"BITCOIN IS NOT A BUBBLE!" - Well, I'm not so sure about that...
Updated
First off all, I'd like to state that I am not at all hating cryptos or denying the potential of the blockchain. But in my personal opinion, what happens to Bitcoin right now is nothing else than ridiculous. The more I am reading about "Financial Bubbles", the more I have to draw the conclusion that Bitcoin may very well be exactly that.
So, before everybody starts stoning me and declaring me "an idiot who doesn't understand anything about bitcoin" (Which already happened more than once and, by the way, is one of the classic signs of a bubble. More about that later), please consider the following:
First:
Simply take a look at this classic bubble pattern and tell me honestly that the bitcoin chart above does look nothing like that:
http://www.marketoracle.co.uk/images/2012/Feb/Bubble-Phases-7.png
Under the premise that we really are in a bubble, then we defnitly would be in the public phase, most likely in greed or even delusion.
Furthermore:
Today I was doing some research on the classic signs of a bubble on fundamental basis and stumbled about this article:
http://www.businessinsider.de/4-signs-of-a-financial-bubble-2017-7?r=US&IR=T
Well, we got 4 points to check here, so let's get started.
1) It may be my personal environment but at the moment it's not possible for me to go for a drink with friends or coworkers without Bitcoin beeing the subject of the whole table sooner or later. Even though nobody is involved yet or has any idea what the word "Blockchain" even means. Nevertheless most of them think about throwing a few thousand bucks in there.
2) Although I don't know anyone who really quit his job yet, I sure see a lot of people writing about quitting or "getting out the system". (Many are going full conspiracist out there. Another thing I don't get.)
3) Sounds familiar? This is what I already mentioned above. As I've been reading discussions on Facebook, Reddit or other "social" networks, I noticed two phenomenons:
a) I've someone critiques Bitcoin, about 90% of the people just laugh at him/her or make fun of his/her (often eligable) doubts. People seem to forget that Bitcoin is still a high risk investment and not their ticket to a beach house on Hawaai.
b) Good news (like the Amazon rumors lately) are accepted without further questions, while any bad news or critic is "fake" or "propaganda" against Bitcoin started by the evil and stupid bankers from Wall Street who just don't have any clue and are simply afraid of BTC.
4) Oh hell, yes. At this point, I'm not going to do anything more than to quote John McAffee: "Bitcoin will reach 500,000$ in 3 years." To reach that price, Bitcoin would need the same market cap as the US$. Doesn't sound that likely to me.
Another interesting article:
investopedia.com/articles/stocks/10/5-steps-of-a-bubble.asp
So, this is just my opinion on Bitcoin at the moment. Feel free to let me know your thoughts about this topic. Maybe I'm wrong and everything is just my very personal environment creating this impression. By the way, I sure as hell won't short Bitcoin, as I have no idea at which time the bubble will burst if there is one. To some part I'm actually hoping that I am wrong because if there is a bubble, it inevitebly will burst and crush the whole life of many people who are fully invested at this point.
P.S.: Some weeks ago, one of the genius traders around here, DianKemala, posted a similar article and it may be more relevant now. I added the idea as it may be even more accurate at this point.
So, before everybody starts stoning me and declaring me "an idiot who doesn't understand anything about bitcoin" (Which already happened more than once and, by the way, is one of the classic signs of a bubble. More about that later), please consider the following:
First:
Simply take a look at this classic bubble pattern and tell me honestly that the bitcoin chart above does look nothing like that:
http://www.marketoracle.co.uk/images/2012/Feb/Bubble-Phases-7.png
Under the premise that we really are in a bubble, then we defnitly would be in the public phase, most likely in greed or even delusion.
Furthermore:
Today I was doing some research on the classic signs of a bubble on fundamental basis and stumbled about this article:
http://www.businessinsider.de/4-signs-of-a-financial-bubble-2017-7?r=US&IR=T
Well, we got 4 points to check here, so let's get started.
1) It may be my personal environment but at the moment it's not possible for me to go for a drink with friends or coworkers without Bitcoin beeing the subject of the whole table sooner or later. Even though nobody is involved yet or has any idea what the word "Blockchain" even means. Nevertheless most of them think about throwing a few thousand bucks in there.
2) Although I don't know anyone who really quit his job yet, I sure see a lot of people writing about quitting or "getting out the system". (Many are going full conspiracist out there. Another thing I don't get.)
3) Sounds familiar? This is what I already mentioned above. As I've been reading discussions on Facebook, Reddit or other "social" networks, I noticed two phenomenons:
a) I've someone critiques Bitcoin, about 90% of the people just laugh at him/her or make fun of his/her (often eligable) doubts. People seem to forget that Bitcoin is still a high risk investment and not their ticket to a beach house on Hawaai.
b) Good news (like the Amazon rumors lately) are accepted without further questions, while any bad news or critic is "fake" or "propaganda" against Bitcoin started by the evil and stupid bankers from Wall Street who just don't have any clue and are simply afraid of BTC.
4) Oh hell, yes. At this point, I'm not going to do anything more than to quote John McAffee: "Bitcoin will reach 500,000$ in 3 years." To reach that price, Bitcoin would need the same market cap as the US$. Doesn't sound that likely to me.
Another interesting article:
investopedia.com/articles/stocks/10/5-steps-of-a-bubble.asp
So, this is just my opinion on Bitcoin at the moment. Feel free to let me know your thoughts about this topic. Maybe I'm wrong and everything is just my very personal environment creating this impression. By the way, I sure as hell won't short Bitcoin, as I have no idea at which time the bubble will burst if there is one. To some part I'm actually hoping that I am wrong because if there is a bubble, it inevitebly will burst and crush the whole life of many people who are fully invested at this point.
P.S.: Some weeks ago, one of the genius traders around here, DianKemala, posted a similar article and it may be more relevant now. I added the idea as it may be even more accurate at this point.
Note
As someone pointed this out in the comments, I may need to clarify one thing:If I'm talking of a bubble, I think of it as a long overdue and hard correction that gets amplified by a highly emotional market and lots of "dumb money" circulating.
After all the things I wrote above are just my thoughts on a lazy saturday afternoon and I wanted to discuss them with other people.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.