4 ms·

We are at -70% from the ATH. At what point does it stop being a bubble?

dogma1138 9y ago
Probably when it either recovers to ATH or close to it or goes bust completely. A crash does not necessarily indicates a bubble a crash without recovery does.
sanderjd 9y ago
For me, the answer to this is that it stops being a bubble once I see a compelling (to me) analysis of the link between the price and some underlying utility. I've heard one compelling (to me) use case for bitcoin - removing big banks from large long-distance cash transfers - but I strongly doubt there is enough value in that to support the current price. Another meta-metric I'm watching is for mainstream media and word of mouth to lose interest, ie. once this no longer comes up at all get-togethers with friends and family, it will seem a lot less bubbly to me.
- Yizahi 9y ago
  Assuming we talking only about "removing big banks from large long-distance cash transfers" which is also one of the few sane possibilities for crypto that I would want. I suspect that if it will ever work then in the fully regulated marked (e.g. we are transferring from regulated country to regulated) then the recipient will have to pay capital gain tax for cashing out on his side. This kinda defeats the whole purpose of the system. The more I think and read about crypto and blockchain the less practical applications I see.
  - gomox 9y ago
    Why would you pay capital gains tax on a money transfer?
    - sanderjd 9y ago
      I think because the implication is that the way the transfer actually happens is: 1. Buy BTC in the right amount in origin country, 2. Transfer it to another BTC address, 3. Sell BTC in the right amount in the destination country. I believe most countries will consider the sale in step #3 a capital gain.
- root_axis 9y ago
  > removing big banks from large long-distance cash transfers In practice, you need an account with a "big bank" to buy bitcoin. The recipient also has to have enough technical literacy and resources to safely convert the bitcoin into spendable money, sometimes at a significant markup. The buying power of the funds are also subject to wild fluctuations for as long as it takes the recipient to convert to usable money. Bitcoin is just not practical for this kind of thing.
  - sanderjd 9y ago
    I tend to agree - this is just the most compelling use case I've heard, despite not being all that compelling.
- sethgecko 9y ago
  I'll give you another use case. Cryptocurrencies are essentially programmable money. You can't write a computer program with a bank account atm but you can with bitcoin. You can have your auto-driving car to go fill up it's tank or pay someone to service it.You can write a computer program that hires a developer to improve it or a million other things.
  - sanderjd 9y ago
    > You can't write a computer program with a bank account atm but you can with bitcoin. Is that true? Surely there is at least one bank with an API? I don't see any fundamental reason there wouldn't or couldn't be. But maybe you're right that this sort of thing just isn't in the DNA of banks, while it's totally up the alley of the blockchain enthusiast programmer community. Still, I wonder: if this were to become a common and important thing, couldn't banks fairly easily add it to the services they offer?
lagadu 9y ago
It's pure speculation. "Bubble" means "something that is overvalued according to fundamental analysis"; once the market or asset stabilises one can argue that the bubble burst and it hit its natural valuation. The problem with crypto in general is that it's such a different type of market that the models for figuring out its valuation are wildly speculative at best. In other words: all I can offer about it not being a bubble anymore is a soft maybe :)

Probably when it either recovers to ATH or close to it or goes bust completely. A crash does not necessarily indicates a bubble a crash without recovery does.

sanderjd 9y ago

For me, the answer to this is that it stops being a bubble once I see a compelling (to me) analysis of the link between the price and some underlying utility. I've heard one compelling (to me) use case for bitcoin - removing big banks from large long-distance cash transfers - but I strongly doubt there is enough value in that to support the current price. Another meta-metric I'm watching is for mainstream media and word of mouth to lose interest, ie. once this no longer comes up at all get-togethers with friends and family, it will seem a lot less bubbly to me.

Yizahi 9y ago
Assuming we talking only about "removing big banks from large long-distance cash transfers" which is also one of the few sane possibilities for crypto that I would want. I suspect that if it will ever work then in the fully regulated marked (e.g. we are transferring from regulated country to regulated) then the recipient will have to pay capital gain tax for cashing out on his side. This kinda defeats the whole purpose of the system. The more I think and read about crypto and blockchain the less practical applications I see.
- gomox 9y ago
  Why would you pay capital gains tax on a money transfer?
  - sanderjd 9y ago
    I think because the implication is that the way the transfer actually happens is: 1. Buy BTC in the right amount in origin country, 2. Transfer it to another BTC address, 3. Sell BTC in the right amount in the destination country. I believe most countries will consider the sale in step #3 a capital gain.
root_axis 9y ago
> removing big banks from large long-distance cash transfers In practice, you need an account with a "big bank" to buy bitcoin. The recipient also has to have enough technical literacy and resources to safely convert the bitcoin into spendable money, sometimes at a significant markup. The buying power of the funds are also subject to wild fluctuations for as long as it takes the recipient to convert to usable money. Bitcoin is just not practical for this kind of thing.
- sanderjd 9y ago
  I tend to agree - this is just the most compelling use case I've heard, despite not being all that compelling.
sethgecko 9y ago
I'll give you another use case. Cryptocurrencies are essentially programmable money. You can't write a computer program with a bank account atm but you can with bitcoin. You can have your auto-driving car to go fill up it's tank or pay someone to service it.You can write a computer program that hires a developer to improve it or a million other things.
- sanderjd 9y ago
  > You can't write a computer program with a bank account atm but you can with bitcoin. Is that true? Surely there is at least one bank with an API? I don't see any fundamental reason there wouldn't or couldn't be. But maybe you're right that this sort of thing just isn't in the DNA of banks, while it's totally up the alley of the blockchain enthusiast programmer community. Still, I wonder: if this were to become a common and important thing, couldn't banks fairly easily add it to the services they offer?

lagadu 9y ago

It's pure speculation. "Bubble" means "something that is overvalued according to fundamental analysis"; once the market or asset stabilises one can argue that the bubble burst and it hit its natural valuation. The problem with crypto in general is that it's such a different type of market that the models for figuring out its valuation are wildly speculative at best. In other words: all I can offer about it not being a bubble anymore is a soft maybe :)