Pop goes the bitcoin bubble

[FreedomFan]

Bitcoin Plunges - Business Insider

It's shaping up to be a pretty ugly day for Bitcoin.
After soaring past $250 earlier, it's tumbled all the way down to current levels around $150.
Bitcoin is now 44 percent off its intraday high of $266.
The chart below shows Bitcoin prices since April 7. The big sell-off underway right now is shown on the far right.

Suckers.

 

[GURPS]

why ?

 

[FreedomFan]

why ?

For not understanding basic economics.

Don't get me wrong, I understand the draw. What with more and more people not trusting governments to guarantee the value of their money (Cyprus, QE, for example).

But when quantities are inflexible, as with BTC, wide swings are the inevitable result. That and the fact that most transactions are speculative instead of for actual goods and services (I bought some wheatberries to run through my mill and make flour just to test out BTC, but the novelty lasted exactly that one single transaction), and BTC becomes more like a stock on the market as opposed to an actual currency. I note that "bubble" might be a bit of a hyperbole as it recovered substantially since, apparently.

As an aside, one thing I never understood about BTC. One aspect of it is anonymity. But the other is decentralization. With that in mind, I never understood why it is "traded" in dollars. Kind of defeats the whole purpose as I see it.

 

[GURPS]

I had heard about it, and how people were using it to hide money from Taxes ... then I heard Drug Dealers were trying to use it ... I didn't know the value fluctuated, like the stock market


what else would you use ? Gold Dollars

 

[bcp]

I had heard about it, and how people were using it to hide money from Taxes ... then I heard Drug Dealers were trying to use it ... I didn't know the value fluctuated, like the stock market


what else would you use ? Gold Dollars

the presentation does say you can buy weed with it.

 

[FreedomFan]

I had heard about it, and how people were using it to hide money from Taxes ... then I heard Drug Dealers were trying to use it ... I didn't know the value fluctuated, like the stock market


what else would you use ? Gold Dollars

Yea, if you skulk around the dark internet you can find all manner of drugs, sex slaves, murder-for-hire, etc. They all take BTC almost exclusively (guarantees anonymity).

Gold is a part (small part) of my portfolio, but not hard gold. Rather equity in companies that mine/process. I woke up a bit too late to buy hard gold at a reasonable price. Nothing else too exotic. I'm in the wealth preservation part of my life, so I'm in theory risk averse, but damn if the goobermint isn't making that more and more difficult.

Even if I could buy hard gold I'm not sure I would. I don't see it so much as a currency as I do a hedge against sh1t hitting the fan. If we go to full-blown collapse, I might have a different answer

 

[dustin]

Gold is a part (small part) of my portfolio, but not hard gold. Rather equity in companies that mine/process. I woke up a bit too late to buy hard gold at a reasonable price. Nothing else too exotic. I'm in the wealth preservation part of my life, so I'm in theory risk averse, but damn if the goobermint isn't making that more and more difficult.

Ever heard about phosphate rock mining companies? Your post reminded me about it...

Phosphorus is an essential nutrient for all plants and animals. We get our phosphorus through the food we eat, which has been fertilized by mineral or organic phosphorus fertilizers. But where the phosphorus in our food comes from and how sustainable it is in the long term is often not the topic of debate or significant investigation.

Modern agricultural systems are dependent on continual inputs of phosphorus fertilizers processed from phosphate rock. Yet phosphate rock, like oil, is a non-renewable resource that takes 10-15 million years to cycle naturally. While all farmers need access to phosphorus, just 5 countries control around 90% of the world’s remaining phosphate rock reserves, including China, the US and Morocco (which also controls Western Sahara’s reserves). Studies suggest current high-grade reserves will be depleted within 50-100 years. Further, peak phosphorus could occur by 2030. While the exact timing might be disputed, it is widely accepted that the quality of phosphate rock is decreasing and costs increasing. In mid 2008 the price of phosphate rock reached a peak 800% higher than early 2007.

The phosphorus situation has many similarities with oil, yet unlike oil, there is no substitute for phosphorus in food production. Phosphorus cannot be manufactured, though fortunately it can be recovered and reused over and over again.

Home

Phosphate - Wikipedia, the free encyclopedia

Aurora mine - Wikipedia, the free encyclopedia

 

[FreedomFan]

Ever heard about phosphate rock mining companies? Your post reminded me about it...

Definitely heard of the process, but never sized it up as an investment. Some on my day trader boards have talked about it.

 

[GURPS]

Some on my day trader boards have talked about it.

quick corner the market

 

[FreedomFan]

Bitcoin Exchange Mt. Gox Suspends Trading As Prices Crash | Singularity Hub

Full article worth a read, but here're some other issues with BTC. Not that I'm calling for goobermint intervention But issues nonetheless.

The bitcoin exchange market price of bitcoins in USD has fallen—and fallen hard. After peaking at $266, prices plunged Wednesday morning. There was a strong late rally, such that some data providers listed the “close” around $165. But the cryptocurrency trades round the clock, and Wednesday morning’s decline continued throughout the evening and into Thursday.

As of this writing, the last price on the biggest bitcoin exchange, Mt. Gox, was $123, about -53.6% off the peak, and it hasn’t moved much from there. Why? Mt. Gox suspended trading for 12 hours to catch up with trade volume—and presumably in the hopes of quelling the panic. A similarly sized correction marked the 2011 peak. The following decline erased over 90% of bitcoin’s USD value in the ensuing months.

What are we to make of the bitcoin madness?

A few things come to mind. One, bitcoin was exhibiting classic bubble behavior and a major correction isn’t surprising. (Although, in a traditional bubble, few commentators call it such—perhaps bitcoin’s supercharged speed makes bubbles easier to spot.) Two, it’s impossible to gauge what a more rational price for bitcoin is, but it’s probably closer to the $15 at the beginning of the year than the $266 recently reached.

And finally, bitcoin is an unregulated market—a strength and weakness—and is behaving like an unregulated market. San Francisco-based exchange TradeHill said Mt. Gox and Bitstamp (another bitcoin exchange) were subject to distributed denial of service attacks yesterday, slowing trade execution to a trickle. According to Mt. Gox, which underwent similar attacks the prior week, they suspect the hacks are being launched by bitcoin investors who sell high, paralyze the exchange, wait for the price to plummet, and buy in again.

 

[GURPS]

Even if I could buy hard gold I'm not sure I would.

I was thinking some sort of E-Gold Currency like BTCoin

oh wait isn't there is e Gold now ?