Is bitcoin just a giant game of “chicken”?

HansOndabush

lozzy1965 said:

HansOndabush said:

Zola. said:

How many investing bubbles have lasted for over 12 years?

South Sea bubble

Japan real estate bubble

Japan stock market bubble

The Wall St. crash of 1929

US housing bubble

S&P 500 bubble (we are currently in)

Crypto bubble

The most obvious part of the bubble is the last parabolic surge upwards but many of these bubbles took years to form before that final surge. Same with bitcoin; it exactly follows the typical bubble chart; we are currently in the bull trap phase before the next leg down to sub $20K. Good luck with your investment, HFSP

And the timeframe for your chart's sub 20K?

Already stated on the other Bitcoin thread. This year, most likely sooner rather than later.

Adyinvestment

A huge catalyst for Bitcoin will be if/when a Bitcoin ETF is approved by the SEC (anticipated by many this year) and eventually FCA.

Once/if this happens and there is easy access in pensions etc I would expect a tremendous amount of money to go into Bitcoin - at this point it will be here to stay.

Malthusian

Zola. said:

How long does it have to keep going up before people may come to realise it has high demand and ultimately value? Short-term volatility is the price you pay for 200% gains per year on average.

lol

The average yearly return from Bitcoin is nil. Average return = average across all investors. Punters' money in == punters' money out.

The price paid for 200% gains per year is that other punters have to lose (200% ^ years) of the amount you invested to allow you to cash out at a 200%pa profit.

lozzy1965

Malthusian said:

Zola. said:

How long does it have to keep going up before people may come to realise it has high demand and ultimately value? Short-term volatility is the price you pay for 200% gains per year on average.

lol

The average yearly return from Bitcoin is nil. Average return = average across all investors. Punters' money in == punters' money out.

The price paid for 200% gains per year is that other punters have to lose (200% ^ years) of the amount you invested to allow you to cash out at a 200%pa profit.

Which is exactly the case when 'investing' in a share that pays no dividend.

Malthusian

lozzy1965 said:

Malthusian said:

Zola. said:

How long does it have to keep going up before people may come to realise it has high demand and ultimately value? Short-term volatility is the price you pay for 200% gains per year on average.

lol

The average yearly return from Bitcoin is nil. Average return = average across all investors. Punters' money in == punters' money out.

The price paid for 200% gains per year is that other punters have to lose (200% ^ years) of the amount you invested to allow you to cash out at a 200%pa profit.

Which is exactly the case when 'investing' in a share that pays no dividend.

No it isn't. When investing in a share that pays no dividend, punters' money out == punters' money in plus all the net profits reinvested within the business. (Or minus its losses.)

naedanger

Malthusian said:

Zola. said:

How long does it have to keep going up before people may come to realise it has high demand and ultimately value? Short-term volatility is the price you pay for 200% gains per year on average.

lol

The average yearly return from Bitcoin is nil. Average return = average across all investors. Punters' money in == punters' money out.

The price paid for 200% gains per year is that other punters have to lose (200% ^ years) of the amount you invested to allow you to cash out at a 200%pa profit.

I am no advocate of Bitcoin but that is not a sensible analysis. 

lozzy1965

Malthusian said:

lozzy1965 said:

Malthusian said:

Zola. said:

How long does it have to keep going up before people may come to realise it has high demand and ultimately value? Short-term volatility is the price you pay for 200% gains per year on average.

lol

The average yearly return from Bitcoin is nil. Average return = average across all investors. Punters' money in == punters' money out.

The price paid for 200% gains per year is that other punters have to lose (200% ^ years) of the amount you invested to allow you to cash out at a 200%pa profit.

Which is exactly the case when 'investing' in a share that pays no dividend.

No it isn't. When investing in a share that pays no dividend, punters' money out == punters' money in plus all the net profits reinvested within the business. (Or minus its losses.)

If you include the value of the underlying asset then that is correct.  But for the punter buying the portion of ownership of that underlying asset 'punters money in==punters money out' in order for that portion to change hands. 
My point is that you are arguing the value of the asset.  "Punters money in == punters money out" is neither here nor there, that is the cost of exchanging ownership of portions of an asset, whether or not there is any value in the underlying asset is a different statement/argument.

Hexane

steampowered said:

me1000uk said:

essentially you're looking at a speculative asset based on luck over the past few years, rather than something that has been relatively robust for generations. 

The price of most other commodities (coal, copper, steel, salt, grain) has crashed; there is no reason to be confident that gold won't do the same.

Are you sure about this?

https://www.macrotrends.net/1476/copper-prices-historical-chart-data

https://www.macrotrends.net/2532/corn-prices-historical-chart-data

Or when you say "has crashed", am I correct in thinking that instead of meaning "has recently lost most of its value" (which is what your comment initially sounds like it means), you actually meant "has occasionally lost as much as 25% of its value just like diversified global equities funds have occasionally done, but on average has consistently increased in value over the long term"?  That's what those charts seem to show.

Malthusian

naedanger said:

Malthusian said:

Zola. said:

How long does it have to keep going up before people may come to realise it has high demand and ultimately value? Short-term volatility is the price you pay for 200% gains per year on average.

lol

The average yearly return from Bitcoin is nil. Average return = average across all investors. Punters' money in == punters' money out.

The price paid for 200% gains per year is that other punters have to lose (200% ^ years) of the amount you invested to allow you to cash out at a 200%pa profit.

I am no advocate of Bitcoin but that is not a sensible analysis. 

If you've got an analysis that proves that punters' money in != punters' money out in a zero sum game, we're all ears.

lozzy1965 said:
If you include the value of the underlying asset then that is correct.

Glad we agree.

But for the punter buying the portion of ownership of that underlying asset 'punters money in==punters money out' in order for that portion to change hands. 

Value added by the business to its inputs generating profit attributable to shareholders != punters' money.

The original point of dispute here is that Bitcoin generates average returns of 200%pa. An unqualified "average" means "across all investors", not "among some random minority of investors who cashed out at a profit".

Rather than argue semantics, you can win this argument by showing where the money has come from to pay Bitcoin investors 200%pa returns that does not come from other punters buying Bitcoins off existing punters.

naedanger

Malthusian said:

naedanger said:

Malthusian said:

Zola. said:

How long does it have to keep going up before people may come to realise it has high demand and ultimately value? Short-term volatility is the price you pay for 200% gains per year on average.

lol

The average yearly return from Bitcoin is nil. Average return = average across all investors. Punters' money in == punters' money out.

The price paid for 200% gains per year is that other punters have to lose (200% ^ years) of the amount you invested to allow you to cash out at a 200%pa profit.

I am no advocate of Bitcoin but that is not a sensible analysis. 

If you've got an analysis that proves that punters' money in != punters' money out in a zero sum game, we're all ears.

What about "punters" who have not yet sold their Bitcoin?
What value are you placing on their holdings? 
Suppose today I bought £10,000 of Bitcoin. Are you saying I have lost all my money, just because I haven't sold them?