Bitcoin Jumps Another 10% in 24 Hours, Sets New Record at $19,000 (arstechnica.com)

An anonymous reader quotes Ars Technica: Bitcoin's price set a new record on Saturday as the virtual currency rose above $19,000 for the first time on the Bitstamp exchange. The gains came just hours after the currency crossed the $18,000 mark. Bitcoin's value has doubled over the last three weeks, and it's up more than 20-fold over the last year.

Bitcoin's value keeps rising despite a growing chorus of experts who say the currency value is an unsustainable bubble. One CNBC survey this week found that 80 percent of Wall Street economists and market strategists saw bitcoin's rise as a bubble, compared to just two percent who said the currency's value was justified. Another survey reported by The Wall Street Journal this week found that 51 out of 53 economists surveyed thought bitcoin's price was an unsustainable bubble.
Less than a month ago, Bitcoin was selling for $8,000.

Comments

I have an idea.

[AlanObject]

Let's play Who's The Greater Fool?

Re:Bitcoin Mania

[Anonymous Coward]

What makes you think that you're the one who is qualified to define what "useful work" is for the entire market and all of its participants? I know you're Big Bruce Perens, but even you are just an extraordinarily tiny player within our massive global economy.

Each and every market participant will decide what is "useful work" to them. That's the nature of a free or a quasi-free market, Bruce. It's not up to you, Bruce Perens, to decide how other market participants should value Bitcoin or anything else. That's a judgment that they need to make for themselves.

Your idea of "feeding one more mouth" as being the utmost form of utility is absurd. If anything, that will only serve to encourage and worsen what's probably the biggest problem facing humanity as a whole today: extreme overpopulation in areas like Africa, the Middle East and India that are already far, far beyond sustainable levels.

Bruce, you may be a big shot in the open source world, but your ideas are laughable within the scope of the global economy.

Re:Bitcoin Mania

[hey!]

I wouldn't say that the creation of a currency is useless, if it fill some sort of need it will probably will metaphorically feed mouths. The problem with Bitcoin is that it sucks as money. Sure if you're trading in BitCoin as an *asset* and your timing works out you'll make a killing, but the volatility of Bitcoin makes it unattractive to set a price for goods denominated in Bitcoin. If the price swings high nobody will buy. If it swings low then you could be selling at a loss.

Only one question left:

[Gravis Zero]

Who will be the ones left holding the bag?

Re:You're a fool if you don't hedge investments

[Rei]

Just admit this is new territory and doesn't work the same as traditional stocks.

All forms of financial assets function as a form of promissory note: an asset that can later be exchanged for desired goods and services. The "selling point" for BTC was that it going to be some new global payment system replacing credit cards, unbacked by anything but public trust, but with sufficient public trust that it can retain value without physical backing assets or a country behind it. How's that assumption going?

  * BTC is a terrible payment system from a technological perspective due to the huge processing cost and delays per transaction. Bitcoin fees aren't high because of gouging, they're high because bitcoin is technologically awful.
  * It's far too volatile for such a role
  * It already has a market cap as high as the major credit card companies combined, yet is accepted by a minuscule fraction as credit cards for the above reasons - which just screams "massive bubble".
  * Indeed, many early "forward thinking" adopters have been going backwards and eliminating bitcoin payment options - the very excuse for justifying its price.
  * Bitcoin is favoured target of hackers; it's proven much easier to compromise exchanges and wallets than traditional financial networks.
  * Governments have numerous reasons to crack down on bitcoin (drugs, money laundering, deliberately crashing the assets of states with bitcoin reserves like North Korea, trying to pop a bubble gently to prevent a recession, etc), and extensive tools to do so, effectively driving it back to its innate value (a currency for underground criminal activity). Historically, the loss of one market - for example, China - has been compensated for by growth in western markets. But if you take western markets out of the picture, you're taking the vast majority of the world's capital out of the picture, period. It's even worse because western markets have disproportional leverage on the world's global financial systems, and decisions taken by them can reach well beyond their borders.

"Neck beards" also pointed out that the dotcom bubble was, in fact, a bubble, even though they couldn't tell you when it was going to burst. Yes, sometimes "neck beards" may underestimate the general public's willingness to mortgage all of their assets into internet fads when they blinded by a growth curve. But that doesn't change the basic issues underlying it all.

That doesn't mean that nothing will survive. Some of the dotcom crash's survivors became giants today eBay, Google, Amazon, etc. But most people who had their money lost their shirts. Perhaps some "coin" future may survive and even ultimately flourish. But what I can say is that BTC itself is going to pop at some point or another.

Re:You're a fool if you don't hedge investments

[JaredOfEuropa]

Of course they said that and of course they were wrong. Nobody knows exactly when the bubble will burst, otherwise they'd be milking it for all it's worth. Though maybe a good many speculators are actually realistic about the long term prospects of BTC and are in fact just milking it while the going's good. Just keep in mind: when the crash comes, don't think you can unload gradually on the way down. When it comes, it will be extremely hard to get rid of your coins at any price...