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Bitcoin Vs. Dot-Com Bubble: You Are Here

"All of my indicators would say that in terms of value creation we are about at the start of 1999."

"All of my indicators would say that in terms of value creation we are about at the start of 1999."
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7 comments on “Bitcoin Vs. Dot-Com Bubble: You Are Here

  1. Paul Tallant

    Is this more of Heisenberg´s “stupidity” re Bitcoin???

  2. Don’t look at the price of bitcoin, look at the market cap. In 1999 the stock market was 6 trillion market cap and the crypto market is at 300 billion right now. 50% of that is in bitcoin. 150 billion in bitcoin. That’s a tiny fraction. In 1999, the bubble wasn’t global, it was in the US. Crypto market is global so 300 billion is nothing compare to where it could go. Not saying that we aren’t in a bubble, but you can’t compare 1999 until we see more money poured into it. Not everyone knows how to even buy bitcoin or altcoins. Once the public or non-tech people are able to buy easily, then we could hit bubble territory. If the crypto market is in a bubble, then I don’t know what the stock market is in, probably ultra super duper bubble. At least the crypto market pulls back more than 20%. We haven’t seen the stock market pull back more than 2% this year.

    • Flip a Bip

      I think you stop too early on your analysis. You do not consider: 1) Total coins lost; 2) Derivative, or proxy methods folks use to invest in alts (hint: look at Overstock.com [OSTK]); 3) Threat of government intervention.

      It’s also funny to think about how US-based institutions, like CoinBase, are giving people access. Since they are regulated in the US, and abide by know-your-customer and anti-fraud laws, those who buy via CoinBase must submit all their personal information to set up an account. I say this is funny because the initial allure of alt coins are the Libertarian underpinnings to the ecosystem – it was designed for anonymous transactions! That is a HUGE feature actual users/miners of alt coins will have to sacrifice if the craze actually has traction!

  3. I closed the last of my BitCoin out today. Vertical chart line rises in essentially dysfunctional exchange mediums make me think that all of their value is 99% speculation and crashes are at hand.

    I’ve made several BitCoin merchandise transactions. My first a year ago – took nearly two weeks to complete, was very expensive compared to PayPal, or credit card. I have no idea whether my transaction went off-chain like 50+% of current BitCoin transactions. This meaning it had zero blockchain security. I lucked out my BitCoin purchase of products in China eventually were confirmed – all be it at extraordinary costs, zero anonymity, and with unknown security.

    My last attempted transaction with Newegg yesterday and today. Neither of which was ever completed and has so far involved about five hours of effort. The lengthy time was a primarily Newegg problem – failing to have staff familiarity with BitCoin transactions. First of all the staff member that I worked with on the order had never made a BitCoin transaction, only knew one person who had ever made a BitCoin transaction at Newegg, and had to spend about 10 minutes locating someone at Newegg that could her – help me – to select items from the Newegg online catalog for which Newegg accepted BitCoins. While Newegg claims to accept BitCoin, it only accepts BitCoin for Newegg inventoried items and not for items being sold by their associate vendors in their catalog. There are no refunds for BitCoin purchases. In some cases you can get a Newegg gift card in an equivalent value to your Newegg returned order. A very ambiguous refund policy – if you can call it that. Essentially, I have had to start my order over repeatedly and continue again until I had to accept that FireFox and Bitpay were simply not going to talk to each other. The problem was apparently between BitPay and FireFox – which could not communicate the respective exchange addresses between Newegg and my LocalBit wallet.

    After nearly 7 hours invested in the order for an iPhone and accessories, I have given up. I traded/sold the Bitcoins necessary for my purchase through LocalBit and had the cash paid into my PayPal account – where I can eventually make a competent purchase in a reasonable amount of time.

    The bottom line as so many BitCoin analyses point out is that BitCoin is not a currency – because it has very little merchant transaction. This is primarily because it’s expensive in both time and money – multiples of a credit card transaction. Almost no one is using BitCoin for regular transactions – in spite of what BitCoin trolls may claim to up the value of their speculative BitCoin holdings.

    BitCoin is 99% speculative trade/gamble at best. There is a big gap between its use as a speculative trade and becoming a competitive currency or exchange medium. Due this lack of competitive exchange functionality – BitCoin is a speculative bubble, and eventually that bubble will pop and BitCoin valuations will reflect the reality of its actual functional value – which is not very much. The real down side of BitCoin is that many people responding to the BitCoin mania – are now purchasing BitCoin on credit – particularly expensive credit card debt – the easiest way to buy BitCoin. If BitCoin valuations collapse – much of the associated BitCoin purchase debt will hit the banks and the economy between the eyes.

    Mean while the blockchain technology (which is used on less than half of current BitCoin transactions because of blockchain throughput time constraints) will continue to be developed not only for currency, but for many other kinds of inventory type source tracing and accounting (i.e. WalMart and others are developing blockchain for product tracking). Soon blockchain will be adopted for national cryptocurrency technology development. When this happens private cryptocurrencies will be superfluous – and will still be non-competitive.

    That’s why BitCoin is by definition a speculative bubble – because there is simply no scenario where private cryptocurrencies become competitive with and or are allowed to displace national currencies. As of now – I no longer own any BitCoin, or have any position in cryptocurrencies – long or short.

  4. Pingback: Larwyn's Linx: The CFPB Coup Attempt Is Over, as Court Rules In Favor Of President Trump - Patriot Advisor

  5. Very well written article. I appreciate your clear assumptions and calculations. Let’s party like it’s 1999!

  6. Pingback: Why I’m not buying into crypto. – Sam's Blog

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