Why is Bitcoin "digital gold" crashing right now?
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Brendan Burgess
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Max
I was responding to tecate's use of the term.
The point is that it's the same age group who chase the latest investment fad and get burnt badly.
Brendan
I was responding to tecate's use of the term.
The point is that it's the same age group who chase the latest investment fad and get burnt badly.
Brendan
Brendan Burgess
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tecate
The common feature is the abandonment of rationality.
Abandoning any of the rules of finance or investment analysis.
And a bit of over-exuberance as well.
I am sure that I have suggested it before but read https://en.wikipedia.org/wiki/Extraordinary_Popular_Delusions_and_the_Madness_of_Crowds
It's shocking for me to be able to sit here watching these things repeating themselves. The difference now is that we have a very good contemporaneous record of it. You will be able to look back in n years and say "How could I have been so stupid? I was a millionaire in Bitcoin and I could have cashed out!"
Brendan
This isn't in any way exclusive to crypto/blockchain. The investment aspect of every new technology goes through a hype cycle. There's no disagreement there.
That's a discussion that we've already had - the normal rules don't apply OR they're the normal rules as they apply to the determination of the fair price of gold.
I don't maintain complete exposure to crypto. However, as it stands today, I also don't share the same thesis as you do (I.e. bitcoin will go to zero -it's just a matter of when). My belief is that we will see further 80% corrections as it progresses. 2017/18 wasn't the first such occasion. However, it appears to me that we're also heading higher.
I'm not in disagreement with the need for caution. For that reason, I've stepped out of the market on a number of occasions. However, after the 2017/18 surge and correction, had I ran with the opinions expressed here on AAM, I would be down considerably on my current position.
I don't have any problem with an abundance of caution. However, as previously stated you fail to acknowledge that there is anything tangible in decentralised crypto - and that's not credible to me. Perhaps you simply believe there's absolutely nothing there or perhaps you don't want to admit it in case it would be seen as an endorsement. The very same with your dot com boom example. Yes, plenty got their fingers very badly burnt. However, there were also those that found considerable upside - with the very same tech/projects that arose from that crash. Why can't you acknowledge that?
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Brendan Burgess
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You are repeating the same arguments.
I am sure that I have recognised that there is some application for crytpto just as there is for paper cheques. It does not mean that the cheques have any intrinsic value.
And of course people made money investing in tech shares. I have not disputed that.
I don't know if you were around then. But a share split could result in the share price increasing. Complete madness. The same with bitcoin. They increase the supply and some of the enthusiasts twist that around to say that the supply is reduced.
It's the exact same lack of reason.
Greed makes people stupid.
But if you see an 80% fall coming, then fair play to you. I see a 100% fall coming.
Brendan
I am sure that I have recognised that there is some application for crytpto just as there is for paper cheques. It does not mean that the cheques have any intrinsic value.
And of course people made money investing in tech shares. I have not disputed that.
I don't know if you were around then. But a share split could result in the share price increasing. Complete madness. The same with bitcoin. They increase the supply and some of the enthusiasts twist that around to say that the supply is reduced.
It's the exact same lack of reason.
Greed makes people stupid.
But if you see an 80% fall coming, then fair play to you. I see a 100% fall coming.
Brendan
I don't think you are in any way understanding the proposition at hand. We've been over the intrinsic value debate so I won't labour it here.
So the point is that they weren't wrong in terms of the proposition. They were wrong in terms of over-exuberance (or at least a proportion of them were).
We've had that discussion - so there's little point in re-opening it other than to say that I disagree. Halving the mining reward isn't increasing the supply.
I do - against the background of a fixed supply asset with an overall upward trajectory.
Do you see this advisory from JPMorgan then as treachery? Is this their honest appraisal or a ruse to suck in the feeble of mind such as myself?
DublinHead54
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Tecate,
I would treat the JPM note in context rather than a fact. I am not disagreeing with the opinion, I'll wait until I get the full note to formulate that. What I am pointing out is that every bank has a research team, and those research articles present an opinion on the topic most commonly in equities with a Buy / Sell / Hold rating. Not every prediction becomes a reality and they are often wrong.
What is more important than the content of the note is in support of your argument that Bitcoin is becoming more institutionalized and the JPM note is a recognition of the further legitimizing Bitcoin as a store of value for Wall Street.
I would treat the JPM note in context rather than a fact. I am not disagreeing with the opinion, I'll wait until I get the full note to formulate that. What I am pointing out is that every bank has a research team, and those research articles present an opinion on the topic most commonly in equities with a Buy / Sell / Hold rating. Not every prediction becomes a reality and they are often wrong.
What is more important than the content of the note is in support of your argument that Bitcoin is becoming more institutionalized and the JPM note is a recognition of the further legitimizing Bitcoin as a store of value for Wall Street.
Absolutely - in this space above any other, there's a need for a healthy cynicism.
Agreed.
If this was an isolated instance, then I'd be inclined to be more wary of the intent behind it. However, there seems to be an emerging consistent view along the lines of their note.
Brendan Burgess
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Why would I see it as treachery? That is a bizarre comment. Does it relate to something I said? I am mystified by it.
The analyst who wrote that note is clearly wrong. And they are often wrong.
Brendan
I was just curious if you found the current JPMorgan analysis to be disingenuous or otherwise - simple as that.
Well either you or they are wrong.
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Brendan Burgess
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You will find very few conspiracy theories in my 41,818 posts.
Why look for disingenuity when incompetence is so widespread?
Brendan
Brendan Burgess
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Wolfie
Have you read the book?
It's about how crowds get deluded. You and the rest are deluded into thinking that a bag of hot air is worth something.
This delusion can persist for a surprisingly long time.
Brendan
Have you read the book?
It's about how crowds get deluded. You and the rest are deluded into thinking that a bag of hot air is worth something.
This delusion can persist for a surprisingly long time.
Brendan
Thanks Brendan, I have given your opinion due consideration but at this juncture in time I will have to respectfully disagree.Today's u-turn example.
November 2017: CEO of S.E. Asia's largest bank (DBS) - "We see bitcoin as a bit of a ponzi scheme."
27 Oct 2020: "Singapore's biggest bank (DBS) is launching a crypto exchange."
November 2017: CEO of S.E. Asia's largest bank (DBS) - "We see bitcoin as a bit of a ponzi scheme."
27 Oct 2020: "Singapore's biggest bank (DBS) is launching a crypto exchange."
Talking of getting burned, the generations that chased property, stocks, commodities, etc got burned repeatedly, once every number of years.
So far in crypto, only the people that bought from september to november 2017 got burned, maybe BOHA is the way to go then...
Did it ever cross your mind for a split second that the deluded crowds might include you?
I’m not saying you are, but it is still a possibility, isn’t it?
Brendan Burgess
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Hi Gus
These items all have value. From time to time they are overvalued and so people who invest in them might see them fall, but they usually recover.
But tulips, ponzi schemes, and Bitcoin have no value. It's not a question of well they are worth x but the overenthusiasm prices them at 2x. Bitcoin is a sham which is worth nothing.
Brendan
According to its earnings call earlier today, MicroStrategy plans on buying more bitcoin with excess cash as the company goes forward.
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