Is cryptocurrency the greatest market bubble of all time?

[over9k]

Side by side:



You have to run 3x etf's to get the leverage necessary to use equities to match crypto's movements on the right kind of news. That is how much better a play crypto is right now. 3x.

 

[Trader X]

I have posted crypto's correlation to inflation about a thousand times for a reason. I have made solid bank tonight. If you aren't making crypto plays you are a fool at this point.

This is a 40 year high for inflation and it is NOT going to be transitory.

Never suggested that crypto is not a tradeable asset, quite the contrary, it's volatility can be traded successfully and many have made bank doing it. But of course your winning trades are others losing trades. Doesn't really matter what the long term future of crypto is to a day, news or swing trader. Long term, the future of crypto is as central bank digital currency. Contrary to the hopes of crypto maximalists, central banks hate competition for good reasons and will seek to suppress it as China has done.

Agree that inflation is not transitory. As for the assertion that crypto is an inflation hedge, I am having great difficulty aligning that claim with the chart below. With inflation even higher than the downward biased official figures, why is the premier digital asset, Bitcoin, down 26% and counting in a month of record inflation reporting by virtually every media platform on the planet? Perhaps because it's not really an inflation hedge? Begs the question, are those who bought Bitcoin at $60K+ feeling comfortable they hold an inflation proof asset?

The 80% of holders that never sell their Satoshi stash thinking it's an inflation hedge and road to riches will be the losers in the end, the short term traders and pump and dumpers are the smart money now.

 

[over9k]

Never suggested that crypto is not a tradeable asset, quite the contrary, it's volatility can be traded successfully and many have made bank doing it. But of course your winning trades are others losing trades. Doesn't really matter what the long term future of crypto is to a day, news or swing trader. Long term, the future of crypto is as central bank digital currency. Contrary to the hopes of crypto maximalists, central banks hate competition for good reasons and will seek to suppress it as China has done.

Agree that inflation is not transitory. As for the assertion that crypto is an inflation hedge, I am having great difficulty aligning that claim with the chart below. With inflation even higher than the downward biased official figures, why is the premier digital asset, Bitcoin, down 26% and counting in a month of record inflation reporting by virtually every media platform on the planet? Perhaps because it's not really an inflation hedge? Begs the question, are those who bought Bitcoin at $60K+ feeling comfortable they hold an inflation proof asset?

The 80% of holders that never sell their Satoshi stash thinking it's an inflation hedge and road to riches will be the losers in the end, the short term traders and pump and dumpers are the smart money now.

View attachment 134100

Depends what's already priced in, but you've also cherrypicked a three week period. No correlations are perfect. In this case, even worse numbers were already priced in.





Run your chart out a bit and you'll see quite a different picture. Last night, bond yields actually DROPPED on the 6.8% numbers news because the market had priced in an even worse number. Hence why the nasdaq ran the hardest of the major indices as being big tech heavy it's thus most sensitive to p/e and therefore interest rates.

NDX futures are the highest even now.

 

[Trader X]

Run your chart out a bit and you'll see quite a different picture. Last night, bond yields actually DROPPED on the 6.8% numbers news because the market had priced in an even worse number. Hence why the nasdaq ran the hardest of the major indices as being big tech heavy it's thus most sensitive to p/e and therefore interest rates.

Given the extreme price volatility of Bitcoin over this last year, the unreliability, inaccuracy and managed bias of official inflation figures and the fact BTC traded sideways the previous three years before exploding upward, it's difficult to reconcile your top chart with actual BTC price history. The 5 year BTC chart below is more closely correlated with tech stocks like Tesla or some of the meme stocks over this time series. The obvious difference being that the FAANGs, Tesla etc. are profitable enterprises creating real products and services while crypto is more akin to the tech stocks of the late 90s that were never profitable, essentially worthless entities trading at sky high prices based on pure speculation. We all know how that era ended and crypto speculation is likely to be the same history repeating itself in another guise.

