I haven't made any predictions for awhile (seeing as my Bear Case for Crypto is playing out more or less exactly as described), but I will sound a warning today. Dramatic run-ups in the price of Bitcoin strangely seem to coincide with large exchanges having banking, withdrawal, and possibly solvency problems. This was the case with,…
All these guys shutdown their mechanisms to exchange Tethers to USD so they're flowing into Butts. Exchanges happily honour them as worth a 1 USD in Butts. They don't really care as long they can suck down the exchange fees. Butts pump because of this, and it probably goes on until it really can't any more. Butts start becoming volatile because they can't be so easily traded out to USD any more, so a sell off begins. As Butts cheapen, Tethers start to cheapen with them as many creeptos are valued in the price of tether and not USD. Finally Butts sink below 1000, as the last hodl outs leave the crypto market and never look back after losing most of their actual money. Creepto continues to decline slowly over the next several years and becomes the novelty that it should have always been. Most people forget that it existed, but some religious contingent is still left trading it amongst themselves. Suddenly a new sucker appears, and the pump begins a-new.
If the looming bubble should spin wildly out of control, here’s a timely and healthy reminder to investors to keep
their wits about them, don’t propose that a new paradigm is upon us, and be mindful of gravity.
There's going to be a lot of gloating coiners in the near future I think. Let them have their fun, I guess. I've thought for a while that we'll see more bubbles in crypto since the market is so volatile, excitable, and easily manipulated. There's a huge amount of money that can be made in crypto, but that doesn't mean it's a good investment - just like you can make a ton of money at roulette.
I think the current upwards pressure is due to Tether shenanagins - large exchanges unloading, bitfinex manipulation or just people untetherin. The question is, will the current pressure form enough of a catalyst for a full-blown bubble all over again? Bitcoin is already known to the general public as this magic thing that has made crazy gains in the past. All it'll take is one mainstream 'news' site posting about the recent price movement and we could see an absolutely ludicrous price explosion.
I hate these bubbles because I don't like seeing people get hurt, and people will get hurt - there's always someone who gets suckered in to buying the bubble.
> I hate these bubbles because I don't like seeing people get hurt
I used to feel that way about S&M dungeons. Now I allow that there are those who sincerely crave that sort of thing.
As a butt connoisseur, I've learned to appreciate the creepoto community on its own terms -- as a radically new, disruptive art form; 21st century Theater of Cruelty if you will :)
This is just the beginning of what will become a multi-year run that will culminate in new highs. Go check a longer term chart and look at the Nov 2015 move to $500 as an analog to where we likely are now.
What are the implications of the court appointment? This could drag out for a long time. Bitfinex is pure smoke and mirrors operationally. The level of shenanigans is ridiculously comical but it works for them.
that's a good point, but all the tether shenanigans so far indicate they're trying to dump everything as fast as possible.
maybe it's a gamble to try to jumpstart another bubble so they can regain the lost reserves, but judging from the binance fuckery, this is most likely a binance pump.
These articles come in like clockwork every time Bitcoin's price moves upwards (or downwards, or plateaus... you get it) to the point I'd take all of them with a truckload of salt.
It's been over 10 years since Bitcoin came out and it's still here. It'll still be here long after most loud detractors (and supporters, for the matter) have moved on, whether it's $1 or $1 million per BTC.
This article doesn't help itself by showing a bias against crypto and particular exchanges.
A few things:
- The scales of the first bitcoin bubble and the last one are very different. The last one created, literally, billions of value for the holders.
- A defunct bitcoin exchange can not "create" billion of dollars of wealth. That does not make any sense. People who bought early and sold when the price appreciated didn't make money from an exchange who went bankrupt but from people who bought higher.
- Bitfinex seems to be doing fine from a price perspective. The premium is gone. The AG doesn't seem to be interested in driving them out of business but rather regulating them.
- The era of the single exchange is gone. Bitfinex is a key player but there is no player holding the whole market. There is also an active off-line trading market.
- A bubble is usually the result of a FOMO-consumer market.
Some people are going to hate crypto and that's fine. But my guess is that crypto will stay here for longer and will mint more millionaires.
I like Preston- It's always good to have thoughtful, polite crypto skeptics around. However, I think by any objective measure his predictions haven't proven to be very accurate.
For instance, he congratulates himself on predicting a Bitcoin price collapse in his September 2017 essay, which is a time at which the price was only $3000, far less than half of what it is now. (His thoughts on the ICO madness fared better)
That said, he is right that the Tether/Bitfinex situation is relevant to the current price runup, though the fact that tether has only about 2% the total market cap of Bitcoin needs to be also taken into account.
FYI Preston Byrne is a longtime blockchain skeptic that crypto bears love to post. He made a big statement that $100 Ethereum was some sort of death knell to the cryptocurrency space, and it's at $185 currently.
No one knows if crypto is going up, down, or sideways. But he does make cryptocurrency haters feel good inside.
> I haven’t made any predictions for awhile (seeing as my Bear Case for Crypto is playing out more or less exactly as described), but I will sound a warning today.
The bear case article the author links to spends 2/3 of its effort railing against Ethereum and ICOs. It's doesn't even lay out a proper bull case for Bitcoin itself. Instead it sets up a few Bitcoin-will-replace-the-state strawmen.
Bitcoin has a long history of being dismissed by those who don't understand it economically, technically, or both. The new article adds little to the discussion.
Bitcoin is a strange animal. It exhibits many traits of a Black Swan (an event that comes as a surprise, has a major effect, and is often inappropriately rationalized after the fact with the benefit of hindsight.)
The switch to believe in its value happens suddenly in many people. It is difficult to make sense out out of its price movements. I am skeptical of any advice trying to rationalize its price movements.
Do your own diligence on how it works, your risk tolerance and stay long.
The great thing about publicly traded things with active markets is that if you have have real insight into their underlying structures and values that other people don't understand, you have an immense ability to personally profit. Anyone rambling online about how it's going to the moon, or it's a scam, or it's going to collapse are trying to affect sentiment not convey some deep understanding they already have.
If they really were confident in their predictions they'd have every incentive to sit there quietly and become wealthy.
As long as BTC doesn't have any practical real-world use besides buying drugs and speculation I don't see how anybody couldn't see the sudden spike in the exchange rate as a huge red flag. You're effectively buying into a pyramid scheme: you bet that there'll be enough people who will enter after you for you to make some money.
It shows that all those revolutionary blockchain projects over the past few years have amounted to basically nothing, the killer app still isn't there and BTC is as wild as ever.
It's odd that Mr. Byrne doesn't mention the ICO craze at all in contributing to the 2017 bull run in this post.
"ICOs and token sales became popular in 2017...By the end of 2017, ICOs had raised almost 40 times as much capital as they had raised in 2016..."
This article makes perfect sense to me, and doesn't display an anti-bitcoin bias. What he is saying is that you should look at for warning signs at an exchange, such as a halt of USD withdrawals (in the case of MtGox) or the suspicions around Bitfinex and tether, and treat that exchange as unsafe. Back when MtGox was operating without USD withdrawals, it was still the most talked-about exchange, and many people kept putting their money into it, and didn't withdraw bitcoin from it into their own wallets.
Now that is gone and a skeptical blogost by someone at a "blockchain" SAAS company replaces it. The bloomberg story is several pages down. But I bet this thread is just going to repeat most of that discussion: