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I really don't think speculators were thinking that far ahead -- herd mentality is a way more believable explanation, there are hundreds of examples going back
by jbooth 13y ago
I really don't think speculators were thinking that far ahead -- herd mentality is a way more believable explanation, there are hundreds of examples going back to http://en.wikipedia.org/wiki/Tulip_mania http://en.wikipedia.org/wiki/Tulip_mania
- bunderbunder 13y agoAs a group, speculators still need to have some underlying theory for why the vehicle they're speculating on is valuable. Almost by definition, a bubble popping is when speculators collectively recognize that theory didn't pan out. For BTC, probably the most likely theory is, "Bitcoin will become valuable as a currency." The world's biggest economies officially deciding that it is not a currency under their laws dealt a crippling blow to that theory.
- jbooth 13y agoIMO, what makes it a 'bubble' is that the speculators don't care about the underlying theory, they're just jumping on the bandwagon because it keeps going up. Which is why it crashes so suddenly as soon as forward momentum slows down.
- brazzy 13y agoAn often-overlooked aspect of the tulip mania story is that Tulip bulbs are actually a productive investment, as they can (slowly) produce more bulbs.