Why Bitcoin Fans Don’t Believe in Bad News

[Coinbuddy]

Bitcoin might be doing poorly, but for the currency's online proponents, it's always time to buy. Here's the reason behind their optimism.

Last weekend, Bitcoin crashed. The dollar value of a single Bitcoin began to decline on electronic markets starting on Friday and by Sunday afternoon had fallen 14%, to $290.

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It recovered a bit in the days that followed, but the slide appears to part of a broader trend: At the Thursday price of about $350, the digital currency has lost almost 70% of its value since its all-time high of $1,147 in December 2013. At the New York Times, Paul Krugman used the roller coaster weekend as an occasion to once again call Bitcoin a long con.

But among the Bitcoin faithful, the sun never stopped shining. On Reddit’s Bitcoin discussion board, for example, home to almost 140,000 enthusiasts of the electronic currency, the price drop was framed as good news. “The good old days are back! Massive walls, manipulation and a true financial wild west – I love it” chirped one of Monday’s most popular posts.

“Who else is enjoying the firesale?” asked another popular participant who claimed to be “picking up tons of cheap bit coin.”

How to explain the eternal optimism? Is it possible that Bitcoin’s most dedicated fans are simply more tuned in to the currency’s long-term potential than the broader market and therefore have a more favorable view of its true value?

Sure, it’s possible — but Meir Statman, a professor at Santa Clara University specializing in behavioral finance, has a more plausible explanation for the findings: Confirmation bias. In short, he says, Bitcoin communities tend to be echo chambers of optimism, giving their members a false impression of the currency’s true value. “What you hear, really, is what you want to hear; what is easy for you to believe: That bitcoin is going to take over and banks are a thing of the past,” explains Statman. “And when you have people who reinforce it, people are not looking for the truth, they are looking for views that are going to support their prior beliefs driven by ideology and self interest and so-on.”

This explanation would seem to be supported by a recent study of Bitcoin users by researchers at the University of Illinois, who found that those who participated in online Bitcoin communities were far more bullish about the currency’s future price than other Bitcoin holders. When asked about the long term value of Bitcoin (which the survey defined as the coin’s price in early 2019), users who talked about Bitcoin on various online platforms produced estimates 68% higher than those who did not.

Of course, that’s not a phenomenon unique to Bitcoin or online forums. “There is a similar finding about communities where people describe their investment success more generally, because people tend to brag about their success and not brag about their losses” the professor warns. “If you are not careful, all you hear is that people are making tons of money.”

Statman suggests yet another psychological explanation for the behavior of the Bitcoin community, noting that many people who invest in Bitcoin — and other alternative assets like gold — do so in part because it fits their broader global outlook and ideology. “It is fair to say that lots of the people who invest in gold invest in a view of the world: That the United States is going down, bad things are going to happen, inflation is going to rise,” Statman says.

That makes hard truths particularly difficult to accept, he says. After all, divesting from a stock is easy. Divesting from a world view, well, that’s a lot more painful.

Statman advises investors of all types to avoid confirmation bias and “ideological” investing by talking to people with different perspectives. For example, he jokes, Bitcoin buyers should have asked his opinion of the currency before last weekend. His take: “I think it’s a scam.”

After being contacted by Bitcoin advocates, Statman clarified his position to MONEY. “My initial thought when I heard about Bitcoin from my students is that is a scam. I know now that the technology of Bitcoin might prove useful but I am puzzled by the rush to it.”

SOURCE: http://time.com/money/3479199/why-bitcoin-fans-dont-believe-in-bad-news/

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[Sindelar1938]

To each his own, indeed! Well said. Amen to that.

[Lethn]

Bahahahhahahaaaa I enjoy these sessions of being told I'm completely wrong about something only to be proven right moments later the fact he just calls it a scam tells us all exactly where he's coming from.

[Melbustus]

OP - quit reposting junk.

...The article is clearly biased and cherry-picked a particularly ignorant/dishonest academic to interview.

Price is always debatable, of course, but anyone still calling bitcoin a "scam" can no longer be forgiven as simply uneducated. Bitcoin has been around long enough, and received enough exposure not only in the media, but also in academic circles and government hearings and regulatory bodies that it is no longer acceptable in educated society to retain the knee-jerk "it's a scam" reaction. At this point, that belies either a profound stupidity, or some disingenuous motivation.

tldr; that article is trash, and belongs in 2011.

