Developing - Bitcoin Bubble

[indigopete]

Hi Folks

Bitcoin departed it's "comfort zone" a few days ago and is now already at $100 altitude above it in another attempt at reaching escape velocity (this time assisted by the Chinese). In the last half hour, hints of panic buying are becoming apparent.

Could get interesting either way.

Take yourselves a ringside seat for either the crash or the revolution: (But don't even THINK about getting involved - spectator sport only from this point on unless you're desperate for another mortgage :) )

http://preev.com/

http://bitcoin.clarkmoody.com/

http://www.google.co.uk/imgres?imgurl=http://brouilletpta.org/wp-content/uploads/2013/09/popcorn1.jpg&imgrefurl=http://brouilletpta.org/popcorn-fridays/&h=252&w=200&sz=1&tbnid=_Xu4tzbN0yqhKM:&tbnh=186&tbnw=147&prev=/search%3Fq%3Dpopcorn%26tbm%3Disch%26tbo%3Du&zoom=1&q=popcorn&usg=__14_lsi1is-motNb7SXXGChtqT1Q=&docid=v9RijAwxBbTV3M&itg=1&hl=en&sa=X&ei=MQ5oUsS5DIWLhQe_yYGoAg&ved=0CJcBEPwdMAo

P.S. it's already added another $2 since I started writing this.

[pequod]

This is what the world needs, a currency free from bent bankers manipulating the value of currency in your pocket. i don't think its a bubble, its what the world is crying out for and what the internet needs, instant international transfers. its just the start of something beautiful for us all. We can break the control of banks down soon, it gives us normal people hope against the elite scum.

[indigopete]

i don't think its a bubble, its what the world is crying out for and what the internet needs

Great remark pequod. I heartily agree (at least about it being what the world is crying out for :) )

However, as you say, there are plenty reasons for thinking it isn't a bubble, though (or at least the crash won't be as heavy as last time's):

[1] - it happened before and BTC recovered every time. The more of those cycles there are, the most confidence there will be in it's robustness

[2] - the technical problems on the exchanges played a big part in freaking people out the last time. I think they're a bit better prepared now, plus there's more liquidity around in terms of more participants (=the Chinese got involved :) )

[3] - pocking around the online media, there's nothing like the amount of hostility there was last time towards BTC. All the journalists are hedging their bets now because they all laughed after the last crash and now it's back

[4] - Bitstamp's got 10,000 businesses signed up against 1000 a year ago, so that shuts up all the critics who moaned about it being investment vehicle, not a currency exchangeable for goods and services

[5] - the paper stuff's not doing too great thanks to Messrs Bernankie, Abe, Carney & Draghi

[6] - the metal stuff's not doing too great thanks to Dimon et al + the famous metal "smackdowns"

See what happens tomorrow. If it gets past the 266 without crashing there will be a few more headlines around.

[pyriel]

have something about feds seizing 28 million $$ in bitcoins.

http://www.infowars.com/feds-seize-28-million-in-bitcoins-from-alleged-silk-road-operator/

[william6565william]

last time i checked, it's now worth $200/BTC. I'm starting to regret investing into it when it was still low. Too late to do that now that the price has skyrocketed.

Heard there are these 'bitcoin faucets' which gives you extremely low amounts of bitcoins for free. are they worth the time collecting? thinking of earning until i have enough to spend it around and hopefully get a return at a higher value.

[indigopete]

It's off again.

Hit $245 this morning.

[Morbid]

haha. funny to read this now when its x10 over..

[A Voice from the Mountains]

Yeah, I thought it was funny to even see the OP. I was like, what? Oh, it's from 2013 lol.

I first bought some only when it was already $800 (last December) and everybody was afraid of another collapse when they finally hit $1100 again -- and in fact it did wobble and go back down for a bit. Word was getting around virally enough that I finally watched some videos to understand how it works, understand the internal and external politics of it, some of the technicalities of the technology and how vulnerable it is to any kind of attacks, etc.

I still think buying is an excellent idea even at current prices, as long as conditions maintain relatively the same. There are a few things that would change this:

A) If prices go up too fast and the network starts getting backed up again. It got backed up by about an entire day's worth of transactions last time it shot up and back down.
B) If the Trump administration begins to indicate that it is going to oppose the currency (which may well happen if globalist banks successfully commandeer it, which is an always ongoing situation actually).
C) Fiat currency collapse could lead to consequences on entire economic structures, including the Internet, shrinking the Bitcoin network, reducing buying and spending in all currencies in general, etc. In this situation you could probably care less about your Bitcoin. All your cash would be worthless too, so what difference would it make? You should have bought gold and silver instead in this case. I diversify a little and buy all three.

[Morbid]

if fiats are collapsing then maybe all cryptos would most likely rise as an escape to a safe haven.. though its all speculation at this point.

[Chuck]

Indigopete, remind me to listen closer next time you suggest a ringside seat!

here is the thing... very, very few of my friends, family, neighbours, colleagues, aquaintances have even heard of cryptocurrencies, let alone own them... and I work in the oil and gas business, considered to be a highly technical field!

If this is a bubble... its going to be the size of a hot air balloon.

[ThePythonicCow]

I think I've figured out a reasonable way to invest in cryptocurrencies.

One of the conventional recommendations for investing in volatile, but (so far) rising, stock markets is to "Dollar Cost Average". Put the same amount (in Dollars or other such currency) in each month. When the price is lower, those Dollars will get more shares of the stock, and when the price is higher, they will get fewer shares. So over time, one's cost to purchase shares will tend to be a little less than the average price, and tend to be a lot less than investors typically see if they rush into hot stocks (buying high), and rush out of falling stocks (selling low.)

My idea is an extension of this, and has two parts:

Purchase some fixed amount (whatever one can comfortably afford to lose) each month, as in the above Dollar Cost Averaging.
But also sell some each month - not a fixed Dollar amount, but rather a fixed percentage of one's current holdings.

For example, I can imagine buying (making up numbers) $100 of crypto currencies each month, and simultaneously raking off 5% of my current crypto currency holdings. If the crypto currencies I choose do wonderfully well, then soon I'll actually be taking out more than I put in, providing a profit as I go. Then when and if those crypto currencies crash or fall dramatically, I would have already turned a fine profit. If the cryptos crash soon after I started doing this ... well that was the reason for only investing what I was willing to lose.

This resembles roughly what I did during the dot.com boom in the 1990's. I was putting money in through my retirement plan at work, while at the same time I was (in a complex tax shelting sort of way) drawing money out to maintain my life style.

Of course one should never expect to make the maximum that one could have made if only one had known the future. But one might be able to get a fair proportion of a volatile rising market, while insulating a decent proportion of one's earnings from a likely collapse.

In short: buy a fixed Dollar amount while selling a fixed percentage of current investment.

[Chuck]

Good Paul. I got into charting very many years ago. Charting by hand about 30 stocks before the computer world. Anyway, it taught me a lot about trends, cycles, patterns before Elliot Wave Theory, Gantt, and such. Channel patterns do help for predicting support and resistance. They might be able to offer guidlines for when to time these purchases and selling points.

As an aside, because these cryptocurrencies are traded today by individuals (not computers), they tend to have the same patterns that we saw in the 80s and early 90s in the stock market... 5 cycles up and 3 cycle correction for example... especially when measured against BTC.

Best of luck... fun at least to have a strategy!