Bitcoinmania

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cswift01
Posts: 819
Joined: Thu Dec 08, 2016 10:46 am

Bitcoinmania

Post by cswift01 »

I hadn't realized how much of a bubble Bitcoin was until I read this:

https://www.marketwatch.com/story/bitco ... 2017-12-22

I thought the bubble was in the fact that it was an unregulated currency that is without institutional backing. Check out the background. It seems like the majority of its value is from derivatives...

Fun stuff!

Best,

Me

crondanet5
Posts: 4330
Joined: Tue Aug 19, 2008 8:51 pm

Re: Bitcoinmania

Post by crondanet5 »

cnbc fastmoney discussed this at length Friday. Their consensus was Friday was a good time to buy. That drop was one in a pattern resulting in a higher high. I would not go out on margin or borrow money to buy it. Time will tell if their prediction comes true.

usps2013
Posts: 137
Joined: Tue Jul 14, 2015 9:52 pm

Re: Bitcoinmania

Post by usps2013 »

EW expects one more higher high, but in all seriousness, this is just beta chasing.

Or this could be the future. Maybe next year a drug cartel will have an IPO.
-An economic forecaster is like a blind javelin thrower; although rarely accurate, he keeps your full attention.

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cswift01
Posts: 819
Joined: Thu Dec 08, 2016 10:46 am

Re: Bitcoinmania

Post by cswift01 »

crondanet5 wrote:cnbc fastmoney discussed this at length Friday. Their consensus was Friday was a good time to buy. That drop was one in a pattern resulting in a higher high. I would not go out on margin or borrow money to buy it. Time will tell if their prediction comes true.
It's worrisome that people are borrowing at great length to purchase bitcoin. I think the ramifications won't be clear for some time.

crondanet5
Posts: 4330
Joined: Tue Aug 19, 2008 8:51 pm

Re: Bitcoinmania

Post by crondanet5 »

The problem is not bitcoin. The problem is the sudden introduction of so many alternate options and regulatory warnings coming in one week. I think it will sort itself out and there is a projection bitcoin goes to 40,000. We'll see. Regardless, I do not view it as a buy and hold fund.

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mjedlin66
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Joined: Wed Oct 02, 2013 7:51 pm

Re: Bitcoinmania

Post by mjedlin66 »

crondanet5 wrote:The problem is not bitcoin. The problem is the sudden introduction of so many alternate options and regulatory warnings coming in one week. I think it will sort itself out and there is a projection bitcoin goes to 40,000. We'll see. Regardless, I do not view it as a buy and hold fund.
There are way too many alternative coins, something like 1300 in all. However, that is the nature of this asset class because it is beyond government- a true free market. I know the IRS will tax your gains when you sell for USD, but the market itself is still pretty much beyond governance.

That is both a good thing and a bad thing. Verifying bitcoin transactions now takes too long to be of practical use. A transaction that takes several days to verify will not be widely used as a currency.

Bitcoin is also extremely expensive to verify, but this is where it gets interesting. It takes over $50 worth of electricity to verify a $3 equivalent transaction, but because bitcoin is so valuable now and the miners are paid in bitcoin, verifying that transaction still pays for itself. It is a bit weird but it is true.

Ultimately, bitcoin will not be the winner here. Mass adoption and use as a currency will require much faster and cheaper transactions. Many alternate coins offer exactly that. But which one will win is completely up to the market. Fascinating.
Owner/creator of TSPcalc.com - "Know your numbers"

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12squared
Posts: 675
Joined: Thu Dec 31, 2015 7:28 am

Re: Bitcoinmania

Post by 12squared »

mjedlin66 wrote: Bitcoin is also extremely expensive to verify, but this is where it gets interesting. It takes over $50 worth of electricity to verify a $3 equivalent transaction, but because bitcoin is so valuable now and the miners are paid in bitcoin, verifying that transaction still pays for itself. It is a bit weird but it is true.
The stories about the energy it takes to "mine" bitcoin seem like urban legends. It's worse than pennies costing the US mint more than $0.01 each to produce. Imagine if the cost to pay with a credit card was $50 per transaction.
Last edited by 12squared on Mon Dec 25, 2017 2:09 am, edited 1 time in total.
“The genius of investing is recognizing the direction of the trend – not catching the highs or the lows.”
- Dean Witter

"Put all your eggs in one basket and then watch that basket."
- Andrew Carnegie

searight
Posts: 85
Joined: Wed Jan 16, 2013 8:56 am

Re: Bitcoinmania

Post by searight »

I believe the CNN article "http://money.cnn.com/2017/12/08/investi ... index.html" which compares bitcoin to 17th-century tulip mania.

To quote Willy Wonka "The suspense is terrible... I hope it'll last"

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