
Bitcoin Was a Bubble and It Popped - taytus
https://www.bloomberg.com/opinion/articles/2018-12-11/yep-bitcoin-was-a-bubble-and-it-popped
======
ascendantlogic
As it has done multiple times previously. I anxiously await reading why this
time is "different", just like all the previous times.

~~~
themgt
Because the previous times it wasn't being hyped in mainstream news and
culture. The point where the guy on the elevator is taking about [bubble] is
the point at which [bubble] is about to burst for real, because you've just
about run out of new suckers to fuel it.

~~~
morgancmartin
Would you be willing to make a friendly wager on whether it returns bigger
than ever? My ten dollars says it will within, say, two years. What do you
say?

~~~
tn_
This guy bitcoins.

~~~
morgancmartin
Haha, thanks for the laugh.

Considering the downvotes I got, I suppose I was out of line suggesting a
wager, but I've yet to see convincing evidence for why blockchain tech can't
work. Sure it's overhyped way beyond what it deserves and it hasn't found its
"killer app" or niche yet, but that doesn't mean it won't.

Nano's my favorite coin. It's fee-less, near-instant, and secure. Its largest
flaw (and one all coins share at this point) is its tendency to fluctuate in
value. But this problem is soon to be overcome by stable coins. Once that's
done, its only remaining disadvantage will be lack of adoption. And if the
product's right, I don't see any reason why a superior product won't gain
market share given enough time. And it's not like crypto is under some
investor enforced deadline to reach a certain market share, it's got all the
time in the world.

Anyone care to point out any flaws in my thinking?

~~~
berbec
I have no skin in the game either way, so I am curious (asked before):

Is crypto:

money/currency (spend able exchange of value)

a store of value (investment etc)

a cool technology with no current useful application

or something I don't understand?

If crypto is money, can I:

Spend it at Amazon? My grocery store? My corner deli? Pay my rent? Pay my
employees?

If crypto is a store of value can I trust it will have any rational storage
value over any time period?

~~~
jki275
It's kind of all of the above.

As to your questions, you can spend it some places. I think newegg takes it,
Valve used to take it with Steam, etc. There are corner delis who take it, I'm
not sure about yours. Your employees may be ok with you paying them in it, but
that's an agreement you have to have with them.

To your last question -- no, I wouldn't think so at least for now.

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abstrct
"Millennials, like generations before them, just got a painful lesson about
speculation." and yet the first tweet is from McAfee... I know life has been
hard to him but that is one very aged Millennial.

Just add this bad article to the 300+ Bitcoin Obituaries, and the even more
writings that try to point out the hard lesson learned by us idiot
Millennials.

A reminder that some Millennials are almost 40 now, we were the first
generation to grow up with the internet, and we lived through things like the
dot com bubble and the 2008 housing crisis. What could we possibly know about
technology and money? What could we possibly desire to see possible change and
improvement in?

~~~
kokokokoko
Cryptocoin speculation will likely be remembered closer to beanie babies or
baseball cards as opposed to the dot com bubble etc.

This was just the first time we saw this happen globally and with digital
goods. Which, possibly coincidentally, happened to baby boomers right when
they were around the same age/point in life as the millennial generation is
now.

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apo
The Bitcoin hype cycle is driven by the mass media. Like this article, they
pile on when BTC/USD exchange rate falls through the floor.

During the period of stability that follows, they're nowhere to be found.

After things have already turned around, they jostle with each other in an
attempt to explain it all to Joe Sixpack.

What the article fails to mention is that each "pop" has left the exchange
rate higher than the previous top.

Missed opportunity to investigate an emerging asset class with no direct
analogy to anything preceding it, periodic manias or not.

~~~
will_brown
>The Bitcoin hype cycle is driven by the mass media.

It’s much more nefarious...the boom and bust articles are essentially ordered
by individuals/groups with the influence as part of the market manipulations.
It’s not entirely unlike what people refer to as submarine articles, what’s
lurking underneath these publishing’s are attempts to move the markets (the
first wall street movie actually does a decent job of demonstrating this
practice in the 80’s for the stock market).

These details will be exposed now that the SEC is beginning to target
manipulations in these markets.

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shuntress
The thing that really bothers me the most about crypto trading is all the
wanna-be day-trader bros who fundamentally misunderstand what they are
actually buying and selling.

"Open source distributed transaction ledger" sails right over their heads but
if I said I hand out a new dirtcoin to whoever moves the most dirt around my
yard each day and here are some exchanges carrying dirtcoin I'm met with an
avalanche of Wall Street jargon about how dirtcoin is the best investment
anyone can ever make.

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matchagaucho
I knew we were at peak in Dec 2017 when a fellow tourist in Mexico proclaimed
his iPhone was stolen, apparently along with his BTC wallet, and he no longer
had funds to continue the vacation.

