Researchers find that one person likely drove Bitcoin from $150 to $1,000
To its proponents, the cryptocurrency Bitcoin offers the potential to disrupt payment systems and traditional currencies. It has also been subject to security breaches and wild price fluctuations. This paper identifies and analyzes the impact of suspicious trading activity on the Mt. Gox Bitcoin currency exchange, in which approximately 600,000 bitcoins (BTC) valued at $188 million were fraudulently acquired. During both periods, the USD-BTC exchange rate rose by an average of four percent on days when suspicious trades took place, compared to a slight decline on days without suspicious activity. Based on rigorous analysis with extensive robustness checks, the paper demonstrates that the suspicious trading activity likely caused the unprecedented spike in the USD-BTC exchange rate in late 2013, when the rate jumped from around $150 to more than $1,000 in two months.
Also, of note, the market cap of combined cryptocurrencies dropped by about $20 Billion in 15 minutes this morning.
The latest company to jump out of penny stock status because of saying the magic word “blockchain” is - Kodak (KODK). Their plan is to use it to protect photographer’s rights to their work, and I think they’re also doing an ICO.
The story i’ve heard is that it was started by some guys in Bulgaria and pitched as a way to pay for and facilitate dental services around the world (as if that is something needed?). They did an ICO and used the money to buy some dental clinics in the US and the UK, and then created very similar websites and FB pages for each clinic (as well as thousands of sites and pages for non-existent clinics), that all coincidentally pointed back to the same owner address, in Bulgaria.
They then repeatedly pitched each clinic as “the next dentist who has joined the network and was now accepting Dentacoin!”
As if all of that wasn’t silly enough, the marketcap of Dentacoin actually grew to $2.2 Billion!!! It has since dropped down to only $465 Million as of this morning.
I don’t know exactly what this is a sign of, but it can’t be the sign of a real, growing market.
I don’t know exactly what this is a sign of, but it can’t be the sign of a real, growing market.
I’ve tried to ignore cryptocurrencies for the purposes of this board, and will continue to do so as that’s not what this board is for, but I think these posts by Epictetus (especially the one regarding Bitcoin’s susceptibility to manipulation) are fascinating and point out a larger issue:
This is what a bubble looks like.
Sometimes people talk in vague terms about the stock market being expensive. Some say, “Maybe there’s a bubble.” Yet many members of this board including Saul saw a real stock bubble first hand in 1999. That phenomenon, as Saul frequently reminds us, was so very different than general “stretched” market valuation. This crypto bubble is too. Here are just a few things I’ve noticed:
Family members who have no interest in investing have mentioned Bitcoin (one even owned some)
Crazy valuation swings by companies simply adding “Blockchain” to their name
The host of a podcast I listen to (subject is Nutrition, nothing to do with investing) bragged about buying Bitcoin
ICO’s (like Dentacoin) siphoning literal billions of dollars out of the pockets of the gullible, without any evidence of value
At best, a crypto asset could be a “store of value” like gold. But Bitcoin or any other coin is only as good a store of value as the confidence of whoever holds it. Someone has to continue to believe that the asset will stay valuable in the future, or it loses its value today. I’ll let Warren Buffett do a better job explaining: https://youtu.be/BtN17EGeVVA
Long time lurker here. Blockchain is worth learning about. It is the future in a lot of ways. That being said, companies do not have to use crypto to use blockchain. I will be curious to see how blockchain affects the corporate world over the next couple of years. It has the potential to be very disruptive as a platform.
Anyone like Buffet who calls crypto a “store of value” does not understand blockchain. The value of Bitcoin is not as a currency but as a blockchain technology. Bitcoin is often ridiculed in the crypto world for being antiquated and useless. Ethereum is likely the future and serves as a token platform (i.e. not used like gold ast all). Bitcoin will be replaced at some point as the leader. It was just the first mover.
I do own some tokens and coins (which are different). Nothing substantial (less than 1 percent of my total portfolio). I just like learning about new technology and have approached it as pure speculation. Over the last 4 months, my small portfolio has increased 5 times. That being said, I would not recommend friends or family to invest. It is the wild west with no oversight.
Bear…I did not mean my post to come across as snarky. Reading it again, I realized it might come across as such. I appreciate the civility of this board and your frequent posting.
Bear…I did not mean my post to come across as snarky. Reading it again, I realized it might come across as such. I appreciate the civility of this board and your frequent posting.
Kevin,
No offense taken. I defer to you on the potential value of blockchain technology. I was simply saying that the enthusiasm for many particular coins seems to be in bubble territory, especially because there’s no intrinsic value other than the value people place on them. It’s similar to gold that way. Gold is only valuable because everyone agrees it is. It’s logical to me that Bitcoin, Ethereum, or some coin that’s not yet invented might be valuable in perpetuity, but I imagine most of the little coins out there will probably go away altogether. I could be completely wrong, though.
Anyway, we should probably nip this here, unless you’d like to move it to another board.
know what you mean but in fact gold has many uses. For instance that gold plate on computer connecters . If it wasn’t so scarce uses would multiply -it has many unique characteristics
What would the gold price be if not for the monetary connection ? I have no idea, but it would probably still be priced by the ounce, not by the pound or the ton. there’s no intrinsic value other than the value people place on them true of the dollar or yen too, with the one exception that by law it has to be accepted for taxes ,a pretty big pro. And it won’t be outlawed.