
Is Bitcoin a Bubble? Economists Say ‘Yes’ - thisisit
https://blogs.wsj.com/economics/2017/12/13/is-bitcoin-a-bubble-96-of-economists-say-yes/
======
AznHisoka
If there's 1 thing I've learned in the past 2 years, it's that experts can be
deadly wrong (Trump being president, Brexit). They seem to be good at
predicting things with known variables, but not with unknown unknowns.

I'm making a contrarian bet that experts are wrong this time as well (at least
in the near term). People are jumping the gun, trying to look smart and
predict the right outcome. The same people that never predicted bitcoin would
be this popular. If I'm wrong, so be it, I'll lose a few % of my net wealth.

~~~
pedrocr
>If there's 1 thing I've learned in the past 2 years, it's that experts can be
deadly wrong (Trump being president, Brexit).

Be very careful with those conclusions. In both cases the predictions were
that the elections were very close. Trump winning the presidency when the best
models we had gave him a 30% chance is not a failing of prediction at all.

~~~
Alex3917
> Trump winning the presidency when the best models we had gave him a 30%
> chance is not a failing of prediction at all.

How accurate the "best models" were isn't really relevant to the accuracy of
the predictions of experts as a whole. The media was running that Clinton had
a 98% chance of winning the morning of the race.

~~~
azinman2
Sounds like the model was correct. We just fell into the 2%.

~~~
21
Today: My model says that I have a probability of 98% of making money by
buying this stock tomorrow.

Tomorrow: I lost money. I guess I just fell into the 2%.

------
billmalarky
Both the founder and lead dev of Ethereum and Litecoin think they are both
significantly overvalued.

Vitalik Buterin (Ethereum):
[https://mobile.twitter.com/VitalikButerin/status/94085013791...](https://mobile.twitter.com/VitalikButerin/status/940850137919836160)

Charlie Lee (Litecoin):
[https://twitter.com/SatoshiLite/status/940353265585160192](https://twitter.com/SatoshiLite/status/940353265585160192)

I've been bullish on crypto past few years but it's gone too far. I've flipped
to bear until the tech catches up.

~~~
placeybordeaux
I was just reviewing the avg tx fee on major coins.

Micropayments aren't possible on any widely accepted coin. BTC has hit 20 USD
a tx (albeit without segwit).

It's looking a little rough.

Might be time for a draw back.

EDIT: I was pulling together the avg tx fees from
[https://bitinfocharts.com/](https://bitinfocharts.com/)

$BTC: 24.4 USD $ETH: 1.07 USD $BCH: 0.17 USD $LTC: 0.632 USD $DASH: 0.62 USD
$XMR: 5.49 USD

My other thoughts on the subject:
[https://twitter.com/placeybordeaux/status/941122240623423490](https://twitter.com/placeybordeaux/status/941122240623423490)

~~~
azinman2
Bitcoin doesn’t HAVE to be used for micropayments to be useful.

~~~
ufo
At this point the transaction costs are making it unusable for most regular
payments as well.

------
Meekro
"Experts" predicting bitcoin's impending doom is nothing new. Does anyone
remember Professor Mark Williams, a top economist who is so well regarded that
he has been called to testify before Congress many times? In late 2013, he
predicted that bitcoin would crash from $1200 to under $10 within the next 6
months [1]. After he was proven wrong, he revised his claim to say that the
crash would happen eventually. I guess he was smart not to attach another date
to his prediction, lest he be humiliated a second time.

Until these economists are willing to put testable specifics to their
predictions (bitcoin will drop to under $X within Y weeks), or are at least
taking short positions to back up their beliefs, no one should take them too
seriously.

In contrast, the Winklevoss Twins correctly predicted Bitcoin's rise and
become Bitcoin billionaires in the process. But they're not selling because
they think it will go up much further [2]. Unlike the economists here, the
Winklevii are putting their money where their mouths are.

Time will tell if they're right.

[1] [http://www.businessinsider.com/williams-bitcoin-
meltdown-10-...](http://www.businessinsider.com/williams-bitcoin-
meltdown-10-2013-12)

[2] [http://www.businessinsider.com/bitcoin-winklevoss-twins-
say-...](http://www.businessinsider.com/bitcoin-winklevoss-twins-say-could-
soar-20-times-trounce-gold-2017-12)

~~~
JamesBarney
This is true of every bubble ever. No one knew how to predict when the real
estate bubble was going to collapse. And they wouldn't have been able to make
any specific predictions, despite real estate being an obvious bubble.

