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[–]digitil 547 points548 points  (78 children)

I looked back at Bitcoin's historical charts and saw this pattern many times starting as far back as 2011, early 2013, again later in 2013, and more times since. I don't think finding it again means much.

Edit: The instances I was referring to: https://imgur.com/a/fvbYd

[–]gusta_gusta 82 points83 points  (2 children)

Except that 3 of the top 5 articles on CNBC prior to 2017 weren’t Bitcoin and crypto related. Now they are. There is a big difference between bitcoin having a market cap of $50M and $250 BILLION.

[–]Rediwed 59 points60 points  (1 child)

Now it's 230 Billion.

Now it's 240 Billion.

Now it's 220 Billion.

[–]bgroins 25 points26 points  (0 children)

Yes, yes. We've all heard the joke.

[–]now-then 13 points14 points  (58 children)

Yeah it’s all about perspective and we will only know once it has played out but I reckon bitcoin is still in the “awareness phase”

[–]skushi08 50 points51 points  (56 children)

I think it’s beyond the awareness phase by now. I heard an ad on XM radio trying to convince people to use some fund to invest bitcoin in an IRA account. The Winklevoss twins starting their fund ages ago was probably towards the mid to end of the awareness phase. I still thing there’s money to be made in it, but for anyone sitting on a large value of bitcoin it might not be a bad idea to start cashing some gains.

[–]sashslingingslasher 43 points44 points  (32 children)

I still don't understand this. I thought it was a currency. Wouldn't its proponents want the value to stabilize, so that it can actually be used irl?

You're not supposed to make money off currency, you're supposed to use it for trade.

[–]Cloverleafs85 41 points42 points  (10 children)

It's why some argue that it's not a currency. If you have to explain to people what it is and try to convince them that it is currency, it's already on shaky grounds. When people start hoarding it as a commodity and investment object instead of circulating it, it gets worse.

[–]its_uncle_paul 20 points21 points  (4 children)

Every time I hear discussion about bitcoin it's almost always about how one can invest in it and make profit from it. I rarely hear anyone talk about practical uses for it. I mean, I still can't use it to pay for my gas or groceries or pay my bills.

[–]Paradigm240 4 points5 points  (1 child)

You can use it to buy things online through some retailers, and I know of a shop in my city that accepts bitcoin as payment, but you're right in saying that it really isn't catching on the way enthusiasts said it would.

[–]FPNarrator 2 points3 points  (0 children)

If you live in a country that makes it hard to get a credit card and you want to access your money in another country, oh man, crypto is so much nicer.

If you regularly live and work in more than one country that don't have good banking relations, oh man, crypto comes in super handy.

If your country's currency is going to shit due to geopolitical collapse, like with Brexit or in Venezuela, oh man, crypto is nice to have.

It currently has lots of value to lots of people. But for first world North Americans, a decentralized, operator-owned crypto credit card is coming soon. Don't worry.

[–]HitItWithAHammerTime 1 point2 points  (0 children)

I would call it a “Cash Equivalent” at this point. Much like a stock or T Bill

[–]ParinoidPanda 4 points5 points  (3 children)

What would your response be to the people who bought the new, US backed Iraqi dollars when they first came out in ~2010 with the expectation that their value would go up?

[–]Cloverleafs85 2 points3 points  (2 children)

That I do not know enough to comment on it. My feet are mostly planted in sociology, psychology, anthropology and pre 1940's history, and only a smattering of basic economy. What money is, how money came about, effects that money can have on us and small odd facts about curious currencies in the past is more my field than actual finance.

[–]cynian 0 points1 point  (1 child)

I'll take the small odd facts if you feel like writing something about them, sounds rather interesting :)

[–]Cloverleafs85 2 points3 points  (0 children)

Allrighty then.

Aside from bartering systems and commodities used as currency, the first proper money in the world, was actually credit. To be specific, credit at grain banks. This was 2000-500 BC, and in ancient Egypt a power concentration push created what may be the world first centralized banking system. People deposited grain, and got a clay tablet in return noting what their deposit was worth. There also seems have been some of the first transactions without actually using physical money, people exchanging clay tablets. When metallic currency came about in Egypt, it did so first in the form of rings and miniature sheep.

Alongside, and possibly much older, there is commodities as money. One of the most widespread is probably shells, and especially Cowry shells, which were used for intercontinental trades even, and it was still used as late as the 19th century in Africa.

