rpietila Wall Observer - the Quality TA Thread ;)

[cAPSLOCK]

What happens when you apply this same forecast to the historical data before the previous run-ups?

Apply it to Jan 1, 2013 and see if you get $266 in April.

Apply it to September 1, 2013 and see if you get $1200 in December.

My guess is that this is too conservative, but I would like to see what you get.

There seems to be a very strong trend among Bitcoin folks to almost certainly expect the market to almost go up in a straight line.

The idea that the next move will be exactly like the last few is extremely simplistic and potentially the road to disappointment.

One argument against it is simply that at some point we can just no longer see 10x or 100x price growth.  It is not sustainable even with the most positive circumstances.  On the other hand we may be underestimating the fundamentals behind the next bull market.  As mass institutional and public money starts to rush in it might make previous bubbles look tiny in comparison.

Then there are the black swans.  Bitcoin 2.0 (monero, darkcoin, anonycoin (tee hee) whatever) could gain momentum and end up taking down BTC 1.0 and adding another 3-4 years of speculation.
 
My point is I see lots of folks here who actually seem to expect it to be a bull market identical in scale and period to to previous, and it COULD happen... but it is less likely each time IMHO.

[dnaleor]

What happens when you apply this same forecast to the historical data before the previous run-ups?

Apply it to Jan 1, 2013 and see if you get $266 in April.

Apply it to September 1, 2013 and see if you get $1200 in December.

My guess is that this is too conservative, but I would like to see what you get.

There seems to be a very strong trend among Bitcoin folks to almost certainly expect the market to almost go up in a straight line.

The idea that the next move will be exactly like the last few is extremely simplistic and potentially the road to disappointment.

One argument against it is simply that at some point we can just no longer see 10x or 100x price growth.  It is not sustainable even with the most positive circumstances.  On the other hand we may be underestimating the fundamentals behind the next bull market.  As mass institutional and public money starts to rush in it might make previous bubbles look tiny in comparison.

Then there are the black swans.  Bitcoin 2.0 (monero, darkcoin, anonycoin (tee hee) whatever) could gain momentum and end up taking down BTC 1.0 and adding another 3-4 years of speculation.
 
My point is I see lots of folks here who actually seem to expect it to be a bull market identical in scale and period to to previous, and it COULD happen... but it is less likely each time IMHO.

coins like monero will be a niche market. BTC is too big. It is the market leader. It is semi-transparant, so the government is happy people use that in stead of things like MRO. Monero and others will be used on the darknet and by people who want to have true financial privacy.

I don't doubt those anoncoins would be valuable in the future, but they will probably not overtake the market cap of bitcoin.

[Biodom]

My point is I see lots of folks here who actually seem to expect it to be a bull market identical in scale and period to to previous, and it COULD happen... but it is less likely each time IMHO.

Perhaps it is less likely to happen, but almost any scenario is possible.
What about 2010-2011 repetition: going from 340 to 300K-500k in a superbubble, then deflating back to 30-50K in a year or two, then slowly getting back to all time high over twenty years. I have seen charts overlaying 2010-2011 percentages over the current chart (they show potential to 100K, I believe).
Chance- maybe 1%, but certainly not zero.

[kireinaha]

Perhaps it is less likely to happen, but almost any scenario is possible.
What about 2010-2011 repetition: going from 340 to 300K-500k in a superbubble, then deflating back to 30-50K in a year or two, then slowly getting back to all time high over twenty years. I have seen charts overlaying 2010-2011 percentages over the current chart (they show potential to 100K, I believe).
Chance- maybe 1%, but certainly not zero.

I too expect that there's a good probability of a "mega bubble" scenario later this year or perhaps next. I'm not sure if we'll hit 300k, but I think many people will be floored by how fast it goes. And I disagree that the chance of another speculative bubble becomes less likely each time; history will most likely reveal that we're still in the "innovator" stage right now in the bitcoin adoption curve, and the masses are only just beginning to take notice.

[2017orso]

Is anyone aware of any in-depth bitcoin vs altcoin analyses which group altcoins based on certain parameters and compare conversion movement vs btc/usd?

As bitcoin moves towards what seems to be an inevitable progression/'progression'? into a not so anonymous and likely quite regulated transaction medium, it would be interesting to assess the conversion rate differences above, esp as the next potential bubbles may involve a greater proportion of banking and traditional investment vs its libertarian and anarchic origins.