It was very easy to see that the price did not reflect the fundamentals. And
Bitcoin is similar. The fundamentals of Bitcoin do not support the price.

Also in terms of putting your money where your mouth is, there isn't any
reliable way to profit off of bubble's unless you know the timing. And that's
very hard. There are no laws of the universe that keep Bitcoin from rising for
another 12 years, or tripling in value before it crashes.

~~~
huphelmeyer
I'm both someone who believes Bitcoin is in a bubble, and someone who holds a
decent amount of it.

I never liked the word "Bubble" do describe these things because they rarely
pop like bubbles. Physical bubbles inflate relatively gradually and pop very
rapidly. Asset bubbles usually don't. The Nasdaq bubble took roughly 6 years
to inflate and 3 years to "pop". The real estate bubble took about 11 years to
inflate and 6 years to fully deflate. IMHO "balloon" might be a better term.

It's possible we could wake up tomorrow in a world where Bitcoin is trading
for $10, but I doubt it. Even if today ends up representing the peak in
hindsight, I'm (literally) betting that it will take years to fully deflate.

------
berberous
Bitcoin is certainly in a speculative bubble. I think Ray Dalio (the hedgefund
manager who runs Bridgewater) explained this very well in this clip:

[https://www.facebook.com/raydalio/videos/401164293638585/](https://www.facebook.com/raydalio/videos/401164293638585/)

The gist of it is, is that if you look at the nature of the investor today, it
is clear that this has become a giant speculative bubble. Investors do not
understand what they are investing in. They are not sophisticated. They are
not analyzing their investments. They are investing on the 'greater fool'
theory.

All of the above does not preclude the possibility that Bitcoin survives, is
useful, and perhaps is even still long-term undervalued despite the current
bubble-aspects. But the nature of the investor today means that the dynamics
of the price today are currently being driven by bubble-like factors, and are
almost certain to have a large (50-90+%) drop at some point.

If you read crypto twitter, you will see that even the devs like Vitalik [0]
and Vlad [1] are extremely wary of how much the price has risen given the
level of development of the technology thus far.

[0]
[https://mobile.twitter.com/VitalikButerin/status/94085013791...](https://mobile.twitter.com/VitalikButerin/status/940850137919836160)

[1]
[https://twitter.com/VladZamfir/status/941220330294644736](https://twitter.com/VladZamfir/status/941220330294644736)

------
evanwise
I'm committing the cardinal sin of commenting before I'm done with the
article, but whenever this discussion comes up, I feel like asking: why not
both? Could it be that Bitcoin is currently overvalued and in a "bubble", but
it or something like it still may have huge value and utility in the long run?
The idea that the Bitcoin bubble is something more like the Dot Com bubble
than Tulipomania seems plausible to me.

~~~
Akujin
Tulipmania lasted 6 months. Bitcoin is now 8 years old.

Stop comparing Bitcoin to flowers. It's not even close to the same thing.

~~~
ceejayoz
If you chart them, they're actually right on top of each other.

[http://www.zerohedge.com/news/2017-12-12/its-official-
bitcoi...](http://www.zerohedge.com/news/2017-12-12/its-official-bitcoin-
surpasses-tulip-mania-now-biggest-bubble-world-history)

~~~
mrb
This chart shows nothing interesting and is hardly scientific. Of course by
lining up price charts of various speculative bubbles they will roughly line
up. The chart also intentially discards the first 4 years of Bitcoin trading
data (2010-2013) where Bitcoin has actually gained the most. None of the other
assets in the chart even remotely compare to Bitcoin's gains in these 4 years.
Also, it should really use a log scale:
[http://bitcoin.zorinaq.com/price/](http://bitcoin.zorinaq.com/price/)

~~~
ceejayoz
> The chart also intentially discards the first 4 years of Bitcoin trading
> data (2010-2013) where Bitcoin has actually gained the most.

Sure, just like the comment being replied to discards several _hundred_ years
worth of tulip sales to say "Tulipmania lasted 6 months. Bitcoin is now 8
years old."

Bitcoin has, until this year, largely escaped widespread public notice beyond
"isn't this odd/interesting" pieces in the media.

------
kiddico
Everyone that I've talked to seems to be aware of the (seemingly) inevitable
price drop, but that doesn't seem to be stopping them from buying in. Most
people just assume they'll be able to sell what they have when the price drops
before all the 'dumb' people have a chance to do the same.

They just assume they'll be the lucky ones. I don't think everyone can be the
lucky ones though.

I think after this all calms down and a reasonable price is reached it'll be a
bit safer to use as an actual currency. Pretty sure we were all saying that
when bitcoin was around $200 though so maybe it won't ever settle.

