Key Post Bitcoin is a clearly identifiable economic bubble
- Thread starter Brendan Burgess
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Alternative thought - rather than being the bubble, perhaps Bitcoin is the pin:
Bitcoin's Role in Deflating the Everything Bubble
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I'm open to correction but it appears to be via this thread started in Feb. 2015.
Duke of Marmalade
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The trajectory of bitcoin since 2017 has truly surprised me. But I am as convinced as ever that it is a nonsense and take considerable comfort that nobody in the Nobel ranks or indeed Warren Buffet have waivered one iota in their dismissal of it.
So why has it sustained so long, albeit well below its ATH? That piece from The Bitconomist kindly provided by @tecate goes some way to explain the situation. It begins with a well illustrated description of how Nixon's abandonment of the gold standard in 1971 has led to massive inflation and increases in asset prices to the point where they argue conventional assets now have a "monetary premium" i.e. are over valued relative to their "fundamental value".
This is all quite convincing with a play on how younger folk are being screwed. So it sets up the next part which is how bitcoin is the salvation (they call it the "silver lining"). And the key attribute is that there can be only 21 million of them. By a sleight of hand the reader might at this stage think bitcoin has "fundamental value" but that is never explained. In the words of crypto's new hero, judge Torres, crypto is just a string of electronic digits. But here is where the great self delusion pivots - it has no fundamental value, if it had we could try to put a value on it. So instead The Bitconomist makes estimates (below) of how much bitcoin's share of world's assets might be. This leads to predictions on the "extremely conservative" side of $500k per bitcoin up to more "aggressive" predictions of $11 million per bitcoin.
Millennials have read all about the billionaires that have been spawned by this craze, and indeed do feel a tad cheated, so they are easy fodder for this total snake oil which is packaged in oh so convincing a manner. IMHO nonsense like this should be tackled along with the other well aired abuses of our modern social media.
So why has it sustained so long, albeit well below its ATH? That piece from The Bitconomist kindly provided by @tecate goes some way to explain the situation. It begins with a well illustrated description of how Nixon's abandonment of the gold standard in 1971 has led to massive inflation and increases in asset prices to the point where they argue conventional assets now have a "monetary premium" i.e. are over valued relative to their "fundamental value".
This is all quite convincing with a play on how younger folk are being screwed. So it sets up the next part which is how bitcoin is the salvation (they call it the "silver lining"). And the key attribute is that there can be only 21 million of them. By a sleight of hand the reader might at this stage think bitcoin has "fundamental value" but that is never explained. In the words of crypto's new hero, judge Torres, crypto is just a string of electronic digits. But here is where the great self delusion pivots - it has no fundamental value, if it had we could try to put a value on it. So instead The Bitconomist makes estimates (below) of how much bitcoin's share of world's assets might be. This leads to predictions on the "extremely conservative" side of $500k per bitcoin up to more "aggressive" predictions of $11 million per bitcoin.
Millennials have read all about the billionaires that have been spawned by this craze, and indeed do feel a tad cheated, so they are easy fodder for this total snake oil which is packaged in oh so convincing a manner. IMHO nonsense like this should be tackled along with the other well aired abuses of our modern social media.
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Brendan Burgess
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And they would have to assume that all the other cryptos went to zero so that Bitcoin got some monopoly.
And they would have to assume that a substantial proportion of the population lost their reasoning faculties.
A much more conservative assumption is that there will be a great dawning of the obvious on people and Bitcoin will fall to zero.
Brendan
And they would have to assume that a substantial proportion of the population lost their reasoning faculties.
A much more conservative assumption is that there will be a great dawning of the obvious on people and Bitcoin will fall to zero.
Brendan
I might have cut you some slack in bringing this up in 2017 but not today. Two things that the vast majority of people accept:
'Crypto' ≠ Bitcoin
Around 2017 there were many that presented with projects to 'improve' upon bitcoin and in 'improving' upon bitcoin they might have covered one facet while totally ignoring other more fundamental and critical facets. Most people accept now that these things are not the same. By and large, 99.5% of 'crypto' projects are pursuing different use cases entirely. They're not comparable.
The second point is that most folks accept that the vast majority of 'crypto' projects will vaporize.
That you still can't distinguish between 'crypto' and Bitcoin in 2023 Brendan, that's quite something.
Meanwhile the Duke defaults to his 'no fundamental value' argument when this past week has seen a US Presidential candidate recognize the lack of fundamental value in the US dollar by suggesting that there's a need to get some hard asset backing behind that muck via gold, platinum, silver and bitcoin. It won't work because you have a non-finite asset at the front end but it is illustrative of what has value and what doesn't.
