Bitcoin and cryptocurrency, what's a financial bubble? Explanations in 5 minutes chrono!

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Bitcoin and cryptocurrency, what's a financial bubble? Explanations in 5 minutes chrono!




by Christophe » 10/12/17, 11:21

A great article on the phenomenon of financial "bubbles" to read and understand absolutely if you want to put some marbles in cryptocurrency: https://www.lesechos.fr/finance-marches ... 137044.php

Is bitcoin a bubble? Three graphics to understand

The digital motto flies from records to records. Many observers warn of the risk of a bubble.

A bubble can be recognized only when it breaks out, they say. With bitcoin, however, observers are convinced that cryptocurrency is a purely speculative asset. Its rise does not correspond to any fundamental data of market, and the courses go straight towards a massive correction. Some do not hesitate to see the largest bubble in history. Here are three graphs to put into perspective the madness that has seized bitcoin and other cryptocurrencies.

-1- The classic model of a bubble

Robert Shiller, Nobel prize winner in 2013, is a specialist in bubble phenomena. In particular, he has written a book on "Irrational Exuberance" of the markets, referring to the comments of Fed boss Alan Greenspan in 1997. In his book, published a few months before the dot-com bubble, the economist estimated that equity markets were overvalued.

In 2005, Robert Shiller publishes a new edition to include the real estate market that he also considers at too high levels. From 2007, the first signs of cracking appear before the big financial crisis in 2008. Today, Shiller is very interested in cryptocurrencies.

In an interview at the Quartz site, the economist believes that the best example of the bubble moment is bitcoin. He insists on the "storytelling" of the motto. A creation by a mysterious Satoshi Nakamoto, an operation out of any central bank, the impossibility of governments to regulate ... in short, a motto that fits perfectly with the air of the post-financial crisis time.

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The classic phases of a bubble. - Wikimedia

It is precisely in the wake of the financial crisis that the economist Jean-Paul Rodrigue developed the graph above detailing the phases of a bubble, from its formation to its burst. Comparing it with bitcoin, the motto appears as a cartoon example of a bubble in formation. After taking off in 2013, he experienced a first correction in 2014. It is with increasing media attention and personal attention that bitcoin has begun to skyrocket since 2017.

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The price of Bitcoin in dollars. - Coindesk

-2- The fastest bubble in history

Another graph has circulated a lot in the cryptocurrency community. He compares the evolution of the price of bitcoin with that of other indices that have formed a bubble. This has raised many debates - as here - about the number of years to remember for bitcoin, or the scale to use - logarithmic or not.

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Charles Schwab

Beyond these debates, by observing the previous bubbles, that of real estate or the Internet bubble, we note that they have grown for 10 years before bursting. On these 10 years, they inflated 1.000%. What about bitcoin? Since a low in mid-January 2015 160 dollars, there is barely two years, he took 1.360% to almost 17.000 dollars. From this point of view, bitcoin would be one of the fastest bubbles in history.

-3- If it's a bubble, is it dangerous for the global economy?

The first thing to keep in mind is that even if the bubble were to burst, the digital currency would not disappear. Amazon or Apple have both gone through the dotcom bubble. The second thing is to measure the weight of bitcoin to better grasp the potential shock of a currency crash. In this case, according to the MarketCoinCap site, the total capitalization of cryptographic currencies is more than 400 billion. Bitcoin alone is close to 260 billion.

These numbers may seem huge, but in the financial world this is not impressive. On the foreign exchange markets, the equivalent of 5.100 billions of dollars are exchanged every day. Global market capitalization is 78.000 billion. At the time of the subprime crisis, US household debt was approaching 13.000 billion.

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The capitalization of cryptocurrencies borders 420 billions of dollars. - CoinMarketCap.com

In reality, more than the size, the danger comes mainly from the links between actors via derivatives. Thus the small hedge fund Long Term Capital Management (LTCM) has shook the global markets in 1998 in its near-bankruptcy. LTCM, which had a strong leverage effect, was very connected to the banks which are themselves interconnected and finance the entire economy.

Same thing for the subprime crisis: the amount of subprime debt in the United States was relatively small, but it contaminated the entire US credit market and the entire planet by being mixed with other assets in the United States. complex derivatives through securitization.

At the moment, few companies are funding bitcoins, and in the absence of official listings on recognized stock exchanges, it is still difficult to develop bitcoin derivatives. But that should change in the coming times. Indeed, the CME Group is preparing to launch a futures contract on the digital currency.

