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Ahh the "time to buy cheap coins" rally of the die-hard bitcoin shysters. Your own post says "It's not liquid enough yet, creates no need to middle men and Bit

Ahh the "time to buy cheap coins" rally of the die-hard bitcoin shysters. Your own post says "It's not liquid enough yet, creates no need to middle men and Bitcoin itself is now being manipulated by futures contracts based on supply being increased artificially." Does that sound like buying now is a good idea? Doesn't to me... Bitcoin is, was and always will be a highly manipulated penny stock. It spiked from $1000 to $20k for absolutely no reason, and now it is dropping down to $10k for absolutely no reason. Any price bitcoin spikes or drops to has no reason behind it... what kind of "store-of-value" / "currency" does that?

nukeop 9y ago
What do you mean "no reason"? Supply and demand are the reasons the prices are shaped the way they are. It's a near perfect market.
- spookthesunset 9y ago
  > What do you mean "no reason"? As in "why is the price what it is". Saying "because of supply and demand" is useless, unhelpful pedantry.
  - celticninja 9y ago
    I think that's an unfair accusation, ultimately the price is determined by supply and demand for the product, your question should really be what are the fundamental reasons behind people buying at X price and I think those are many and varied.
- kakarot 9y ago
  With a healthy dose of FUD from several directions.
- bsaul 9y ago
  Was that sarcasm ?? In case you don't know, things like https://en.wikipedia.org/wiki/Market_manipulation https://en.wikipedia.org/wiki/Market_manipulation exists..
- lkrubner 9y ago
  What is the P/E ratio of Bitcoin? There is none. So there is no rational basis for any price. $1 is as valid as $1 million. There is no traditional way to analyze this investment and figure out its real worth. To the limited extent that Bitcoin helps Chinese citizens out-maneuver the capital controls that the Chinese government has tried to enforce, then it could be analyzed as a shadow of the Chinese currency, but since the action is illegal, the data is dark. Thus Bitcoin, and other crypto currencies, are the world's most opaque investment.
  - 21 9y ago
    > There is no traditional way to analyze this investment and figure out its real worth. Is that bitcoin's problem or a traditional economists problem? Behavioral economics does have frameworks for thinking about bitcoin price, but then again, behavioral finance is not traditional and highly controversial. For once, it dispenses with the myth of the rational investor (homo economicus)
    - lalaland1125 9y ago
      > Behavioral economics does have frameworks for thinking about bitcoin price, but then again, behavioral finance is not traditional and highly controversial. So, how does behavioral economics supply a price for Bitcoin?
  - gfodor 9y ago
    What's the "rational basis" for a specific value of the P/E ratio? There are many stocks that belong to companies that have no mechanisms in place nor could they be reasonably expected to introduce mechanisms to directly return profits to shareholders. These stocks have the same form of "intrinsic value" as gold or Bitcoin: whatever the hell the next person is willing to pay for it. Pretending that an underlying asset that doesn't throw off any yield or return of capital is somehow more rationally valuable than another doesn't make sense.
    - FabHK 9y ago
      Glad you asked. P/E ratios can be anchored (with expected earnings growth and a risk premium) to interest rates. Whether stocks pay dividends or not is not terribly relevant, see Modigliani-Miller. Thus, share prices are rationally anchored to economic reality. Of course, there's a lot of estimation involved, and people can get it wrong for a while, individually or collectively.
KasianFranks 9y ago
Efficient Market Theory is dead. There is no zero sum game. In the Markets things do not work based supply and demand but on perceived supply and perceived demand. Based on what I've learned I'd rather work with crypto than stocks or other more manipulated trading vehicles.

nukeop 9y ago

What do you mean "no reason"? Supply and demand are the reasons the prices are shaped the way they are. It's a near perfect market.

spookthesunset 9y ago
> What do you mean "no reason"? As in "why is the price what it is". Saying "because of supply and demand" is useless, unhelpful pedantry.
- celticninja 9y ago
  I think that's an unfair accusation, ultimately the price is determined by supply and demand for the product, your question should really be what are the fundamental reasons behind people buying at X price and I think those are many and varied.
kakarot 9y ago
With a healthy dose of FUD from several directions.
bsaul 9y ago
Was that sarcasm ?? In case you don't know, things like https://en.wikipedia.org/wiki/Market_manipulation https://en.wikipedia.org/wiki/Market_manipulation exists..
lkrubner 9y ago
What is the P/E ratio of Bitcoin? There is none. So there is no rational basis for any price. $1 is as valid as $1 million. There is no traditional way to analyze this investment and figure out its real worth. To the limited extent that Bitcoin helps Chinese citizens out-maneuver the capital controls that the Chinese government has tried to enforce, then it could be analyzed as a shadow of the Chinese currency, but since the action is illegal, the data is dark. Thus Bitcoin, and other crypto currencies, are the world's most opaque investment.
- 21 9y ago
  > There is no traditional way to analyze this investment and figure out its real worth. Is that bitcoin's problem or a traditional economists problem? Behavioral economics does have frameworks for thinking about bitcoin price, but then again, behavioral finance is not traditional and highly controversial. For once, it dispenses with the myth of the rational investor (homo economicus)
  - lalaland1125 9y ago
    > Behavioral economics does have frameworks for thinking about bitcoin price, but then again, behavioral finance is not traditional and highly controversial. So, how does behavioral economics supply a price for Bitcoin?
- gfodor 9y ago
  What's the "rational basis" for a specific value of the P/E ratio? There are many stocks that belong to companies that have no mechanisms in place nor could they be reasonably expected to introduce mechanisms to directly return profits to shareholders. These stocks have the same form of "intrinsic value" as gold or Bitcoin: whatever the hell the next person is willing to pay for it. Pretending that an underlying asset that doesn't throw off any yield or return of capital is somehow more rationally valuable than another doesn't make sense.
  - FabHK 9y ago
    Glad you asked. P/E ratios can be anchored (with expected earnings growth and a risk premium) to interest rates. Whether stocks pay dividends or not is not terribly relevant, see Modigliani-Miller. Thus, share prices are rationally anchored to economic reality. Of course, there's a lot of estimation involved, and people can get it wrong for a while, individually or collectively.

KasianFranks 9y ago

Efficient Market Theory is dead. There is no zero sum game. In the Markets things do not work based supply and demand but on perceived supply and perceived demand. Based on what I've learned I'd rather work with crypto than stocks or other more manipulated trading vehicles.