[QuestionAuthority]

Meir Statman is a geriatric dinosaur that's entrenched in 20th century financial philosophy. Has he learned to use a computer yet or did someone younger type his blathering into digital form for him? I believe him about as much as I believe the ramblings of Warren Buffett. However, I would certainly be willing to trust either one of them to provide advise on the best discount store to buy depends adult diapers.  

[Beliathon]

Or... maybe the people who value Bitcoin do so because of it's useful properties which are unlike any other asset on the planet?

...I happen to think that censorship proof money is quite priceless in today's world of increasing capital controls.

Nailed it.

Bitcoin is not "priceless", however at the present moment it is certainly way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way, way undervalued.

Historical Note: October 10th, 2014, Bitcoin trading at ~$360 US dollars. If you're reading this from the future and wondering what a "US dollar" was, it was a paper thin promise-note made of cotton and ink, issued by national governments that folks used to use before the age of cryptocurrency.

If you're reading the distant future and now wondering what a "national government" was, it was a group of men with concentrated power that was derived from violence, coercion, mass-deception, and mass-indoctrination. A relic from before the age of reason usurped violence.

[corebob]

How about the more obvious reasons, like the financial "crisis", bailouts, bankers that seems immune to common laws, lying and corrupt politicians, high taxes and duties, concentration of power, expensive transfer of money, secret trade agreements, rigged markets and last but not least, the revolutionary technology that underpins Bitcoin?

For my own part, it is the Bitcoin technology that makes all the hype in the world seem irrelevant.

Also, its not without reason that governments all over the world is rushing to regulate this strange new thing.

[Chef Ramsay]

Historical Note: October 10th, 2014, Bitcoin trading at ~$360 US dollars. If you're reading this from the future and wondering what a "US dollar" was, it was a paper thin promise-note made of cotton and ink, issued by national governments that folks used to use before the age of cryptocurrency.

If you're reading the distant future and now wondering what a "national government" was, it was a group of men with concentrated power that was derived from violence, coercion, mass-deception, and mass-indoctrination. A relic from before the age of reason usurped violence.

That was a pretty good flashback commentary from the future, Dr. Brown. I can see that being an exhibit at The Henry Ford Museum at some point down the line.

[philipma1957]

I think I will buy 5 more coins today.

[Beliathon]

That was a pretty good flashback commentary from the future, Dr. Brown. I can see that being an exhibit at The Henry Ford Museum at some point down the line.

Thanks. I do what little I can to serve the community of the future, to offset all that my generation is robbing from them with our selfish and myopic ways. First and foremost being a livable planet.

[Eotnak]

He made one good point at least.  Confirmation bias.  There's plenty of that going around.  Almost as much as in the skeptic community.

[247casino]

Yep btc sucks

It was what 3 bucks a couple of years ago

Now it's ONLY 115 times that

A definite bad investment

haha

Personally I hope it does fall to 100 or 50

The fact it is now so integrated into major retailers acceptance and running online btc gambling means it will be 3K to 5K end of 2015

More and more retailers take it and more and more general public acquire it for gambling and drugs and whatever

If you had 100K in 1974 and kept it in USD what would you have today

100K that buys 10K of stuff in dollar value from 1974

So the USD sucks, the stock exchanges are rigged and the only thing that is somewhat 'real' as to a real market value is btc

yeah btc sucks

LOL

NOT

[TheButterZone]

I'd like to know how UofI found its respondents. How are they finding BTC users who do not voluntarily identify as BTC users by participating in forums? Not like they can just ask 100 random people, all of them hold/have had BTC and then segregate them by "do you participate in BTC forums or not?"

I tend not to take unpaid surveys unless they are quick to complete, but IMO effectively all BTC news is bad news, and I expect it to hit $1 sooner than the ATH again. I am not selling, nor buying at this shit price range (between $1 and ATH).

[Eotnak]

Yep btc sucks

It was what 3 bucks a couple of years ago

Now it's ONLY 115 times that

A definite bad investment

haha

Personally I hope it does fall to 100 or 50

The fact it is now so integrated into major retailers acceptance and running online btc gambling means it will be 3K to 5K end of 2015

More and more retailers take it and more and more general public acquire it for gambling and drugs and whatever

If you had 100K in 1974 and kept it in USD what would you have today

100K that buys 10K of stuff in dollar value from 1974

So the USD sucks, the stock exchanges are rigged and the only thing that is somewhat 'real' as to a real market value is btc

yeah btc sucks

LOL

NOT

There it is.