This seems already to be leading to a darker market, which may grow more separate from bitcoin (whereas in the past, altcoins were less focused on anonymity etc).  It also still remains to be seen what the growth in marketcap will look like, as a composition of libertarian/anarchist vs large investment / VC vs small speculators ('masses').

If indeed bitcoin does continue to shed its anarchic roots, this will likely continue more dramatically through the next 1 or 2 bubble phases.

[thezerg]

Another fiat currency crisis + 2nd market institutional exchange + ETF + worldwide ATM dispersal --> OMFG!

I hate this cliche but it could be "a perfect storm..."

[sgbett]

My point is I see lots of folks here who actually seem to expect it to be a bull market identical in scale and period to to previous, and it COULD happen... but it is less likely each time IMHO.

Is  that not the very kind of unshakable belief that currency relies on to have value?

I think it could be argued both ways that an almost fanatical devotion, belief and desire for BTC to succeed will be what supports it through the dark times and ultimately helps realise that fate.

My worry is that there might not be enough of those people for us to reach critical mass and get the inertia to carry this through to adoption by the masses. The kind of people whom when you mention bitcoin, they start to glaze over because you are making them confront their fragile world view. People don't want things to change, they don't want to think. They just want to go about their business. Those are the people that could end up being the deciding factor as to whether BTC becomes new money, or remains a niche system on the edges of the internet that only dreamers, radicals and geeks ever use.

[zimmah]

wtf just happened?

[explorer]

wtf just happened?

Your computer went to sleep? F5  FTW 

[SlipperySlope]

Here is a 3-day resolution chart of the breakout rally that probably marks the end of the November 2013 bubble collapse. My logistic model says the prices must rise about $10 each day to stay parallel with the long term Log10 trend. The trend price for today by the way is $1344.

[kehtolo]

Here is a 3-day resolution chart of the breakout rally that probably marks the end of the November 2013 bubble collapse.

...A thing of beauty, that.

[wachtwoord]

My point is I see lots of folks here who actually seem to expect it to be a bull market identical in scale and period to to previous, and it COULD happen... but it is less likely each time IMHO.

Bull markets seem to come closer and closer together but the size and fall get smaller and smaller (in relative terms, we're rising exponentially here). This is all based on too little data points to be certain thought. This will keep things interesting

[thoughtfan]

...
My worry is that there might not be enough of those people for us to reach critical mass and get the inertia to carry this through to adoption by the masses. The kind of people whom when you mention bitcoin, they start to glaze over because you are making them confront their fragile world view. People don't want things to change, they don't want to think. They just want to go about their business. Those are the people that could end up being the deciding factor as to whether BTC becomes new money, or remains a niche system on the edges of the internet that only dreamers, radicals and geeks ever use.

I disagree that these 'glaze over' people are those who are going to make or break wider acceptance of bitcoin.  If it is a good enough speculative vehicle for substantive liquidity (that we may well be heading towards with SecondMarket, ETFs etc) then as a means of 'clearing' intra-bank and intra-currency I believe it likely to prove of value.  Also in the meantime, outside of countries where, despite the abuse of banks and central banks, our currencies are for the time being relatively stable and it's fairly easy for most of us to get bank accounts there is an immediate use for it - especially as the service providers are beginning to mature and offer easy integration with apps and even SMS-based products.

And my current assessment of something else coming along and taking over if Bitcoin doesn't dominate quick enough is that the odds are moving towards the eventual dominating technology being bitcoin-based i.e. integrated into the existing (such as with the potential of treechains) rather than a competitor, whether altcoin or another competing technology, making bitcoin itself irrelevant.

As a little note of caution one should be sceptical of my neutrality in making such assessments given I am heavily invested and therefore like many here prone to many of the investment biases!

[rpietila]

According to my research, the average sum a person would invest in bitcoins is $1000. Therefore, 4 million new users are needed in addition to the 1 million current ones to reach $7000.

That seems like a lot to ask for the next 7 months. I think chances are some bigger investment funds are going to have a big impact though.

That is only 25.8% monthly growth in userbase. Which happens to coincide with the long-term slope of the price appreciation curve.

