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I am a huge crypto currency skeptic and think the market is largely driven by massive amounts of fraud. That said -- eventually the price will drop to the poin

I am a huge crypto currency skeptic and think the market is largely driven by massive amounts of fraud. That said -- eventually the price will drop to the point where the price is entirely driven by Bitcoin's natural customer base -- tax cheats, money launderers, drug dealers, etc, and will probably in fact over correct. Just for the sake of argument, let's said that 'natural price' is $500 or $600 a bitcoin -- it bottomed out around $300 last time and we've had a 'halvening' since then. So let's imagine the price drops down to below $1000, and stays around that range for a year or more. Then a new halvening happens, the price doubles to $2000. Maybe someone figures out how to do something useful with cryptocurrency? 3-4 years from now, people will have already forgotten about the last bubble and might FOMO again. Bitcoin has a long history of boom and bust with each boom being bigger than the last. It won't take much to convince people that another boom is on the offing.

vkou 8y ago
Ransomware authors, heroin dealers and money launderers don't care how much BTC is worth - they only use it to cash out into USD. For them, the spot price is largely irrelevant. All their prices are denominated in USD, all they care about is that the exchange rate is stable. As for the launderers, you can launder money with BTC just as well when it is $3/coin, as you can when it is $3 million/coin.
- empath75 8y ago
  true, but there is some point at which the natural level of demand for bitcoins will match bitcoin supply.
ascendantlogic 8y ago
> Bitcoin's natural customer base -- tax cheats, money launderers, drug dealers, etc, and will probably in fact over correct. Funny I should read your comment about Bitcoin's use for criminal enterprise after I read about Goldman Sach's alleged hand in a multi-billion dollar fraud in Malaysia, or Deutche Bank's multi-billion dollar money laundering. Or going back a few years the Panama Papers and that entire underground financial apparatus that drummed up exactly zero long term outrage or changes. I'll be more inclined to believe crypto is only for thieves when you convince me that the existing financial system isn't also completely rife with thievery and cheats.
- TeMPOraL 8y ago
  Every system involving money will attract criminals. But a new system that's much better for criminals and much worse for regular people will obviously attract more of the former than of the latter. Still, I agree with vkou: > Ransomware authors, heroin dealers and money launderers don't care how much BTC is worth - they only use it to cash out into USD. For them, the spot price is largely irrelevant. That is, they'll still want to use Bitcoin, just not necessarily care about the spot price. The price is, I believe, driven up by gamblers.
- koboll 8y ago
  Funny you should say that. I bought in at the beginning of the frenzy last September, and sold ten minutes after I read in early December that Wall Street was about to open up futures trading. I guessed that meant that the likes of Goldman were about to vaccuum up cash from the normal folks on my Facebook timeline with no technical background suddenly posting "I should buy Bitcoin!". Nailed that one.

vkou 8y ago

Ransomware authors, heroin dealers and money launderers don't care how much BTC is worth - they only use it to cash out into USD. For them, the spot price is largely irrelevant. All their prices are denominated in USD, all they care about is that the exchange rate is stable. As for the launderers, you can launder money with BTC just as well when it is $3/coin, as you can when it is $3 million/coin.

empath75 8y ago
true, but there is some point at which the natural level of demand for bitcoins will match bitcoin supply.

ascendantlogic 8y ago

> Bitcoin's natural customer base -- tax cheats, money launderers, drug dealers, etc, and will probably in fact over correct. Funny I should read your comment about Bitcoin's use for criminal enterprise after I read about Goldman Sach's alleged hand in a multi-billion dollar fraud in Malaysia, or Deutche Bank's multi-billion dollar money laundering. Or going back a few years the Panama Papers and that entire underground financial apparatus that drummed up exactly zero long term outrage or changes. I'll be more inclined to believe crypto is only for thieves when you convince me that the existing financial system isn't also completely rife with thievery and cheats.

TeMPOraL 8y ago
Every system involving money will attract criminals. But a new system that's much better for criminals and much worse for regular people will obviously attract more of the former than of the latter. Still, I agree with vkou: > Ransomware authors, heroin dealers and money launderers don't care how much BTC is worth - they only use it to cash out into USD. For them, the spot price is largely irrelevant. That is, they'll still want to use Bitcoin, just not necessarily care about the spot price. The price is, I believe, driven up by gamblers.
koboll 8y ago
Funny you should say that. I bought in at the beginning of the frenzy last September, and sold ten minutes after I read in early December that Wall Street was about to open up futures trading. I guessed that meant that the likes of Goldman were about to vaccuum up cash from the normal folks on my Facebook timeline with no technical background suddenly posting "I should buy Bitcoin!". Nailed that one.