David Rosenber: Bitcoin is in a 'massive bubble'

[eaLiTy]

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There are certain phases of the market that can last for years or decades, but the cycles do not change from the duration! So bitcoin burst in 2017 and recovered in 2020!

Depending on the market it is true, the BTCitcoin market usually recovers every 4 years and it coincides with the halving as well and it is a perfect timing and i do not think that we will see any major changes in that aspect.

And I'm sure another bubble burst and another recovery awaits us... Just look at the chart to see how many bubbles there were...

It is how the market will perform and we need correction and this time around as the investors are pouring in millions every time there is a correction we should expect a massive burst when all these investors decide to book their profit.

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[amishmanish]

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.

In fairness though, Bitcoin's future economic viability is purely theoretical. We're all just hoping it works. Right now, Bitcoin is extremely inflationary, and that's why miners have such a strong interest in securing the network. In the future when the mining subsidy is no longer relevant, the mining economy may look very different, and accordingly so may the security and viability of the network.

He's not wrong when he says the supply limit can't be changed. Consider things like the DAO fork in Ethereum, and then consider that lack of mining incentives could be an existential threat to Bitcoin in the future. If so, then a hard fork that further inflates the 21M coin supply is a real possibility.

We're all just theorizing when you get down to it.......

Yes, we are fantasizing ... However, the rise in bitcoin prices over the past 10 years is also fantastic!

Let's pretend that Bitcoin is the world's reserve currency ... In this case, mining isn't just about making a profit.  In this case, full nodes and control over Bitcoin mining is a precondition for governments and large corporations to issue money (If I host a full Bitcoin node, I have the option to issue my own money).

At present, states are interested in controlling the Internet.  In the future, it is possible that large corporations and states will seek to control the mining of bitcoins.  This will be as important as having your own army and control over the oil fields.  

Bitcoin can become a strategic resource.  This is its value.  There are not so many common human values ​​in the world.  Bitcoin is one of them.

I just had to continue the thread on this important discussion. As @exstasie pointed out, the arguments from the economist are not without basis. The issue of a sustainable fee-market is something that most bitcoin well wishers struggle with.

I wouldn't say that things will go as far as lifting the mining cap. Though, how the future will eveolve regarding decentralized governance is a question very much up in the air. The current system of reserve banks, powerful governments and fixed borders may well be challenged by Decentralized systems like Bitcoin in the coming century. The struggle can be as revolutionary as the ones between for Democracy and free markets.

One thing is for sure that in the long run, Bitcoin's future will not simply be decided by "code". There is always the human governance element and nothing is off the table.

[Findingnemo]

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This is not correct reasoning... Just look at the dotcoms bubble, which burst just like the Bitcoin bubble in 2017... Some companies like Google, Amazon, eBay and so on have recovered and grown in value... About the same situation we see now with Bitcoin!

I am talking about the bitcoin not cryptocurrency in general, so you can't call the dump as bubble burst because no one can deny that prices recovered faster in no time compared to the big companies you are talking and still no end to be seen for that recovery.

It has nothing to do with the recovery time... There are certain phases of the market that can last for years or decades, but the cycles do not change from the duration! So bitcoin burst in 2017 and recovered in 2020!
And I'm sure another bubble burst and another recovery awaits us... Just look at the chart to see how many bubbles there were...

As long as the prices are recovering then there is no risk involved with it right? Why we can't take it as normal behaviour of bitcoin when every kind of investment schemes hold their own volatile phase ranges!

[verita1]

I wish that the seasoned Rosenberg's forecast does not come true. Although he should have taken into account the max supply cap of bitcoin, the scarcity and its technology.
Rosenberg has shown skepticism which shows that his appreciation is not fully supported.
Now Bitcoin is at its best. Great changes are happening in the world, leaders have realized that they must evolve and this is the reason for the creation of their own digital currencies because finance needs to adapt to the time we live in and that awakening was thanks to Bitcoin.

[Maslate]

Everytime bitcoin pumped, experts will always say that it's a bubble, and when bitcoin dumped they will be more convince that they are right, but when it pumped again, i think it's not right anymore for them to think that bitcoin is still a bubble as bitcoin survive and it's supported by big institution now.

Well, we are all entitled with our own opinion, some experts thinks bitcoin is a bubble, some think there's an adoption happening here, so it's up to us which side we will choose to believe.

in the long run, either of the two.. massive adoption or massive bubble. Only time can tell.

[SamTheRecordMan]

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.

