Trade or Invest in Bitcoin?

BigSimon

Newbie
7 0
Is the bubble finally over?? My Bitcoin value has dropped by about 50% and seems to have levelled out. I’ve also been trading effectively against my investment, making enough to write off my loss off Bitcoin value.

Do people think Bitcoin will ever recover? I read an article by Harvard Business Review who think the value will be around $100 in the next 10 years!

I currently trade crypto with Olsson Capital if anyone was wondering…
 

Quantt

Established member
944 57
Is the bubble finally over?? My Bitcoin value has dropped by about 50% and seems to have levelled out. I’ve also been trading effectively against my investment, making enough to write off my loss off Bitcoin value.

Do people think Bitcoin will ever recover? I read an article by Harvard Business Review who think the value will be around $100 in the next 10 years!

I currently trade crypto with Olsson Capital if anyone was wondering…
It is just the beginning, the real burst is going to be when the US government start shutting down exchanges and arresting people for manipulation... Tether anyone?
 

remme001

Member
69 2
Do people think Bitcoin will ever recover?
I see a lot of people ask this question and I get it there are many newbies around that haven't experienced Bitcoins past. Bitcoin has crashed many times before and it will crash many times in the future. Every time it comes back stronger. Bitcoin is 9 years old now. People have been calling Bitcoins end ...well since its very beginning as far back when the price was $0.23 according to bitcoinobituaries.com.
 

Quantt

Established member
944 57
I see a lot of people ask this question and I get it there are many newbies around that haven't experienced Bitcoins past. Bitcoin has crashed many times before and it will crash many times in the future. Every time it comes back stronger. Bitcoin is 9 years old now. People have been calling Bitcoins end ...well since its very beginning as far back when the price was $0.23 according to bitcoinobituaries.com.
Actually, this is the biggest decline in history with no sign of rebound on the horizon

“Bitcoin is on track for its worst first quarter ever with over $114 billion wiped off its value”

https://www.cnbc.com/2018/03/30/bitcoin-price-is-on-track-for-its-worst-first-quarter-ever.html
 

remme001

Member
69 2
Actually, this is the biggest decline in history with no sign of rebound on the horizon

“Bitcoin is on track for its worst first quarter ever with over $114 billion wiped off its value”

https://www.cnbc.com/2018/03/30/bitcoin-price-is-on-track-for-its-worst-first-quarter-ever.html
In terms of value yes but not in terms of biggest decline by percentage. Bitcoin once dropped from $30 to $0.25 in 2011. Source Andreas Antonopoulos.
 
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Brumby

Established member
593 135
Bitcoin has crashed many times before and it will crash many times in the future. Every time it comes back stronger.
I see this arqument being made so often that it is almost laughable. An instrument on the ascent will retrace and then when that retracement is done will reestablish itself and will carry on in various iterations. Such characteristics is the definition of a trend. However all trends will and do end. Context is important. Specifically in the case of Bitcoin it was a parabolic trend. The nature of a parabolic trend is tht all retracement conform to a parabolic curve and eventually exhaust itself when it goes vertical as it was with Bitcoin. A parabolic trend when it ends also exhibit certain characteristics post exhaustion. When measured against its parabolic base will retrace between 62 to 78 % (typically) and up to 90 % as in the case of the dot com bubble. What is not obvious is the Nasdaq is a composite of stocks and that means some companies would had totally lost all value.



Bitcoin is 9 years old now. People have been calling Bitcoins end ...well since its very beginning as far back when the price was $0.23
If you wish to talk about timing then let's also put that in perspective of comparative parabolic exhaustion and recovery. Subsequent to the dot com bubble, it took the Nasdaq 15 years to recover to its prior high and this is before discounting inflation.



In the case of Bitcoin, if it retraces to the level of the dot com crash it still has some way to go.

 
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NVP

Legendary member
36,359 1,803
Bitcoin is a market displaying high volatility at times ....however it is neither a rarity or a unique market ....so learn from history and Trade it like any other market .....

