How to Recognize a Bubble (for the stock market.... see any similarities?)

[Mirsad]

That's stupid..
If there would be greater utility the number of transactions would have grown much faster.

That has nothing to do with the price. It's still 1 transaction if I pay 100 BTC worth 10$ each or 1 BTC worth 100$ to buy my new bike.

So the numbers of transactions has to grow, if there is really more utility in real life applications. That is not related to the price.

You should know that if you ever had a course about statistics.


Growth of wealth measured purely speculative price increase? That's a flawed logic.

[toy4lov3rs]

Bitcoin is pure speculation. But that's fun -> great profits to take.

For pure speculation you may try some altcoin. Bitcoin is usefull already, but price affected by speculation. If the price drops under $100, Bitcoin is still usefull to buy stuff online

[Mirsad]

Bitcoin is pure speculation. But that's fun -> great profits to take.

For pure speculation you may try some altcoin. Bitcoin is usefull already, but price affected by speculation. If the price drops under $100, Bitcoin is still usefull to buy stuff online

That's what I'm talking about.
It is 50% more usefull then early 2013.
50% growth is huge!

But the price is way ahead of market implementation.
20-30$ would be a reasonable price compared to the infrastructure.

And yes, bitcoin will allways be usefull to buy stuff regardless the price.

[Voodah]

It is very comforting seeing the Frozenlock avatar and not having to read Ardana.

[Harley997]

This is interesting and useful but as all the others say BTC Is NOT A STOCK and will never be one.

ok. a lot of people say this, though, without adequately explaining how its price movement does and will differ, specifically. in other words, it is an excuse to do no analysis whatsoever.

Glad to see someone else calling people out on this bullshit. Just because bitcoin isn't a company issued stock doesn't mean that it won't react to the same market psychology and supply/demand forces.

this is a good point.

[jubalix]

How Bubbles Grow: 12 Easy Steps

1. A believable concept offers a revolutionary and unlimited path to growth.
>>no limited coins, and s curve event so not unlimited

2. Surplus of funds and lack of opportunities lead to buying or investing in anything available.

>>no its an evaluation even the "funds" are the over printing, devaluation and bad economic decisions of the banks/gov for oh, 100+ years


3. An idea is complex and cannot be totally explained or related to an investor. [/b]
its easy, we bank now.

4. The crowd imitates the leader. All Aboard! Even the gardener has a tip!?
nope a fraction of a fraction know about BTC in any meaningful way.

5. Prices fluctuate from traditional level to overvalued level, THEN to all new ground and all time highs.
there are no traditonal levels nothing had been done like this before

6. New levels are sanctioned by experts. "We are in a new Paradigm!"
the "experts" decry BTC


7. Fear of missing the boat takes over.
Cloning of the idea occurs as many new overvalued competitors enter the market.[/b] this may be true

8. Lending practices are eased. Money flows like water to anything or anyone with a new idea.
no alot of forces make it hard to get FIAT in
 
9. Cult figures emerge for the new paradigm. The media promotes lifestyles, not substance.
No satoshi disappeared at the beginning...because he realized the implications of what he had just done....

10. The Bubble lasts longer than expected. Critics are dismissed. The last suckers are sucked in.
This think has gone up and down to the complete misitification of the "experts" who have pronounced BTC dead several times.




11. Fraud emerges as partly responsible for the bubble as the first cracks show in the bubble.
Nope. If anything the opposite.


12. Finally, everyone has a reason why it cannot continue. But nobody dumps, and all hold onto their profits. No new buyers. Market stalls.
Ok some truth, but the reason no one dumps is because they have seen it happen too many times, eg dumping, then the price going and order of 10 leaving them with FIAT never to be able to buy back in.

[jubalix]

This is interesting and useful but as all the others say BTC Is NOT A STOCK and will never be one.

ok. a lot of people say this, though, without adequately explaining how its price movement does and will differ, specifically. in other words, it is an excuse to do no analysis whatsoever.

Glad to see someone else calling people out on this bullshit. Just because bitcoin isn't a company issued stock doesn't mean that it won't react to the same market psychology and supply/demand forces.

this is a good point.

the difference is stocks swaps around existing gov FIAT money supply so they all swim in that pool of money neither creating or destroying money or wealth just swapping it round and changing the velocity of the money. By printing more money makes any individual denomination less valuable.

BTC is competing with the FIAT pool itself. That is an entirely different proposition to a stock. The fluctuations come from the un even transfer of value in an out of BTC but mainly in as the log graph shows rather convincingly

[kireinaha]

This is interesting and useful but as all the others say BTC Is NOT A STOCK and will never be one.

ok. a lot of people say this, though, without adequately explaining how its price movement does and will differ, specifically. in other words, it is an excuse to do no analysis whatsoever.

Glad to see someone else calling people out on this bullshit. Just because bitcoin isn't a company issued stock doesn't mean that it won't react to the same market psychology and supply/demand forces.

this is a good point.

the difference is stocks swaps around existing gov FIAT money supply so they all swim in that pool of money neither creating or destroying money or wealth just swapping it round and changing the velocity of the money. By printing more money makes any individual denomination less valuable.

BTC is competing with the FIAT pool itself. That is an entirely different proposition to a stock. The fluctuations come from the un even transfer of value in an out of BTC but mainly in as the log graph shows rather convincingly

That's not true at all and you obviously have never invested in a stock before. Money invested is used by the issuing companies to grow by hiring employees and developing assets and IP. Investors share in this growth through increased valuation and dividends.

Your comment actually represents bitcoin -- fiat money being swapped around, and early investors rising off the backs of later ones. Since there is essentially no intrinsic value other than the volunteer mining network. It's open source, so there is no IP or or similar assets. While I maintain that bitcoin basically behaves in the manner of a publicly traded stock, if anything, this lack of intrinsic value serves to make it an even riskier asset, similar to a penny stock or worse. High reward/high risk.

[e521]

I think there's a chart knocking about somewhere which shows the anatomy of a bubble...

This? [from wikipedia]

[Lloydie]

Your comment actually represents bitcoin -- fiat money being swapped around, and early investors rising off the backs of later ones. Since there is essentially no intrinsic value other than the volunteer mining network. It's open source, so there is no IP or or similar assets. While I maintain that bitcoin basically behaves in the manner of a publicly traded stock, if anything, this lack of intrinsic value serves to make it an even riskier asset, similar to a penny stock or worse. High reward/high risk.

Schiff also denies btcs have intrinsic value. Otoh, Voorhees says that btcs' intrinsic value exists due to the payment network and the network effect.

In the context of intl remittances, export/imports, store of value versus fiat, it appears that btcs have intrinsic value.

Possibly, Btc price is a function of hoarding and the size of the payment network. As long as the payment network is expected to expand, hoarders are likely to keep hoarding.