David Rosenber: Bitcoin is in a 'massive bubble'

[dothebeats]

Economist David Rosenberg told Bloomberg he believes bitcoin is in a bubble and investors don't understand supply dynamics of the cryptocurrency.
"You speak to most people that are asking me to put money in bitcoin, they can't even tell you who the person was that developed it or even how it's actually mined," the Rosenberg Research chief economist said. "It's just a classic, follow-the-herd, extremely crowded trade. It's in a massive bubble."

Bitcoin reached a record high of $23,777 on Thursday shortly after topping $20,000 for the first time ever on Wednesday, marking a 20% gain over the past day. The cryptocurrency is now up over 200% year-to-date, but Rosenberg said the chart looks "absolutely crazy right now."
Bitcoin's rally comes as several institutional investors and fund managers place sky-high predictions for the coin. On Wednesday, Guggenheim's global chief investment officer, Scott Minerd, said bitcoin will surge to $400,000 based on its scarcity and value relative to gold.

Though Rosenberg raised his doubts about the scarcity of bitcoin and the thesis that only 21 million bitcoin are able to be mined. 
"Everybody seems to believe that we're going to get to that 21 million cap on the supply constraint, but there's really nothing in the protocol to suggest that the supply of bitcoin can't go up once we hit that limit," the economist said.
While investors do know about the supply curve of gold with certainty, Rosenberg said that investors just "think they know" but don't really know about bitcoin's supply curve.

He added that the last time bitcoin behaved with such a "speculative fervor," it suffered massive disappointments in the months to follow. Bitcoin bulls say that 2020's rally is different because of the institutional inflows.

From: https://markets.businessinsider.com/currencies/news/bitcoin-price-bubble-david-rosenberg-supply-mining-cryptocurrency-outlook-record-high-2020-12-1029903485

It is important to note that Rosenberg identified the housing market bubble in 2005 right even before things started going south in 2008.

As experienced as Rosenberg might be in the field of economics, I don't think he grasps the idea of a hard-coded limit for bitcoin's supply. He might be right that we will never know what holds bitcoin's future should 21M coins be mined, but those values wouldn't even be achieved in a hundred years literally. Also, its specified scarcity makes bitcoin's value stand where it is, and if someone is going to change it just because it does not meet the need of people around the world, its price or valuation would be severely affected.

Stay in the path of centralization and easy-to-control assets for too long and you would really practice distrust on, and undermine decentralization and its concept. For more than a decade, no substantial changes on the max supply cap and other things connected to it has been made, plus no kill switch for bitcoin and its entirety is ever present to raise such questions IMO.

[2double0]

Reminds me of an Economics professor (I can't recall his name) who predicted that btc is nothing but a piece of shit which will be worth 0 in near future, see it is 2020, where is that professor?

Did anybody ask Rosenberg why he thinks btc is a massive bubble? Because institutional investors are preferring it over gold? Or he wants to buy btc cheap?

If we will see a spike in the total supply number after reaching the last Bitcoin through mining, I am sure btc will fall down but it has years to come. Why add more btc in supply when you can add a new coin to the list: a fork of btc at 1:1 ratio and add 21 million coins more to the market like Bch did?

[exstasie]

As experienced as Rosenberg might be in the field of economics, I don't think he grasps the idea of a hard-coded limit for bitcoin's supply.

Or he's implying that a hard-coded limit isn't really hard-coded. Technically, all it takes is a hard fork to lift the limit.

Let's say we begin approaching the 21M limit and then honest mining incentives start to collapse because fees aren't generating sufficient income. Hash rate enters a down spiral, mining attacks become the norm, confirmations become totally unreliable. What if the only answer to fix the mining economy were to subsidize miners again, as they are subsidized currently by the 21M supply?

Not what I'm expecting (and I'll be dead anyway) but the possibility is there, and the skeptics know it.

For more than a decade, no substantial changes on the max supply cap and other things connected to it has been made, plus no kill switch for bitcoin and its entirety is ever present to raise such questions IMO.