This. Bitcoin has crashed many times before and risen again but that hasn't stopped it from moving forward. Though I doubt it could crash to under 15-20K under current market conditions or under 10K in bad market conditions. What is more concerning is the possibility for price manipulation if large players sold all at once.

Bitcoin is a new asset class. You can't even buy it at the bank yet. There is plenty of room to grow.

[DrBeer]

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.

This. Bitcoin has crashed many times before and risen again but that hasn't stopped it from moving forward. Though I doubt it could crash to under 15-20K under current market conditions or under 10K in bad market conditions. What is more concerning is the possibility for price manipulation if large players sold all at once.

Bitcoin is a new asset class. You can't even buy it at the bank yet. There is plenty of room to grow.

We must not forget one simple truth - bitcoin, like the entire crypto market, today there is a purely speculative market, moreover, in fact, it is not provided with anything other than speculative demand. And in the first half of 2021 (+/-), the situation in 2018 with the market fall will repeat itself. Those who manipulated and cheated the market will receive income at the level of the financial ability of "home investors" to purchase the rising bitcoin, after which the flow of finance will end. Then there will be another phase of depression, the accumulation of fiat funds, and a new bubble. And this will continue until the crypto market becomes part of the real market, with a real, not inflated, cost

[Vishnu.Reang]

I have talked to some of my friends, who are saying that Bitcoin is now overpriced. The reason given by them is that the exchange rates have gone up by around 180% during the last 3 months. But why concentrate only on this 3 month period? If you take a look at the combined cryptocurrency market capitalization, it can be seen that the current levels are still around 15% lower than the peak level attained in 2018 January. And this is despite the massive increase in user base and mainstream adoption. I would say that Bitcoin at current levels is rather underpriced.

[SamTheRecordMan]

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.

This. Bitcoin has crashed many times before and risen again but that hasn't stopped it from moving forward. Though I doubt it could crash to under 15-20K under current market conditions or under 10K in bad market conditions. What is more concerning is the possibility for price manipulation if large players sold all at once.

Bitcoin is a new asset class. You can't even buy it at the bank yet. There is plenty of room to grow.

We must not forget one simple truth - bitcoin, like the entire crypto market, today there is a purely speculative market, moreover, in fact, it is not provided with anything other than speculative demand. And in the first half of 2021 (+/-), the situation in 2018 with the market fall will repeat itself. Those who manipulated and cheated the market will receive income at the level of the financial ability of "home investors" to purchase the rising bitcoin, after which the flow of finance will end. Then there will be another phase of depression, the accumulation of fiat funds, and a new bubble. And this will continue until the crypto market becomes part of the real market, with a real, not inflated, cost

Good analysis. Every time bitcoin rises and then crashes it loses a little bit of faith. After the crash of 1929 people didn't want to invest in the stock market for decades.

In the early years bitcoin bubbles affected only a small number of people but as time went on those bubbles started to affect larger and larger numbers of people.

[CarnagexD]

A lot of people in the past have said thatbitciin is a bubble, but several dumps and crashes yet bitcoin had never even reached a critical point whereas most commodities did in the past. Heck, it even went down to $7000 and jumped right back in to itsregular pricing last March and not a lot of people batted an eye. That's because the real bubble is the vibe of the people towardsyour asset. If they are in for a quick buck, then best believe me that your coin is not gonna last long.

[Sithara007]

This. Bitcoin has crashed many times before and risen again but that hasn't stopped it from moving forward. Though I doubt it could crash to under 15-20K under current market conditions or under 10K in bad market conditions. What is more concerning is the possibility for price manipulation if large players sold all at once.

Bitcoin is a new asset class. You can't even buy it at the bank yet. There is plenty of room to grow.

Bitcoin is susceptible to mass-selloffs, because a large part of its circulating supply is being held by individual investors. And when compared to institutional investors, these investors are more susceptible to panic selling. This is the reason why the prices crash by 80% or more, whenever a correction happens. But the situation has changed now, with the entry of mainstream investors and Wall Street giants. That should add more stability to the exchange rates.

[New_order]

Might be true, might be wrong, but this ain't the first time that some will say the same exact thing, whenever bitcoin surges to a new all time high it's always bubble that's about to burst for others, I can't make a decision because of one man prediction, what I believe is volatility isn't bubble

[jaberwock]

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.

Currently I would understand why some people say this, normally I wouldn't agree with them because they are doing this out of anger that they missed out, let's face it there were people who called bitcoin a bubble when we broke over a thousand dollars, let alone 27 thousand dollars, so there has been a lot of people who called bitcoin a bubble, but this is different.