He goes on about the central bank set (because that's what the nobel set are) and how they have not been convinced. Turkey's don't vote for Christmas. Bitcoin emerged as a direct response to the failings of the system that they espouse. Of course they're going to be opposed and be the last hold-outs.
Two years ago Larry Fink stopped Musk from accepting BTC as payment for Tesla product on the basis of this ESG nonsense the likes of BlackRock and Vanguard are pushing. A couple of years ago, he said that bitcoin was a 'network of money laundering.' Now BlackRock is pursuing a Bitcoin ETF and Larry has changed his tune entirely. Meanwhile, Vanguard - one of the leading champions of the ESG agenda - has invested in two of the leading Bitcoin miners.
We keep moving further away from Brendan's notion that 'Bitcoin will fall to zero.'
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Brendan Burgess
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Don't include me in that "we". Be absolutely sure. It is going to zero.
I have to agree that people have taken leave of their reason for much longer than anyone expected and for longer than any other bubble, but it's still going to zero.
Brendan
Duke of Marmalade
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This is what @tecate chooses as his Sunday reading. I wonder does he agree with this assessment.The Bitconomist said:
Using The Bitconomist's scientific method. About 99% of those who read this and similar are like me and see it for what it is, utter B/S. But that doesn't effect the bitcoin price as we will never be buyers or holders. But it just needs 1% to be duped by this pump and dump propaganda to sustain some speculative buying/holding interest. I guess this is what I have missed. I was concentrating on the common sense extolled by the Nobel Laureates but missing the fact that with social media the sort of drivel promulgated by the likes of The Bitconomist can sustain the nonsense. For how long? It may need the sort of SEC developments that @letitroll predicts to protect gullible people from this sort of outrageous propaganda.
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You know perfectly well that was far from the interesting part of Zac Gignard's write-up and you know perfectly well I was drawing attention to the notion of the 'everything bubble', and how unhelpful it has been for society to have assets like property/real estate inflated beyond their fundamental values such that there's a monetary premium, brought about by the manipulation of the monetary system by your beloved central bank alchemists.
Beyond that, the guy is as entitled as anyone else to speculate on future value (especially when its an extension of the idea he put forward - the idea that you have skipped over entirely - as you clamber to try and seize on something...anything).
You can join @letitroll in wishing/thinking/hoping that you can prevent the march of decentralized money but its rate of development can only be slowed down by central governments - that's as far as it goes.
If he is an example of the great unwashed of social media, why then don't you have the ability to critique what he wrote rather than seizing on future price estimation, which was far from the cut and thrust of his point? And you yourself are not on firm ground in taking anyone else to task on that item in any event. In early 2018, you smugly expressed the view that it had been put down for good and that it would fizzle out from there. Over the next couple of years every second post of yours pointed to Bitcoin's Dec. 2017 peak price of $20K with the suggestion that it would never reach that point again. He has much more right to put forward his view on that than you do - especially so when he lays out clear rationale for arriving at that conclusion.
Here are your more recent predictions made in the depths of this latest bear market.
You claimed that Bitcoin had a 50% chance of never seeing $20k ever again. Your prediction was wrong.
A 75% likelihood of it never crossing $30k again. Your prediction was wrong.
It doesn't appear to me that you should be having a go at anyone on future price prediction.
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Duke of Marmalade
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Lots of people have difficulty with probability. By your reasoning my 50% was always going to be wrong as I was also quoting 50% that it would rise above $50k.
As I say you are not alone in struggling with the concept of probabilities.
So I presume I am not going to get your views on The Bitconomist's predictions. Just your view on the "extremely conservative" $500,000 will suffice.
You think that you can't be taken to task because this was a % expression of probability of outcome rather than an absolute prediction and you'd be wrong. I would say that the means by which you arrived at those probability levels was wayward - borne out by the fact that BTC ripped through them while being far still from setting foot back in bull market territory.
Your next prediction in that list is a 95% probability that it will never reach $50K ever again. Don't you think you should revise that? There's every likelihood we take a dip down over the short term but a 95% probability of it never reaching $50K again seems far from a realistic level of probabilities to me. Didn't you tell me at some stage that your professional life used to revolve around probabilities? How on earth did you calculate these levels of probability?
You know well that over the course of 5+ years of discussion, I've not spent much time and energy in the area of future price prediction even though it has still been discussed at length here. Beyond that, once again, you are ignoring what was obvious from the start, and what I - in my last post - pointed out to you explicitly. The main thrust of Zac Gignard's write-up is what is interesting here. It is also what I was driving at - in referencing what he wrote. You want to ignore that because its 'inconvenient' to you - and take this discussion down a previous rabbit hole. Great to see you're working on mastering the art of distraction, Duke.