They were pretty and decorative, so they were a commodity, but eventually they turned into a sort of currency as well. They were good money too. They were small and easily transported, hardy, non perishable, and very, very difficult to forge.

The classic Chinese symbol for money is based on a pictograph of a cowry shell. Not all shells are interchangeable though, in Australia, one tribes legal tender could be worthless to another.

Then you have edible currencies. Most well known is Salt, and the word salary is derived from it. Roman soldiers weren't actually paid in salt though, it refers to what you'd use it for. A world without refrigerators needs lots and lots of salt. One of the salt roads is called Via Salaria. (edit, they did trade with salt bricks though. It was a proper currency in that sense )

There is also tea brick money. To make them more durable they used binding agents, flour if your were lucky. Blood or manure if you were not. In Mongolia and Siberia they could and still can be used to produce more solid foods, butter tea, porridge, and it could double up as "medicine", so some favored it more than metal coins. It was used as late as WWII in Siberia.

There is also the very local yam currency on Trobriand Islands. Only women actually own them, men grow them, but not for their wives, and with annual ritual exchanges, plus more. It's about as complicated and odd as anything that mixes economy, religion, politics, traditions and sex can be. It also means that because it is so much more than currency, even after tourists come bringing in less perishable currency, it still remains. Also bundled banana leaves. Value based on time to make them.

There is also the cocoa bean in central america.

The world biggest currency by volume is Rai stones, quarried on some Micronesian islands, and used on Yap (who do not have that type of limestone themselves)

Their value is derived from sheer size and the effort it takes to make and transport them. Once settled the stones rarely get moved though, fear of damage to stone and backs alike. Ownership during trades is what changes, through oral agreements. Everybody knows whose stone it is, and who had it before, and even further back.

Besides size, decoration and quality, some stones may also gain extra value if lots or nobody died transporting it, or if a famous sailor brought it in, or other historical tidbits making it more special.

Not being able to reach a Rai stone also does not make it worthless. When one sank into the sea, it was agreed it's ownership was still relevant. The stone exists, down there somewhere, ergo it counts.

Modern currency has arrived and settled on Yap, but Rais are still used, usually for rare important social transactions, marriage, inheritance etc.

There was also that whole inflation thing thanks to a rogue by the name of David O'Keefe which nearly ruined it, until they agreed that the new stones brought in were not as valuable as the old proper ones.

Africa had several very funny shapes metallic money, Katanga Crosses, Lobi Snakes, Kissi Pennies.

And I'm running out of time. I hope it lives up to it's promise of interest.

[–]Petersaber 4 points5 points  (6 children)

It's not a currency. It's a commodity. It only has value because people deem it valuable. Meanwhile, real currencies have governments to ensure their value.

[–]eBelowTheStaff 0 points1 point  (4 children)

Exactly how do governments "ensure" the value of fiat currency other than saying "Hey guys, no really, this has value"? If people stop believing in the value of a currency, you get hyperinflation no matter what the government says. You're treading dangerously close to an appeal to false authority.

[–]Num10ck 1 point2 points  (0 children)

Enforcement, using marshalls, courts, police etc. try to refuse cash payment for any debt and see how your experience goes.

[–]IrnBroski 8 points9 points  (0 children)

90% of proponents are lying to themselves and only wanna make money

[–]skushi08 6 points7 points  (3 children)

That’s it’s big issue. Try spending bitcoin on real and legal multimillion dollar purchases and you’ll be laughed at. Concept of block chain currency is awesome and actually has plenty of real world applications, but “crypto” currency not so much. I’ve limited my involvement in it to essentially be like trading a stock. I can’t go anywhere and spend it without converting it to a hard currency. As far as I see it it’s like trying to buy a TV with Apple stock.

[–]FPNarrator 1 point2 points  (0 children)

You can buy property in Dubai with it ;)

[–]rolf_muller 1 point2 points  (1 child)

Currency is traded at a greater rate then stocks by far. $5 trillion a day.

[–]Num10ck 0 points1 point  (0 children)

Makes sense since the vast majority of companies are not publicly traded; and currencies are used for all sorts of transactions, like purchases, instead of just exchanging pieces of ownership in publicly traded companies.

The average investor shouldn’t worry about diversifying currencies until they have a million dollars or so.

[–]beeeel 8 points9 points  (1 child)

The only reason Bitcoin can't be used IRL at the moment is ridiculous transaction fees (25%+), but other cryptocurrencies can be: I saw this video of a guy using XRP to buy beer in Walmart.

