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Is anyone else tired of hearing the word 'bubble' applied to everything? Whether we're talking about tech stocks, chicken futures, tulips, or Bitcoin, it's beco

Is anyone else tired of hearing the word 'bubble' applied to everything? Whether we're talking about tech stocks, chicken futures, tulips, or Bitcoin, it's become a really tired and meaningless term. You can't know if an asset is in a 'bubble' until long after the bubble has burst. Bitcoin is far from having burst, so this article and all those that came before it offer nothing new or insightful. Please, let's move past the name calling. Calling something a bubble does not make it so.

nacho2sweet 9y ago
No I am not tired of keeping my uniformed friends scared and their money safe.
- jtbayly 9y ago
  Why only your uniformed friends? Are only cops and members of the military worthy of having their money protected? Also, I thought they were the ones who were supposed to do the scaring...
  - rm_-rf_slash 9y ago
    I think parent meant to say “uniNformed”
- cryptofyodor 9y ago
  Well, I think it's more proper to inform and educate friends and people instead of scarring them. For me what SEC and regulators in majority of other countries are doing is scarring people (with all the warnings) - I'd find education more effective.
  - aaron-lebo 9y ago
    The SEC is warning people so they don't get scammed. Good for them. Their actions aren't unwarranted because there's been a lot of scams. You're asking for an open market so that people can be defrauded.
    - cryptofyodor 9y ago
      Not really, first of all when SEC warns it is usually when people already actually get scammed. Second - if my father kept telling me "son, don't go there" I wouldn't know why, and how to distinguish safe places from unsafe. All I mean is that by scarring you don't protect people from being defrauded. And I wouldn't care if I'd like to see people being defrauded, but in fact I do care, and don't find the "scarring/warning approach" to be working.
      - maksimum 9y ago
        Since you made the same mistake twice: scarring ~ creating scars; scaring ~ frightening.
      - nacho2sweet 9y ago
        My dumb friends can go get defrauded all they want, but if they know it is a bubble, and know they are mostly likely in the gambling unINformed losers end of the deal they will probably only get defrauded and gamble with what they are willing to lose. Like going to a casino.
      - soundwave106 9y ago
        What is wrong with the SEC's statement on Bitcoin? (https://www.sec.gov/news/public-statement/statement-clayton-2017-12-11 https://www.sec.gov/news/public-statement/statement-clayton-...) My opinion is, if you read that and believe this is the SEC attempting to merely "scare" you, that you really shouldn't be investing in Bitcoin. None of their statements seem incorrect. Bitcoin is new, but it is most similar to forex IMHO, and all the disclaimers to forex apply. Forex has higher than average risk, particularly in developing countries where volatility can be very high -- the possibility of losing almost everything is above average. It is also quite a bit more prone to scams compared to other investment platforms. It can work out well, but I wouldn't plunge into forex without doing a heck of a lot of research, and I wouldn't bet the farm on a single forex investment. That applies to Bitcoin too. But there are some additional specific risks not linked to forex though. With forex, you can use various economic indicators of the nation of the currency to attempt to make a more solid investment. I'm not sure what economic indicators are out there to help with Bitcoin. Bitcoin's not backed by any government, furthermore, so there is higher risk for government intervention as we've seen to some degree in China and South Korea, which will at the very least cause greater volatility. Furthermore, bitcoin has a huge disadvantage compared to forex right now: it is relatively illiquid. All that adds up to a very risky investment from my perspective at this point. Some might be willing to take the plunge anyways. But the office talk I hear on Bitcoin is way too casual compared to the actual risk.
  - donkeyd 9y ago
    Every time theres a crypto for which I can explain why the value makes no sense, there's another ten that pop up that are the next big thing, which they 'researched'. There's no way to keep up with this stuff. Just the fact that a tweet from John McAfee can push a crypto up over 100% is reason for me to stay away from that stuff. Too much manipulation and FOMO going on. I'd consider investing in a regulated crypto IPO though, if there's serious due diligence and a product that's actually being used.
deleted 9y ago
[deleted]
zerostar07 9y ago
Balloon is better. These kinds of "bubbles" don't pop in a day, they deflate slowly
rythie 9y ago
We had the dot-com bubble, but it didn't stop the internet from changing everything in fundamental way. Google, Facebook and Amazon are in the top 10 most valuable companies in the world - all completely dependant on the internet for the business model. Granted webvan and pets.com didn't make it, but it didn't mean the internet had failed as an idea.
- eloisant 9y ago
  What it meant is that people were throwing money at really bad idea, because they didn't understand the web, they just FOMO.
- JumpCrisscross 9y ago
  > We had the dot-com bubble, but it didn't stop the internet from changing everything in fundamental way We also had the Japanese theme park bubble, which left behind a lot of scrap metal. Be wary of sampling bias.
- rhino369 9y ago
  But just because there was an internet bubble and there is a bitcoin bubble, doesn't mean the internet and bitcoin are similar. The internet had explosive growth. New uses and technology were coming out constantly. Bitcoin? It's not clear actual use of bitcoin as a currency is even growing. It's very possbile nobody uses bitcoin at all in 5 years. The internet on the other hand was an eventuality. We knew it wasn't a fad.
- acdha 9y ago
  That’s a common marketing claim but the comparison has problems: Bitcoin is turning 10 without a single application where it has a significant advantage over the status quo unless you count ransomware. In contrast, as soon as the internet became available to normal people they had immediate new or improved options for a bunch of different activities. Yes, speculators backed a lot of bad business ideas but that was because people were getting online in droves because there were so many uses. Those companies failing didn’t change that, especially since there were so many examples showing that concepts were solid: e.g. a dotcom losing money on each sale didn’t mean online stores were doomed since Sears had proven the model many decades earlier.
dublidu 9y ago
A 40% drop in any other asset price would already be considered a deflated bubble.
- fastball 9y ago
  Not when it increased by 100% over the last 3 months...
  - IncRnd 9y ago
    > Not when it increased by 100% over the last 3 months... Actually, yes, that is a pretty good indication of a bubble.
    - deadmetheny 9y ago
      Yes, but a 40% drop isn't necessarily that bubble popping quite yet.
rcar 9y ago
There are plenty of things being called a bubble that aren't, but cryptocurrency is almost certainly one right now. The formal definition of a bubble is something that's priced far above its inherent value. Unless you want to argue that there's currently $500B+ of actual value in cryptocurrencies right now and not just speculation, it's absolutely a bubble. That said, bubbles don't always have to end in a burst. If real and sizable use cases for cryptocurrency arise, the value could eventually catch up with the prices.
- andrewprock 9y ago
  Allow me to suggest that the definition of a bubble is rapid and unsustainable price escalation with no predictable end in sight.
jhbadger 9y ago
You certainly can guess whether an asset in in a bubble with reasonable accuracy, though. Is the asset inherently valuable or is it only being valued because it is currently trendy? Some tech companies provide valuable products but most in the dot-com bubble didn't even have a working product for sale.

