The Crypto Bubble Will Pop Only When The Skeptics Will Start To Buy In
In a very interesting piece published yesterday, @zerohedge (I don't know if this is his real account on Steemit, but I refer it anyway) gave the most reasonable explanation of the cryptocurrency status and why we are not - yet - in a bubble.
The true potential value of cryptocurrencies will not become visible until the global economy experiences a catastrophic collapse of debt and/or a major fiat currency. These events are already baked into the future, in my view; nothing can possibly alter the eventual collapse of the current debt/credit bubble and the fiat currencies that are being issued to inflate those bubbles.
The skeptics will continue declaring bitcoin a bubble that's bound to pop at $3,000, $5,000, $10,000 and beyond. When the skeptics fall silent, the potential for a bubble will be in place.
When all the former skeptics start buying in at any price, just to preserve what's left of their fast-melting purchasing power in other currencies, then we might see the beginning stages of a real bubble.
Full article here. Be aware, it has a lot of scientific references, not your usual pseudo-journalistic mumbo-jumbo.
I'm a serial entrepreneur, blogger and ultrarunner. You can find me mainly on my blog at Dragos Roua where I write about productivity, business, relationships and running. Here on Steemit you may stay updated by following me @dragosroua.
https://steemit.com/~witnesses
has a lot of scientific references,
math is hard
not your usual pseudo-journalistic mumbo-jumbo
which is why journalists don't use it.
Don't think of crypto as a bubble so much as an airbag...
handy things airbags..
....when you're in crash.
I saw Charles' post yesterday. I think another way to think of his point is Bitcoin riding from bubble to bubble, ultimately following the curve of adoption. I like his relationship with Metfalfe's law, I would make similar statements.
We are just waiting for the institutional money. It is coming.
My recent post: What it is like riding Bitcoin bubbles: an adventure through the present cryptocurrency explosion dives into some of my opinions on the Bitcoin bubbles.
We are still far away from a mailkmaid bubble!
What is a mailkmaid bubble? :)
Sorry, the Housemaidhausse ^^
Does that not exist in English? German Dienstmädchenhausse = when even the maids (and similar "low" folks) buy stocks etc. and drive up the prices.
It is a strong signal to sell.
btw. this time you inspired me to a post ;) https://steemit.com/til/@lennstar/brainstorming-is-a-bad-idea
Had no idea that word existed. Glad to see I'm inspiring people, will check it out :)
The problem with predicting bubbles is that there is a huge amount of psychology involved and if something is fickle and hard to predict, it's surely humans. Something has value only while enough market participants agree that it has value and as human behavior is often illogical and emotional, the market is capable of doing some strange things sometimes.
But the point made by the article makes a lot of sense even on the face of it without even considering the math. Most of the people participating in the cryptocurrency markets right now are still mostly people that firmly believe in the concept. Their overall confidence makes the system stable and value continues to climb. A lot of those people are in it for the long run and are very unlikely to sell in panic, so as long as they are the majority, you could say that there isn't a real bubble or that a bubble would be hard to pop. This type of problem can arise only when enough people that are more skeptical of the concept enter the market, so their irrational behavior can start swaying it.
Good point, thanks for sharing your opinion.
It's my pleasure.
In the event of skeptics buying into cryptos we are still quite far from the reality. However you do you have a solid point, i agree with @everittdmickey to think of it more as airbags deflating and inflating. If the skeptics buy into Bitcoin for example the currency is forever capped specifically to prevent such bubbles that caused the 2009 financial crisis.
Interesting theory. That seems like it could be true.
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