Investing

Do you think that bitcoin is a bubble?

  • Last Updated:
  • Dec 13th, 2017 2:28 pm
Tags:
None

Poll: Will bitcoin crash?

  • Total votes: 192. You have voted on this poll.
No
 
61
32%
Yes, to less than $6000 USD
 
27
14%
Yes, to less than $4000 USD
 
15
8%
Yes, to less than $2000 USD
 
7
4%
Yes, to less than $1500 USD
 
2
1%
Yes, to less than $1000 USD
 
28
15%
Yes, to less than $500 USD
 
6
3%
Yes, to less than $100 USD
 
46
24%
Deal Addict
Jun 27, 2007
3249 posts
533 upvotes
xuemike wrote:
Dec 6th, 2017 12:05 pm
For those who think it is a bubble, then I urge you sign up for one of these exchanges and short sell it. If you believe it then why not make some money?
soon CBOE will launch futures and it will be fun to watch.
don't be lemmings, it's a bubble
After spending many years in Wall Street and after making and losing millions of dollars I want to tell you this: it never was my thinking that made the big money for me. It was always my sitting. Got that? My sitting tight!
Sr. Member
Dec 12, 2009
526 posts
25 upvotes
Applesmack wrote:
Dec 6th, 2017 12:20 pm
Companies have intrinsic value due to the strength of their business.

Resources such as oil have intrinsic value due to societies need for them. Nobody has a NEED for bitcoin.
By such definition then does money have value? You are comparing apples to organes because I certainly NEED money to buy oil and shares for companies.
Deal Addict
User avatar
May 11, 2014
1705 posts
719 upvotes
Iqaluit, NT
xuemike wrote:
Dec 6th, 2017 12:05 pm
For those who think it is a bubble, then I urge you sign up for one of these exchanges and short sell it. If you believe it then why not make some money?
Because shorting is also a form of speculation and leverage. The thing with bubbles is that irrationality can persist for a very long time. Markets overtime are rationale and efficient, but speculation has a way of feeding itself and the bubble persisting for a very long time. So why should I gamble with my money assuming everyone will realize it's a bubble immediately and be subject to call from the broker all to chase a few dollars?

So instead, I invest my money where I have an actual solid investment or business that actually exists. I have a decent return and I'm happy.
Support your local Credit Union! PM for different options available!
Sr. Member
Dec 12, 2009
526 posts
25 upvotes
dlhunter wrote:
Dec 6th, 2017 12:28 pm
soon CBOE will launch futures and it will be fun to watch.
don't be lemmings, it's a bubble
They only settle for cash, bitcoins are actually not delivered, I doubt it will affect the market too much, what it's actually doing is bringing a lot of legitimacy into the market right now.
Deal Addict
User avatar
May 11, 2014
1705 posts
719 upvotes
Iqaluit, NT
xuemike wrote:
Dec 6th, 2017 12:29 pm
By such definition then does money have value? You are comparing apples to organes because I certainly NEED money to buy oil and shares for companies.
But bitcoin is not a well-accepted currency (yet... if ever). Society and government have deemed currency to have value and the entire country which a company operates and the world uses it. Bitcoin while having some retailers here or there, does not function as a currency. In fact, with the market speculation that is occurring, it is failing it's job as a currency as it's perceived value is not steady. If someone wanted to price things in bitcoin, they would likely have to change the prices frequently based on the price movements that are occurring.

The point @Applesmack is bringing up is that people are treating Bitcoin as an investment. But this investment has no intrinsic value and no cashflow as a business.
Support your local Credit Union! PM for different options available!
Sr. Member
Dec 12, 2009
526 posts
25 upvotes
xgbsSS wrote:
Dec 6th, 2017 12:33 pm
Because shorting is also a form of speculation and leverage. The thing with bubbles is that irrationality can persist for a very long time. Markets overtime are rationale and efficient, but speculation has a way of feeding itself and the bubble persisting for a very long time. So why should I gamble with my money assuming everyone will realize it's a bubble immediately and be subject to call from the broker all to chase a few dollars?

So instead, I invest my money where I have an actual solid investment or business that actually exists. I have a decent return and I'm happy.
That's very well I'm simply saying hey you got to put your money where your mouth is. I am not sure if it's a bubble it may or may not correct, I'm simply saying if you think it is, it's profitable to short sell.
Deal Addict
Jun 3, 2009
3802 posts
461 upvotes
Montreal
I think lots of people who got in late will be hurt sooner than later.
Deal Addict
User avatar
May 11, 2014
1705 posts
719 upvotes
Iqaluit, NT
xuemike wrote:
Dec 6th, 2017 12:40 pm
That's very well I'm simply saying hey you got to put your money where your mouth is. I am not sure if it's a bubble it may or may not correct, I'm simply saying if you think it is, it's profitable to short sell.
And I am arguing it isn't because in order to make money shorting, it is assumed that it will drop immediately. Bubbles have a tendency to inflate further, so that doesn't work as an argument to reaffirm the bull case for bitcoins.