~~~
jandrese
That's textbook bubble behavior.

One caveat with Bitcoin is that the network is so slow (effectively just 3
transactions per second) that a crash would be spread out over time. If a
panic starts you won't be able to get a slot to sell your bitcoins unless you
pay an enormous transaction fee. It could be an interesting situation where
the rich literally pay to get to the head of the line and avoid the crash.

~~~
googletazer
You don't understand how trading bitcoin works. Trading is not done on the
chain, its the centralized exchanges which keep the books. Its instantaneous,
with people who are involved in arbitrage between the exchanges keeping the
prices level across all.

~~~
dimillian
A bubble explosion would inevitably bankrupt the exchange platform first, then
you. GDAX/Coinbase will never be able to create money out of thin air if
everyone are selling and the BTC is dropping to $5. So even if you sell before
everyone, even if you get your money on Coinbase virtually, they'll never
honour the wire transfert.

~~~
jfoldager
Why will a bubble explosion bankrupt an exchange platform? The platform
doesn't need to own any bitcoins and can be unaffected by price swings. The
platform likely earns bitcoins through fees, but is free to trade them at any
time. In principal all the bitcoins in the care of the exchange can be owned
(or owed) to the traders.

------
rubenrails
Did you guys see this thread on Twitter a couple of days ago?
[https://twitter.com/TedOnPrivacy/status/940588631709896704](https://twitter.com/TedOnPrivacy/status/940588631709896704)

Have you had similar problems selling bitcoin?

EDIT: saw -> see

~~~
chomp
Yes, I used breadwallet to sell some bitcoins, accidentally set the
transaction fee at (what I'd later find out to be) ~10 satoshis/byte.

Now I have ~$2300 locked up in the mempool, and no end in sight for these high
transaction fees. Can't figure out a way to raise the fee.

[https://jochen-hoenicke.de/queue/#4d](https://jochen-hoenicke.de/queue/#4d)

~~~
option_greek
It should expire in 3-4 days. You can also try importing the keys to another
compatible wallet and redo the transaction with higher fee.

~~~
chomp
Thanks! Currently trying to find a wallet that will let me double spend. Any
recommendations?

~~~
option_greek
Actually I don't think any wallet will let you do that. How ever, you can
install breadwallet on another phone/device (don't mess with your existing
one) and restore with your backup seed (12 or 24 words one). Electrum is
another good wallet for desktop that supports all kinds of seed words where
you can again import your seed words and re-spend them. The newly installed
wallets will let you spend it again because it has no way of knowing that you
already spent it.

Good luck.

------
root_axis
It's obviously a bubble, just stop and think about it for a moment. P2P
payments over the internet clearly have _some_ utility, but the quantity of
bitcoins owned has no relationship to its utility, thus, the incredible rise
in price can be attributed almost entirely to speculation. The masses don't
care about P2P payments (at least not as far as that concept might relate to
cryptocurrency), they are engaged in a FOMO reaction to constant hype and the
false narrative that bitcoin is going to be the future of money. It's not as
if all these new bitcoin buyers are going to engage in some kind of novel
economic activity or wealth creation, they are just going to hodl till they're
ready to cash out. Certainly, it is clear that bitcoin's rise in price does
not track with any sort of uptick in commercial activity by the masses...
really, every sign points to a bubble.

------
OscarCunningham
I've seen a few estimates for what value Bitcoin would have if it did become a
world currency (or suchlike), and they're all in the $500 000+ range. So the
current price of around $20 000 is consistent with the theory that Bitcoin
will succeed with probability 5% and go to zero with probability 95%. I don't
think that's _obviously_ wrong, so I'd say it's wrong to call it a bubble.

And even if Bitcoin does go to zero that _still_ doesn't prove that we were in
a bubble now. The market is already 95% sure that that's what's going to
happen!

