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> $50k is not really that far fetched... No, it actually is a ludicrous bet. No rational investor would ever make this investment. The absolute max value stand

> $50k is not really that far fetched... No, it actually is a ludicrous bet. No rational investor would ever make this investment. The absolute max value stands at less than a third of that. This sort of call only makes sense if it's designed to manipulate fools into a buy spree to supply liquidity to mask a massive cashout. > Bitcoin tripled in value Ah yes, and lightning will certainly hit the same person again and again. Do you happen to have any money on bitcoin by any chance?

wellboy 9y ago
You were probably the same guy who shouted at $10, at $1000, at $10000 that it's gonna crash soon and that it's never going higher.
y0ghur7_xxx 9y ago
> The absolute max value stands at less than a third of that. Care to elaborate?
- FabHK 9y ago
  I assume GP means the highest value realised so far, and was a bit sloppy on his mental maths.
Kiro 9y ago
What do you base the "absolute max value" on?
- geezerjay 9y ago
  On time series records of its market price, of course.
  - sdiepend 9y ago
    And what did it say about the "absolute max" only a few months ago?
    - headmelted 9y ago
      I think geezerjay meant it as a literal statement of past values rather than speculation on a future price. The absolute maximum value that bitcoin has ever traded at publicly is (I believe) just under $20k USD. His point is that no rational investor would bet the farm on a 3x increase on anything regardless of past values. This is the reason why advertised investments need to include a disclaimer stating that past returns are not an indicator of future success. That all being said - I don't think a bet like this requires someone to be masking a cashout. Not everything has to be a conspiracy. It's far more likely someone is caught up in the hysteria and genuinely believes that Bitcoin will hit that value (which it might, I don't have a crystal ball). "The market can remain irrational longer than you can remain solvent." - John Maynard Keynes
      - PeterisP 9y ago
        Don't pretty much all VC investors bet that the particular company is going to get a 3x+ increase in value? Expecting something like that is a sign of a speculative and risky investment, but there are quite a few asset types that have such expected returns if the result is the returns instead of a bust.
trhway 9y ago
>No rational investor would ever make this investment. i think the notion of "rational investor" gets redefined with the speed of the BTC price growth :)
ringaroundthetx 9y ago
So there’s zero leverage across the ecosystem, not withstanding bucket shop margin at fly by night exchanges, and you think you can call an absolute maximum? This is the only bubble WITHOUT credit and institutional leverage so far I would take the opposite side of your bets, there simply aren’t enough whole bitcoin units for even every schmuck with a million dollars Wake me up when crypto ventures are built entirely on rehypothecated assets in the crypto ecosystem, and Morgan Stanley is leveraged 5,000% again
- vasilipupkin 9y ago
  I think all that money you are talking about will go into other coins. https://medium.com/@mkogan4/four-predictions-for-crypto-five-years-out-40dacc80ed7e?source=linkShare-3ef666994b11-1513862362 https://medium.com/@mkogan4/four-predictions-for-crypto-five...
AznHisoka 9y ago
“No rational investor would ever make this investment” Are the current buyers of bitcoin rational?
Kurtz79 9y ago
"Ah yes, and lightning will certainly hit the same person again and again." It did though. Again and again. Will it keep doing so ? Possibly, possibly not. I don't think anyone can make a reasoned prediction one way or the other. Common sense about Bitcoin flew out of the window long ago.
bousaid 9y ago
Take a look at Bitcoins historical prices. I call what we’re experiencing right now the “Third Rise.” At the beginning of each, I thought there was no way the price would double or triple. Yet each time it did. I’d suggest if looking at history before you make such strong statements about Bitcoin’s price possibilities.
- ben_w 9y ago
  Is there any price, any price at all, where you would say “bitcoin is not worth this much, I should cash in before it goes down”? Σ(all bitcoin) = 0.1% world money supply? 1%? 10%? 100%? Even more? At some point it will go down. If you have a rational model for what value is too high, great! But if you don’t, you’ll gamble yourself into poverty, like so many other speculators over so many centuries.
  - logicallee 9y ago
    I think a fair market cap target to work with is $7.7 trillion market cap for all of bitcoin. This probably seems high but there are a lot of lost bitcoins. This is 27x the current market cap so if the current price is $16704 a good target is $451,008. Prices above that would seem excessive to me. I shared some of my reasoning here: https://news.ycombinator.com/item?id=15840591 https://news.ycombinator.com/item?id=15840591 You are not going to get 1000x higher prices than the current price, my opinion. It's not justified. On the other hand, 3x, 5x and so forth prices are easily justified given what bitcoin "is" and the role it can serve. This remains so even if transaction prices are very high, the blockchain is very slow, and there are more liquid and easier alternatives. This is because bitcoin serves as a kind of "gold" for various usages of that term. The only difference is that when you hold a piece of gold in your safe, there is no physical possibility that due to a coding error in the fabric of the universe, it disappears from your safe. However there is a very large possibility of bitcoins disappearing entirely, due to a coding error. It is very important to hedge against this or account for this possibility.
    - akvadrako 9y ago
      Your analysis seems very reasonable, but John McAfree thinks it will go to $1 million. And the reason I think it's not impossible is that only a very small percent of the float is actively traded, so the total market cap really doesn't matter that much. The higher it goes the less the people invested in it need to sell at all, because they don't have anything better to do with the money.
nullc 9y ago
> No, it actually is a ludicrous bet. No rational investor would ever make this investment. Do the math: Given the extreme volatility (https://www.bitmex.com/app/index/.BVOL https://www.bitmex.com/app/index/.BVOL) of Bitcoin that price is not unreasonable for that call per conventional means of valuing options. And every party that is long bitcoin and who isn't selling that position is implicitly taking that position as well: in the sense that, at least in theory, they could also sell those calls but have not (yet). Or perhaps your argument was that no rational investor would own Bitcoin at all? :)
mmjaa 9y ago
>Do you happen to have any money on bitcoin by any chance? Maybe you don't have anything in BtC and are therefore exhibiting criticism on the basis of projected schadenfreude? I mean, it can work both ways, this argument of if you've got a "Vested Interest" .. or not.
golergka 9y ago
You have good arguments on your side, I can agree - but how can you be so _sure_ in your opinion? TBH, while I don't know enough to have an educated opinion on Bitcoin's price, I can't help but feel skeptical about your comment, if only because of the amount of confidence you express.
scotty79 9y ago
>> Bitcoin tripled in value > Ah yes, and lightning will certainly hit the same person again and again. Not a person but a tall grounded metal rod in the middle of nowhere that was designed and built to have physical qualities to attract lightnings. It works for that purpose as was demonstrated multiple times already. Analogies, aren't they fun?
dustyleary 9y ago
The great thing about having a real futures market available is that when you’re 100% certain that you’re correct, as you seem to be, you can put your money where your mouth is and reap a big reward. How many of these call options have you sold? And if the number is zero, then what are you waiting for? Why not take advantage of how much smarter you are than all of these sheep and make some easy money?
- ckastner 9y ago
  The market can remain irrational longer than you can remain solvent. (attributed to John M. Keynes)
  - dustyleary 9y ago
    Yes, but he said “ludicrous bet” that no rational investor would make. As a rational investor/gambler, when I hear that someone is willing to make a “ludicrous bet”, I’m happy to book their action.
zeep 9y ago
> No rational investor would ever make this investment. Depends on your situation. But of course you need to assume that this is a very high risk investment... It could go to $500k or $0.50. > Do you happen to have any money on bitcoin by any chance? I only have a very small fraction of 1 Bitcoin... nothing to be excited about.