 

[over9k]

It's like you can't even see the charts I posted. I mean I literally posted bitcoin's volatility tracking the 10 year treasury to show why bitcoin's been so volatile and you responded as if you didn't even see it.

There's always mania with the new "thing". What you're saying is exactly what was being said about amazon etc 20+ years ago. This was correct about a lot of the "etc's". It was not correct about amazon, which is my entire point.

At no point have I said that all crypto's are a good idea, in fact I've made quite a point of stating that they aren't, and I've also made a point of saying not all internet companies were in 1999 either.

But the internet itself was, hence why we have companies like google, microsoft etc now despite the massive bust. Take and apply to crypto and as I keep saying, sort the wheat from the chaff.

Dogecoin is not bitcoin same as pets.com is not amazon.com.


And honestly, if you think any of the old rules since before the pandemic crash still apply then I'm not really sure what to say to you. If you (or anyone else) don't realise that we're now living in an entirely different market and everything before the crash of march last year no longer applies then there's really nothing else I can say.

There is a reason why I never run any chart out to the half decade point or whatever. In fact, the only time I do is precisely when I'm showing just how different a market we are now in.

 

[Trader X]

There's always mania with the new "thing". What you're saying is exactly what was being said about amazon etc 20+ years ago. This was correct about a lot of the "etc's". It was not correct about amazon, which is my entire point.

Comparing Bitcoin or any other crypto to Amazon, Microsoft, Google etc. in any sense is a false equivalence perpetuated particularly within the Bitcoin community by the likes of Mike Saylor, Mark Moss, Anthony Pompliano etc. Bitcoin is an application of blockchain technology, not a technology company selling products and services for profit. Bitcoin has no intrinsic value as a product or service, nor does it act as currency for financial transactions. Any use of Bitcoin to transact would necessitate immediate conversion to a stable fiat currency like the USD to limit the financial risk of holding Bitcoin for any length of time. But then you should never sell your Bitcoin so why transact.

Bitcoin is the premier digital asset by market cap primarily because hodlers have been convinced the hyperbole of promoters (with a vested interest) is true and its price will go to the moon and make them rich, not because any of the actual applications of the technology itself (that few understand at all) will ever increase its intrinsic value. It's a mania for this reason, not because it's the next Amazon or Google and never will be.

We are revisiting another historic manifestation of exploiting human greed, a manic event that has happened before in the past. Crypto investing is a fad that has caught on due to FOMO and hype just as internet stocks were in the late 90's before they crashed. If you can't see that then there's really nothing else I can say.

 

[over9k]

Comparing Bitcoin or any other crypto to Amazon, Microsoft, Google etc. in any sense is a false equivalence perpetuated particularly within the Bitcoin community by the likes of Mike Saylor, Mark Moss, Anthony Pompliano etc. Bitcoin is an application of blockchain technology, not a technology company selling products and services for profit. Bitcoin has no intrinsic value as a product or service, nor does it act as currency for financial transactions. Any use of Bitcoin to transact would necessitate immediate conversion to a stable fiat currency like the USD to limit the financial risk of holding Bitcoin for any length of time. But then you should never sell your Bitcoin so why transact.

Bitcoin is the premier digital asset by market cap primarily because hodlers have been convinced the hyperbole of promoters (with a vested interest) is true and its price will go to the moon and make them rich, not because any of the actual applications of the technology itself (that few understand at all) will ever increase its intrinsic value. It's a mania for this reason, not because it's the next Amazon or Google and never will be.

We are revisiting another historic manifestation of exploiting human greed, a manic event that has happened before in the past. Crypto investing is a fad that has caught on due to FOMO and hype just as internet stocks were in the late 90's before they crashed. If you can't see that then there's really nothing else I can say.