In addition to Bitcoin and other currencies, there are also crypto tokens which act in a similar way to stocks, such as NEO which pays dividends in the form of GAS tokens. Long story short, crypto is will be revolutionising the financial sector (IMO).

[–]Paradigm240 5 points6 points  (0 children)

That's stretching the definition of revolutionizing. I'd rather say something like it's demonstrating itself to be a viable financial instrument, but it's hardly as if the financial industry is falling head over heels to embrace it.

[–]dkac 1 point2 points  (0 children)

My understanding is barely above novice, but as I understand it, the term "currency" is used loosely when describing Bitcoin, at least with the current state of the technology. Right now, it's more like a security...people are mostly investing in it as a secure place to store funds, while a much smaller percentage of people are actually taking advantage of using it as a virtually anonymous currency to help with shady transactions. With it's volatile value, how secure it is up for debate when compared to government-backed currencies, but from a technical perspective, it is indeed very secure.

[–]Rookwood 0 points1 point  (0 children)

It's proponents right now are trying to get rich quick, which is the crux of the issue.

[–]ManlyBearKing 0 points1 point  (0 children)

Tell that to the multi-billion dollar Forex industry. Arbitrage is big business outside of crypto currency

[–]TimothyGonzalez 3 points4 points  (0 children)

Which is exactly why technical analysis is a pseudoscience.

[–]Rookwood 0 points1 point  (0 children)

Why are you cutting it off so early. We need to see the aftermath, despair. Makes me assume that it doesn't actually crash by bubble standards.

[–]TheGreatMuffin 754 points755 points  (28 children)

This chart comparison has been posted in various bitcoin subs almost since its inception... You can find correlating curves in almost any given time frames :)

[–]Zachasaurs 363 points364 points  (20 children)

statistics can be made to match anything needed with the correct axis labels

[–]Termy56 114 points115 points  (9 children)

I know the guy below you was like oh man, who farted! but this is the right answer. ^ this is how the democrats can project a trillion dollar surplus, while the republicans can project a trillion dollar deficit. (i'm talking about the early 1990's, that ship has sailed and gone a while ago).

It boggles my mind that people just take some random data, throw it on an x and y axis, and call it a day.

Images like this makes my eyeball twitch

[–]teerre 47 points48 points  (4 children)

I mean, this one is very low effort

The real dangerous ones are the ones that have the correct labels and mostly the correct procedural for computing but only happened to screen the right data for the job, which is infinitely harder to detect and might even be impossible without being familiar with the subject

[–]Pasty_Swag 1 point2 points  (3 children)

Is that a case of biased/skewed data? I'm not sure I understand, but I'd like to.

[–]windupcrow 9 points10 points  (0 children)

I think he means sampling bias.

[–]teerre 1 point2 points  (0 children)

I was very general on my description, biased data is certainly a technique that could be implemented to the effect I described, but there are also infinite many other ways of masking your data

It's common in Statistics 101 classes to open the course by explaining that all data is interpreted. The very action of choosing a subject is already skewing your data

Wikipedia has an article on it. Some sources in the bibliography

[–]ManlyBearKing 0 points1 point  (0 children)

Yes. The days is intentionally skewed. It's one way of showing sample bias as mentioned

[–]pez78guy 2 points3 points  (0 children)

November 2009 was some sort of tipping point, right?

[–]brereddit 7 points8 points  (0 children)

Stock charts also have fractal properties so using various time intervals can bring about similar chart patterns.

[–]jaymz58 4 points5 points  (0 children)

Yeah and they don't even have a Y axis label on this.

[–]HandshakeOfCO 20 points21 points  (1 child)

Ugh god the smell... Someone light a math

[–][deleted] 3 points4 points  (0 children)

You can use statistics to prove anything. Forfty percent of people know that.

[–]Aeolun 1 point2 points  (0 children)

This had me look at the axis and realize I had been bamboozled.

[–]expresidentmasks 0 points1 point  (0 children)

I’m just now getting into higher level business and our CFO has opened my eyes to the accounting world. It’s crazy how 3 different accountants can look at the same books and give me a different P&L. Kind of makes me understand why people think so differently about economics.

[–]leshake 0 points1 point  (0 children)

Technical analysis is kind of voodoo. That said, this pattern shows weakness to the high point because it keeps meeting sell resistance below its all time high. But it looks like it's already reverting to the mean at the current price.

[–]lifestream87 0 points1 point  (0 children)

BTC didn't go parabolic and get into mainstream consciousness or pique institutional investors until recently, though. That chart had no value 2009-2016 in BTC context.

[–]instatrashed 153 points154 points  (7 children)

This subreddit is awesome because it compares similar data and uses analytics. These are just two graphs that look the same. This honestly shouldn't be here. What if I used one of those sane charts with a chart showing the rise and fall of landline phones? If I adjust the timeframe and axis it looks similar. Would mods here let me post that?

[–]Bl0bbydude 16 points17 points  (0 children)

I’d actually be curious if you managed to do that.

[–]rolf_muller 5 points6 points  (0 children)

Also the stock chart is satire and not any real data at all.

[–]Petersaber 1 point2 points  (0 children)

Do it!

[–]TheJoker1432 96 points97 points  (1 child)


Honestly this is not OC since its been on many bitcoin subs and its without any kind of analysis. You can make any graph match each other

[–]Drakkur 2 points3 points  (0 children)

This is why it is frowned upon to do line charts with two different unit values/scales (dual axis). You end up drawing baseless conclusions about the chart.

[–]hibuddha 527 points528 points  (29 children)

Thought this was a repost from one of the dozens of crypto subs I've been seeing this in for the past 8 months.

I'm proud of you, you found two similar lines. There is no analysis here, and it's definitely not OC.

[–]SamSlate 46 points47 points  (9 children)

also: not what a bull trap looks like.

[–]the_zukk 13 points14 points  (8 children)

Curious, why doesn’t it look like a bull trap? Genuinely curious.

[–]ForkLiftBoi 13 points14 points  (3 children)

I believe his point is because it didn't follow the rules of a trap below. Investopedia explains it in this Image and that's where I go for learning trading and market phrases.


[–]Rookwood 1 point2 points  (2 children)

Technical analysis is market voodoo. If cryptos continue to crash, this will be a bull trap. If they shoot up to 2x current prices, it will have been a bear trap.

[–]leshake 4 points5 points  (1 child)

Bull trap and bear trap are not patterns, they are qualitative descriptions using hindsight.

[–]Rookwood 1 point2 points  (1 child)

It's a bull trap if it continues downward. Bear trap if it shoots back up. If it goes side ways, it wasn't much of a bubble.

[–]the_zukk 1 point2 points  (0 children)

I guess that doesn’t really help figuring out which way it’s going then lol. Only way to know is in hindsight?

[–]SamSlate 1 point2 points  (0 children)

the trap isn't the bottom it's the direction change and reversal

[–]CRISPROC: 1 52 points53 points  (1 child)

Stockmarket cycle is awfully detailed for a schematic representation of the concept.

[–]fresh_naanbread 33 points34 points  (6 children)

You start your graph in october and still call it the stealth phase. Around that time it had already blown up.

[–]satyrPAN 79 points80 points  (20 children)

The thing is that the knowledge of the stock market price cycle will affect the price of bitcoin. (If people see this chart and believe it, they will sell.)

[–]TheCatOfWar 75 points76 points  (3 children)

Ah, the self-fulfilling prophecy

[–]RhinostrilBe 4 points5 points  (2 children)

Borderline catch 22

[–]SleepyHarry 13 points14 points  (1 child)

Catch 21.999999999999

[–]letskeepthiscivil 0 points1 point  (0 children)

TIL: How to write a repeating decimal with a keyboard (I used the horizontal line, the vinculum, when writing it by hand): https://en.wikipedia.org/wiki/Repeating_decimal#Notation

[–]coolkid_RECYCLES 6 points7 points  (0 children)

Or people waiting for it to drop for their chance to buy

[–]Nullrasa 40 points41 points  (21 children)

I think the most interesting thing about this post is the number of upvotes it has. The message is pretty clear, but it's also the farthest thing from being anything concrete. I actually wouldn't call this 'data' in any sense of the word, because it doesn't give any meaningful information.

The popularity of this post would indicate that people WANT bitcoin to crash.

Edit: meta data?

[–]nicematt90 20 points21 points  (8 children)

Most people on Reddit want to see bitcoin crash because it would justify their decision not to invest in it.