wellboy 9y ago

You were probably the same guy who shouted at $10, at $1000, at $10000 that it's gonna crash soon and that it's never going higher.

y0ghur7_xxx 9y ago

> The absolute max value stands at less than a third of that. Care to elaborate?

FabHK 9y ago
I assume GP means the highest value realised so far, and was a bit sloppy on his mental maths.

Kiro 9y ago

What do you base the "absolute max value" on?

geezerjay 9y ago
On time series records of its market price, of course.
- sdiepend 9y ago
  And what did it say about the "absolute max" only a few months ago?
  - headmelted 9y ago
    I think geezerjay meant it as a literal statement of past values rather than speculation on a future price. The absolute maximum value that bitcoin has ever traded at publicly is (I believe) just under $20k USD. His point is that no rational investor would bet the farm on a 3x increase on anything regardless of past values. This is the reason why advertised investments need to include a disclaimer stating that past returns are not an indicator of future success. That all being said - I don't think a bet like this requires someone to be masking a cashout. Not everything has to be a conspiracy. It's far more likely someone is caught up in the hysteria and genuinely believes that Bitcoin will hit that value (which it might, I don't have a crystal ball). "The market can remain irrational longer than you can remain solvent." - John Maynard Keynes
    - PeterisP 9y ago
      Don't pretty much all VC investors bet that the particular company is going to get a 3x+ increase in value? Expecting something like that is a sign of a speculative and risky investment, but there are quite a few asset types that have such expected returns if the result is the returns instead of a bust.

trhway 9y ago

>No rational investor would ever make this investment. i think the notion of "rational investor" gets redefined with the speed of the BTC price growth :)

ringaroundthetx 9y ago

So there’s zero leverage across the ecosystem, not withstanding bucket shop margin at fly by night exchanges, and you think you can call an absolute maximum? This is the only bubble WITHOUT credit and institutional leverage so far I would take the opposite side of your bets, there simply aren’t enough whole bitcoin units for even every schmuck with a million dollars Wake me up when crypto ventures are built entirely on rehypothecated assets in the crypto ecosystem, and Morgan Stanley is leveraged 5,000% again

vasilipupkin 9y ago
I think all that money you are talking about will go into other coins. https://medium.com/@mkogan4/four-predictions-for-crypto-five-years-out-40dacc80ed7e?source=linkShare-3ef666994b11-1513862362 https://medium.com/@mkogan4/four-predictions-for-crypto-five...