nacho2sweet 9y ago

No I am not tired of keeping my uniformed friends scared and their money safe.

jtbayly 9y ago
Why only your uniformed friends? Are only cops and members of the military worthy of having their money protected? Also, I thought they were the ones who were supposed to do the scaring...
- rm_-rf_slash 9y ago
  I think parent meant to say “uniNformed”
cryptofyodor 9y ago
Well, I think it's more proper to inform and educate friends and people instead of scarring them. For me what SEC and regulators in majority of other countries are doing is scarring people (with all the warnings) - I'd find education more effective.
- aaron-lebo 9y ago
  The SEC is warning people so they don't get scammed. Good for them. Their actions aren't unwarranted because there's been a lot of scams. You're asking for an open market so that people can be defrauded.
  - cryptofyodor 9y ago
    Not really, first of all when SEC warns it is usually when people already actually get scammed. Second - if my father kept telling me "son, don't go there" I wouldn't know why, and how to distinguish safe places from unsafe. All I mean is that by scarring you don't protect people from being defrauded. And I wouldn't care if I'd like to see people being defrauded, but in fact I do care, and don't find the "scarring/warning approach" to be working.
    - maksimum 9y ago
      Since you made the same mistake twice: scarring ~ creating scars; scaring ~ frightening.
    - nacho2sweet 9y ago
      My dumb friends can go get defrauded all they want, but if they know it is a bubble, and know they are mostly likely in the gambling unINformed losers end of the deal they will probably only get defrauded and gamble with what they are willing to lose. Like going to a casino.
    - soundwave106 9y ago
      What is wrong with the SEC's statement on Bitcoin? (https://www.sec.gov/news/public-statement/statement-clayton-2017-12-11 https://www.sec.gov/news/public-statement/statement-clayton-...) My opinion is, if you read that and believe this is the SEC attempting to merely "scare" you, that you really shouldn't be investing in Bitcoin. None of their statements seem incorrect. Bitcoin is new, but it is most similar to forex IMHO, and all the disclaimers to forex apply. Forex has higher than average risk, particularly in developing countries where volatility can be very high -- the possibility of losing almost everything is above average. It is also quite a bit more prone to scams compared to other investment platforms. It can work out well, but I wouldn't plunge into forex without doing a heck of a lot of research, and I wouldn't bet the farm on a single forex investment. That applies to Bitcoin too. But there are some additional specific risks not linked to forex though. With forex, you can use various economic indicators of the nation of the currency to attempt to make a more solid investment. I'm not sure what economic indicators are out there to help with Bitcoin. Bitcoin's not backed by any government, furthermore, so there is higher risk for government intervention as we've seen to some degree in China and South Korea, which will at the very least cause greater volatility. Furthermore, bitcoin has a huge disadvantage compared to forex right now: it is relatively illiquid. All that adds up to a very risky investment from my perspective at this point. Some might be willing to take the plunge anyways. But the office talk I hear on Bitcoin is way too casual compared to the actual risk.
- donkeyd 9y ago
  Every time theres a crypto for which I can explain why the value makes no sense, there's another ten that pop up that are the next big thing, which they 'researched'. There's no way to keep up with this stuff. Just the fact that a tweet from John McAfee can push a crypto up over 100% is reason for me to stay away from that stuff. Too much manipulation and FOMO going on. I'd consider investing in a regulated crypto IPO though, if there's serious due diligence and a product that's actually being used.