[–]Valuesauce 1 point2 points  (0 children)

This exactly. Salty people gonna salt

[–]SkinSuitUnSub 0 points1 point  (0 children)

I'm curious . What exactly do you think your investment was? If you made money (so far) it's in speculation about future worth . It isn't an investment until it can be quantified in set of books. You made money but it isn't an investment that follows the ideas of a future value . You're speculating . That isn't investment

[–]FirstHipster 8 points9 points  (4 children)

Maybe then people will stop discussing their bitcoin investments openly at work.

You don’t see me bragging about my 401k performance over the last year, Brad.

[–]lf11 2 points3 points  (3 children)

Maybe because it didn't jump a few hundred percent last year?

[–]FirstHipster 1 point2 points  (1 child)

If you think it's appropriate to openly brag about a 100% speculative investment in front of co-workers then you're one of the people I'm talking about. Keep your personal finances to yourself.

[–]lf11 1 point2 points  (0 children)

Let's face it: the best way to be monetarily comfortable is to understand and practice budgeting, saving, tax sheltering, and stable growth. All very tedious and boring topics unless you're into that sort of thing. If money comes up, that's what I talk about, because that's the only thing that's worth talking about, and frankly if folks aren't into that level of money management then the conversation moves elsewhere.

If bitcoin comes up, I'm always happy to talk about it, but only in non-monetary frames. The politics, the anarchy, the technology, stuff like that. Never the money. It's easy for me anyway because I sold out a while back to help pay for school and I have yet to bring home a paycheck to buy more.

[–]cedarSeagull 0 points1 point  (0 children)

And all your co-workers don't call you a fool or crazy for investing in a 401k.

[–]Ledoux88 7 points8 points  (1 child)

and it's not even OC, and even the original poster just slapped two different images next to each other.

[–]Nullrasa 4 points5 points  (0 children)

Thats going into a grey area that I'm not going to touch.

You can also argue that no data is OC.

[–]LonnieMachin 0 points1 point  (1 child)

You should see r/investing. They celebrate every "crash" with their I told you so comments.

[–]cedarSeagull 0 points1 point  (0 children)

Wierd they don't short it then. Haters

[–]Dyl000 0 points1 point  (0 children)

I personally want it to drop a bunch so I can invest in it before it climbs again

[–]sadop222 25 points26 points  (0 children)

This is really unworthy of dataisbeautiful. It's barely OC too. But keep calm, nothing is deleted in this sub.

[–]CABrock 15 points16 points  (0 children)

Jesus. I think this chart deserves the repost MVP for 2017-2018 already. I love watching people play Wolf of Wall Street on the Internet.

[–]RedHotDornishPeppers 3 points4 points  (0 children)

This also happened with Ripple/XRP recently, you could watch the denial on the ripple subreddit on others saying to hold and "It's just stabilising" when it's down and "TO THE MOON!" when it goes up a decent bit. Quite funny but since I have money in it I'm nearly with this mentality

[–]pittsnoggle 4 points5 points  (0 children)

PSA: don't attempt to"time" the market with charting with any money you can't afford to lose. Charting is not a particularly effective method of investing, and should be viewed the same way monkeys throwing darts would. You can do it, but you should only do it for fun with money you can lose. Long term index funds are the safest and most effective form of investing. Don't gamble with your retirement.

[–]justsaying0999 11 points12 points  (2 children)

Bitcoin chart analysis is the biggest load of horseshit. You can apply that chart to a hundred points in bitcoin's history. Also, how can you seriously claim bitcoin was in its stealth phase in October? It doubled in price over the course of the summer, and everyone and their grandma has known about bitcoin since it first hit 1000 dollars.

[–]Fishwithadeagle 3 points4 points  (0 children)

Well let's not get ahead of ourselves here. Most people don't know the basic concept of bitcoin, they just know that it is worth money.

[–]Calvin_v_Hobbes 0 points1 point  (0 children)

You could also use the same chart to argue that the BTC price over the past several months represents just the tiny "bull trap" decline in the larger cycle.

When everything is equally valid, it's all invalid.

[–]cwmaker1 2 points3 points  (0 children)

I don't know how many times I've seen this meme chart posted everywhere, eventually it will be right, but posting it every week for the last year plus is really annoying.

[–]Davidjhyatt 9 points10 points  (36 children)

Except one is tracking the value of companies and the other is representing the value of hype and speculation.

