Crypto Currency Bubble

[Louie Dawgs]

Originally Posted by diasick

A real investor won't get paranoid when shit goes down, because it will just go back up, a good way to lose your money is to pull it out when it goes down, like I said, any investment is risky, it's probably more controlled than the stock market/real estate right now, this attitude is why me and many others didn't jump on it in 2010, we could all be millionaires by now, and it wouldn't be luck either,all them dudes that got rich off it, new what was going to happen, and wasn't stubborn like we was, so I hardly call that luck.

Oh please.

The reason that you would hold a stock or a currency in a downturn or even a loss if your models still show that you can and will make money based off of your valuation. Bitcoin has no fundamental value, it is not the same.

---------- Post added at 12:42 PM ---------- Previous post was at 12:25 PM ----------

A few other things. Here is why the bitcoin bubble will pop CRAZY hard.


Investors have break-even points, what I mean is this... If you invest in a stock at 10 dollars that is your break-even. If the value of the stock goes below 10 then you are losing money. Your decision to either hold or sell is based upon your valuation of the stock. If you think the stock should be worth $20 then you will hold due to your belief that the market price will eventually reflect that. If you think that the stock is really worth $5 and you're just trading momentum then you will sell at or around 10 because you don't have faith in it going higher.


Momentum stocks are usually top loaded, meaning a few people get in at the bottom and make a ton, but most people get in much later during the frenzy and buy at a price above the valuation. This buying keeps upping the price so that more and more people keep getting in and it goes up a shit ton. Eventually, people get scared and start selling off. Since most of the people are in at the top, and they are above their valuation (bitcoin has no valuation, fwiw) they have no incentive to hold below their break even. Thus, when you get a major downward move in a crypto like bitcoin the huge mass of people invested at the top all start selling and the massive sell pressure drives the price down massive amounts. This has already happened to some degree a couple of times already. Bitcoin has ZERO fundamental valuation and the only reason people hold it is because they think they can make money off of it. Once people realize they cannot make money buying pressure will fail and the currency will go down a crazy amount. I think that there will someday be the bitcoin superpop and it could go under 1k.


Another thing, bitcoin has no valuation because it is basically unusable as a currency. It is a volatile deflationary currency with no banking system and an economic model that hasn't been used since the 1800's. It is a horrible currency for actually using on a day to day basis, it cannot power a stable economy.

---------- Post added at 12:45 PM ---------- Previous post was at 12:42 PM ----------

Originally Posted by Shodan

I used to have a spreadsheet where I invested fictional money in stocks and followed their performance. I gained quite a bit of money. Tfw I'm better at stock trading than some companies

No you're not, because most companies are going to HFT and algo trading, which blows any human trader out of the water. A good quant can write a python script, backtest it, and destroy 99% of human traders within a week.

[Louie Dawgs]

Originally Posted by diasick

A real investor won't get paranoid when shit goes down, because it will just go back up, a good way to lose your money is to pull it out when it goes down, like I said, any investment is risky, it's probably more controlled than the stock market/real estate right now, this attitude is why me and many others didn't jump on it in 2010, we could all be millionaires by now, and it wouldn't be luck either,all them dudes that got rich off it, new what was going to happen, and wasn't stubborn like we was, so I hardly call that luck.

Oh please.

The reason that you would hold a stock or a currency in a downturn or even a loss if your models still show that you can and will make money based off of your valuation. Bitcoin has no fundamental value, it is not the same.

---------- Post added at 12:42 PM ---------- Previous post was at 12:25 PM ----------

A few other things. Here is why the bitcoin bubble will pop CRAZY hard.


Investors have break-even points, what I mean is this... If you invest in a stock at 10 dollars that is your break-even. If the value of the stock goes below 10 then you are losing money. Your decision to either hold or sell is based upon your valuation of the stock. If you think the stock should be worth $20 then you will hold due to your belief that the market price will eventually reflect that. If you think that the stock is really worth $5 and you're just trading momentum then you will sell at or around 10 because you don't have faith in it going higher.


Momentum stocks are usually top loaded, meaning a few people get in at the bottom and make a ton, but most people get in much later during the frenzy and buy at a price above the valuation. This buying keeps upping the price so that more and more people keep getting in and it goes up a shit ton. Eventually, people get scared and start selling off. Since most of the people are in at the top, and they are above their valuation (bitcoin has no valuation, fwiw) they have no incentive to hold below their break even. Thus, when you get a major downward move in a crypto like bitcoin the huge mass of people invested at the top all start selling and the massive sell pressure drives the price down massive amounts. This has already happened to some degree a couple of times already. Bitcoin has ZERO fundamental valuation and the only reason people hold it is because they think they can make money off of it. Once people realize they cannot make money buying pressure will fail and the currency will go down a crazy amount. I think that there will someday be the bitcoin superpop and it could go under 1k.


Another thing, bitcoin has no valuation because it is basically unusable as a currency. It is a volatile deflationary currency with no banking system and an economic model that hasn't been used since the 1800's. It is a horrible currency for actually using on a day to day basis, it cannot power a stable economy.

---------- Post added at 12:45 PM ---------- Previous post was at 12:42 PM ----------

Originally Posted by Shodan

I used to have a spreadsheet where I invested fictional money in stocks and followed their performance. I gained quite a bit of money. Tfw I'm better at stock trading than some companies

No you're not, because most companies are going to HFT and algo trading, which blows any human trader out of the water. A good quant can write a python script, backtest it, and destroy 99% of human traders within a week.