Bitcoin is a terrible short term investment.  I buy, but that's because I'm going looonnnggg!

[Eotnak]

He made one good point at least.  Confirmation bias.  There's plenty of that going around.  Almost as much as in the skeptic community.

There may indeed be a lot of confirmation bias on this forum. It is a Bitcoin forum, after all.

But... anyone who has bothered to discuss Bitcoin with non-Bitcoiners outside of this forum setting has probably experienced more than a healthy amount of skepticism to keep things balanced.

That's my point exactly.  Let's discuss the pros and cons and all the negatives as well as positives and come away with a good grasp of the reality of everything, and then we can move forward and sort the FUD from the truly bad stuff and then fix it.

Or we can all circle jerk like the skeptics but feel enlightened because we're in a different camp...circle jerking

[Velkro]

To each his own, indeed! Well said. Amen to that.

Agree

[247casino]

There it is.

Bitcoin is a terrible short term investment.  I buy, but that's because I'm going looonnnggg!

The reason global retailers are adopting btc is they know there's a huge user base already

however, all that acceptance is killing exchanges since retailers dump

the underlying fundamental is users

that number is growing exponentially and you just need to see the blockchain.info wallet info

70K wallets btc was 50 range
700K wallets btc was 500 range

next fundamental for the 1000% jump is 7M wallets

right now you have 2M and the pressure of retail dumps is driving the value down

so once you understanding the real fundamentals involved in btc that being user base

that's the only thing that matters

so 7M wallets = 3K to 5K value in some educated opinions I've seen

then what

70M wallets and 30K to 50K btc?

700M wallets

btc is still a baby in terms of market acceptance

you know how many people gamble and do drugs?

haha

that's enough to take btc to 700M wallets or 10% of the world

2m wallets is nothing

[BADecker]

Some of the things Bitcoin fans know:

The price of the dollar is artificially propped up.

The prices of Bitcoin, gold and silver are artificially kept low.

Something that many Bitcoin fans know:

The American people (and people of other countries, as well) are somewhat afraid of their government. The main two things that keep them in fear are: 1) they don't know how to integrate Bitcoin into serious buying and selling in the face of IRS constraints in taxation; 2) they don't know how to fight the government courts and win when the IRS comes after them.

The way that the American people will overcome their fear, crash the $dollar, and start using Bitcoin in a big way:

Bill Thornton:

http://1215.org/

Also, Youtube search on "Bill Thornton common law."

Karl Lentz:

http://www.myprivateaudio.com/Karl-Lentz.html = Angela Stark's Talkshoe.

http://www.youtube.com/channel/UC5duR4OvEHHxOSdEZhANETw = TrustInAllLaw snippets of Karl's audios.

http://www.broadmind.org/ = Karl's main page.

http://www.unkommonlaw.co.uk/ = Karl's United Kingdom page.

http://www.youtube.com/user/765736/videos?view=0&live_view=500&flow=grid&sort=da = Craig Lynch's snippets page.

http://www.youtube.com/watch?v=HOkAHRzuiOA&list=PLHrkQxgz0mg6kUBciD-HIvTXByqjcIZ-D = Ten great Youtube videos, might be the best introduction to Karl.

http://www.talkshoe.com/talkshoe/web/talkCast.jsp?masterId=127469&cmd=tc = Karl's Talkshoe site.

http://www.youtube.com/watch?v=Iua56K4Mysk = Karl Lentz - The Brian Bonar Incident - YouTube.

http://www.youtube.com/watch?v=cdHLHWS4gPE = Lentz-Sense - don't be a More~On - YouTube.

Also, Youtube search on "Karl Lentz common law."

Other Info:

http://voidjudgments.com/ = The Secret is most judgments are Void on their face and not merely voidable.

http://educationcenter2000.com/Trinsey-v-Paglario.htm = Trinsey v. Pagliaro - Attorneys cannot "speak" in common law trials if the one who is bringing the suit orders it. Holding from Trinsey v. Pagliaro: "An attorney for the plaintiff cannot admit evidence into the court. He is either an attorney or a witness."

When Americans wake up to this stuff, fiat will crash, Bitcoin will become king, the people will have their freedom back.