~~~
rhino369
I think a 5% chance of bitcoin becoming a world currency is obviously wrong.
You also have to figure in discount rates.

~~~
OscarCunningham
>You also have to figure in discount rates.

Yeah, and risk aversion which I think would be much more significant.

------
porter
Sean Snaith from UCF is quoted in the article calling bitcoin a tulip bubble.

Back in 2007 I watched his presentation in person where he said the U.S. would
experience a "soft landing" and nothing major.

A few months later the stock market crashed 60%.

Economists are terrible at predictions.

~~~
slyfocks
You cherry-picked one poor prediction from a single (shoddy) economist and
somehow conclude that economists in aggregate are terrible at predictions.

That statement doesn’t even logically support a conclusion that Sean is
terrible at predictions. It’s also entirely possible that Sean errs on the
side of optimism given his 2007 prediction, in which case his alarmism over
Bitcoin shouldn’t be immediately dismissed.

------
andrewla
It's completely possible for Bitcoin to be in a speculative bubble but also
not overvalued.

I'm somewhat bullish on Bitcoin, but there's no doubt that there's a
speculative bubble -- people with no knowledge of Bitcoin other than its price
history are getting more and more eager to invest to ride the wave. This is
the definition of a speculative bubble.

The main question is what side of the bubble we're on -- where are we relative
to the point where Bitcoin has passed its fundamentals.

------
mancerayder
So one of the items that keeps coming back to awareness is the potential
implications of the Tether fraud. For those few that haven't heard of this by
now, Bitfinex is tied closely structurally (in terms of management and
ownership) to the company that created Tether, the altcoin that claims to be
backed in a 1:1 basis with a USD.

Well, there've been mysterious USDT transactions, in regular intervals, that
suggest that there's tens of millions of Tether being pumped into Bitfinex on
a regular basis, which of course can be converted into BTC (and other coins).
However, no one thinks it's likely due to the soured reputation of Bitfinex
(their big hack, their inability to do business with a U.S. bank, among other
things) that this is REAL USD being pumped into this suspicious company with
ill-reputed owners. This has been mentioned on Bloomberg and other mainstream
publications.

So (if this is all true) what in the world will it mean reputationally that
people have been pouring 800M of counterfeit coins into Bitcoin, and what does
it mean economically?

I can't wrap my head around that second question.

[edit: updated last sentence of p2 for clarity)

------
tedeh
Well, there's already talk that Bitcoin is the biggest financial bubble in
world history: [http://www.zerohedge.com/news/2017-12-12/its-official-
bitcoi...](http://www.zerohedge.com/news/2017-12-12/its-official-bitcoin-
surpasses-tulip-mania-now-biggest-bubble-world-history?page=1)

~~~
excalibur
Well, we still have that apocalyptic "derivatives bubble" hanging over our
heads, which is estimated to be around $1.5-2 quadrillion (with a q). I don't
think Bitcoin is competing in the same league.

~~~
pocoloco
MarketWatch has an infographic that shows the relative sizes. It's originally
from 2015 but it has as been updated for 2017.

[https://www.marketwatch.com/story/this-is-how-much-money-
exi...](https://www.marketwatch.com/story/this-is-how-much-money-exists-in-
the-entire-world-in-one-chart-2015-12-18)

------
lpolovets
An interesting data point can be found at
[https://twitter.com/charliebilello/status/938859025483141121](https://twitter.com/charliebilello/status/938859025483141121)

The author of that tweet (a researcher at a pension fund) polled his followers
several times about whether they thought BTC was a bubble. The higher BTC's
price, the fewer people believed it was a bubble.

------
bhouston
In the end Bitcoin is so similar to Gold. It is a means of storing wealth and
is valued on a shared belief of finite quantities and that it is an
effective/secure means of storing wealth.

It is hard for me to call a shared belief a bubble, because there is a clear
understanding I think now that there is no underlying fundamental asset value.

~~~
zimablue
Gold has a floor value though, sure it has a value above that based on being
used as a store of wealth but the whole thing is predicated on the fact that
gold is actually useful and has thousands of years of human history of being
valued.

~~~
lawlessone
bitcoin will still have a sort of floor value for the various illegal things
it was and is still use for.

Obviously though that is far far lower than what it is now.

~~~
zimablue
I see your point but even on that - there are alternative blockchains, we
could all just swap to litecoins and send it to zero.

If it were the only feasible crypto it would have some sort of floor I agree
but factor in altcoins and it actually doesn't have any.