The early years, where the mining subsidy is largest, is not the test. The supply has actually been inflating really fast. Many halvings down the road, these questions may become more relevant.

[Fortify]

Michael Burry is the person best known for predicting the 2008 subprime mortgage driven recession - captured in the well known film "The Big Short". I don't know why any credit is being given to this random "economist" David Rosenberg as having predicted it. To that end, he has no special knowledge on the future of Bitcoin and while it may be in a bubble nobody knows its true intrinsic value and it could still be worth much more.

"While investors do know about the supply curve of gold with certainty," is a stupid claim to make, as new deposits of gold are constantly being found all around the world and while the extraction is at a predictable rate - the ultimate available supply is not known. You should be very wary of economists, they claim to know a lot but rarely predict with reliable accuracy.

[The Sceptical Chymist]

"You speak to most people that are asking me to put money in bitcoin, they can't even tell you who the person was that developed it or even how it's actually mined," the Rosenberg Research chief economist said. "It's just a classic, follow-the-herd, extremely crowded trade. It's in a massive bubble."

Eh, I wouldn't exactly say he's wrong on that, but I would also say that people don't really need to understand the technical aspects of bitcoin in order to use it (or to speculate on its price).  For the longest time I didn't know how physical coins were minted, but that never kept me from using them to buy things.

And as far as the bubble part goes, he might not be wrong about that either--but we have yet to see how high bitcoin goes this time around in the bull market cycle.  If I'm not mistaken it did reach its previous ATH price this week, but that doesn't mean it's going to keep going up.  I do think it's true that the price rise has likely sucked a lot of speculators into the market who otherwise wouldn't have bought bitcoin.  I'm just hoping this doesn't turn out to be like the end of 2017.

I don't know why any credit is being given to this random "economist" David Rosenberg as having predicted it.

It's probably article-worthy because 1) he's an economist, and 2) he's talking about bitcoin, which is quite hot at the moment.  I suspect all the other typical talking heads will be voicing their opinions as well, Peter Schiff and those types.  They jump in and get their names mentioned and thereby stay relevant in people's minds.  Makes it much easier to hype up precious metals IMO.

[coolcoinz]

"Everybody seems to believe that we're going to get to that 21 million cap on the supply constraint, but there's really nothing in the protocol to suggest that the supply of bitcoin can't go up once we hit that limit," the economist said.

He talks big how most Bitcoin investors don't know much about it and don't understand it, but he obviously doesn't get it either. It really takes an hour to learn some basic facts about the protocol and understand that we are limited to 21m. It's possible to change it with a fork, but it's not that easy to fork Bitcoin and make people choose the new chain. You can fork it, but without the community behind you you'll be like Roger Ver.
As far as the bubble is concerned, if we look at google, facebook, apple, amazon, tesla, they were all in a massive uptrend that someone could call a bubble. Doesn't mean they will suddenly go to 0.

[hatshepsut93]

Of course it's in a bubble, it's naive to think that we won't have a massive crash because "this time is different - we have institutional investors". But this doesn't mean that it's bad to invest in it, you can try to do some short-term trading and exit long before the crash, you can try to buy dips and sell them quickly, and dips will happen because there's always corrections in the bull market. Bitcoin is a risky investment, but the risk is justified, so the only thing investors should worry about it so not overexpose themself to it.

[Darker45]

Bitcoin, most especially its technical aspects, is not the forte of economists. Yes, Bitcoin would somehow disrupt the current economic system but it doesn't make it a subject which automatically falls under the science of economics. I'm afraid the likes of Rosenberg have too little information or understanding of Bitcoin as far as its real deal is concerned that they couldn't provide a relevant argument against Bitcoin.

Speaking of "a classic, follow-the-herd" approach, it is the very thing that Rosenberg is doing in criticizing Bitcoin. His criticism is basically grounded on what he doesn't know.

[figmentofmyass]

a bubble like 2017? or like tulip mania? big difference!

"You speak to most people that are asking me to put money in bitcoin, they can't even tell you who the person was that developed it or even how it's actually mined," the Rosenberg Research chief economist said. "It's just a classic, follow-the-herd, extremely crowded trade. It's in a massive bubble."

