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It's only a bubble if you can identify it ahead of time. Stating that something became much more valuable over a short period of time doesn't mean you know how
by vasilipupkin 9y ago
It's only a bubble if you can identify it ahead of time.
Stating that something became much more valuable over a short period of time doesn't mean you know how to identify bubbles. Bitcoin is 70-80 times more valuable now than when it was at 32, and had you bought it then you would be up a lot. So, to say crypto is in a bubble today is the same thing as to predict that in a few years it will be worth less than today. Do you know that definitively ? I don't
- vasilipupkin 9y agoDownvoters, since you know how to indentify bubbles, I'm assuming you shorted ethereum on margin on GDAX when it hit 400 and made a ton? No? If not, why not, if you knew definitely it was a bubble ?
- Taek 9y agoBecause it's very hard to figure out where the top of a bubble is, and if you short a bubble asset too long before the peak, you go broke, even if you are correct. Don't short hopium.
- vasilipupkin 9y agoWell, now we are talking semantics. You don't get to claim you are correct if your forecast turns out to be wrong. So, if you identify a bubble, part of the requirement to say that you succeeded is that you can identify the top. Otherwise, your "knowledge" that it's a bubble is useless
- MockObject 9y agoI think people agree that a price rise was a bubble after it pops, and I don't believe that prediction is a necessary condition.
- vasilipupkin 9y agoIt is, otherwise how do you distinguish a bubble from a rise justified by fundamentals ?