Is cryptocurrency the greatest market bubble of all time?

[Captain_Chaza]

The difference being legal gambling is regulated and the odds of winning in each type of game are known. When you speculate on crypto, it's all about price movement/momentum on those unregulated exchanges, there is no underlying business generating revenue or asset possessing intrinsic value. A bit like trading currency pairs on Forex exchanges except it's real "currency" and those trading it successfully are skilled leveraged risk managers (perhaps no more than 5% of all FX traders).

It's also like Buying BHP 30 years ago

 

[Craton]

It's also like Buying BHP 30 years ago

Hey, I resemble that remark.

 

[Sharkman]

The difference being legal gambling is regulated and the odds of winning in each type of game are known. When you speculate on crypto, it's all about price movement/momentum on those unregulated exchanges, there is no underlying business generating revenue or asset possessing intrinsic value. A bit like trading currency pairs on Forex exchanges except it's real "currency" and those trading it successfully are skilled leveraged risk managers (perhaps no more than 5% of all FX traders).

except it does have value, just only in certain rare niches at the moment. the vendor i bought most of my PC components from (a large US company) was perfectly willing to accept BTC (and a few other coins, even DOGE) in exchange for those PC components, which do have intrinsic value. they're running a business, they wouldn't just give me those components for something that's worthless, so clearly they do think it has value.

 

[Captain_Chaza]

except it does have value, just only in certain rare niches at the moment. the vendor i bought most of my PC components from (a large US company) was perfectly willing to accept BTC (and a few other coins, even DOGE) in exchange for those PC components, which do have intrinsic value. they're running a business, they wouldn't just give me those components for something that's worthless, so clearly they do think it has value.

I don't!
Have you tried Amway and Tupperware?
IMHO A well written Chain-Letter works the Best of All

 

[Tyre Kicker]

I have always thought This was a Brilliant Pyramid Scheme
and that the last one holding "LOSES!"
View attachment 149245

Was my thoughts early on and nothing has changed since.

Pulled in the suckers and the social media addicted gen (who live their lives through their phone) with sheer saturation of crypto adds, fads and lingo.

It’s amusing to me when people who truly believe (for some inexplicable reason) they were going to buy houses, cars, boats, travel the world, retire etc before they were 30.

Lol.

And some are still drinking the koolaid.

True value of Bitcoin is only $16K or so further downward.

 

[Trader X]

except it does have value, just only in certain rare niches at the moment. the vendor i bought most of my PC components from (a large US company) was perfectly willing to accept BTC (and a few other coins, even DOGE) in exchange for those PC components, which do have intrinsic value. they're running a business, they wouldn't just give me those components for something that's worthless, so clearly they do think it has value.

Price and value are quite different things. Crypto has a price, that price is represented by a local fiat currency and converted into that currency to complete the transaction for the business entity. As most businesses well understand you don't keep BTC in your treasury or on your balance sheet, far too volatile in price for that. For the sake of getting a sale, transacting in crypto has a holding risk that necessitates rapid conversion to local fiat (USD in your example). For low margin sales like PC components, accepting BTC means your profit margin can literally evaporate and turn into a loss within minutes.

 

[sptrawler]

I would guess the big problem for crypto at the moment, will be the herd heading for the exits.
A bit like a run on the banks, except the banks can tap the RBA the Govt and international markets to prop them up, it will be interesting to see if the crypto slide halts or accelerates.

 

[divs4ever]

except it does have value, just only in certain rare niches at the moment. the vendor i bought most of my PC components from (a large US company) was perfectly willing to accept BTC (and a few other coins, even DOGE) in exchange for those PC components, which do have intrinsic value. they're running a business, they wouldn't just give me those components for something that's worthless, so clearly they do think it has value.

indeed a valid point , but then the other widely accepted currency is a fiat currency ( which is backed by government promises .. they don't even promise to pay in gold or silver in recent times )

interesting times

 

[Value Collector]

except it does have value, just only in certain rare niches at the moment. the vendor i bought most of my PC components from (a large US company) was perfectly willing to accept BTC (and a few other coins, even DOGE) in exchange for those PC components, which do have intrinsic value. they're running a business, they wouldn't just give me those components for something that's worthless, so clearly they do think it has value.