deleted 9y ago

[deleted]

zerostar07 9y ago

Balloon is better. These kinds of "bubbles" don't pop in a day, they deflate slowly

rythie 9y ago

We had the dot-com bubble, but it didn't stop the internet from changing everything in fundamental way. Google, Facebook and Amazon are in the top 10 most valuable companies in the world - all completely dependant on the internet for the business model. Granted webvan and pets.com didn't make it, but it didn't mean the internet had failed as an idea.

eloisant 9y ago
What it meant is that people were throwing money at really bad idea, because they didn't understand the web, they just FOMO.
JumpCrisscross 9y ago
> We had the dot-com bubble, but it didn't stop the internet from changing everything in fundamental way We also had the Japanese theme park bubble, which left behind a lot of scrap metal. Be wary of sampling bias.
rhino369 9y ago
But just because there was an internet bubble and there is a bitcoin bubble, doesn't mean the internet and bitcoin are similar. The internet had explosive growth. New uses and technology were coming out constantly. Bitcoin? It's not clear actual use of bitcoin as a currency is even growing. It's very possbile nobody uses bitcoin at all in 5 years. The internet on the other hand was an eventuality. We knew it wasn't a fad.
acdha 9y ago
That’s a common marketing claim but the comparison has problems: Bitcoin is turning 10 without a single application where it has a significant advantage over the status quo unless you count ransomware. In contrast, as soon as the internet became available to normal people they had immediate new or improved options for a bunch of different activities. Yes, speculators backed a lot of bad business ideas but that was because people were getting online in droves because there were so many uses. Those companies failing didn’t change that, especially since there were so many examples showing that concepts were solid: e.g. a dotcom losing money on each sale didn’t mean online stores were doomed since Sears had proven the model many decades earlier.

dublidu 9y ago

A 40% drop in any other asset price would already be considered a deflated bubble.

fastball 9y ago
Not when it increased by 100% over the last 3 months...
- IncRnd 9y ago
  > Not when it increased by 100% over the last 3 months... Actually, yes, that is a pretty good indication of a bubble.
  - deadmetheny 9y ago
    Yes, but a 40% drop isn't necessarily that bubble popping quite yet.

rcar 9y ago

There are plenty of things being called a bubble that aren't, but cryptocurrency is almost certainly one right now. The formal definition of a bubble is something that's priced far above its inherent value. Unless you want to argue that there's currently $500B+ of actual value in cryptocurrencies right now and not just speculation, it's absolutely a bubble. That said, bubbles don't always have to end in a burst. If real and sizable use cases for cryptocurrency arise, the value could eventually catch up with the prices.

andrewprock 9y ago
Allow me to suggest that the definition of a bubble is rapid and unsustainable price escalation with no predictable end in sight.

jhbadger 9y ago

You certainly can guess whether an asset in in a bubble with reasonable accuracy, though. Is the asset inherently valuable or is it only being valued because it is currently trendy? Some tech companies provide valuable products but most in the dot-com bubble didn't even have a working product for sale.