Eh, I wouldn't exactly say he's wrong on that, but I would also say that people don't really need to understand the technical aspects of bitcoin in order to use it (or to speculate on its price).

yeah, i don't know shit about gold mining, minting, or anything like that. i just know that other people value gold bars and coins at the spot market price. that's all that really matters to me---that i can buy, hold value, and sell. does that make gold a bubble?

the same logic applies to bitcoin. it's crazy to think the average person would ever become knowledgeable about bitcoin's technical aspects. we'll be lucky if they even use a real wallet, as opposed to an exchange or other custody provider!

[Twentyonepaylots]

That's because one does not need to know all the twists and turns of this project in order to learn and be efficient in it. Unlike his conventional assets that require you to have the brains and the money, bitcoin doesn't, which makes it easily accesible to people. Either he's really salty about bitciin reaching new heights or he himself would want to buy btc cheap.

Bitcoin, most especially its technical aspects, is not the forte of economists. Yes, Bitcoin would somehow disrupt the current economic system but it doesn't make it a subject which automatically falls under the science of economics. I'm afraid the likes of Rosenberg have too little information or understanding of Bitcoin as far as its real deal is concerned that they couldn't provide a relevant argument against Bitcoin.

Speaking of "a classic, follow-the-herd" approach, it is the very thing that Rosenberg is doing in criticizing Bitcoin. His criticism is basically grounded on what he doesn't know.

People should do their own research in this day and age because not even the 'experts' themselves have the time to fact-checj their claims. This is not to compare with healthcare and vaccines altogether obviously, but people should stop believing everything they see on the internet. Including this Rosenberg guy.

[sunsilk]

2017 is a bubble, we've heard it. 2020 is also a bubble and other future rise of bitcoin in the next years is also a bubble. That's what we'll hear from these "experts and economists".

He's doubting the supply limit of bitcoin @ 21 million. We would even see it hit the limit and whatever will happen next to it. Probably, he haven't read what satoshi read about reaching the supply limit. He don't know that transactions will continue and miners will still earn through confirming transactions.

And if bitcoin hits another all-time high just next year, he'd probably say the same thing about it being a bubble and so on. These people can always change their statements and say that they're liking the trend and it's the new modern asset that everyone should get into.

[Leviathan.007]

Bubble price comes out when you see the price is increasing sharply without of any valid reason, so we can say the bubble is going to explode and the price will fall, this can be happen is any market not just crypto. But what is can these days from the bitcoin price is not just a bubble price because there were some fundamental reasons for the price for increase and technically the ATR is getting lower comparing to the last months, this shows us the stability of the market.

[Saisher]

After years we still see and read people talking about Bitcoin being a bubble, Paypal think it's just a bubble some years ago and now they are making huge profit by adopting Cryptocurrency, they should now realized that Bitcoin have withstand the most harshest FUD and scenario and yet it's still standing.

[so98nn]

Really!! Then why the heck bitcoin price keeps increasing over the period of time. It's so funny that these so called economist keep saying bubble stuff about the bitcoin and still bitcoin is getting adopted on mass level. I mean I have seen same predictions and bubble bubble bubble thread since 2016-17. Moreover there are people talking about it way before that. Still here we are in 2020, in the historical pandemic when people are loosing jobs but still bitcoin is rising in its market cap and price. Isn't that's funny pips?

[Smartprofit]

David Rosenberg is wrong.  Many well-known economists are theoreticians.  They know economic theory well, but they don't have enough imagination to understand the meaning of Bitcoin.  

Bitcoin is a potential global reserve currency.  Before Bitcoin, that currency was the US dollar (petrodollar).  Before even earlier, the reserve currency was gold.  The world is currently experiencing a global financial crisis.  The main cause of economic crises is a decrease in energy consumption.  It takes a huge amount of electricity to maintain the Bitcoin network.  Basically, Bitcoin is a currency based on electricity consumption.  At the same time, Bitcoin has limited emissions and a transparent blockchain.  