[–]never_reddit_sober 22 points23 points  (34 children)

I submit that stock prices are also affected by hype and speculation

[–]ACrispWinterDay 1 point2 points  (32 children)

Of course they are, but that stock is backed by ownership in a real company. Bitcoin is backed by it's blockchain ledger. Is the blockchain ledger on it's own worth that much? I don't think anyone really knows, but anecdotally pretty much everyone I talk to in the real world, even those investing in it, think it's just a scam and they are riding the wave.

[–]bearpie1214 1 point2 points  (0 children)

I think there other value it has is in the number of computers that are part of the network.

A system with two computers to verify things isn't worth much.

A system with 200k computers is worth something. I'm making the 200k up. No idea how many.

So I think there is a network affect that can help value the coin.

[–]K3TtLek0Rn 2 points3 points  (12 children)

I'll never understand this argument. For thousands of years, gold has been a widely used store of value and wealth. But what makes gold valuable? It's just a hunk of metal. The same weight in aluminum is comparatively worthless. Things are only as valuable as people make them. If Bitcoin is worth $15,000 to someone, then it's worth $15,000.

[–]ACrispWinterDay 4 points5 points  (11 children)

Gold has value for several reasons. It's appearance, which makes it useful in creating jewelry(people like shiny things). It's incredibly stable, so it doesn't tarnish, and holds it's beauty. It's also rare, making it somewhat scarce.

What is the value in bitcoin? It has scarcity. It has a stable location in the blockchain ledger. It can be traded electronically with virtually no transaction cost. Is that worth this tremendous valuation as a store of wealth? Maybe I guess.

[–]Zouden 2 points3 points  (0 children)

Gold has value for several reasons. It's appearance, which makes it useful in creating jewelry(people like shiny things). It's incredibly stable, so it doesn't tarnish, and holds it's beauty. It's also rare, making it somewhat scarce.

Yeah, but the price of gold jumps up and down all the time while its usefulness is the same it's been for centuries. The price is disconnected from its use.

[–]pablodiegopicasso 1 point2 points  (0 children)

Gold is also used in electronics.

[–]IrnBroski 0 points1 point  (3 children)

No I think they are both very similar in that they don’t have intrinsic value other than stability, chemical or ledger based. I’d wager gold jewellery came after gold was valuable, not vice versa.

[–]ACrispWinterDay 0 points1 point  (2 children)

This is way off topic, but I think jewelry came first, as there is plenty of evidence of even neanderthals wearing intricate jewelry. Not crafted from metals, but from feathers and bones and so on. Europeans would raid militarily weaker civilizations for their gold jewelry, and at one time it made Spain the richest country in the world.

The main problem I see with bitcoin is basically a handful of people own almost all of it. That gives them price setting powers. I think the market cap is high enough that it's very unlikely it goes down to zero, but it would only take a few unfavorable events for the value to drop dramatically.

[–]IrnBroski 0 points1 point  (1 child)

I would have thought, even in that case, that the feathers and bones would have had value before they adorned the neanderthals.

There are many contradictions in terms of what bitcoin is, and what people think of it. It's supposedly a vehicle for decentralisation, but, as you point out, a few entities hold huge sway over its value - miners who can affect the ledger, huge bag holders who can pump and dump at their own whims, and exchanges who have access to large amounts of the coins and whose problems have historically caused huge dips in value.

It's supposedly a vehicle for taking power away from the banks, yet it's not as if the gains made by any individual are directly taking away from banks. Some banks have huge holdings and can increase stakes easily by means of inducing FOMO. Profits taken by individuals would mainly be from other individuals who had less luck/skill in predicting market movements. For long term holders, their profit comes entirely from more people seeing the potential gains to be made and buying into the system at a later date than you.

I see it as more of a Battle Royale between millions of people trading on exchanges. All this talk of disruptive technology, decentralised ledgers is just jargon. It's a way for the individual, not the masses, to accrue money in times of great economic disparity.

[–]ACrispWinterDay 0 points1 point  (0 children)

Well said, and I agree with you on that. I'm starting to feel like it's just a new vehicle to store wealth that is very convenient.

[–]Dyl000 0 points1 point  (2 children)

It’s incredibly similar to fiat currencies, it’s valuable because enough people agree that it’s valuable, and there is a set number of bitcoins that can ever exist

[–]ACrispWinterDay 0 points1 point  (1 child)

It has very little to do with fiat currency, because fiat currency is used to acquire goods and has wide distribution. Bitcoin is used as a store of wealth for a handful of people who can control prices. It is not used to purchase goods unless you're crazy.

