Monitoring the Crypto Bubble

Discussion in 'Digital Currencies' started by Bullion Baron, Dec 12, 2017.

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Where do you think we are in the crypto bubble?

  1. Very early (years left to run)

    22.6%
  2. Around the middle (could still run for months or a year)

    37.6%
  3. Very late (could end within days/weeks)

    24.1%
  4. It's not a bubble

    15.8%
  1. serial

    serial Well-Known Member Silver Stacker

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    Well said.
    But pro corners will easily refute that with.
    "You clearly don't understand the technology "
     
  2. mmm....shiney!

    mmm....shiney! Administrator Staff Member Silver Stacker

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    I've tried explaining things to humans and sometimes it's a complete waste of time.
     
  3. mmm....shiney!

    mmm....shiney! Administrator Staff Member Silver Stacker

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    You need to read my response to him, it may help you understand something at last.

    Edit to add: hang on, cats.
     
  4. STKR

    STKR Well-Known Member Silver Stacker

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    Lol...ok?

    I'm not even sure why you responded with that garbage. My point was that it's not "the hardest money in the history of the world". It could be kicked to the curb the moment it fails to perform on an investment level. It could easily become a stale, stagnant, underperforming asset class with very little needed utility. Whether it aims to solve problems is irrelevant. Its uses are only relevant if it fulfills needs. Right now, overall market participants are heavily weighted towards speculative investors. Those are the needs being fulfilled, and they will continue to be, until they're not. What is left beyond that? As it directly related to Bitcoin, what is left for you specifically beyond investment?
     
  5. serial

    serial Well-Known Member Silver Stacker

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    Lol you literally did exactly what I said then insinuate that it's because we don't understand.
    Again, pro-coiner will spin a whole lot of technical ideology and think that they have properly responded to the overall issues raise by instead they only respond to 1 part, not the overall issue that crypto is 100% reliant on the greed of people feeding money into it to make money and that should that flow of new money stop, it has no other value
     
  6. mmm....shiney!

    mmm....shiney! Administrator Staff Member Silver Stacker

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    I agree.
     
  7. mmm....shiney!

    mmm....shiney! Administrator Staff Member Silver Stacker

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    Reposting because I couldn't fix the formatting:

    You asked what it offers beyond the system we already have in place and I answered with a quote from the Whitepaper, that it seeks to solve the double spending problem in a peer-to-peer platform. I answered a couple of other questions too.

    Again, you asked the question:

    No other alternative technology can do that. All legacy digital transactions still require the use of a centralised authority to prevent double-spending, as has been the case in the banking system for centuries since the advent of promissory notes and cheques.

    That was one of your points, it was made in relation to gold and I told you I'm not interested in a gold v BTC debate because it's not that important and detracts from the value that both gold and cryptocurrencies bring to users.

    It's been kicked to the curb on quite a number of occasions and every time it's bounced back. It could become stale and stagnant with little use, but it hasn't.

    Yep, like everything we assign value to. So far you haven't come up with anything remarkable to refute the claim that BTC has value.

    Refer to the 15 qualities we assign to BTC I outlined above.
     
    Last edited: May 23, 2022
  8. STKR

    STKR Well-Known Member Silver Stacker

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    You've explained uses and benefits of Blockchain technology. I don't disagree that it has utility. Bitcoin is just a brand that utilises the underlying technology. It doesn't fulfill enough needs to stand on it's own beyond speculative interest. It doesn't own the rights to DLT, and It's best and most utilised function is as a speculative asset - The king of the Crypto Casino. Strip that away and all you have left is a skeleton of a good concept.

    As for the ability to transact, society doesn't require it to function. Double spending is controlled in our current system through centralised authorities. We don't need Bitcoin if we were to adopt Blockchain tech in a new system. Hence my point: What does it really have to offer beyond it's branding that others can't offer?
     
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  9. mmm....shiney!

    mmm....shiney! Administrator Staff Member Silver Stacker

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    BTC is more than just a brand of blockchain technology, it is the pinnacle of it and its best and most utilised functions or qualities are its security and the number of nodes in existence ie level of decentralisation. It is the most secure and decentralised platform, it stands on its own on these two metrics alone. As a result developers go to great efforts in creating more and more use cases with BTC. A smart contract employed on the BTC blockchain will be more secure, more cost-effective and will offer superior performance (especially when new technologies are deployed) to say one on the Ethereum platform. However because of the nature of the BTC blockchain, new developments take longer to integrate than they would on other platforms.