~~~
lawlessone
True, there are others, some with more privacy built in , bitcoin enjoys a
network effect for now. That might change.

------
craigc
How would someone classify Bitcoin’s rise from $0.08 to $31 from 2010 to 2011
before dropping to $2 or its rise from around $100 to around $1200 and
subsequent crash to around $200 from 2013 to 2015?

I would say losing 85% to 95% of its value in a relatively short period of
time after a large run up could be considered a bubble bursting. The thing
that is interesting is that each time this has happened with Bitcoin the price
settled somewhere ABOVE where it was before the last bubble.

I do think Bitcoin is in a bubble right now, but I think it could go much
higher (maybe $50-100k?) before crashing, and I think the price after the
crash will not go below $5k or $10k. The current wave began around $1000.

So what I think we are seeing is actually mass adoption of a new technology in
waves that are increasing exponentially.

There has never been anything like Bitcoin so it is difficult to use lenses of
Bubbles in the past to explain what is happening with it.

------
RosanaAnaDana
I really don't think cryptocurrency in general is a going anywhere; I don't
think this is even the tip of the iceberg in terms of where this is going to
lead. There are reason however, why bitcoin specifically might bubble and
collapse. The main issue being the fact that at the moment its not reasonable
to use bitcoin as if it were money, with the prime cause (in my eyes) being
the cost of transactions. I do think bitcoin will collapse (not any time
soon), but I think the contents of that bubble will find themselves in other,
technically more useful cryptos. Not being able to move bitcoin around with
out these ridiculous transaction fees is why bitcoin will eventually collapse.
Its not (as) useful as a store of value in its current form than a store of
value that doesn't have acost for its use.

~~~
heurist
We need to give up on the idea of bitcoin being used as money. It wasn't
designed in a way that would encourage holder to spend it like money until a
stable valuation is found when everyone in the world is holding it. As Yellen
said, it's a highly speculative asset. Small chance of massive yield, large
chance of small failure.

------
jrimbault
IMO, bitcoin is a commodity money, and history has moved on from those a long
time ago. At most treat it like stock, and not as if it were _money_.

------
seanwilson
I'm curious how much of an understanding of coding and computer science gives
you an edge here in terms of making money. It's weird seeing people on the
news talking about different cryptocurrencies when they obviously don't
understand the technical merits of each. For example, Litecoin and Bitcon
differ by the block mining times and the hash function used and Ethereum
allows more complex smart contracts etc. but these kinds of details aren't
mentioned. Bitcoin seems to be facing scalability issues (in terms of the
protocol and the community) but I'd be very surprised if the news picked this
up.

~~~
Rmilb
The crypto market trades more on sentiment first, then technicals.

------
einrealist
Many economists also say that the current economic state may be a bubble, an
even worse than that one that popped in 2008.

I think, Bitcoin is undervalued because it can provide a way out for unstable
currencies (Venezuela, some African and Asian countries, maybe soon western
countries) or to avoid regulations (China, Russia) and of course, for unlawful
business (money laundry, blackhats, drugs). That's probably the real value
drivers at the moment.

The biggest risk is regulation. Exchanges have to operate somewhere. But I
guess, its hard to regulate something that is global (looking at you tax
heavens).

------
vasilipupkin
Unless you have any predictive insight about when a bubble going to burst,
it's essentially a meaningless term. Specifically, I mean, it doesn't tell you
anything about what you should do. Suppose Bitcoin is a bubble but it won't
burst until 2152. Well, in that case, I should buy it. If it's about to burst
in the next few months to few years, then perhaps I should sell it. If you
can't tell me when, then you can call it whatever you want, it's not an
informative term.

~~~
TheCowboy
There's a fallacy in there somewhere. It's like telling me that calling
something gambling is a meaningless term because I can't tell you exactly when
you will lose your money playing craps. I don't know exactly when. There's a
random factor involved. There's even a chance you might come out ahead.

The fact that you don't know when it will burst is just one problem with
bubbles. You don't know if it will be 2152 or now. If you know it is a bubble
because of a strong irrationally motivated valuation but still buy in, then
you are gambling on not "if" but "when" the bottom will fall out.