AznHisoka 9y ago

“No rational investor would ever make this investment” Are the current buyers of bitcoin rational?

Kurtz79 9y ago

"Ah yes, and lightning will certainly hit the same person again and again." It did though. Again and again. Will it keep doing so ? Possibly, possibly not. I don't think anyone can make a reasoned prediction one way or the other. Common sense about Bitcoin flew out of the window long ago.

bousaid 9y ago

Take a look at Bitcoins historical prices. I call what we’re experiencing right now the “Third Rise.” At the beginning of each, I thought there was no way the price would double or triple. Yet each time it did. I’d suggest if looking at history before you make such strong statements about Bitcoin’s price possibilities.

ben_w 9y ago
Is there any price, any price at all, where you would say “bitcoin is not worth this much, I should cash in before it goes down”? Σ(all bitcoin) = 0.1% world money supply? 1%? 10%? 100%? Even more? At some point it will go down. If you have a rational model for what value is too high, great! But if you don’t, you’ll gamble yourself into poverty, like so many other speculators over so many centuries.
- logicallee 9y ago
  I think a fair market cap target to work with is $7.7 trillion market cap for all of bitcoin. This probably seems high but there are a lot of lost bitcoins. This is 27x the current market cap so if the current price is $16704 a good target is $451,008. Prices above that would seem excessive to me. I shared some of my reasoning here: https://news.ycombinator.com/item?id=15840591 https://news.ycombinator.com/item?id=15840591 You are not going to get 1000x higher prices than the current price, my opinion. It's not justified. On the other hand, 3x, 5x and so forth prices are easily justified given what bitcoin "is" and the role it can serve. This remains so even if transaction prices are very high, the blockchain is very slow, and there are more liquid and easier alternatives. This is because bitcoin serves as a kind of "gold" for various usages of that term. The only difference is that when you hold a piece of gold in your safe, there is no physical possibility that due to a coding error in the fabric of the universe, it disappears from your safe. However there is a very large possibility of bitcoins disappearing entirely, due to a coding error. It is very important to hedge against this or account for this possibility.
  - akvadrako 9y ago
    Your analysis seems very reasonable, but John McAfree thinks it will go to $1 million. And the reason I think it's not impossible is that only a very small percent of the float is actively traded, so the total market cap really doesn't matter that much. The higher it goes the less the people invested in it need to sell at all, because they don't have anything better to do with the money.

nullc 9y ago

> No, it actually is a ludicrous bet. No rational investor would ever make this investment. Do the math: Given the extreme volatility (https://www.bitmex.com/app/index/.BVOL https://www.bitmex.com/app/index/.BVOL) of Bitcoin that price is not unreasonable for that call per conventional means of valuing options. And every party that is long bitcoin and who isn't selling that position is implicitly taking that position as well: in the sense that, at least in theory, they could also sell those calls but have not (yet). Or perhaps your argument was that no rational investor would own Bitcoin at all? :)

mmjaa 9y ago

>Do you happen to have any money on bitcoin by any chance? Maybe you don't have anything in BtC and are therefore exhibiting criticism on the basis of projected schadenfreude? I mean, it can work both ways, this argument of if you've got a "Vested Interest" .. or not.

golergka 9y ago

You have good arguments on your side, I can agree - but how can you be so _sure_ in your opinion? TBH, while I don't know enough to have an educated opinion on Bitcoin's price, I can't help but feel skeptical about your comment, if only because of the amount of confidence you express.

scotty79 9y ago

>> Bitcoin tripled in value > Ah yes, and lightning will certainly hit the same person again and again. Not a person but a tall grounded metal rod in the middle of nowhere that was designed and built to have physical qualities to attract lightnings. It works for that purpose as was demonstrated multiple times already. Analogies, aren't they fun?

dustyleary 9y ago

The great thing about having a real futures market available is that when you’re 100% certain that you’re correct, as you seem to be, you can put your money where your mouth is and reap a big reward. How many of these call options have you sold? And if the number is zero, then what are you waiting for? Why not take advantage of how much smarter you are than all of these sheep and make some easy money?

ckastner 9y ago
The market can remain irrational longer than you can remain solvent. (attributed to John M. Keynes)
- dustyleary 9y ago
  Yes, but he said “ludicrous bet” that no rational investor would make. As a rational investor/gambler, when I hear that someone is willing to make a “ludicrous bet”, I’m happy to book their action.

zeep 9y ago

> No rational investor would ever make this investment. Depends on your situation. But of course you need to assume that this is a very high risk investment... It could go to $500k or $0.50. > Do you happen to have any money on bitcoin by any chance? I only have a very small fraction of 1 Bitcoin... nothing to be excited about.