    That's right, under the system where the State has a monopoly on the issuance of currency BTC transactions are on the fringe of economic activity. Therefore any desire to conduct transactions without having to "trust" a third-party to maintain a ledger is an outcome of our desire for greater economic freedom ie a system where we can do away with or at least minimise the third-party approval or interference in our economic affairs. Of course, the use cases for BTC have moved on since the early days when Satoshi first laid out the white paper.

    What do you have in mind as an alternative blockchain technology? How would you incentivise individuals to verify transactions?
     
  10. STKR

    STKR Well-Known Member Silver Stacker

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    I don't have anything in mind as an alternative. I never suggested that it needs one either. I just think it's largely a speculative asset class that poses significant risks.

    I actually think Bitcoin was allowed to propagate by TPTB. Although I'm all for a mechanism to transact privately without 3rd party intervention, I think it's naive to believe it will be allowed to threaten the very fabric of the current system by allowing every day people to transact privately outside the system with a new form of "money". We have very powerful forces in this world that could've made it impossible for BTC to reach the levels of adoption it has.

    If History is a true indicator, we are nearing the end of this current monetary cycle. The wheels are in motion to move to a new system of less privacy and more control. I don't understand how people aren't suspicious of what Bitcoin has helped pave the way to...CBDCs. I'm certain the money manipulators would be able to Influence the markets to the point that Bitcoin becomes unfavourable. Capital inflows could be squeezed from this space with harsh regulations, especially as it relates to companies and corporations holding Bitcoin as an asset on their books.

    I don't think it's a sure thing whatsoever. I think it's extremely risky and dependant on speculation to maintain it's status moving forward. I think it could easily dissolve into a nothing burger, while the technology and infrastructure it helped propagate will stay with us for the rest of our lifetimes. Sadly, it will be in the form of CBDCs and we won't have any influence on that.
     
  11. Polar.bear.Stacker

    Polar.bear.Stacker Well-Known Member

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    If CBDCs become a thing, enshrined in law and physical cash is removed, gold and silver does not help in the slightest
     
  12. mmm....shiney!

    mmm....shiney! Administrator Staff Member Silver Stacker

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    If the price of BTC froze at the current level of $30000 and its price then moved in a similar manner to other asset classes it would still have value and still remain in demand because of the uses we have for it, capital gain naturally is just one of the qualities that makes it attractive.

    Well I'm not seeing any historical precedence that would indicate we are nearing the end of the current monetary system. In fact I'm of the belief that the State must have a fiat system in order to operate most effectively, any other form of currency issued and redeemed by the State would result in austerity. So I think that fiat is here for a very long time. I've posted about this at length in the Fractional Reserve Banking 2.0 thread.

    So we're moving off the subject of our debate and onto increasing the autonomy of Central Banks.

    I'm of the opinion that the threat of CBDCs is probably overblown. They offer real improvements to the ability of financial institutions to speed up cross-border transactions but no real benefit for domestic applications except as a channel where the RBA could deposit funds directly into user's accounts, something they are not allowed to do as yet. Apart from the legislative hurdles that would need to be cleared before the RBA could issue a CBDC to the people, not to mention that there would be little point to transacting in a CBDC as opposed to State issued fiat - and very little observable difference to retail users - it could cause the collapse of the entire financial system if CBDCs were to replace commercial banks issuing money by creating loans. Maybe the RBA could issue just a little bit of its CBDC to people, kind of drip feed when necessary, but then what would be the point there? The government can already fund people's bank accounts directly with its digital currency if it chooses - and get the electoral kudos for it as well.
     
    Last edited: May 23, 2022
  13. STKR

    STKR Well-Known Member Silver Stacker

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    It's a shift in paradigm. History has shown that fiat currencies typically last between 40-50 years before their demise or transition into something... different.

    I think it's very likely that we're in for some significant changes ahead. Lots of "problems" in the developing world that are about to get a well packaged "solution". I can see CBDCs tieing in nicely to this "new world order".