All this makes it the ideal world reserve currency of the XXI - XXII centuries.

[hatshepsut93]

yeah, i don't know shit about gold mining, minting, or anything like that. i just know that other people value gold bars and coins at the spot market price. that's all that really matters to me---that i can buy, hold value, and sell. does that make gold a bubble?

the same logic applies to bitcoin. it's crazy to think the average person would ever become knowledgeable about bitcoin's technical aspects. we'll be lucky if they even use a real wallet, as opposed to an exchange or other custody provider!

He has a lot of wrong arguments in his rant, but it's a common sense that if investors are just FOMOing, and there's no fundamental reasons that could justify such price levels, then sooner or later it will crash hard. If something like that was happening to gold or any other asset, it would have been a bubble too.

However, if the previous pattern repeats, then people who invest at the current prices would probably be in profit regardless of what happens, as the next bottom will still be higher than what we have now.

[slapper]

Bitcoin is only a massive bubble to anyone who blindly invests their money in bitcoin without having any research or knowledge. Following the bubble is the shortest way to become rich. As you can see, from 2016y to 2017, bitcoin had grown from $500 to $20000. And even when the bubble exploded, bitcoin was stable at $6000

Therefore, it is always a way for us to avoid the risk involve. Becoming a smart investor is my aim.

[Chrystora123]

After years we still see and read people talking about Bitcoin being a bubble, Paypal think it's just a bubble some years ago and now they are making huge profit by adopting Cryptocurrency, they should now realized that Bitcoin have withstand the most harshest FUD and scenario and yet it's still standing.

until Bitcoin touch $100k price they will definitely go on and on and think Bitcoin is a "massive bubble".  how stupid he is because not buy Bitcoin last March and miss the chance to make a huge profit from this "massive bubble" (as David Rosenberg says).. "LOL"

[Argoo]

Of course it's in a bubble, it's naive to think that we won't have a massive crash because "this time is different - we have institutional investors". But this doesn't mean that it's bad to invest in it, you can try to do some short-term trading and exit long before the crash, you can try to buy dips and sell them quickly, and dips will happen because there's always corrections in the bull market. Bitcoin is a risky investment, but the risk is justified, so the only thing investors should worry about it so not overexpose themself to it.

You cannot blindly assert that bitcoin will not manifest itself as a financial bubble over time.  Therefore, such a statement has the right to go.  You should always remember about the peculiarities of cryptocurrencies and especially universal coins that do not have a real product.  They always say that you need to invest in a cryptocurrency so much of your money that you don't mind losing it.  However, no one can say that he has some extra money and he can afford to lose it.  Especially if one coin is worth more than $ 23,000.  Everything can be put into place and judged only for a significant period of time.  Ten years is still very little for this.

[South Park]

It is important to note that Rosenberg identified the housing market bubble in 2005 right even before things started going south in 2008.

As experienced as Rosenberg might be in the field of economics, I don't think he grasps the idea of a hard-coded limit for bitcoin's supply. He might be right that we will never know what holds bitcoin's future should 21M coins be mined, but those values wouldn't even be achieved in a hundred years literally. Also, its specified scarcity makes bitcoin's value stand where it is, and if someone is going to change it just because it does not meet the need of people around the world, its price or valuation would be severely affected.

Stay in the path of centralization and easy-to-control assets for too long and you would really practice distrust on, and undermine decentralization and its concept. For more than a decade, no substantial changes on the max supply cap and other things connected to it has been made, plus no kill switch for bitcoin and its entirety is ever present to raise such questions IMO.

After reading just a little bit of it there is no point in reading anymore, he accuses people of not really understanding bitcoin and I think he has a point, many newbies do not understand it, however he then begins to make a bunch of accusations against bitcoin proving that he himself doesn't understand bitcoin at all, the 21 million coins limit is never going to be lifted, any suggestion by anyone to do that will be met with very harsh criticism and no one will ever allow it because we know that is one of the characteristics that it gives bitcoin its massive value.