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reidjs
Why’s it still so darn expensive then?

~~~
gargarplex
Venture investment in Blockchain went up in 2018. The median deal size
increased over $1.0mm and the number of deals is also up. [1] Once the
ecosystem of complements matures, Bitcoin's utilization is expected to
increase. [2] The price of Bitcoin is driven by speculation that utilization
of Bitcoin creates value. [3]

[1] [https://medium.com/@PanteraCapital/market-update-pantera-
blo...](https://medium.com/@PanteraCapital/market-update-pantera-blockchain-
letter-december-2018-f48ad020f9d6)

[2] _Crossing the Chasm, 3rd Edition: Marketing and Selling Disruptive
Products to Mainstream Customers_. Paperback – January 28, 2014

[3]
[https://www.investopedia.com/articles/investing/091814/what-...](https://www.investopedia.com/articles/investing/091814/what-
bitcoins-intrinsic-value.asp)

~~~
jeron
to add to this, adoption rate for cryptocurrency increased this year as well

[https://www.investinblockchain.com/cryptocurrency-
adoption-r...](https://www.investinblockchain.com/cryptocurrency-adoption-
rising-in-2018/)

~~~
verdverm
The stats can be misleading, because I have 3 verified accounts. How many
people expanded the number of accounts they hold to access more ICOs / tokens
/ P&D?

BTW, the reference states

"The study indicated user growth rates were higher in 2017 but continued on
into 2018 at a rapid pace."

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NathanCH
I would love an analysis on who is moving the market today. In the last month
there have been three occurrences where the price of BTC jumped 10% in a
single moment (followed by equal sell-offs hours/days later).

Stranger still, all coins seem highly correlated. BTC goes up, all coins go
up.

I realize this behavior is not new and the market has been highly correlated
since the beginning, ...but why?

~~~
jboles
In a stock market, some companies outperform others by being more valuable at
one moment than another. The difference in value results from differences in
the companies’ expected future cash flows.

Crypto coins, despite ICO promises, have not historically been revenue
generating assets, so there is no future cash flows generated by them. Thus
they can be considered fungible, retaining the same value despite their
different symbols and nominal prices. With the level of distrust in the
ecosystem, only “bad” news affects a given ICO, sending its value to zero.
Neutral news, or good news, does not increase a given coin’s price, so they
all settle around the same “value”, and all their “values” move together.

When anyone or their pet monkey can clone a Git repo, change some variables,
and launch their own ICO with zbsolutely zero proprietary innovation, it is to
be expected that all crypto coins will approach the same value.

(I put “value” in quotes because different coins have wildly different prices,
being a function of some variables in the coin’s software determining e.g. how
many were “issued”, but you have to ignore those prices and instead think
about the underlying “value” represented by the coin. It’s really not much at
all — perhaps only the sunk cost of electricity, but likely less than even
that.)

I would also love an analysis on what is moving the market. It has to be more
than Tether at this point.

------
wtracy
Either McAfee was being facetious in that tweet, or he was smoking something
good.

It's one thing to believe that Bitcoin is the future, it's another to believe
that "Bubbles are mathematically impossible in this new paradigm. So are
corrections and all else."

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vminkov
What we won't tell you is that many investors have realised that the price
will fall freely if the supply can't be limited in demand drops. And they are
now seeking to gain control over as much of the circulating supply as
possible.

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yellowapple
This article lost all credibility when it had managed to frame itself in a
"haha stupid millennials" attitude by the very first sentence.

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bitxbitxbitcoin
Bubbles only pop once. Bitcoin has spiked and crashed multiple times and it
isn't unreasonable to expect it to do so again.

Eventually, we might see the terminology change from "bubble" to "spike." It's
already happening... Albeit slowly [0]. Can anyone think of a better term?

[0]
[https://trends.google.com/trends/explore?date=all&q=%22bitco...](https://trends.google.com/trends/explore?date=all&q=%22bitcoin%20bubble%22,%22bitcoin%20spike%22)

~~~
orev
A spike is something that happens and completes in a very short period of
time, not drawn out over a year like this was. The terminology used pretty
clearly follows the shape of the price charts — there’s no need to try to
redefine terms to meet whatever point one is trying to make.

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vokep
Sure it did, oh man, ah jeez, I'm so sad my bitcoins are all now worthless,
gosh, the price is...so...so low now...

 _buys 5 more_

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pazimzadeh
Buy low, sell high.

~~~
vkou
Or buy low, sell lower.

You're just gambling.

~~~
pazimzadeh
The trick is not to sell lower.

And if you sell enough when it's high, then you're not gambling any more.

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KasianFranks
Like the dot com bubble, and here we are today bigger, better and stronger.
Think in terms of a public trading vehicle that enables anyone to raise
capital in a global marketplace. Either real value gets translated to that
vehicle or it does not.

~~~
the_gastropod
"Everyone said Bob was an idiot for playing the lottery, but look at him now!"

"<X> is a $10 Billion/year industry! If we could just capture 1%..."

Just because some other thing was successful doesn't mean your pet thing will
be successful too.

~~~
KasianFranks
So lets just stop innovating right here right now. Bad logic.

~~~
the_gastropod
Negative. Innovation is great. But new inventions won’t all be successful. And
claiming one will because another invention was successful in the past is bad
logic.

~~~
KasianFranks
"New inventions won't all be successful" thanks for the stroke of brilliance!