    Maybe at $30,000 where people perceive it to be in that range of value. Not so much when the naked swimmers decide it's time to evacuate. I mean, I think the majority of holders are there for speculative means. They'd abandon ship in a heartbeat if there were no capital gains involved. Most of what's holding the crypto price at these levels would surely be speculation. It's bubble territory on that front. But bubbles can be blown a lot larger, for a lot longer that what we've seen so far.

    I'd say yes and no.

    All it takes is two parties both seeing the value of silver who wish to barter. Same could apply to anything but silver wasn't used as money by mistake.

    I actually think that PM's and Crypto can have a symbiotic relationship if done right. I've seen several pop up but they appear poorly structured with their $$ value relationship to the metals. Much like a scam where you pay for an Oz and get 1/10th of an Oz.
     
  14. mmm....shiney!

    mmm....shiney! Administrator Staff Member Silver Stacker

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    The difference with fiat currencies in the past compared to today is that the States issuing them were once revenue constrained, that is no longer the case. We now have keyboards and computer screens issuing currency for us.

    As I said above I believe that the threat of CBDCs is largely overblown, especially when it comes to any implementation of a "new world order", something which nation states would vehemently oppose. Maybe the Eurozone would move to implementing a CBDC as the member states have lost sovereignty over the issuance of currency, however that scenario is less likely in nations such as the US, UK, Oz etc. CBDCs pose a greater threat to the current commercial banking system and have a mountain of legislation to overcome before they can even be considered for rolling out to the people, for that reason I can't see widespread implementation at a retail level.

    There's not a market on the planet where holders of assets are not speculating on the chance of a capital gain. The beauty of on-chain data though is that it can be analysed to determine user behaviour in an attempt to work out at what point any capitulation occurs that would either send the price barreling to the bottom or signal the start of a new bull market. That quality of data is largely absent from most other markets but on the BTC blockchain all transactions, sender and receiver addresses are there for the world to see.

    Glassnode carries out regular research comparing Long Term Holder's (LTH) profitability with those of Short Term Holder's (STH) in an attempt to identify points of capitulation. The latest data suggests that LTH capitulation is dominated by those who bought in during the 2020-2021 bull cycle. Those long term holders who entered the market prior to the last bull remain largely unfazed.

    https://insights.glassnode.com/the-week-onchain-week-18-2022/

    What data are you using to arrive at your conclusions?
     
  15. markcoinoz

    markcoinoz Active Member Silver Stacker

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    We could be in for a very bumpy ride over the next few months.

    [​IMG]
     
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  16. STKR

    STKR Well-Known Member Silver Stacker

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    But legislation can easily be overcome when the right crisis or series of events come along. Call in pandemic legislation. Call in anti-terrorism legislation.

    I do agree that it wouldn't be an easy transition in normal terms.

    Yeah, I'm not buying that those on the long-term holders list won't sell BTC if it becomes a stale investment There will always be the stubborn, "defiant to the end" types, but they won't be enough keep the party going. People will just move on to the next opportunity. You're a good example if this with your experience and perception of Gold and Silver.

    I don't base it on data, I base it upon my understanding of market psychology and psychology in general.
     
    Last edited: May 24, 2022
  17. mmm....shiney!

    mmm....shiney! Administrator Staff Member Silver Stacker

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    That's assuming that the LTH are not interested in the many other varied uses for BTC aside from its investment thesis.

    Yep, I've recognised the next opportunity, it's a technology thing, always has been since year dot, not only does the human experience evolve but so do the tools we employ to satisfy our ends. As far as the gold and silver thing go, I see a place for exposure to gold and silver in an investment portfolio, I just don't happen to own a lot of hard assets any more because I believe there's more potential to profit from those metals in the share market.
     
    Last edited: May 24, 2022
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  18. STKR

    STKR Well-Known Member Silver Stacker

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    Well, you're a good example of this again. If silver and Gold continued to perform on a level that produced 1000% gains, why would you step away from it? You wouldn't. It's performance would justify a greater presence in your portfolio. The same is true for silver.