Right now we are about 4x from the start of the year and we are about 9x higher than the bottom we reached, those are some huge numbers. Which is why I have to say maaaaaybe we could be in a bubble right now, I am not happy to say that, I think bitcoin has merit and it should go up, but when things go up this fast this quickly I start to think that maybe they are in a bubble as well. Of course what difference does a bull run and a bubble has is unknown, it is only the afterwards that shows the difference and not during.

[shoreno]

Currently I would understand why some people say this, normally I wouldn't agree with them because they are doing this out of anger that they missed out,

me too . I understand the guy why he say this thing . He has an experienced and some background but others that have said this before that Bitcoin is a bubble are mostly random guys that don't have a reason on why they say that .

 The guy here didn't say that he missed the btc in its early price so he isn't angry but even me I won't still totally agree with what he is saying because I just can't accept the fact that btc or if btc is a bubble .

[Rexler]

IMO everyone is entitled to their own opinion about bitcoin, but I don't believe it's possible to add more bitcoins to the total supply, we'll  let's just wait till the 21 million bitcoins are totally mined, if there's any way to add more to it then the price of bitcoin will crash, because investors will no longer trust it, nevertheless he might be right about saying bitcoin is a bubble because of how the price of bitcoin fluctuates it could go $2k+ up in a day and the next moment it could dump $5k, maybe when the total bitcoin has been mined we can see more price stability.

[bryant.coleman]

Nah, why bother when we aren't alive during that time when the 21M Bitcoin is mined already? You may be lucky to be alive during that time but I still don't believe that the hard coded 21M cap limit of Bitcoin will be added, unless if Satoshi himself shows up and rewrite those codes. Anyone can say whatever they want but the pattern of Bitcoin market is almost just the same if we look at the chart.

Agreed. The controlled supply principle is there for a reason. If you change the limit on total supply, then Bitcoin will be more like fiat currency. I know that some of the miners are interested in doing this, but it is never going to happen. And some of the noobs are still confused about the mining reward. A significant section of the mining reward comes from the transaction fee, and it will be there even after 2140. In short, the mining operation is never going to be stopped.

[romero121]

Let it be a bubble, nothing to worry just try to enjoy the good out of it. People are much obsessed of different narrations that come out of different people. Whenever there is growth, everyone tries to relate the same with something else. The same is taking place with bitcoin, and in my personal thinking don't try to find reason, just live the present leaving the past.

[South Park]

He is absolutely right, Bitcoin is bubble and those who are already in will not believe this, they will tag you as anti Bitcoin and at the same time, those complaining currently will be happy if they are the one who bought bitcoin at bottom with this sweet profit.
We will always complain about something especially when it's not in our favour, that's why I try possible best with ant influencers with negative energy with Bitcoin. Somebody should try to setup a wallet for that man any time bitcoin goes below $10k, he would keep quiet for eternity ones he is in profit. 

I could accept bitcoin criticism if it was done fairly but it is not which is why I do not listen to people like him, when bitcoin crashed in March many economists were declaring bitcoin dead... again, then we recovered and went above the 10k level and remained there for some time then those people argued that bitcoin was going nowhere, now bitcoin is above 26k and the problem is that is in a bubble, do you see the pattern? They criticize bitcoin no matter what which makes it clear they are just attacking bitcoin and not giving a fair assessment of the situation at hand.

[judeafante]

Are they not doing enough study for them to think that it's a massive bubble, fiat's value is based on trust in who created it and so does Bitcoin, but Bitcoin is much better than fiat now because Bitcoin reputation is trusted by people around the world, the bubble issue should have been gone long ago.

[jaysabi]

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.

It's mind-blowing to me the number of people on these boards who take economist positions and just dismiss them because they don't want to believe that someone who studies economics for a living might know more about economics than they do. Worse than that, your response shows you didn't even understand his point since your critique is you don't think he grasps the idea of a hard-coded limit, and his point is exactly that the hard-coded limit is not absolute and can be changed.  It's kind of implicit in his statement, but it's likely the hard cap limit will be changed because of future unforeseen problems with the diminishing block size. Regardless, his statement that investors "think they know but don't really know about bitcoin's supply curve" is accurate.  However, if you're going to advocate that point you have to take the flip side with gold as well.  We think we know the supply curve for gold, but future space mining could greatly alter the precious metals market in currently unforeseen ways.