~~~
vasilipupkin
I don't agree with your analogy. If you play craps, then given the odds, we
can predict that you will lose money on average if you play a large number of
games. That's a pretty specific statement. Which specific statement are we
making when we call something a bubble?

~~~
TheCowboy
Bubble can be overused and become meaningless, but it can be a useful concept
to consider when deciding if this is where you want to put your money. In my
opinion, irrationally motivated valuation is key here.

People buying Bitcoin as the future are taking a leap of faith that only comes
true if enough people take that leap and do not abandon it. There is no
underlying asset or intrinsic value, there is no government force backing it
up. There is nothing people can point out to express why this particular
cryptocurrency has value.

This isn't an argument against the underlying technology, just the valuation
of Bitcoin.

~~~
vasilipupkin
Perhaps, but there are all sorts of sophisticated people with all sorts of
valuation models for crypto, etc. What you are saying is just disagreement
about valuation. I mean, if bitcoin is irrationally priced, there is a way to
express that view by shorting bitcoin futures.

------
pteredactyl
Seems to me international fiat currencies are the bigger, more pressing
bubbles. But what do I know?

How many people know about QE, NIRP, or PPT?

~~~
tbirrell
Fiat currencies are still reasonably stable compared to actual goods right
now. I know that can and has changed in the past (pre/post WWII germany), but
at the moment, they are not in a bubble. Not at the same level that bitcoin
is, anyway.

How do I know this? Well, because I can still get a gallon of milk or loaf of
bread for ~$3. If I put that $3 into bitcoin, I'd get some fraction of a coin
(roughly 0.0001). Which is all well and good until the bubble bursts, and
suddenly milk is worth 0.1 bitcoins. Did milk suddenly become 1000x more
valuable? No, bitcoin lost value.

This is something I don't understand about people who say they "cashed out of
fiat currency". Fiat currency is still what everything is valued by. The value
of a gallon is milk is relatively stable. Compared to this, fiat fluctuates a
little, and bitcoin is a drunk on a rollercoaster.

Which, if you consider fiat currencies to be a bubble, would make me even more
concerned for bitcoin as it is a bubble within a bubble.

~~~
existencebox
Just a comment to chime in with some interesting info.

QE in the UK seems to have actually kicked into the inflation cycle. Commodity
prices (butter was a big one, if I remember correctly, at >20% yoy) have been
jumping alongside service costs (insurance). I'm sure that Brexit is _some_
sort of variable in this equation but I won't pretend to make heads or tails
of how beyond that inflation is in fact happening in some places. [0][1]

Given the level of concern there is over the "missing inflation" in USD that
causes so much headscratching by the Fed WRT rate raises, I think the OP is
fair to say that we should be at least somewhat concerned about the state of
currencies during QE (My intuition as someone not in finance is that it's
simply been "absorbed" somewhere in the system that doesn't trickle down to
normal consumers, such that it doesn't manifest like the inflation they're
looking for; would be curious if someone more informed could speak to this.);
and more importantly, the position that a multi-year ZIRP regime puts us in to
respond to the next crisis.

Bitcoin is an obvious outlier for sure, and a correction would hurt. But
compared to the populations currency exposure, bitcoin's pain would likely be
much less widespread.

[0] (because I trust reuters as a source) [https://uk.reuters.com/article/uk-
britain-economy-inflation/...](https://uk.reuters.com/article/uk-britain-
economy-inflation/uk-inflation-hits-highest-in-nearly-six-years-peak-seen-
soon-idUKKBN1E60YF)