From tulips to real estate to dotcoms to every other bubble or non bubble market in history

Just trade what you see and don’t believe the noise

N
 

remme001

Member
69 2
I see this arqument being made so often that it is almost laughable. An instrument on the ascent will retrace and then when that retracement is done will reestablish itself and will carry on in various iterations. Such characteristics is the definition of a trend. However all trends will and do end. Context is important. Specifically in the case of Bitcoin it was a parabolic trend. The nature of a parabolic trend is tht all retracement conform to a parabolic curve and eventually exhaust itself when it goes vertical as it was with Bitcoin. A parabolic trend when it ends also exhibit certain characteristics post exhaustion. When measured against its parabolic base will retrace between 62 to 78 % (typically) and up to 90 % as in the case of the dot com bubble. What is not obvious is the Nasdaq is a composite of stocks and that means some companies would had totally lost all value.
Zoom out. BTCs long-term trend on the log scale is very much intact. I also do not expect BTCs recovery to take as long as the previous years to recover as the now bankrupt Mt Gox exchange at the time accounted for as high as 90% of the trading volume whereas with this current short-term bear trend BTC has not had any major setbacks to match that would cause a prolonged recovery.


If you wish to talk about timing then let's also put that in perspective of comparative parabolic exhaustion and recovery. Subsequent to the dot com bubble, it took the Nasdaq 15 years to recover to its prior high and this is before discounting inflation.

In the case of Bitcoin, if it retraces to the level of the dot com crash it still has some way to go.
If you've been in the cryptocurrency market for long enough you'll know that due to its sheer volatility 1 month in the cryptocurrency market feels very much equivalent to 1 year in the stock market if not more. BTC is definitely not going to take 15 years to recover. A maximum of 1.7 to 2.35 years according to the log scale on the bearish trend.
 
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Kaeso

Established member
836 91
Zoom out. BTCs long-term trend on the log scale is very much intact....
by the looks of it the blue line is the one you hope for and you will sell at about 1BTC = $120,000 :cheesy:
 

remme001

Member
69 2
by the looks of it the blue line is the one you hope for and you will sell at about 1BTC = $120,000 :cheesy:
I'm fine with either. I'm a long-term investor. If things go in the direction of the orange line I'll buy a little more as I don't have quite enough BTC that I'd like. The other will let me retire a little earlier than anticipated.
 

Kaeso

Established member
836 91
I'm fine with either. I'm a long-term investor. If things go in the direction of the orange line I'll buy a little more as I don't have quite enough BTC that I'd like. The other will let me retire a little earlier than anticipated.
what fundamental reason is there for the price of a BTC to keep going up in your view?
 

remme001

Member
69 2
what fundamental reason is there for the price of a BTC to keep going up in your view?
For starters, there is the long-term trend but that isn't fundamental. This aside regulation is a big driver in the sentiment of the market at the moment. A lot of institutional investors are still on the sidelines waiting for proper regulatory guidance in place before jumping in. Bitcoin is one of the rare examples of the average joe entering the market before the big institutional investors. Almost always institutional investors get first dibs on opportunities usually in the format of venture capital funding, IPOs etc. Not long ago there was a G20 meeting discussing cryptocurrencies so there was quite a bit of uncertainty around this and the result of the meeting was positive but still lacked action. So we may have to give it more time however once proper guidance is in place I would expect to see a surge from institutional investors. Other factors that could drive the price up is China lifting their exchange ban that was largely driven by lack of oversight around ICOs. Meanwhile, you have Nasdaq looking to introduce BTC futures which will possibly encourage the growth of BTC ETF trackers and help reduce the ridiculous premiums around the current BTC ETF trackers available. BTC ETFs currently carry big premiums because it's currently the only way to 'hold' cryptocurrencies in a tax efficient account (at least in the US).

From a tech perspective, the lightning network also went live recently which will help address some of the scalability and fee concerns surrounding Bitcoin. This was released on the main net and there is already 1100 nodes running. The technology is still essentially being tested but it's gaining quicker momentum than anticipated. There is also the recent segwit adoption from major exchanges such as Coinbase and Bitfinex which should also help reduce fees.

As far as markets by size go the cryptocurrency market is tiny in comparison. Take a look here for a great visualisation.