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Duke of Marmalade
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@tecate I'll chalk that no response as you saying there is a 50% chance of bitcoin surpassing its "extremely conservative" $500,000 valuation by year end. If it finishes say between $450,000 and $550,000 I will congratulate your astuteness.
You are suggesting that I have taken your bitconomics intervention on a distraction. I disagree. The credibility and the bias of the author is always relevant in any discussion on economics and boy did those predictions as well as the description of bitcoin as a "silver lining" betray both bias and a serious lack of credibility. Where do you get this stuff?
You are suggesting that I have taken your bitconomics intervention on a distraction. I disagree. The credibility and the bias of the author is always relevant in any discussion on economics and boy did those predictions as well as the description of bitcoin as a "silver lining" betray both bias and a serious lack of credibility. Where do you get this stuff?
Go ahead once more and ignore the cut and thrust of his write up and try and get this bogged down into price predictions. The only price predictions I have made is that a finite asset with ever growing network effect and thus demand will have no choice but to experience upward price movement. That and I've a 'bet' with @letitroll that the bitcoin unit price will exceed $67,617 by 2030.
Beyond all of that, I've been led astray by your mistruths and done Gignard a disservice. He hasn't presented a price prediction. He's presented a calculation based on a particular assumption. You can say if you like Duke that said assumption is a step too far and will never happen. That doesn't make what he set out wrong.
Meanwhile, we have boomers on here predicting a bitcoin price of $0 - now that's the most ridiculous naysayer misinformation going.
Thanks tecate.......
Duke of Marmalade
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He says "$500,000 should be considered an extremely conservative scenario". I wasn't saying he couldn't use a calculator, but the way I read that is as an opinion, prediction call it what you want, of the bitcoin price potential. But, look, I don't want to spoil your Sunday reading. If you think he was just showing off his use of a calculator and not implying anything in a judgmental nature on how the bitcoin price might go, I suppose I should be glad that you are trying to give the boul' Gignard some deniability.
He stated that having first outlined that he is working through that having first assumed a scenario in which only 1% of all global asset value (roughly $10 trillion) flowed into Bitcoin.
What calculations did you use to come up with your Bitcoin price probabilities (besides bitterness and rage distilled into tears)?
Duke of Marmalade
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@tecate This is my last word on this, I know it won't be yours.
He stated that "$500,000 (bitcoin price) should be considered an extremely conservative scenario". We ll know what that means. The ridiculous squirming you are doing to try and deny this at least shows even you are embarrassed by it, after all it was you that brought the guy into this thread. Please be careful to vet any of your future sources.
He stated that "$500,000 (bitcoin price) should be considered an extremely conservative scenario". We ll know what that means. The ridiculous squirming you are doing to try and deny this at least shows even you are embarrassed by it, after all it was you that brought the guy into this thread. Please be careful to vet any of your future sources.
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What I encouraged you and others to do was to consider and critique the main thrust of the idea that the guy put forward. I think this is the fourth time I've pointed out to you that it was precisely that that was my rationale for citing his write-up. Although I already knew you were purposely avoiding that consideration and latching on to anything you could possibly find to try and work a counterpoint - I asked you explicitly to do so. Each time, you've very deliberately chosen not to do that.
On the guy himself, I didn't say he was any sort of expert (he isn't), and with that I didn't invite anyone to 'assume' that he's right in what he has set out. You complain about social media - but the good thing about what he has written up is that anyone is free to challenge it. You've chosen to do your best to undermine what he's set out by inviting others to be shocked at a calculation he has made based on what he clearly stated was an assumption.
Now he's a nobody just like you. Unlike you, he has provided calculations/estimations based on the assumption that he clearly set out. You on the other hand have not. Can you outline what calculations you used to determine this =>
Bitcoin never again to reach the following prices:
$20K - 50% probability (and the second time you've reached the wrong conclusion on $20K)
$30K - 75% probability
$50K - 95% probability
I invited you to revisit that last probability determination. In the meantime, I'd be really appreciative to hear what formula you used. I suspect its driven entirely by the burning desire (admitted long since by you) to see bitcoin fail.
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Brendan Burgess
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tecate
You can't calculate the price of BTC because it has no value.
The value is zero. The eventual price will be zero.
I thought I could predict the limits of the stupidity of the BTC advocates, but I was wrong. the stupidity appears unlimited.
That other guy did a ridiculous calculation
Whatever way you look at that it is a forecast. He set out a lower limit and an upper limit.
Brendan
You can't calculate the price of BTC because it has no value.
The value is zero. The eventual price will be zero.
I thought I could predict the limits of the stupidity of the BTC advocates, but I was wrong. the stupidity appears unlimited.
That other guy did a ridiculous calculation
Whatever way you look at that it is a forecast. He set out a lower limit and an upper limit.
Brendan