The limit to the number of bitcoins is a reason why it is not the same as a fiat currency. This limit makes it extremely vulnerable to a concentration of wealth which turns it into a cartel. It could very well be a cartel right now.

[–]Dyl000 0 points1 point  (0 children)

True, bitcoin hasn’t been adapted for use in very many places, although KFC and Microsoft, as well as the occasional bar, accept bitcoin as payment, I do agree that it’s used as a store for wealth instead of a currency like it was supposed to, which is why Bitcoin Cash has become a thing. Bitcoin Cash is still pretty young though so even that will take a while to be widely used

[–]DeliciousOwlLegs 0 points1 point  (0 children)

The point where the advantages over gold and the innovation of bitcoin break down is when bitcoin gets less useful for transactions the more it is used for speculation (transaction times increase).

[–]Nullrasa 0 points1 point  (0 children)

Investment vehicles are correlated. Often times, you'd see the stock market crashing because bonds offer better returns, or vice versa.

[–]JavierTheNormal 9 points10 points  (15 children)

Fun post, but capitulation is the bottom. After mass capitulation where who will sell does sell, the stock has nowhere to go but up because nobody's left willing to sell for less. In other words, there are buyers but zero sellers at the current price for long enough to drive up prices.

The other amusing thing about your post is BTC returning to some "normal" price. But it has no intrinsic value, so perhaps the "mean" is more like "zero".

[–]Chrisw_2003 1 point2 points  (9 children)

[–]ACrispWinterDay 7 points8 points  (4 children)

A dollar has intrinsic value, by law the US government requires people to accept it as payment.

[–]IrnBroski 2 points3 points  (3 children)

That’s extrinsic by definition

[–]ACrispWinterDay 0 points1 point  (2 children)

Depending on how you look at it. People like to get incredibly pedantic about this stuff, but value is generally measured in USD. It is the basis of monetary value, built into the world economy as the currency of exchange, based on the size of the US economy and the stability of the dollar, the use of government debt as an investment instrument, the guarantee of value by the US government, and a lot of agreements made between the world powers decades ago.

Is it extrinsic because you trade it for goods? Sure. But usually people trade goods to get dollars.

[–]IrnBroski 0 points1 point  (0 children)

A piece of paper has no intrinsic value other than the paper itself.

Money is an IOU. It is a medium to store and transfer value, value which is accrued through other means (work, goods, hype, etc).

The widespread acceptance (and in some cases enforcement) of the extrinsic value imparted upon money means that money is now literally synonymous with value, and that has allowed for many sub-markets of various natures to develop around it.

[–]ralf_ 2 points3 points  (3 children)

The intrinsic value of the Dollar is that in the US you have to pay your taxes in it.

[–]the_zukk 2 points3 points  (2 children)

How is that intrinsic? That’s just a use case. It’s not intrinsic to the dollar. You could vote in a gold bug who says you have to pay it in gold, or euros, or tacos.

[–]ralf_ 2 points3 points  (1 child)

Your Mom is paid in tacos!

[–]the_zukk 0 points1 point  (0 children)

intrinsic value

There’s not really any such thing as intrinsic value. Something has value because of its usefulness. Gold has value because it is useful as jewelry and some manufacturing and as a long standing history of a store of value. Dollars have value because of a faith in the government not to inflate it too quickly and as a medium of exchange. Neither are intrinsic.

Bitcoin has value for both a medium of exchange and a store of value. Sure speculation has created a bubble but a return to the mean would not be zero unless bitcoin loses its functionality (gets hacked or otherwise fails in its promises such as 21 million cap and global payments)

[–]baddepls 3 points4 points  (9 children)

i wouldn't be surprised if the so called "cycle" for crypto is similar, but because there are so many more traders the bubble will be much bigger. i think we are still in "bear trap" phase of the left hand graph

[–]TimothyGonzalez 1 point2 points  (0 children)

This is exactly why technical analysis is stupid, you can just say you "think" this or you "think" that, and only after the fact can you apply some technical analysis patterns to the graphs and be like: "How did we miss this!?"

[–]crap_punchline 1 point2 points  (0 children)

1) This doesn't show any aesthetically interesting data.

2) This post won't age well, as we saw this exact bubble formation at $13, $120, $1000, $2000, $4000, $9000, $15000, $20000 etc

[–]UKcoin 4 points5 points  (0 children)

great, so that means in just a couple of months we'll be back on a bull run, because according to you the entire crash cycle will only last 2 or 3 months, then we'll be back to the beginning of another major bull run.

You post this on reddit without the slightest clue what you're doing or talking about. You're comparing one entire cycle to a 3 month snippet of Bitcoin price, what about the entire year before that?

[–]brofesor 3 points4 points  (1 child)

I love how the OP is being downvoted because Bitcoin fanboys are in the denial phase. The transaction length alone indicates that Bitcoin will never be in use as a currency. I very much like the idea of cryptocurrencies but Bitcoin is nothing but a huge gamble and although I'm sure it's made many people rich, far too many investors will end up in tears when it all crumbles down.

[–]sunnbeta 1 point2 points  (3 children)

Not beautiful... just looks like 2 google image search results put side by side. I can also find that bitcoin curve for probably half of stocks if picking and choosing timeframe/scale.

Lastly what’s the source for the stock market cycle, real or anecdotal? Markets don’t follow perfectly (or even slightly) predicable patterns.

[–]hehexdwutface 0 points1 point  (2 children)

Markets do follow patterns how do u think algorithmic trading is done?

[–]sunnbeta 0 points1 point  (1 child)

And what timeframes are algorithmic trades done over? Not long term like this.

[–]joe9439 1 point2 points  (0 children)

That red line is not based on any real data. It’s just a random line that someone drew on a chart. This is art, not data.

[–]agnostic_science 1 point2 points  (0 children)

I'd replace 'smart' money with 'lucky' money, but otherwise accurate! If anyone was smart enough to consistently predict their way up half-pipes like this, they'd be a trillionaire. It's true that smart people look for these kinds of opportunities and smart people are more likely to find them, but I think most people aren't smart, so the majority of people who find it are just lucky. Most speculative early investments can be smart but still don't pan out because they're inherently risky.

[–]latenightsandshite 0 points1 point  (0 children)

just curious, what do y’all think about the intrinsic value? do you think prices will diverge sharply towards some average of historical prices (what the graph claims) or that crypto is actually gaining real social utility (aside from anonymity) that is edging out fiat and has an intrinsic value much closer to current speculative prices than most people think?

[–]robo98 0 points1 point  (2 children)

All I know is Heidi Fleiss bought $600 worth of crypto currency a few years ago and now it’s worth several million. According to a Dr. Drew podcast I listened to. So talk to her bout dis.

[–]Paradigm240 0 points1 point  (1 child)

See, now this is my issue - how easy is it to convert that into actual money? Bitcoin on its own is practically useless. You can sell it, sure, but is it guaranteed? Who is going to buy $600 million worth of crypto currency?

[–]robo98 1 point2 points  (0 children)

From what I understand it’s not guaranteed. Seems complicated. You can sell it or cash it out. Here’s a link I found that tells more about it.


[–]SkylarkV 0 points1 point  (0 children)

I mean, just look how crazy this Bitcoin run has been!... http://www.efficientfrontier.com/t4poi/1-7.gif

Oh, wait, my bad: that's the history of the stock market (before it really shot up the past 9 years).

[–]james1765 0 points1 point  (0 children)

Keep in mind: - Even if stocks crash, they have to find their way back to intrinsic value, because they reflect companies that create real economic value. - Bitcoin produces no inherent value. After a severe crash, people could decide it's not really worth believing in. Nothing says it has to keep or increase in value.

[–]-Mediocrates- 0 points1 point  (0 children)

I think it’s important to think of bitcoin’s value relative to the world economy. Bitcoin goes up it goes down who cares... as long as it can’t be hacked or controlled by very few entities it’ll be good in the long run.

Global fiats are all a charade and every time there is a big downswing in the economy or some crazy scandal (such as too big to fail bailouts while 5million people lose their homes), people lose faith in the US dollar for example.

The petro/military backed-dollar is losing its grip. Countries are going green and also thanks to independent media and wikileaks, the scandals of the oligarchs and corrupt politicians are getting exposed. USA Can’t invade Random countries because it no longer accepts US dollars. The lies don’t work anymore Iraq has no connection to 911 and no weapons of mass destruction... what a waste of a war on the backs of the tax payers.

You want to increase the price of bitcoin? Instigate a massive bubble to pop in the world economy and/or expose the corruption of banks and/or government. Every time something like this happens more and more people realize that paper money is all a charade that we agree to play.

It’s just a matter of time. If u want to think of it diabolically, short the world economy and then make it happen with media content. You know... just like how most shorting strategies work on Wall Street.