[1] (more fine grained breakdown from sketchier news site)
[http://www.trustnodes.com/2017/12/13/inflation-spikes-
britai...](http://www.trustnodes.com/2017/12/13/inflation-spikes-britain)

~~~
polotics
To answer your intuition: QE is trickling up into asset price inflation.

------
osrec
Bitcoin is designed to be a bubble. I mean, I love the concept and have
profited from it, but looking at the mechanics, it almost makes sense to buy
and hold, as the money supply doesn't grow much. This sort of puts a
deflationary pressure on prices (of goods, not bitcoin - bitcoin becomes ever
more valuable as the money supply tends towards a constant), meaning hoarders
are rewarded, thereby reducing supply further. I don't know for sure, but mass
deflation doesn't really sound all that sustainable. Couple that with hype
driven demand, and you have yourself a perfect little bubble! I've personally
sold a lot of my holding, but I'm very excited to see how this plays out in
the next few months. There will be a lot of lessons to learn, but the end of
bitcoin (should that happen) will not be the end of a decentralised money - I
genuinely believe society needs this.

------
mrb
This WSJ survey is very deceptive. It worded the question to make it sound
like they were asking if 2) was true, but the blog post title make it sound
like 1). Let me explain: in my experience people mean two very different
things by "bubble":

1) Bitcoin is _a_ bubble: the entire technology is worthless and its long-term
valuation is zero.

2) Bitcoin is _in_ a bubble: currently in a bubble phase, will probably crash
in the short-term, but the long-term potential and value of the technology is
or may be real. (Just like there has been bubbles in the past: 2011, 2013,
2014: [http://bitcoin.zorinaq.com/price/](http://bitcoin.zorinaq.com/price/)
they have been corrected, but the price ended up always surpassing previous
peaks)

------
brndnmtthws
Does this count as another "Bitcoin is dead" proclamation? We're already well
over 200 obituaries:
[https://99bitcoins.com/bitcoinobituaries/](https://99bitcoins.com/bitcoinobituaries/)

------
adamnemecek
The one thing they aren't accounting for is that there really hasn't been
anything like bitcoin. In most bubbles, eventually the whales start selling
which triggers an avalanche, however bitcoin is distributed enough that this
might not happen. Too many different people are interested in it doing well
now. E.g. rich people in 3rd world countries, boy are they pumped for bitcoin.

I've mentioned it before, and I was kinda laughed at but I legit believe that
certain economic truth need to be reevaluated for software and crypto. You
know how at tech companies, the economics are different from other companies?
I can imagine the same being the case for crypto.

~~~
jandrese
_Every_ crash is preceded by people saying "It's different this time".

 _Edit: Fixed autocorrect goofery_

~~~
csallen
Every crash is preceded by people saying _everything_ , because there are
billions of people in the world and it's easy to find any opinion. Thus, the
mere presence (or lack thereof) of any particular opinion is not a useful
barometer of what's actually happening.

------
AaronHester
Bitcoin is a bubble but that doesn’t mean that you can’t make money investing
in it. All you need is someone else to be the “greater fool” to purchase it
from you. Just don’t get stuck holding bitcoin when the bubble collapses.

~~~
virgilp
Same thing could be said about sub-prime loans. Or really - anything. If you
have this kind of "God-like knowledge", even gambling is a great idea.

------
virgilp
> 96% of Economists Say ‘Yes’

Oh God this means I was wrong... I should start buying bitcoin ASAP.

------
mancerayder
_“Old Baron Rothschild’s recipe for wealth winning applies with greater force
than ever to speculation. Somebody asked him if making money in the Bourse was
not a very difficult matter and he replied that, on the contrary, he thought
that it was very easy… “I will tell you my secret if you wish. It is this: I
never buy at the bottom and I always sell too soon.”_

(from
[https://en.wikipedia.org/wiki/Reminiscences_of_a_Stock_Opera...](https://en.wikipedia.org/wiki/Reminiscences_of_a_Stock_Operator))

------
vthallam
I always wonder how an opinion piece from WSJ or the economist can change the
direction(few billion $) of the market to some extent. Especially in these
markets which are partly running on mass hysteria.

------
deweller
Look at the value of gold between 2001 and 2013[1]. There were multiple years
with 20-30% gains.

I grant that a +1500% gain in 1 year is a different animal. But combine the
store of value along with rapid technological innovation in all
cryptocurrencies (ICOs, alt-coins, etc). I submit to you that there could be
something here besides baseless mania.

1\. [http://onlygold.com/Info/Historical-Gold-
Prices.asp](http://onlygold.com/Info/Historical-Gold-Prices.asp)

------
HHalvi
If you think of it as a currency probably yes and i assume that is what most
of these people are assuming it to be. But Bitcoin and other alt coins have
suddenly become a way to hoard something digitally. Pretty sure if everyone
wants to cash out their bitcoin "portfolio's" there is gonna be a lot of long
term and short term plummets. Overvalued ? Over Hyped ? Over Sold ? Over
Everything ? Sure , but a Bubble ? Lets wait till it all goes down shall we ?

------
WheelsAtLarge
Yes, it's a bubble but we've never had one where the whole world can be, and
is, involved. This can go on for years before it falls. The key , for it to
continue, is to make it VERY EASY for people to buy and sell. Once that's in
place who knows when it will stop. All the naysayers can't see that.