Cope

 

[moXJO]

Comparing Bitcoin or any other crypto to Amazon, Microsoft, Google etc. in any sense is a false equivalence perpetuated particularly within the Bitcoin community by the likes of Mike Saylor, Mark Moss, Anthony Pompliano etc. Bitcoin is an application of blockchain technology, not a technology company selling products and services for profit. Bitcoin has no intrinsic value as a product or service, nor does it act as currency for financial transactions. Any use of Bitcoin to transact would necessitate immediate conversion to a stable fiat currency like the USD to limit the financial risk of holding Bitcoin for any length of time. But then you should never sell your Bitcoin so why transact.

Bitcoin is the premier digital asset by market cap primarily because hodlers have been convinced the hyperbole of promoters (with a vested interest) is true and its price will go to the moon and make them rich, not because any of the actual applications of the technology itself (that few understand at all) will ever increase its intrinsic value. It's a mania for this reason, not because it's the next Amazon or Google and never will be.

We are revisiting another historic manifestation of exploiting human greed, a manic event that has happened before in the past. Crypto investing is a fad that has caught on due to FOMO and hype just as internet stocks were in the late 90's before they crashed. If you can't see that then there's really nothing else I can say.

These coins also represent ecosystems that are expanding. Both with eth, sol and a myriad of others.

100+ Ethereum Apps You Can Use Right Now [2021 Update] | Consensys

Need work? Buying art? Licensing music? Getting a loan? There’s a dapp for that.

consensys.net

They go beyond that of just "store of wealth".
So you are actually wrong about the comparison.

I've communicated with a lot of people in the space and it is not going away. From the sounds of it, you have a very shallow understanding of what is trying to be achieved. It's very early days.

That's not to say we won't see a crash or coins disappear. Regulation will stifle the space. But it is basically being touted as the new "web". And it does feel that way in many regards. I was a user of the internet when it first launched and the crypto space has the same feel.

The space is over a decade old. It's hardly a flash in the pan "fad"

 

[moXJO]

Since 2010 bitcoin returns 99331348.192%

335.394% yearly returns.

So everyone had 12 years (or even 7 years of high profits) to spend 1 month to learn the ins and outs of the space.

Hands up who did

If not: why at least from an investors curiosity perspective?

 

[basilio]

While enough new people "believe" and part with the readies to keep the crypto market going the prices will stay buoyant. Just like tulips really.

Another current perspective on the game.

Cryptocurrency bubble risks exposed by Bitcoin's recent slide​

By business editor Ian Verrender
Posted 2h ago2 hours ago

Bitcoin investors who bought at the start of the year would be up around 70 per cent in US dollars, but those who bought near the peak later this year are down around 25 per cent.(Unsplash: Executium)
Help keep family & friends informed by sharing this article


They seem to be almost everywhere. Cool looking hipsters livin' the dream after amassing a fortune in the world of crypto.
Social media sites are overflowing with them. Even old school glossy magazines, barely clinging to life, have dialled in with tales tall and not so true of the fabulous riches to be earned in the ether.

There's no doubt they exist. Those that either got in early or built financial structures that facilitate trades which, none like to admit, replicate old style banks and broking houses, have socked away unimaginable riches.

But what of the hoi polloi? How many newly arrived crypto traders, just for example, lost their life savings last weekend, when bitcoin and the crypto universe plummeted?

Just like pokie addicts and those who frequent the track, the wins are talked up while the losses often are forgotten.

The allure may be the same; the chance to strike it rich, big time. But, unlike ordinary gamblers, many crypto devotees have embraced what they believe is the future of finance with a kind of religious zealotry that insulates them from reality.

Launched in 2009, Bitcoin was supposed to liberate ordinary citizens from the shackles of government and nation; an alternative, independent and truly global financial system.

Space to play or pause, M to mute, left and right arrows to seek, up and down arrows for volume.


Bitcoin explained: Everything you need to know about the crypto craze(David Chau)

More than a decade later, however, and the faithful can't, or refuse to, recognise the ultimate irony. Instead of overthrowing traditional currencies, bitcoin and its 10,000 or so imitators are still priced in them.