With this adoption growth, without the logistic slowing, we would be at 2 billion people in March, 2017.

[thoughtfan]

According to my research, the average sum a person would invest in bitcoins is $1000. Therefore, 4 million new users are needed in addition to the 1 million current ones to reach $7000.

That seems like a lot to ask for the next 7 months. I think chances are some bigger investment funds are going to have a big impact though.

That is only 25.8% monthly growth in userbase. Which happens to coincide with the long-term slope of the price appreciation curve.

With this adoption growth, without the logistic slowing, we would be at 2 billion people in March, 2017.

My suspicion is before we get anywhere near 2 billion people using bitcoins that there will be factors at play that will dwarf the impact on price arising out of adoption and its use in day-to-day transactions. 

My fear is as the realisation dawns on the bigger players that Bitcoin is 'the one' that it will be pumped by banks and central banks who can magic large sums of fiat into existence with which to buy bitcoin (and who may even dump gold temporarily), creating the ultimate bitcoin megabubble so that billions of latecomer ordinary people and businesses buying their first bitcoins will be shafted as the great bitcoin dump starts, into pms, into land, artwork etc. into a 'better' crypto - assets that had been neglected for the period bitcoin was so attractive, even back into fiat (they could use this point to launch more 'stable' 'new crypto-dollar or new crypto-pound etc.) until bitcoin finds a stable long-term pricepoint well below (even orders of magnitude below) the hyped price the masses bought at.  Problem is of course nobody beforehand can know what this price will be.  We would still be in a much better world than today because with bitcoin established fiats (old or new) will not be that attractive but if central banks are deliberately hyperinflating forcing people into crypto on their pump stage people could end up with 1000th of what they had before.

Btw, I'm only just exploring this idea so please point out if there's an obvious reason this is not how the future looks!

[impulse]

My suspicion is before we get anywhere near 2 billion people using bitcoins that there will be factors at play that will dwarf the impact on price arising out of adoption and its use in day-to-day transactions. 

My fear is as the realisation dawns on the bigger players that Bitcoin is 'the one' that it will be pumped by banks and central banks who can magic large sums of fiat into existence with which to buy bitcoin (and who may even dump gold temporarily), creating the ultimate bitcoin megabubble so that billions of latecomer ordinary people and businesses buying their first bitcoins will be shafted as the great bitcoin dump starts, into pms, into land, artwork etc. into a 'better' crypto - assets that had been neglected for the period bitcoin was so attractive, even back into fiat (they could use this point to launch more 'stable' 'new crypto-dollar or new crypto-pound etc.) until bitcoin finds a stable long-term pricepoint well below (even orders of magnitude below) the hyped price the masses bought at.  Problem is of course nobody beforehand can know what this price will be.  We would still be in a much better world than today because with bitcoin established fiats (old or new) will not be that attractive but if central banks are deliberately hyperinflating forcing people into crypto on their pump stage people could end up with 1000th of what they had before.

Btw, I'm only just exploring this idea so please point out if there's an obvious reason this is not how the future looks!

Unfortunately this scenario is almost a certainty if Bitcoin achieves mass adoption, such is the nature of financial bubbles. I don't see any effective way of preventing it. Caveat emptor.

[wachtwoord]

According to my research, the average sum a person would invest in bitcoins is $1000. Therefore, 4 million new users are needed in addition to the 1 million current ones to reach $7000.

That seems like a lot to ask for the next 7 months. I think chances are some bigger investment funds are going to have a big impact though.

That is only 25.8% monthly growth in userbase. Which happens to coincide with the long-term slope of the price appreciation curve.

With this adoption growth, without the logistic slowing, we would be at 2 billion people in March, 2017.

My suspicion is before we get anywhere near 2 billion people using bitcoins that there will be factors at play that will dwarf the impact on price arising out of adoption and its use in day-to-day transactions. 

