Is the Bitcoin bubble about to burst?

[Joey Shabadoo]

Is it viable to run a country on a virtual currency?

http://www.bbc.co.uk/news/world-latin-america-42217798

 

[Tin Pot]

Is it viable to run a country on a virtual currency?

http://www.bbc.co.uk/news/world-latin-america-42217798

What The Actual F..?

 

[Tin Pot]

http://www.hl.co.uk/news/2017/12/6/...coin-and-crypto-currency-everyone-should-read

 

[MossCommuter]

If you, like me, struggle with the economics of it all it helps to stop thinking of it as a currency like sterling and more like an asset such as a mortgage.

I still struggle with the concept but this helped:

https://blog.chain.com/a-letter-to-jamie-dimon-de89d417cb80

 

[nickyboy]

Ha ha - what fundamentals?!

Well the fundamentals of any exchange rate are driven by demand for the currency to buy and sell things across borders and demand for the currency for its interest yield

There is a demand for bitcoins to facilitate buying and selling things. But nearly all the current demand is coming from speculators. Sooner or later the exchange rate between bitcoins and "conventional" currencies will normalise based on people needing bitcoins to actually transact things

 

[Tim Hall]

Anyone fancy buying a few tulip bulbs off me?

Will you take payment in shares? I've got some in an outfit called The South Sea Company.

 

[PK99]

It's small-scale retail investors speculating on it's continuing appreciation that is driving the price up. I'm not convinced the fundamentals support the current price

I hope your investment is successful, but in a speculative market (ie. hoping someone will buy it off you for more than you paid, who in turn hopes to do the same) it is prone to change in sentiment and a crash

Anyone fancy buying a few tulip bulbs off me?

The greater fool theory states that the price of an object is determined not by its intrinsic value, but rather by irrational beliefs and expectations of market participants. A price can be justified by a rational buyer under the belief that another party is willing to pay an even higher price.

 

[PK99]

Banner ad at the top and bottom of the page is for a Bitcoin investment company...

 

[mjr]

You've got to remember that "real money" isn't real anything. It's a convention that allows you to swap it for goods and services

Crypto currencies are exactly the same. It's just that they aren't issued by a government.

My only comment re buying bitcoins is that the current market and the way bitcoins are being promoted displays many of the characteristics of a bubble

All currencies are bubbles, aren't they?

Remember the money trick?

View: http://youtube.com/watch?v=yB7OUHbK1BE

Or
http://www.avine.co.uk/great-money-trick/

 

[mjr]

Banner ad at the top and bottom of the page is for a Bitcoin investment company...

My main problem with bitcoin is that a lot of the mining now seems to be done with stolen resources from server break-ins, as it's currently more profitable than spamming but less risky than ransomware.

 

[PeteXXX]

Banner ad at the top and bottom of the page is for a Bitcoin investment company...

Probably because we’re talking about them..

 

[Globalti]

Apparently they are big news in Africa now where people don’t have easy access to banks, you can keep your electronic wallet on your smart phone and undertake transactions in seconds.

Possibly so amongst wealthy, clever Nigerians and Lebanese with cash to spare but for ordinary Africans M-Pesa has revolutionised their lives by allowing them to pay and transfer through their mobiles without needing to travel to and queue in a bank.

 

[Ciar]

Well now they have announced that Futures Contracts will be trade able on Bitcoin soon, i expect it shall all go tits up asap ;-)

https://www.bloomberg.com/news/arti...-will-start-bitcoin-futures-trading-on-dec-10

 

[Bonefish Blues]

If it looks like a bubble, behaves like a bubble, then there's a fair old chance it's a bubble.

 

[nickyboy]

If it looks like a bubble, behaves like a bubble, then there's a fair old chance it's a bubble.

It's a pity as the losers will be the small retail investors, as always

Never, ever invest your cash in something you don't understand nor are able to assess whether it is over or under valued

I was in China at a time when there was a large speculative surge in the Shanghai stock market. People I knew, who had no idea about shares, were piling savings into funds that invested in Shanghai stocks. They had seen people get rich and wanted a slice of the action. They advised me to do the same, on the basis that the market was rising quickly. Not on any fundamental value of the shares. I refused. The market crashed and they lost a large chunk of their savings. Bitcoin will be the same. It's all about timing when you sell to someone who is a bigger mug than you are

There is an story (probably apocryphal) that JD Rockerfeller was getting his shoes polished by a shoe shine boy in the 1920s. The shoe shine boy didn't know who he was and proceeded to give Rockerfeller share tips as the market was booming. Rockerfeller listened to the boy and decided that, as people with no financial acumen were punting shares, it was a bubble and time to get out. He liquidated a lot of his holdings and avoided the worst of the Great Depression