The devotees, even the famous and fabulously rich, measure their wealth not in BTC but in greenbacks, yen, pounds, euro and Aussie dollars.

Cryptocurrencies on a knife edge: Is this the slow decline of Bitcoin?

While cryptocurrency millionaires allegedly abound, the real future for digital currencies looks far more conventional and state-controlled, writes Ian Verrender.

www.abc.net.au

 

[moXJO]

While enough new people "believe" and part with the readies to keep the crypto market going the prices will stay buoyant. Just like tulips really.

Another current perspective on the game.

Cryptocurrency bubble risks exposed by Bitcoin's recent slide​

By business editor Ian Verrender
Posted 2h ago2 hours ago
View attachment 134180
Bitcoin investors who bought at the start of the year would be up around 70 per cent in US dollars, but those who bought near the peak later this year are down around 25 per cent.

Stay in the shallow end boys.

 

[Trader X]

These coins also represent ecosystems that are expanding.

Such "ecosystems" are only sustained by confidence in the claims made by self-interested promoters, with laser eyes in their images, about the future of Bitcoin. Ecosystems need to be self-sustaining or they collapse and Crypto is not a self-sustaining financial ecosystem.

Let's imagine a dialogue with a typical 20 something with little or no investing experience or knowledge (the vast majority no doubt) who puts all his spare change into a Satoshi stash, call him Dennis Denuto.

So Dennis, you've made some paper profits buying Bitcoin, can you answer a few questions for me...

What's your trading plan?
A) What's a trading plan?
What strategy do you use to decide when to buy and sell?
A) I buy as much as I can because it always goes up eventually, it's already up 99331348% and is going to a million. Also maxed out my credit card buying more.
Why do you think it's going to a million?
A) Because it's just like Tesla, Apple and Amazon, it's new technology and everyone I know is buying it. Also, Mike Saylor says so.
What do you know about Blockchain tech and Bitcoin's value add proposition?
A) Umm, well I can exchange my dollars for Bitcoin and make money by never selling
Do you care then if Bitcoin is really not a store of value, medium of exchange, unit of account, or acting as digital currency?
A) Not really, why would I?
Have you heard of Dogecoin and Shibu Inu?
A) Yes, put some money in them also but sadly my holdings are in the dog house, down 70% this week.
So how would you describe the future of crypto currency?
A) It's the future of the internet, it's the vibe, it's Mabo

Genuinely no offense intended to anyone, but the blind faith exhibited in the future of crypto by millions of novice speculators should be a cause of concern.

 

[moXJO]

Such "ecosystems" are only sustained by confidence in the claims made by self-interested promoters, with laser eyes in their images, about the future of Bitcoin. Ecosystems need to be self-sustaining or they collapse and Crypto is not a self-sustaining financial ecosystem.

Let's imagine a dialogue with a typical 20 something with little or no investing experience or knowledge (the vast majority no doubt) who puts all his spare change into a Satoshi stash, call him Dennis Denuto.

So Dennis, you've made some paper profits buying Bitcoin, can you answer a few questions for me...

What's your trading plan?
A) What's a trading plan?
What strategy do you use to decide when to buy and sell?
A) I buy as much as I can because it always goes up eventually, it's already up 99331348% and is going to a million. Also maxed out my credit card buying more.
Why do you think it's going to a million?
A) Because it's just like Tesla, Apple and Amazon, it's new technology and everyone I know is buying it. Also, Mike Saylor says so.
What do you know about Blockchain tech and Bitcoin's value add proposition?
A) Umm, well I can exchange my dollars for Bitcoin and make money by never selling
Do you care then if Bitcoin is really not a store of value, medium of exchange, unit of account, or acting as digital currency?
A) Not really, why would I?
Have you heard of Dogecoin and Shibu Inu?
A) Yes, put some money in them also but sadly my holdings are in the dog house, down 70% this week.
So how would you describe the future of crypto currency?
A) It's the future of the internet, it's the vibe, it's Mabo

Genuinely no offense intended to anyone, but the blind faith exhibited in the future of crypto by millions of novice speculators should be a cause of concern.

