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Bitcoin Plummets Below $8,000 For First Time Since November (axios.com)
Bitcoin's value dipped $8,000 this morning -- the first time since November 24, according to CNBC -- just hours after the cryptocurrency made news after going under $9,000. From a report: After the news that Bitcoin had headed south of $9,000, CNBC branded the range of $9,000 to $10,000 as "a difficult one for bitcoin to break below" after its surge over $10,000 last year.
CNBC branded the range of $9,000 to $10,000 as "a difficult one for bitcoin to break below" after its surge over $10,000 last year.
Based on what reasoning? There is no price support for BTC. There is no equity or guarantor behind BTC at all. Control is centralized in a small handful of "owners". They could make it go from zero to 100,000 in a day, if they decided to.
So what genius pundit decided there was a floor to the price, and how much does he get paid to make shit like that up?
Learning HOW to think is more important than learning WHAT to think.
And there's the issue. The bubble has to pop. The entire basis of bitcoin retaining value was that it would become an everyday currency used for buying and selling goods and services. It's current value and volatility preclude that, so it's valueation (not value) is supported primarily by investors running around like chickens looking for the next kernel of corn. Let someone yell BOO and it all goes to hell.
NY TIMES Nov 18, 2005 ... THERE is a venerable Wall Street joke featuring an investor who, having accumulated a large position in an illiquid stock, decides it is time to get out. "Yes, sir," replies the broker when he is told to sell. "To whom?"
You can't see ANYTHING from a car, You've got to get out of the goddamned contraption and walk...Edward Abbey
Bitcoin's actual value is under a dollar. Until its price crashes down to that level, it is vastly overvalued. The word, "bubble" doesn't even come close to describing Bitcoin's current price.
What is the actual value of a bitcoin?
The actual (intrinsic) value of a bitcoin is $0.
The only reason it's valued above $0 is the perception that it has more value than that. I can't tell you whether Bitcoin will ever be valued above $10k in 2017 equivalent dollars, again because that's mostly down to the actions of speculators and possibly currency manipulators. There's also the small problem that there isn't really anything special about Bitcoin that make it inherently more valuable than Litecoin, Namecoin, Swiftcoin, Bytecoin, Peercoin, Dogecoin, Emercoin, Feathercoin, Gridcoin, Omni, Primecoin, Ripple, Nxt, Auroracoin, BlackCoin, Burstcoin, Dash, NEO, MazaCoin, Monero, NEM, PotCoin, Titcoin, Verge, Stellar, Vertcoin, Ether, IOTA, Sia, sixEleven, Decred, Waves, Lisk, Zcash, Komodo, Ubiq, EOS, Electroneum, TRON, Cardano, or Petro. It's value is basically based on speculation and name recognition.
Note, I left Tether off that list because Tether is inherently more valuable than Etherium because it is tied to $1 USD, but because it's tied it's value shouldn't fluctuate making it speculative value approximately $0.
It will go back up. Things always continue upwards.
As a warning, it's been almost 400 years since the peak of Tulip mania and looking at a Dutch flower exporter, the highest price is approximately $2 per bulb, but the high price in 1637 was reported to be around $100 guilders. That means the current price is approximately 3.6% of the peak value (using today's exchange rate). At that rate, the price will have fully recovered in approximately 10,000 years. Now inflation will surely cause it to reach $100 sooner than that (using historic rates, it would still take over 100 years), but the point is it could take a very, very long time to recover.
Fanatically anti-fanatical
There is one more thing that's needed for a bubble, and that's leverage - investing with loaned money.
A rich guy who invests in ugly modern art with his own money, in the hope of making a profit - he has the option of just holding on to his asset forever, deluding himself about its "real" value. Even though nobody would actually buy it at the price he asks, he can pretend that's what it's worth.
But someone who's loaning money to buy ugly modern art, needs the asset to appreciate in order to pay interest on the loan. If it doesn't, the bank will eventually force him to sell to cover their losses. This will drive prices lower - and this can cause a chain reaction where other people investing borrowed money are forced to sell.
Yep. Any day now I expect my Beanie Baby collection to go back to it's old value and continue it's inevitable upwards climb.
Technological progression is not linked in any way to economics. If it was, there would have been no video games crash, no dotcom bubble, and no bitcoin bubble. Also just because my phone has more processing power than the Apollo Lunar Lander, doesn't mean it will get me to the moon.
If you gave me a choice between a printer and a giraffe with explosive diarrhoea, i'll get my ladder and my raincoat