Is the Bitcoin bubble about to burst?

[Bonefish Blues]

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

This being the internet I'd like to disagree with you, but sadly find myself unable to!

 

[NickNick]

The big problem with bitcoin (other than the dodgyness @mjr referred to earlier) is it's power consumption. Bitcoin mining currently uses as much power in a year as around the 60th most power consuming country does. As the increases in performance of new mining tech start to slow down relative to the difficulty in mining (which increases every couple of weeks) this will just get worse. A bitcoin transaction currently uses around 5000x more electricity than a credit card transaction, which is not good.

 

[Tin Pot]

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

Not how I’d phrase it - fundamentals are determining the underlying assets worth, not the market value.

And bitcoin is not a currency, arguably, it’s an asset.

 

[Tin Pot]

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

And the site is probably serving mining malware - meaning those ads are using your device to mine currency.

 

[classic33]

Bitcoin is a "fraud" according to Jamie Dimon, speaking in September .

Was it Satoshi Nakamoto or Nick Szabo who took advantage of the 2008 banking crash?

 

[Inertia]

A bitcoin bank heist?
http://www.bbc.co.uk/news/technology-42275523

 

[Rickshaw Phil]

There's a guy kicking himself now for dumping a few thousand bitcoin with his old computer back when they were worth pennies: Link to the story on Gizmodo

 

[nickyboy]

If it is an asset, what does anyone own?

The ability to use decentralised apps

Do try to keep up....tsk

Actually nobody is using these decentralised apps...but they might...one day. Seems that bitcoins are useful for ransomware and that's about it for now

 

[nickyboy]

Not how I’d phrase it - fundamentals are determining the underlying assets worth, not the market value.

And bitcoin is not a currency, arguably, it’s an asset.

I think this asset/currency argument is bollocks

If I own a share in a company (ie an asset) I can swap it for food or give it to a plumber as payment for fixing my leaking tap. If you have an asset that you can readily exchange for goods or services, it's a currency

 

[Tin Pot]

A bitcoin bank heist?
http://www.bbc.co.uk/news/technology-42275523

Incredible that a business run by a couple of guys making fast bucks off a bubble could be so lax in security.

Or...

"We have not abandoned you guys,"

 

[User16390]

My financial sixth sense says it feels like a bubble when someone makes a break for the fire exit the fallout will be quite painful foe those who have made a recent investment.

Maybe because I am an old fart, I have more confidence in something more tangible which is yellow and heavy and has been seen as real money for thousands of years.

Gold has traditionally been used as a hedge when fiat currencies start to tank, whenever the dollar is performing badly gold tends to always do well. It's a question of when to buy and sell.

 

[PK99]

I think this asset/currency argument is bollocks

If I own a share in a company (ie an asset) I can swap it for food or give it to a plumber as payment for fixing my leaking tap. If you have an asset that you can readily exchange for goods or services, it's a currency

No. You are bartering -
exchange where goods or services are directly exchanged for other goods or services without using a medium of exchange, such as money

 

[Drago]

Is that how much they're worth now? I've got half a ton, so it looks like its time to sell.

 

[wheresthetorch]

I'm mystified by the whole thing. I don't think I've got any.

 

[classic33]

The ability to use decentralised apps

Do try to keep up....tsk

Actually nobody is using these decentralised apps...but they might...one day. Seems that bitcoins are useful for ransomware and that's about it for now

Or any transaction you don't want tracing.