question with an "yes"? 

[jzcjca00]

A bubble is "trade in high volumes at prices that are considerably at variance with intrinsic values". So it's meaningless to argue about whether Bitcoin is a bubble without first estimating its intrinsic value.

If you are certain that Bitcoin will never gain significant traction in any of its target markets, then its intrinsic value is very low, and it's a bubble at almost any price. However, if you believe that it has a good chance of becoming a major player in any major financial arena, then it is almost certainly undervalued at its current price.

For example, consider Bitcoin as an alternative to credit cards for low profit margin industries. Grocery stores typically have a 2% profit margin and pay 3% in credit card fees. If they can convince their customers to pay with bitcoins, perhaps by offering a 1% discount, they could double their profit margins. Of course, we need better hardware wallets and point-of-sale terminals, both of which are in the works. And the current volatility complicates things. But the possibility of doubling profit margins provides a strong incentive to find solutions.

Consider countries like Argentina, with 25% inflation and frequent currency collapses. Some people there are already using Bitcoin for their savings, and as long as their government continues to abuse their currency, that number will certainly grow.

Consider all the countries that would like to unseat the U.S. dollar as the world's reserve currency. Consider various blocs of smaller countries that are having trouble competing internationally, each with its own weak currency. Imagine all the Arab nations, or a group of African nations, or South American nations, deciding to adopt Bitcoin as their common currency, much as the European nations adopted the Euro. As Bitcoin matures and the U.S. dollar crisis deepens, this becomes an increasingly viable possibility.

Consider those wanting to send a portion of their paycheck back home to poor relatives, but not wanting to pay the high fees of today's systems.

Bitcoin is better than the existing money in many ways, and I believe its eventual adoption is inevitable. For that to happen, the price must go up. Many people have done their homework, reached the same conclusion, and that's why the price keeps rising.

[Altoidnerd]

There is perhaps a bit of pressure on the market now.  The prices may be a little (perhapps $100 over?) on the high side, for today, as my analyses have told me.  But I still won't sell them, I still will only buy them.

Because I do not care if bitcoin falls tomorrow to 200.  That would be awesome actually, because then I could buy even more.  

Bitcoin gains around 1000% a year and has done so like clockwork for 4 years.  It is the most intensely gainful investment you can make.  Just sit back and enjoy the ride.  If you buy coins today, there will come a day in the not so distant future that you will be glad you did so.

My suggestion is take the same amount of USD per week or whatever you like ..  as long as you can afford to play with that money, buy bitcoins and keep them the hell offline.  It will not take long for you to realize the short term crap, hype, and speculative instability is not of your concern.  You don't even have to wait too long to watch bitcoin develop into a new realm of pricing.  It may swing a whole lot, and make you unformfortable.  But the plot of the log of the price is linear for 4 years.  Just relax.  The market is so young - there is a lot of upside still.

[r00tbg]

No Bubble!
The party just begin.
But I have more faith in the future of LTC than Bitcoin!

[Krikke81]

No Bubble, but it's gonna be a bumpy ride.
BTC will have its dramatic moves, but overall the only way to go is up!

Important now is that business needs to develop more and more applications for BTC, so keep your eyes on news that comes from sites like Ebay and Baidu, golden would be that facebook follows this. Giving every facebook person a wallet (anonymous or not, not everybody cares about it), and then making them do online purchases with it! At least that's what they want to develop a "facebook" wallet.

cfr. http://venturebeat.com/2012/06/25/facebook-payments-apple-google-paypal/

That could do the trick to get a huge lift-off again for BTC

But we'll see what the future brings, just make sure you've got your seatbelt on!

 

[Lauda]

No Bubble!
The party just begin.
But I have more faith in the future of LTC than Bitcoin!

Well don't. LTC is useless.

[vendetahome]

How could such rapid price growth not to be a bubble, I have high confidence the bubble pop and we will see under 200 this month

[bitcoindigi]

price is slightly going down already. good thing, I need to buy some more coins

[Lauda]

price is slightly going down already. good thing, I need to buy some more coins

-$70.94
-20.79%
The price change for today.