My fear is as the realisation dawns on the bigger players that Bitcoin is 'the one' that it will be pumped by banks and central banks who can magic large sums of fiat into existence with which to buy bitcoin (and who may even dump gold temporarily), creating the ultimate bitcoin megabubble so that billions of latecomer ordinary people and businesses buying their first bitcoins will be shafted as the great bitcoin dump starts, into pms, into land, artwork etc. into a 'better' crypto - assets that had been neglected for the period bitcoin was so attractive, even back into fiat (they could use this point to launch more 'stable' 'new crypto-dollar or new crypto-pound etc.) until bitcoin finds a stable long-term pricepoint well below (even orders of magnitude below) the hyped price the masses bought at.  Problem is of course nobody beforehand can know what this price will be.  We would still be in a much better world than today because with bitcoin established fiats (old or new) will not be that attractive but if central banks are deliberately hyperinflating forcing people into crypto on their pump stage people could end up with 1000th of what they had before.

Btw, I'm only just exploring this idea so please point out if there's an obvious reason this is not how the future looks!

And even when you know this will happen it's hard to take advantage as the currency you can exchange Bitcoin for will be undergoing a significant and permanent loss in purchasing power. Maybe changing for fiat and then immediately (without delay) investing in a diverse set of items is the best tactic, but while this is happening a huge stock market crash might also occur simultaneously.

Thinks will end up getting complex very very quickly.

[rpietila]

Thinks will end up getting complex very very quickly.

Build your supernode on time. Sign up for the Malla conference in June 27-29.!

[sgbett]

According to my research, the average sum a person would invest in bitcoins is $1000. Therefore, 4 million new users are needed in addition to the 1 million current ones to reach $7000.

That seems like a lot to ask for the next 7 months. I think chances are some bigger investment funds are going to have a big impact though.

That is only 25.8% monthly growth in userbase. Which happens to coincide with the long-term slope of the price appreciation curve.

With this adoption growth, without the logistic slowing, we would be at 2 billion people in March, 2017.

My suspicion is before we get anywhere near 2 billion people using bitcoins that there will be factors at play that will dwarf the impact on price arising out of adoption and its use in day-to-day transactions. 

My fear is as the realisation dawns on the bigger players that Bitcoin is 'the one' that it will be pumped by banks and central banks who can magic large sums of fiat into existence with which to buy bitcoin (and who may even dump gold temporarily), creating the ultimate bitcoin megabubble so that billions of latecomer ordinary people and businesses buying their first bitcoins will be shafted as the great bitcoin dump starts, into pms, into land, artwork etc. into a 'better' crypto - assets that had been neglected for the period bitcoin was so attractive, even back into fiat (they could use this point to launch more 'stable' 'new crypto-dollar or new crypto-pound etc.) until bitcoin finds a stable long-term pricepoint well below (even orders of magnitude below) the hyped price the masses bought at.  Problem is of course nobody beforehand can know what this price will be.  We would still be in a much better world than today because with bitcoin established fiats (old or new) will not be that attractive but if central banks are deliberately hyperinflating forcing people into crypto on their pump stage people could end up with 1000th of what they had before.

Btw, I'm only just exploring this idea so please point out if there's an obvious reason this is not how the future looks!

Extrapoloting...

In the same way that morpheus tells neo that he won't have to cash out at BTC $10000 (or whatever). Neither will the big guys have to. I think when if the time comes that BTC is inherently worth that much its too late to worry about buying or selling it (from a speculative investment POV) its more about how much you have (how much you got when the getting was good). So I don't think there will be a final crash, I think this line of reasoning justifies the 'exponential pulse' pattern we see now. The value that fiat represents (if its going to) won't smoothly migrate from fiat into BTC. If its going to it would likely follow this pattern as people get in cheap and then take profits. All the profit takers do is delay the inevitable, the transfer of wealth continues, and gets ahead of itself. When I saw it the first time, it seemed like a bubble that burst. The second time I thought wow, it did it again, the third time I thought, this is ridiculous, this kind of repeated behaviour is entirely without justification and absolutely will not continue.

And yet here we are all wondering whether this is the next one. Many here will be as cynical as I. Pah we;ve seen it all before, like anyone is going to get suckered into this silly pump/dump cycle again. (Just like we thought last time?)

How many millions of people out there are still entirely oblivious to all of this and ready to fuel this go-round?

What about the next one?

Is this really 'institutional investors' stage?

Strange times.

[cspeter8]

Thinks will end up getting complex very very quickly.

Build your supernode on time. Sign up for the Malla conference in June 27-29.!

where can we find the information for the Malla conference, presumably at your castle in Estonia?  Is it public, or an invitation-only kind of thing?