Etienne Goetz


Edit add, a video of 30 minutes to see to understand the interest of crypto currencies:



Use the subtitle function and automatic translation into French ...
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Re: Bitcoin and cryptocurrency, what's a financial bubble? Explanations in 5 minutes chrono!




by sen-no-sen » 10/12/17, 14:33

The diagram presented below corresponds quite to a typical thermodynamic cycle:

Image

It can be seen that the so-called phase mania typically corresponds to an exponential curve induced by retroactions.
The sentence blow off corresponding to a collapse ... followed by a phase of repurposing, and it goes away for a ride ...
I leave you alone judge if you make a correspondence between this one and the world demographic expansion ... ditto for the GDP ...
Given that the bitcoin comes from the computer world and therefore benefits from hyper-acceleration specific to this area, it allows to see judiciously what will happen in the short term ...

Representation in 3d of an economic cycle:
Image
To know more:http://www.francois-roddier.fr/?paged=3
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Re: Bitcoin and cryptocurrency, what's a financial bubble? Explanations in 5 minutes chrono!




by Christophe » 12/12/17, 12:24

Well bubble right now zamis! Here's what Litecoin does since 24h: https://www.gdax.com/trade/LTC-EUR

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Still not convinced that you have to NOW?

No problem, I advise you VIVEMENT to let your money enrich banks at 1% per year (at best)...because they are going to put in and keep the profits for them ... because there are profits ... Putting 100, 500 or 1000 is frankly a measured risk that can put butter in spinach!

What is pure speculation? Of course! So what? So what? Ask Medef how he has enriched his bosses during the last 30 years ...

This is not worse than speculation in stock market or other risky financial investments ...

And the advantage, the TRUE, is that investing in cryptocurrency is SHUNTER the banks! Some analysts predict that the bitcoin will be at 100 000 $ within a few months, others see it coming to 500 000 $ ...

Another advantage over conventional stocks and investments: you can buy fractions of bitcoins! You can put 10 € in a twelfth bitcoin today and resell tomorrow 5 € of these 10 € ...

In short, cryptocurrency is giving the people the tools reserved for "high" finance and this can, it will, change everything ... and more broadly restore their real savings power ...

Gdax https://www.gdax.com/ is a powerful tool, reactive in real time and which must resemble those used by professional traders for "classic" finance ... It is accessible for free, even without registering and with ridiculous commissions (0.25%. ..the banks take how much when we do the stock market ???)

I force anyone to take risks (invest only what you can lose and do not be too greedy ... it's the basis ...) but I think the worst bullshit is to leave even more power to banks leaving them your money ... They have already done enough damage ... They have pity for you? No, no pity for them! : Cheesy: : Cheesy: : Cheesy:
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Re: Bitcoin and cryptocurrency, what's a financial bubble? Explanations in 5 minutes chrono!




by sen-no-sen » 12/12/17, 13:39

Christophe wrote:Still not convinced that you have to NOW?


What to put to what?
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Re: Bitcoin and cryptocurrency, what's a financial bubble? Explanations in 5 minutes chrono!




by Christophe » 12/12/17, 14:27

Bin to Cyber ​​€ pulation so that banks do not smoke us again ... : Cheesy:

How much the French have billions on their booklets A with a miserable 0.75% per year (less than inflation !!)? This frozen money benefits who ?? If not to the banks!

GDax is a great tool ... it seems to me right? I tested it for you ... So go for it! Go for it! It has a reactivity that extremely limits the risks ... after obviously you have to be "available" or plan to sell and buy orders in advance ...

Start with 100 or 200 € ... have fun and hack during 1 week, reinvest your profits and in the worst case, it will cost you the price of a good restaurant ... With values ​​that make + 20% or - 20% a day is easy enough to win easily ... (today + 80% is exceptional anyway ... and all the better: the press will talk about it and it will attract capital and therefore stir up the market on the rise!)

I have nothing to gain from convincing you (except the satisfaction of helping to move towards a more democratic world less controlled by banks... uh I think no ??) ... but you yes!
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Re: Bitcoin and cryptocurrency, what's a financial bubble? Explanations in 5 minutes chrono!




by Christophe » 12/12/17, 14:44

I say + 80% because that's what Litecoin took in 24h at 14h40 today ...

Compare with the above screenshot at + 55% which was already outstanding!

