Investing.com - Financial Markets Worldwide
Get 40% Off
Get 40% Off
👀 👁 🧿 All eyes on Biogen, up +4,56% after posting earnings. Our AI picked it in March 2024.
Which stocks will surge next?
Unlock AI-picked Stocks

The Insane Bitcoin Bubble

ByTim Knight
Published 04/07/2014, 03:04 PM
Updated 07/09/2023, 06:31 AM

One of the earliest chapters in my Panic, Prosperity, and Progress book is about the South Sea Bubble. I know I’m not the first chap to compare the insane Bitcoin bubble (which is rapidly deflating) with South Sea, but I am truly struck by the similarities. Here’s what happened with South Sea, four centuries ago………(the notations about Newton relate to Sir Isaac Newton’s own investing losses with this “security”:). I’ve put an arrow approximating where I think we are right now with respect to the Bitcoin (BTC-eUSD) analog.

South Sea Stock
And here, in the modern age, since we’ve all learned so much, is Bitcoin:

Bitcoin
So the virtual currency is now down about 60%. I’m sure many of you remember when Bitcoin reached parity with gold. Ummm, I daresay those holding on to gold are more content with their shiny little coins than those who have shiny little binary digits floating aroud in cyberspace (that is, unless they get Mt. Gox’d).

Latest comments

BTC crashed from 32 o 2 usd in the past. From 264 to 80, from 1200 to 400, from 10.000 to 2.500?? It is a new technology, an advanced system of transferring money, it will end credit cards a technology from the 50's too expensive and old for the new digital economy. people now don't send letters, they send e-mails. So in a few years people will stop using credit-debit cards and will use crypto currencies.
Interesting, but Bitcoin is just the tip of the iceberg in the crypto-currency world. You should do a piece on an alternative coin, like Zetacoin. They are about to become one of the major mobile payment solutions around Africa, lead developers are in meetings right now to make it happen. You can get Zetacoin on most major coin exchanges Bter/Cryptsy/Mintpal. As of today Zetacoin are 1,000 times cheaper than Bitcoin. They will be all over the news in the next few weeks! Do a research piece on Zetacoin for people who don't know what alternative coins are, or want to get on the bandwagon before they get to $100 per coin. Right now they're only about $0.01 each
Is that really the sum total of your analysis, "the charts look similar" ?
Exactly. He should look at historical logarithmic chart data for the past 3 years on a site like bitcoinwisdom. This isn't the first "bubble". This has happened 3-5 times since Bitcoin's inception. After each peak it recedes to around half it's value over the following 3 months, but each exponential peak has occurred almost exactly 8 months after the prior one. Don't judge bitcoin by it's current downtrend. Opinions should be based on whether it will have more uses and government support in the future. Just read a few articles about New York's upcoming BitLicense, numerous deployed BTC ATMs, and the various other companies starting to accept or created to allow easier BTC transactions and maybe you'll actually be able to create a valuable and reliable analysis.
False! the past exponential rise was due on Chinese manipulation and those people believe it WILL MAKE MONEY, NOT IT"S TECHNICAL EVOLUTION!. NOW GOVERNMENT TRIES TO REIGN IT, AND THAT WILL BE THE END OF THIS SO-CALLED CURRENCY.
Install Our App
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.