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That chart shows a little under 10x from beginning to peak. Many people compare cryptocurrencies to the South Sea company, however, many of the different crypt

That chart shows a little under 10x from beginning to peak. Many people compare cryptocurrencies to the South Sea company, however, many of the different cryptocurrencies have gone 15-30x within the last year. A lot of the hype in the media seems to be gone (or is now "doom and gloom"), so it will be interesting to see whether or not today's values can be sustained without a high rate of people continously buying in.

pimmen 9y ago
Because markets move quicker than they did in the 18th century. These bubbles have progressively grown and collapsed quicker and quicker with the introduction of railways, telegraphs, phones, improvements in printing presses, radio, television and finally the Internet. The pattern is still the same. You can look at Railway Mania, the Oil boom of the mid 1800s, the Florida property boom, the airline boom of the early 20th century and the Dot Com boom of the late 90s for reference if you want and you can see that they become progressively quicker.
- ajmurmann 9y ago
  From the chart someone posted above it looks like the South Sea Bubble only took 1-2 years. Isn't that shorter than most recent bubbles.
- Gargoyle 9y ago
  Cryptokitties might be seen to have continued that trend on an even faster scale!
  - SimbaOnSteroids 9y ago
    Idk I like the idea of a crypto collectible even if genetic crypto kitties misses the mark.
charlesdm 9y ago
1. Most bubbles are not global but geographically restricted in some way; crypto is global. 2. There is some value to Blockchain technology, so the value is not $0. 3. When comparing, given all of these assets had a starting value of effectively $0 at launch, you should probably look at them from an angel investment PoV. Peter Thiel got similar returns when investing in Facebook. I'm not saying crypto is (entirely) comparable to Facebook in value (it might, it might not -- too early), but that's how I think the gains could make sense. It's valued like an internet startup, and then some. 4. The global market is still tiny? The entire crypto space is $550bn in market cap. Facebook is $552bn in market cap. Valuations have probably gotten ahead of themselves and a lot of the smaller coins will die eventually, but it's still a blip in the grand scheme of things. 5. There is too much capital in the world. Too much cheap debt. Too much free money. This will fuel the mania. You could have put $2m in the stock market in 2008-2009, and if you used leverage in a smart way, could have ended up with $75-100m.
- pg314 9y ago
  > 2. There is some value to Blockchain technology, so the value is not $0. The value of current crypto-currencies might very well be zero, even if there is some value to blockchain technology. > 4. The global market is still tiny? The entire crypto space is $550bn in market cap. Facebook is $552bn in market cap. Comparing market caps like that is silly. I launch my own coin pg314-coin, 1 billion exist. I sell one to my friend for $1000. The market cap is now $1 trillion, twice that of Facebook... > You could have put $2m in the stock market in 2008-2009, and if you used leverage in a smart way, could have ended up with $75-100m. That is true of any period in time where the stock market went up. If you have a positive return to start with you can have an arbitrary multiplier with 'leverage used in a smart way'.
  - charlesdm 9y ago
    > The value of current crypto-currencies might very well be zero, even if there is some value to blockchain technology. Sure. I'm just saying; you can't know. Bitcoin might be around in 5 years, Ethereum might be the platform everything gets built upon, or something better comes along, or it all dies never to be heard of again. > Comparing market caps like that is silly. I launch my own coin pg314-coin, 1 billion exist. I sell one to my friend for $1000. The market cap is now $1 trillion, twice that of Facebook... Approx. $10bn worth of Bitcoin was traded in the last 24 hours ($200bn market cap). Approx. $3.4bn Facebook shares were traded per day during the last 50 trading sessions ($550bn market cap). Let's assume that even half of that Bitcoin trading is wash trading (which I don't think so). I think it's a pretty good way of looking at market caps. But you're right for the smaller coins -- those valuations are not in line with the money invested. > That is true of any period in time where the stock market went up. If you have a positive return to start with you can have an arbitrary multiplier with 'leverage used in a smart way'. Sure. But debt has been cheap in the last 10 to 20 years, and that has driven up asset prices significantly across the globe. People overpay for assets everywhere. In times when everything has been going up, people are more willing to take risks. In times where everything is falling, people are less likely to take on speculative investments. That's just part of the cycle.