You generally cannot hold onto a short indefinitely especially for something with speculative demand. It will definitely get called in.
Support your local Credit Union! PM for different options available!
Sr. Member
Dec 12, 2009
526 posts
25 upvotes
xgbsSS wrote:
Dec 6th, 2017 12:43 pm
And I am arguing it isn't because in order to make money shorting, it is assumed that it will drop immediately. Bubbles have a tendency to inflate further, so that doesn't work as an argument to reaffirm the bull case for bitcoins.

You generally cannot hold onto a short indefinitely especially for something with speculative demand. It will definitely get called in.
shorting doesn't require you to put in ALL your money. You can calculate out your stop points just like any investments
Deal Addict
User avatar
May 11, 2014
1705 posts
719 upvotes
Iqaluit, NT
xuemike wrote:
Dec 6th, 2017 12:05 pm
For those who think it is a bubble, then I urge you sign up for one of these exchanges and short sell it. If you believe it then why not make some money?
xuemike wrote:
Dec 6th, 2017 12:53 pm
shorting doesn't require you to put in ALL your money. You can calculate out your stop points just like any investments
Even if you have no stop, brokers stop in and call in shorts, so you then lock in losses, hence why it's riskier.

Eg. I shorted Sears Canada. i was making a profit, bit the brokerage still called in the shares. Since liquidity was tight, my profit was miniscule in the end. Literally less than $100 for a $15k short I was sitting on over $1k profit.
Support your local Credit Union! PM for different options available!
Sr. Member
Dec 12, 2009
526 posts
25 upvotes
xgbsSS wrote:
Dec 6th, 2017 1:03 pm
Even if you have no stop, brokers stop in and call in shorts, so you then lock in losses, hence why it's riskier.

Eg. I shorted Sears Canada. i was making a profit, bit the brokerage still called in the shares. Since liquidity was tight, my profit was miniscule in the end. Literally less than $100 for a $15k short I was sitting on over $1k profit.
You can leave money in your account don't have to push your margins to the max, I can't imagine them liquidating your position otherwise. I mean... if you short and the thing goes up another 500% you simply just made the wrong decision thinking that it currently is a bubble.
Deal Addict
User avatar
May 11, 2014
1705 posts
719 upvotes
Iqaluit, NT
xuemike wrote:
Dec 6th, 2017 1:09 pm
You can leave money in your account don't have to push your margins to the max, I can't imagine them liquidating your position otherwise. I mean... if you short and the thing goes up another 500% you simply just made the wrong decision thinking that it currently is a bubble.
My margin was not maxed. The shares were called in and no longer available. That is a risk of shorting

Also, just because something goes up 500% doesnt mean it isnt a bubble. As already mentioned, bubbles are irrationale. They move irrationally.Hence why people should not short, even if they think or it is a bubble.
Support your local Credit Union! PM for different options available!
Newbie
Mar 1, 2011
80 posts
26 upvotes
I tend to agree with the crowd that says the price mirrors the adoption curve (s-curve) of a new technology.
Sr. Member
Dec 12, 2009
526 posts
25 upvotes
xgbsSS wrote:
Dec 6th, 2017 1:20 pm
My margin was not maxed. The shares were called in and no longer available. That is a risk of shorting

Also, just because something goes up 500% doesnt mean it isnt a bubble. As already mentioned, bubbles are irrationale. They move irrationally.Hence why people should not short, even if they think or it is a bubble.
I don't understand how your broker can call in the shares unless your margins were not maxed.

if it goes up another 500% I wouldn't call the current price a bubble at all, maybe 500% later it is. If it goes up 500% from here it's more like a missed opportunity.
Deal Addict
User avatar
May 11, 2014
1705 posts
719 upvotes
Iqaluit, NT
xuemike wrote:
Dec 6th, 2017 1:29 pm
I don't understand how your broker can call in the shares unless your margins were not maxed.

if it goes up another 500% I wouldn't call the current price a bubble at all, maybe 500% later it is. If it goes up 500% from here it's more like a missed opportunity.
When a brokerage has no longer access to the shares to borrow, the brokerage has no choice but to call in the shares. Not all shares or bitcoins are available to be borrowed. This occurs with ALL brokerages, although some may have better access to shares vs others. In order to borrow it, they have to be made available. For example, shares held in registered accounts are no available for people to borrow. Brokerages also set rules such as they have the right to lend out your shares or you have to give consent before this etc. Regardless, this changes the availability of shares to be held and hence why brokerages have to sometimes call in shorts. Hence why shorts are not the exact opposite of long positions: they come with much higher risk because of the limitations in how they are set p.

And if you think in this matter (+500%=missed opportunity), I will just say be careful. You are speculating if you think in this way. Not every money making opportunity is a wise trade, and comes with it's risk. Ask yourself, what is a bitcoin worth and why is the value up +500%/ Unlike companies, you have no metrics to value it as such. The only reason why it is worth that much more in terms of bitcoin is because people are speculating. Show us why that is false... the fact of the matter is noone can.

I will not touch bitcoin unless I am transferring money overseas, which is the one use I do use bitcoin for. Any money I would put in to speculate will be play money at most.
Support your local Credit Union! PM for different options available!

Top