You mean the same speculators that have always been there from tulips onwards. Whom drive up your % returns (as you should be able to spot an opportunity)?

You don't have to "believe" in its sustainability to trade it.

What's your argument.
Crypto is risky?

All the people I've seen take major losses cried but accepted it. It's the nature of the space. You would have to be really dumb to not know the risks. Meme coins are lottery tickets. Others are made viable from in game utility. Anything can pump or dump at any time. And as far as I'm concerned it's a pain in the ar5e to use.

But I'll trade caterpillars if I can make a profit.
What the hell are you doing?
Standing back for a decade saying "It's not sustainable, it's going to crash". That to me is worse. Why wouldn't I want to learn the basics of the space with the returns on offer.

I get your point. But doesn't everyone already know that crypto is basically a casino for many.

 

[qldfrog]

Since 2010 bitcoin returns 99331348.192%

335.394% yearly returns.

So everyone had 12 years (or even 7 years of high profits) to spend 1 month to learn the ins and outs of the space.

Hands up who did

If not: why at least from an investors curiosity perspective?

Cryptos: a personal history
I started with paper wallet etherium and bitcoin, then thought I should put a few $ there
Then too busy to try to save the world (babys) and 2 years later, prevented to save babies and no $;
woke up after looking at the price of BTC, bought a few ethernum, and few btc bits I think..was too expensive @ 8k AUD or something LOL;
then flying across continents for new venture and thought hum should buy 3 or 4 BTC..well, by the time I was able to actually buy-> could get 1 not 3 for that amount of $;
So yes i looked at the tech, but yes i missed most of the gains;
I think overall cryptos netted me around $60k, taxed, so less in the pocket and still some gambled now but not much: I am personally scared of governments..aka China move reproduced here.
anyway..these gains cover parts of my systems losses

 

[over9k]

There's no point that's been made here about crypto that couldn't be made about precious gems, and yet, last I checked, diamonds were still worth serious money.

 

[moXJO]

There's no point that's been made here about crypto that couldn't be made about precious gems, and yet, last I checked, diamonds were still worth serious money.

I think a study was done (or something) and Lego was one of the strongest performers for returns.
Serious niche fundamental analysis needed.

 

[over9k]

I think a study was done (or something) and Lego was one of the strongest performers for returns.
Serious niche fundamental analysis needed.

Hilarious as that is, my point is that confidence is confidence. Precious gems lack any intrinsic value (are for the most part utterly useless) unless someone else will pay money for them too and yet how long has that kind of stuff been valuable, millennia now?

Saying "it's not backed by anything" is not an argument.

 

[moXJO]

Hilarious as that is, my point is that confidence is confidence. Precious gems lack any intrinsic value (are for the most part utterly useless) unless someone else will pay money for them too and yet how long has that kind of stuff been valuable, millennia now?

Saying "it's not backed by anything" is not an argument.

I know. I just really wanted to throw that Lego fact out there.

 

[qldfrog]

The way things are going in Oz, storing a bit of diesel, flour bags and cans and you will easily beat the share market in the next 6 months, tax free, or stockpile and resell both uel and generators so that people can power their computer to try to sell their cryptos for a feed?
Purposely provocative...

 

[againsthegrain]

The way things are going in Oz, storing a bit of diesel, flour bags and cans and you will easily beat the share market in the next 6 months, tax free, or stockpile and resell both uel and generators so that people can power their computer to try to sell their cryptos for a feed?
Purposely provocative...

That would make you a pest and feeding on other people's misery and pain. Just buy some RE and do the same and you will be a hard worker and smart investor instead