That doesn't mean that the coin has value, it just means the person accepting it believes it does, they can be wrong.
I imagine in the height of the tulip craze people would have shaped tulips for product too.

 

[Value Collector]

indeed a valid point , but then the other widely accepted currency is a fiat currency ( which is backed by government promises .. they don't even promise to pay in gold or silver in recent times )

interesting times

even people that say they accept Bitcoin still are actually basing their prices on the fiat currency, for example if the bitcoin price halved over night their bitcoin prices would change, so its not really a currency they are accepting, its more like a commodity.

 

[InsvestoBoy]

except it does have value, just only in certain rare niches at the moment. the vendor i bought most of my PC components from (a large US company) was perfectly willing to accept BTC (and a few other coins, even DOGE) in exchange for those PC components, which do have intrinsic value. they're running a business, they wouldn't just give me those components for something that's worthless, so clearly they do think it has value.

Is this really what happened?

More likely your vendor was using a payment gateway that automates the process of receiving any cryptocurrency and converting it to USD, giving customers who wish to to pay in cryptocurrency with the vendor able to remain agnostic on the merits or lack thereof of whichever cryptocurrency they "accept".

In any case the vendor can't pay suppliers, employees, taxes etc in whatever cryptocurrency, so they wouldn't retain it on their balance sheet even if they did accept it directly.

One might argue they could retain their after tax profits on balance sheet in cryptocurrency form, but I doubt any business owner is stupid enough to do such a thing.

 

[Garpal Gumnut]

Everytime I see the title of this thread appearing under "what's new" I feel like shouting out YES.

So tonight I will.

Q. Is cryptocurrency the greatest market bubble of all time?​

A. YES

gg

 

[Tyre Kicker]

Definitely

 

[divs4ever]

even people that say they accept Bitcoin still are actually basing their prices on the fiat currency, for example if the bitcoin price halved over night their bitcoin prices would change, so its not really a currency they are accepting, its more like a commodity.

i didn't dabble in cryptos , but sometimes have been swapping my fiat into durable ( storeable ) commodities

i can see governments trying to clamp down on cryptos as they are competition to their own ponzi scheme ( the fiat currencies )
interesting times ahead ( at least you can store cryptos in a 'cold wallet ' try doing that with CBDCs )

 

[Sharkman]

indeed a valid point , but then the other widely accepted currency is a fiat currency ( which is backed by government promises .. they don't even promise to pay in gold or silver in recent times )

interesting times

yes that's what i was getting at, the value of fiat is in its near universal acceptance as a means to obtain the goods and services that have utility to a person. as you say, it's not physically backed by anything and has no intrinsic value either. i was only pointing out that i could have used BTC in the same way (granted, in a niche situation) ie. as a means to obtain some goods that i wanted. what the company does with the BTC afterwards is their own business, i don't know whether they swapped it out for fiat straight after or not. they may well have kept part of it on their books as a long term play. but the fact remains that i could have used BTC to obtain physical assets that have utility to me, had i wished to do so.

That doesn't mean that the coin has value, it just means the person accepting it believes it does, they can be wrong.

the same could be said for fiat too, it's just been around for much longer and so has (a lot) more people who are willing to believe it does. though that may not necessarily be true in some nations.

 

[Value Collector]

the same could be said for fiat too, it's just been around for much longer and so has (a lot) more people who are willing to believe it does. though that may not necessarily be true in some nations.

Thats why I said this back in post 230

"How much would bitcoin be worth if you took out all the people buying it that just wanted to make money, and left the only people in the Bitcoin market those that want to use it as a currency?"

If bitcoin was actually just being used as a genuine currency, it would be a different story, but its not actually being used as a genuine currency. So even as a currency at the moment it has next to no value.

I think we could all agree that even fiat currency has no value in itself, its simply a token we use to record and carry out transactions, its like an IOU, its coins and paper themselves have little value, as you can see in the many debunked currencies that exist, any one that said the way to riches was to store currency is not thinking straight.

 

[Dona Ferentes]

Brisbane-based crypto exchange Digital Surge has frozen withdrawals, pointing to its exposure to bankrupt global player FTX.