    You became salty at PMs because you "foolishly" bought into the hype that they would perform to your expectations. Failing to do so, you saw your decisions to hold physical PM's as an "opportunity lost". Would that have been the case if they performed to your expectations on an investment level? No.

    So why do you think that LTH won't be running to the door to seek other opportunities? They may continue to hold a fraction of their position in BTC - much like you probably still hold a fraction of your position in Gold and Silver. But it's silly to expect market participants to stay true to BTC when it's primary benefit (and/or the primary reason why It's purchased) is capital growth.

    My point is: BTC's realised growth and the perception of capital growth is the driving force behind capital inflows. It's not because BTC is seen as "The hardest money in the history of the world". It's not because people want to use it as a medium of exchange, Nor is it because it solves Problems and fulfills needs beyond it's investment status. Participants mainly Hold BTC to cash out their gains into fiat.

    When an assets value is inflated far beyond it's value in terms of real world use, it becomes a bubble. It has risen on the back of speculation in the Crypto Casino, and it will burst on the back of speculation in the Crypto Casino. I think it has the potential to go a lot further than it's ATH because of it's weighted speculative interest, but that very same speculative interest is what poses the greatest threats.
     
  19. mmm....shiney!

    mmm....shiney! Administrator Staff Member Silver Stacker

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    There have been no 1000% gains for gold. I've had them and more in crypto and the share market though.

    I bought into the hype that the system as we know it will crash and that gold and silver will be restored to their place as sound money. I'm smarter now. I hold a different position. That's not something I think will happen nor wish to happen as it would be a backward step in the evolutionary process for mankind. It cost me a bit of money that learning experience but they're the best lessons in life I'm told. :oops:

    What I've learned and why I've changed my investment approach:

    1. The opportunity cost of largely holding PMs as opposed to diversifying across a variety of asset classes,
    2. the real experience of how inflexible and how much of a PITA holding physical metals is from a compliance point of view when you live in a corner of regional Australia that takes you the good part of 8 hours to drive (or if you're lucky $500 in flights/fares) to where your assets are stored, not to mention the storage costs etc,
    3. an avid desire to learn and keep abreast of new ideas especially in economics, finance and technology that has taught me that a return to any form of sound money based upon a commodity standard is a backward move for any national economy.
    4. learning about and investing in other asset classes such as shares, some of which have exposure to PMs

    If PMs had performed to my initial expectations then I still would have sold them off as that was always my intention, swap PMs for RE. But I didn't have decades to wait for an opportunity that may or may not have/ever happened, and which I now know is unlikely so I had to make a rational investment decision and divest of much of my holdings in order to diversify.

    I also realised my previously held theories on why I should hold PMs were mistaken.

    I've addressed that a number of times, see the Glassnodes insight posted above and when I listed the use cases for BTC.

    What evidence would change your mind that would show you that individuals invest in BTC for more than just capital gain?
     
    Last edited: May 25, 2022
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  20. markcoinoz

    markcoinoz Active Member Silver Stacker

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    Overall Shiney, I agree with your thinking.
    I cannot see BTC to be the be it to end all.
    Sure, Blockchain will continue to develop, along with the way we invest.
    Where BTC, ETH or Gold fit within the pie over the next 10 or 20 years, I have no idea.

    Disruptive technologies is probably the most exciting growth potential going forward.
    I don't see Gold sitting in that mix.
    Just as the internet ushered in a new technology that transformed our lives over the last 30 years, I believe
    we are witnessing something similar in its infancy.

    The book by Jeff Booth - The Price of Tomorrow, is a great little book that explains how disruptive technologies continue to grow exponentially
    outpacing and transitioning itself to be the next Leaders in the new frontier. They are the next Amazon, the next Google, Microsoft, Apple and as
    James from Invest Answers rightly points out, Tesla. Get on early and follow the fastest horses. Initially, I wasn't a Tesla fan, as I looked at the
    costs and blow outs, including the initial adoption. Well the adoption has certainly changed in a short amount of time. Sure, there will be supply issues
    and not meeting targets. However, they are not major long term issues and can be fixed.

    Point being, Disruptive Technologies grow exponentially outpacing old systems.
    The key is searching for them, do the due diligence and then invest into them for the long term.
    Just my few cents worth.
     
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