Litecoin2.gif
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Obviously there may be some profit taking soon that will make the price fall (... or not ^ ^) to you to be responsive ... (or not ...) : Cheesy:

I think it's still the beginning of the bubble and when the middle classes are going to go into it, shunting the banks, it will explode !! I think that can revolutionize even society! And all the better because the classic banks only bring misery to the world! Obviously they will try to defend themselves ... but billions of savers are stronger than they!

I predict a Litecoin to 1000 € in 2 months ... maybe even before Christmas ... or not! : Cheesy:
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Re: Bitcoin and cryptocurrency, what's a financial bubble? Explanations in 5 minutes chrono!




by sen-no-sen » 12/12/17, 14:51

Do not take it badly, but this is an analysis of geek anti-capitalist Besancenot 2.0 trend that you hold us there! : Lol:

Believe that Bitcoin would be disconnected from the economic system is a gross illusion, since it is only the dematerialized trend pushed to the extreme of the said system ...
"Banks" are not the enemy, only the current interface, traditional if I may, between consumers and the economic system.
Bitcoin is just the emergence of the new trend to come (well I would say the swan song before the crash especially!), Ie without humans, so without advisers, so without employees *, in the sense of the wind of dehumanization.

Moreover Bitcoin has dematerialized only the name, since behind each transaction of this kind hides near 215 kilowatt hours (KWh) of energy, itself more than a week of electricity of an average French family!
To the extent that most of the electricity produced in the world comes from fossil fuel (mainly coal), investing in Bitcoin is an act of high ecological treason!

If you want to invest money there is only one safe haven:buy agricultural land especially those near a water source immediate and available all year.
Bitcoin will be dematerialized when the time comes with your savings!


* Except those of coal plants ...
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Re: Bitcoin and cryptocurrency, what's a financial bubble? Explanations in 5 minutes chrono!




by Christophe » 12/12/17, 15:09

sen-no-sen wrote:Do not take it badly, but this is an analysis of geek anti-capitalist Besancenot 2.0 trend that you hold us there! : Lol:


So she is good this one: I advocate cyber-financial speculation and you say that I am anti-capitalist trend red 2.0? : Cheesy: : Cheesy: : Cheesy:

I simply want the good of the people and the stopping of the monetary oligarchy! JFK also wanted this ... We know the end ..

The Bitcoin is obviously connected to the banks, they start to be on the spot that's for sure! But we can shunt them! And that's a great first time in finance!

Go see on Gdax, there are orders live hey orders of hundreds € (90% of orders) are private ... a banker is not shit for these sums! There are orders of less than 20 € too ... On the other side there are more 40 50 000 € ... yes yes they are certainly traders behind! All the better but this is not the majority of transactions ... and here is the novelty: we do not have banks to speculate!

Obviously when a trader sells in 1 order for 1 million, it hurts a few minutes during ...
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Re: Bitcoin and cryptocurrency, what's a financial bubble? Explanations in 5 minutes chrono!




by Christophe » 12/12/17, 15:17

sen-no-sen wrote:Moreover Bitcoin has dematerialized only the name, since behind each transaction of this kind hides near 215 kilowatt hours (KWh) of energy, itself more than a week of electricity of an average French family!
To the extent that most of the electricity produced in the world comes from fossil fuel (mainly coal), investing in Bitcoin is an act of high ecological treason!


Transaction or creation? There are not only bitcoins strictly speaking, look on Gdax are the littlecoin and Euthereum too ... We equate all virtual currencies bitcoin term ...

sen-no-sen wrote:If you want to invest money there is only one safe haven:buy agricultural land especially those near a water source immediate and available all year.


Easy to say, find me in one 500 € (probably the average amount on the French Livret A ... times are hard) and I sign : Cheesy: : Cheesy: : Cheesy:

Well I spoke too fast ... 80% it's nioniotte ... : Cheesy: : Cheesy: : Cheesy:

Promised it's not photoshopé, go see yourself: https://www.gdax.com/trade/LTC-EUR
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Re: Bitcoin and cryptocurrency, what's a financial bubble? Explanations in 5 minutes chrono!




by sen-no-sen » 12/12/17, 15:18

Christophe wrote: All the better but this is not the majority of transactions ... and here is the novelty: we do not have banks to speculate!


To speculate is precisely what pushes the biosphere to its loss.
At the time of high frequency trading, the only thing I can tell you is that Bitcoin is no longer a value "underground".
Moreover, whether the speculation is orchestrated by banks or "little people" does not change anything, since the end is only the production of abstract value, and I think that in a few years this notion will make sense! : Lol:
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