pimmen 9y ago

Because markets move quicker than they did in the 18th century. These bubbles have progressively grown and collapsed quicker and quicker with the introduction of railways, telegraphs, phones, improvements in printing presses, radio, television and finally the Internet. The pattern is still the same. You can look at Railway Mania, the Oil boom of the mid 1800s, the Florida property boom, the airline boom of the early 20th century and the Dot Com boom of the late 90s for reference if you want and you can see that they become progressively quicker.

ajmurmann 9y ago
From the chart someone posted above it looks like the South Sea Bubble only took 1-2 years. Isn't that shorter than most recent bubbles.
Gargoyle 9y ago
Cryptokitties might be seen to have continued that trend on an even faster scale!
- SimbaOnSteroids 9y ago
  Idk I like the idea of a crypto collectible even if genetic crypto kitties misses the mark.

charlesdm 9y ago

1. Most bubbles are not global but geographically restricted in some way; crypto is global. 2. There is some value to Blockchain technology, so the value is not $0. 3. When comparing, given all of these assets had a starting value of effectively $0 at launch, you should probably look at them from an angel investment PoV. Peter Thiel got similar returns when investing in Facebook. I'm not saying crypto is (entirely) comparable to Facebook in value (it might, it might not -- too early), but that's how I think the gains could make sense. It's valued like an internet startup, and then some. 4. The global market is still tiny? The entire crypto space is $550bn in market cap. Facebook is $552bn in market cap. Valuations have probably gotten ahead of themselves and a lot of the smaller coins will die eventually, but it's still a blip in the grand scheme of things. 5. There is too much capital in the world. Too much cheap debt. Too much free money. This will fuel the mania. You could have put $2m in the stock market in 2008-2009, and if you used leverage in a smart way, could have ended up with $75-100m.

pg314 9y ago
> 2. There is some value to Blockchain technology, so the value is not $0. The value of current crypto-currencies might very well be zero, even if there is some value to blockchain technology. > 4. The global market is still tiny? The entire crypto space is $550bn in market cap. Facebook is $552bn in market cap. Comparing market caps like that is silly. I launch my own coin pg314-coin, 1 billion exist. I sell one to my friend for $1000. The market cap is now $1 trillion, twice that of Facebook... > You could have put $2m in the stock market in 2008-2009, and if you used leverage in a smart way, could have ended up with $75-100m. That is true of any period in time where the stock market went up. If you have a positive return to start with you can have an arbitrary multiplier with 'leverage used in a smart way'.
- charlesdm 9y ago
  > The value of current crypto-currencies might very well be zero, even if there is some value to blockchain technology. Sure. I'm just saying; you can't know. Bitcoin might be around in 5 years, Ethereum might be the platform everything gets built upon, or something better comes along, or it all dies never to be heard of again. > Comparing market caps like that is silly. I launch my own coin pg314-coin, 1 billion exist. I sell one to my friend for $1000. The market cap is now $1 trillion, twice that of Facebook... Approx. $10bn worth of Bitcoin was traded in the last 24 hours ($200bn market cap). Approx. $3.4bn Facebook shares were traded per day during the last 50 trading sessions ($550bn market cap). Let's assume that even half of that Bitcoin trading is wash trading (which I don't think so). I think it's a pretty good way of looking at market caps. But you're right for the smaller coins -- those valuations are not in line with the money invested. > That is true of any period in time where the stock market went up. If you have a positive return to start with you can have an arbitrary multiplier with 'leverage used in a smart way'. Sure. But debt has been cheap in the last 10 to 20 years, and that has driven up asset prices significantly across the globe. People overpay for assets everywhere. In times when everything has been going up, people are more willing to take risks. In times where everything is falling, people are less likely to take on speculative investments. That's just part of the cycle.