Digital Surge, which is a six-year-old company, revealed its vulnerability to Sam Bankman-Fried’s collapsed trading platform in an email to customers.

“Digital Surge does hold some limited exposure to FTX, “Since hearing the news, we have worked hard to best understand the situation as it relates to our users.”

Dan Rutter, the co-founder and CEO, recently said the company was targeting self-managed super funds through its “Earn” product, which supposedly offers investors annual returns of up to 23 per cent.

- too good to be true!

 

[The Triangle]

Brisbane-based crypto exchange Digital Surge has frozen withdrawals, pointing to its exposure to bankrupt global player FTX.

Digital Surge, which is a six-year-old company, revealed its vulnerability to Sam Bankman-Fried’s collapsed trading platform in an email to customers.


Dan Rutter, the co-founder and CEO, recently said the company was targeting self-managed super funds through its “Earn” product, which supposedly offers investors annual returns of up to 23 per cent.

- too good to be true!

The fear we should all have is crypto 'dealers' paying/bribing investment managers in untraceable crypto coin to invest our super $$$ in their dodgy crypto Ponzi schemes.

Warning: Self-managed super funds and crypto investments | ASIC

asic.gov.au

 

[Trader X]

If bitcoin was actually just being used as a genuine currency, it would be a different story, but its not actually being used as a genuine currency. So even as a currency at the moment it has next to no value.

I think we could all agree that even fiat currency has no value in itself, its simply a token we use to record and carry out transactions, its like an IOU, its coins and paper themselves have little value, as you can see in the many debunked currencies that exist, any one that said the way to riches was to store currency is not thinking straight.

Only the most diehard bitcoiners are still pushing the currency use case for Bitcoin, even though it's unsuitable for this purpose as the El Salvador experiment has clearly demonstrated.

In fact, maximalists like Saylor and Breedlove advise never to sell using the scarcity argument as their reasoning for why BTC's price will eventually go to the moon. Their hypothesis is that, as fiat money supply continues to grow along with monetary debasement, the fixed number of Bitcoins must translate to a rising price in terms of fiat. Many grandiose assumptions are built into this hypothesis that are very unlikely to happen. At -75% over the last 12 months in terms of valueless fiat, BTC can't be lauded as an inflation hedge or store of value.

 

[Dona Ferentes]

FTX : insolvency expert John Ray ... said in a recent bankruptcy filing:

“I have over 40 years of legal and restructuring experience. I have been the Chief Restructuring Officer or Chief Executive Officer in several of the largest corporate failures in history. I have supervised situations involving allegations of criminal activity and malfeasance (Enron). I have supervised situations involving novel financial structures (Enron and Residential Capital) and cross-border asset recovery and maximization (Nortel and Overseas Shipholding). Nearly every situation in which I have been involved has been characterized by defects of some sort in internal controls, regulatory compliance, human resources, and systems integrity.

“Never in my career have I seen such a complete failure of corporate controls and such a complete absence of trustworthy financial information as occurred here. From compromised systems integrity and faulty regulatory oversight abroad, to the concentration of control in the hands of a very small group of inexperienced, unsophisticated, and potentially compromised individuals, this situation is unprecedented.”

The more you dig into this the more you are amazed at the lack of adult supervision. SBF and his executive team took customer money and “lent” it to Alameda Research (effectively themselves), and then tried to trade their way to profits, lending themselves massive amounts of money along the way. Read this note from Forbes.

“FTX bankruptcy filings released Thursday revealed that FTX founder Sam Bankman-Fried, his cofounder Gary Wang and two other executives received a total of $4.1 billion in loans from his Alameda Research trading firm.

“Of that total, $1 billion went to Bankman-Fried in the form of a personal loan, while $2.3 billion went to an entity he controls, Paper Bird (Bankman-Fried has told Forbes that he owns 75% of the entity, with Wang owning the rest)—so that’s another nearly $1.73 billion at Bankman-Fried’s disposal. FTX’s Director of Engineering Nishad Singh got his own loan of $543 million, while Ryan Salame, the co-CEO of FTX’s Digital Markets subsidiary, received a $55 million personal loan.

“The obvious question: Where did all that money go? There are two principal areas we know about so far: political donations and personal investments