[jzcjca00]

How could such rapid price growth not to be a bubble, I have high confidence the bubble pop and we will see under 200 this month

A bubble is "trade in high volumes at prices that are considerably at variance with intrinsic values."  You can have extremely high price growth without being a bubble as long as the price does not greatly exceed its intrinsic value.

The problem is that it's hard to estimate the intrinsic value because it's hard to predict what will happen in the future.  Will some governments adopt bitcoin as their national currency?  Will some governments outlaw it?  Will the media give more negative or positive coverage?  What happens when Mt.Gox gets shut down?  Will the media start ignoring bitcoin altogether, causing people to lose interest?

For those who believe that bitcoin will certainly fail, it's in a bubble at any non-zero price.  For those who believe it might become the global store or wealth, then it can appreciate by 100X overnight and still not be in a bubble.  For example, if a block or Arab or African nations announced tomorrow that they are all adopting Bitcoin as their national currency, much as the European nations adopted the Euro, the price could go to $100,000 overnight, and it would not be a bubble.

So asking if it's in a bubble is really a meaningless question.  You want to be asking where the speculative traders are likely to take the price in the short term.

I see two possibilities.  We're currently experiencing the second highest level of Google interest ever, at about 70% of the April interest.  Increased interest means an influx of new investors.  Second Market has made it much easier for big players to invest (Rich people don't have to invest time learning about wallets, etc.), so some of these investors might invest large sums of money.  There might be a huge demand in China.  All of these things could drive things much higher very quickly.

On the other hand, it takes time for investors to become comfortable with higher prices.  After the price goes way up way fast, people get nervous, and bitcoin usually has a flash crash, then settles somewhat lower than the peak.  As a general rule, the faster the run up, the deeper the crash, and the longer it needs to settle before running up again.

The fact that the recent crash didn't go down far suggests to me that we are probably in for a continuation of the run up.  Perhaps starting this evening when China wakes up, or perhaps Tuesday, after the banks wake up after the U.S. banking holiday.

So it could go either way.  The best bet is to buy and hold.

[RaggedClown]

http://i42.tinypic.com/24w6hxs.jpg

Hubble

http://i42.tinypic.com/ngesu1.jpg

Bubble

http://i42.tinypic.com/w0l6h1.jpg

Toil and trouble

[Lauda]

Hubble Bubble? 

[beenyce]

the fact that we're still right around 300 is a good sign IMO

[torontocoinexchange]

the fact that we're still right around 300 is a good sign IMO

Expect the unexpected with bitcoin - if it falls really low, buy...if it goes really high...haha...I like to hold. I'm pretty much putting all my disable income into bitcoin. 

I am currently only holding bitcoin =)  year to date return is something like 300%

[Lauda]

$326.98
Daily Change:
-14.25
-4.17%

It has improved over the day.

[geraFoerra]

The price recovered pretty quick today, maybe not bubble afterall, but steady adoption instead.

[Lauda]

The price recovered pretty quick today, maybe not bubble afterall, but steady adoption instead.

I've been thinking the same. Someone has dumped and we have recovered within the same day.

[botolo86]

It keeps on going up. $415 on Bitstamp right now!

[Serpo Eben]

http://farm4.staticflickr.com/3043/2867609321_7a821a4099.jpg

This cartoon is the simplest visual representation of what and how a bubble builds and bursts.  Bubbles are nothing more than herd mentality.

If I could send a message to every single Bitcoin holder in the world if would be this.  Hold on to your Bitcoins.  Even if you "hear" the market is going on a down turn.  The secret lies in the power of the people holding Bitcoins.  By all means if you want the price of Bitcoin to plummet then go ahead and dump your holdings when the fear factor brigade shows up with pitch forks and torches.  Then they will be the ones scooping up your hard earned Bitcoins for pennies on the dollar and riding the wave back to the top.

Hold....hold....hold....and last but not least....HOLD.

[bitcoindigi]

it's about time the bubble pops...