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There's a fallacy in there somewhere. It's like telling me that calling something gambling is a meaningless term because I can't tell you exactly when you will
by TheCowboy 9y ago
There's a fallacy in there somewhere. It's like telling me that calling something gambling is a meaningless term because I can't tell you exactly when you will lose your money playing craps. I don't know exactly when. There's a random factor involved. There's even a chance you might come out ahead.
The fact that you don't know when it will burst is just one problem with bubbles. You don't know if it will be 2152 or now. If you know it is a bubble because of a strong irrationally motivated valuation but still buy in, then you are gambling on not "if" but "when" the bottom will fall out.
- vasilipupkin 9y agoI don't agree with your analogy. If you play craps, then given the odds, we can predict that you will lose money on average if you play a large number of games. That's a pretty specific statement. Which specific statement are we making when we call something a bubble?
- TheCowboy 9y agoBubble can be overused and become meaningless, but it can be a useful concept to consider when deciding if this is where you want to put your money. In my opinion, irrationally motivated valuation is key here. People buying Bitcoin as the future are taking a leap of faith that only comes true if enough people take that leap and do not abandon it. There is no underlying asset or intrinsic value, there is no government force backing it up. There is nothing people can point out to express why this particular cryptocurrency has value. This isn't an argument against the underlying technology, just the valuation of Bitcoin.
- vasilipupkin 9y agoPerhaps, but there are all sorts of sophisticated people with all sorts of valuation models for crypto, etc. What you are saying is just disagreement about valuation. I mean, if bitcoin is irrationally priced, there is a way to express that view by shorting bitcoin futures.