As far as theories go for the cause of the downturn in the first place one of the theories included the Mt Gox trustee selling $400 million-worth of bitcoin BTC to deal with the Mt Gox bankruptcy administration in order to cover obligations from the creditors. This just happened to take place January through February this year when the downtrend started taking place. The positive note is that the creditor's obligations are believed to have been met now. The trustee claims he sold OTC in order to not affect the BTC price however regardless whether the trustee sold via OTC or not he is still filling a portion of the liquidity. In order to continue selling more BTC the trustee must now get approval from the Japanese courts. The trustee has not stated how he intends to distribute the remaining BTC to clients so there continues to be uncertainty around that. The remaining BTC in possession of this trustee is $1.18 billion. Other theories due to the sell-off are related to the new tax year. The US has to pay tax on every crypto to crypto transaction. There is no doubt some will have sold off some of their cryptocurrencies in order to cover their tax obligations. If we start seeing a reversal towards the end of April you'll know the main driver.
 

Kaeso

Established member
836 91
For starters, there is the long-term trend but that isn't fundamental. This aside regulation is a big driver in the sentiment of the market at the moment. A lot of institutional investors are still on the sidelines waiting for proper regulatory guidance in place before jumping in. Bitcoin is one of the rare examples of the average joe entering the market before the big institutional investors. Almost always institutional investors get first dibs on opportunities usually in the format of venture capital funding, IPOs etc. Not long ago there was a G20 meeting discussing cryptocurrencies so there was quite a bit of uncertainty around this and the result of the meeting was positive but still lacked action. So we may have to give it more time however once proper guidance is in place I would expect to see a surge from institutional investors. Other factors that could drive the price up is China lifting their exchange ban that was largely driven by lack of oversight around ICOs. Meanwhile, you have Nasdaq looking to introduce BTC futures which will possibly encourage the growth of BTC ETF trackers and help reduce the ridiculous premiums around the current BTC ETF trackers available. BTC ETFs currently carry big premiums because it's currently the only way to 'hold' cryptocurrencies in a tax efficient account (at least in the US).

From a tech perspective, the lightning network also went live recently which will help address some of the scalability and fee concerns surrounding Bitcoin. This was released on the main net and there is already 1100 nodes running. The technology is still essentially being tested but it's gaining quicker momentum than anticipated. There is also the recent segwit adoption from major exchanges such as Coinbase and Bitfinex which should also help reduce fees.

As far as markets by size go the cryptocurrency market is tiny in comparison. Take a look here for a great visualisation.

As far as theories go for the cause of the downturn in the first place one of the theories included the Mt Gox trustee selling $400 million-worth of bitcoin BTC to deal with the Mt Gox bankruptcy administration in order to cover obligations from the creditors. This just happened to take place January through February this year when the downtrend started taking place. The positive note is that the creditor's obligations are believed to have been met now. The trustee claims he sold OTC in order to not affect the BTC price however regardless whether the trustee sold via OTC or not he is still filling a portion of the liquidity. In order to continue selling more BTC the trustee must now get approval from the Japanese courts. The trustee has not stated how he intends to distribute the remaining BTC to clients so there continues to be uncertainty around that. The remaining BTC in possession of this trustee is $1.18 billion. Other theories due to the sell-off are related to the new tax year. The US has to pay tax on every crypto to crypto transaction. There is no doubt some will have sold off some of their cryptocurrencies in order to cover their tax obligations. If we start seeing a reversal towards the end of April you'll know the main driver.
thanks for this it was interesting to hear about the new developments and have a look at the links (especially visualcapitalist (y)). Although you are reporting some positive things about bitcoin and reasons for support of the price and future buying pressure its not exactly what i meant by fundamental, i meant is there some sort of intrinsic value of a coin which is increasing for some reason? i see that crypto is potentially useful in the future for transactions in some configuration but that it doesn't necessarily involve the price going up and up (and staying up)
 
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remme001

Member
69 2
thanks for this it was interesting to hear about the new developments and have a look at the links. Although you are reporting some positive things about bitcoin and reasons for support of the price and future buying pressure its not exactly what i meant by fundamental, i meant is there some sort of intrinsic value of a coin which is increasing for some reason?
The intrinsic value debate of Bitcoin has been done to death so I'll keep this one minimal. Price is driven by supply and demand plain and simple. The more people that want to use Bitcoin as means of value transfer and store of value the more demand there is. Bitcoin is also deflationary with an ever increasing difficulty rate to mine maxing out at 21 million.