------
DrNuke
It is still pioneers and early adopters time, people seeing bitcoin as the
first possible single currency for the entire planet. We will see how it goes
when the masses and legislators come. Utopian it is not anymore and even
technically feasible nowadays, so we will have attempts.

~~~
slyfocks
My grandma bought some Bitcoin last week and she doesn’t even use the
internet. Friends who are not tech-savvy are talking about Bitcoin often.

It most definitely is not still “pioneers and early adopters time”—that idea
seems to be Bitcoin propaganda aimed at potential new Bitcoin buyers on the
margin.

~~~
tbirrell
This sounds like the Joe Kennedy Shoe Shine story.

------
davidw
The take by this economist seems pretty sensible:

[https://johnhcochrane.blogspot.com/2017/11/bitcoin-and-
bubbl...](https://johnhcochrane.blogspot.com/2017/11/bitcoin-and-bubbles.html)

------
cs702
Keep in mind, many of these economists also say that no one, not even them,
can consistently identify undervalued or overvalued liquid assets.

By calling Bitcoin a "bubble" with such confidence, aren't they contradicting
themselves?

------
donquichotte
Oh dear. I don't own any bitcoins, but I sure af don't trust the judgement of
people who invent fantasy signal processing strategies like fibonacci
retracement [1], support and resistance levels [2] and Elliott Waves [3].
Sincerely, a dude who does actual signal processing for stuff that has to
work.

[1]
[https://en.wikipedia.org/wiki/Fibonacci_retracement](https://en.wikipedia.org/wiki/Fibonacci_retracement)

[2]
[https://en.wikipedia.org/wiki/Support_and_resistance](https://en.wikipedia.org/wiki/Support_and_resistance)

[3]
[https://en.wikipedia.org/wiki/Elliott_wave_principle](https://en.wikipedia.org/wiki/Elliott_wave_principle)

~~~
merloen
What makes you think that those fantasy signal processing strategies were
invented by (respectable) economists? Because they weren't.

------
mabbo
I don't know whether bitcoin is a bubble or not, but I would love to see it
pop and the twits who won't shut up about it lose all their money.

It may never happen. If it does, I will feel schadenfreude.

------
WalterSear
Who could have expected 4% of economists to be holding bitcoin already?

------
zeep
If a stock market crash was to happen, Bitcoin would go up or down? (the peak
of 2007 look small when compared to the peak of 2017)

------
sschueller
I saw an article of one economist comparing bitcoin to Lehman brothers and
that it will burst just like Lehman did.

How are these two in any way similar?

------
monochromatic
It’s easy to spot a bubble. It’s much harder to predict _when_ it’s going to
burst.

------
creaghpatr
One more percent and they'll have 'scientific consensus' /s

------
rufusroflpunch
In a related noted, 4% of economists are bitcoin holders.

------
mr_dynamite
by the same people who broke the economy on 2008... lets just trust them...

------
zerostar07
Genius does not come from consensus. The economist who knows what bitcoin is
is probably in the 4%.

------
porter
Usually the same number of economists forecast continued growth right before
recession.

------
EGreg
Doesn't this headline actually violate Betteridge's law?

~~~
qbrass
By answering their own question, the headline doesn't end in a question mark,
so Betteridge's law doesn't apply.

------
arkona
Looks like professor bitcorn is back

> trust me I’m an economist

------
scirocco
4% are Bitcoin owners :)

------
Megamex
These statistics are as useful as the pre brexit and us presidency polls

~~~
zerostar07
a lot _less_ useful tbh

------
patrickaljord
Must be the 96% of Economists who have no idea what cryptography is.

------
KasianFranks
Gotta love how the negative crypto articles rise to the top on HN immediately.
What's not understood is that crypto is a way for the un-banked (1/3 of the
people on earth who barely have clean water, toilets or telephones, yes
telephones and that make $1/day) now have access and participation in a global
trading platform. Disruption for the first time is happening to both VCs and
traditional investment bankers and they are rekt. Be a contrarian.

~~~
darkstar999
Except that bitcoin transaction cost is what, $10 or $15 now? There's no way
"unbanked" people will benefit from that, at all.

~~~
Tepix
He wrote crypto, not bitcoin.

~~~
matt4077
Yet the economists they're mocking were asked about bitcoin.

