What would trigger a drastic collapse of value in Bitcoin?

Phaneendra Veluguleti

Phaneendra Veluguleti

Mise à jour il y a 18w

Let's answer this question using a different approach.

Maximum number of Bitcoins which can exist is 21 millions .(which Will take another 100 years approx) As of now nearly 16.7 millions bitcoins present in the system and nearly Bitcoins 75 are being mined every hour . As nearly 79.7% is already in the system , the bitcoins which are being mined will have least significance in Bitcoin price movement ( demand and supply rule).

Total market cap of Bitcoin is valued at 167 billion USD ( 1 bit coin ~10k USD) .

APPLE , the tech gaint is valued at it's peak at 900 billion USD. ( Highest market cap in this world) and have liquid reservers of 250 billion USD.

US Federal reserve is at 2245 billion dollars.

Now let's dig why has the price of Bitcoin has surged this year

  • The day before Japon accepted Bitcoin as legal currency it is trading at 1133 USD. From there on it rose 9X times in this current year.
  • Wash trade :- Repetadly trading very small amounts of bitcoins back and forth between accounts thus inflating their volumes and channeling it as people acceptance has been on rise.
  • Herd mentality : Let's take example of South Korea. Once people got to know that a hedge fund manager has bought Bitcoin in huge quantity , all other fund managers and people are flocking to buy Bitcoin pushing it popularity and demand much higher. Similar scenario is being seen in other countries .

People were dreaming they would be Warren Buffet one day by investing in Bitcoins but are failing to acknowledge the trap.

When each Bitcoin goes 200x ( each Bitcoin 2 million dollars)from here , it's total worth will wound upto 3300 milliards de dollars . Thus much more than Federal Bank reserves and Apple combined.

How about each Bitcoin costs 4 million dollars ? . Well with around 6600 billion dollars one can go on shopping spree to buy APPLE, ALPHABET,Facebook,Microsoft,Amazon without thinking much as it can have greater value than total forex reserves of all countries put together .

Now think about intermediate platforms which can be used to exchange Bitcoins for USD. Even if 10% pour cent of people wish to close their positions in bitcoins . These platforms needs to provide 300 Billion dollars (need to have that much liquidity at least)which is mere IMPOSSIBLE.

Buying Bitcoin is just like “Blowing a balloon with eyes closed and hoping it will not burst” , but the inevitable happens , it's just a matter of time.

If and When Bitcoin hits 1 million dollars , one can expect the imaginary currency to fall down or raise by 30% - 40% dans un single day due to it's high volatility.

Better avoid it.

Marty Smallman

Marty Smallman, I currently work in IT related roles with the United States Antarctic Program

Répondu il y a 46w · L'auteur dispose de réponses 137 et de vues de réponses 192.8k

It doesn’t really matter what the value of bitcoin is. All that matters is that it is a decentralised currency that no one government can control, it has almost mainstream adoption now and people want it. As long as that holds true any collapse in value will be short lived.

It should not be seen so much as money but more as a store of wealth. Gold like bitcoin only has value because someone decided it did and it’s scarcity. Bitcoin’s going mainstream because people are fed up with traditional banking, which in an electronic age offers little value. Anyone with an online storefront or a bricks and mortar business now has the ability through payment gateways to accept bitcoin. Once the realisation hits Joe Public that anyone can use bitcoin to pay for things pretty much anywhere adoption is going to skyrocket.

Who is going to let the value plummet, not the people holding bitcoin, not the miners who have huge investments in mining hardware, not the exchanges as bitcoin is the “gateway” currency.

Value will continually fluctuate and yes there will be so called “crashes” and so called “peaks”. Average them out over time and coupled with increased accessibility and adoption and I maintain the value will only trend up.

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Don’t have all your eggs in one basket with bitcoin but aim to only hold what you can afford to lose. Lock in profit at the peaks by selling some and buy back when the price drops. High return usually means high risk, and dollar for dollar there is no higher return on investment currently than Bitcoin.

I think of Bitcoin more like betting on a horse race. I’m backing the favourite but I still might not get anything from it, but then again I might win big. So far it’s been the latter but like anything use good judgement and never risk more than you can afford to lose.

Ian Chhoa

Ian Chhoa, I hodl mostly ETH

Répondu il y a 46w · L'auteur dispose de réponses 166 et de vues de réponses 317.1k

A better coin.

Here me out: I don’t think BTC will be the future.

Mhm. That’s right. I think technologie blockchain is 100% the future, and I do think that BTC will be around for the medium term, but in the long run, I’m not too confident that it’ll be around. I may change my mind if the reasons below change.

  • Outdated tech
  • Meme steam
  • Évolutivité

The silly fork debacles aren’t giving me confidence that BTC can upgrade fast enough to compete when it matters. Sure, BTC OGs will say: “But it was expected all along!” That doesn’t change the fact that twice in a row, BTC has tried to update its technology - faster ad better transactions - and twice in a row the community has rejected these changes, for a multitude of reasons, not all of them being purely technical.

Personally, I believe that the prominence of BTC right now is that it’s the dans un premier temps. It’s the gold standard, the USD of cryptocurrencies, and many of its early adopters have a sentimental reason to hold it and keep its value up there.

You know who doesn’t share these sentimental reasons? You know who’s not impressed with the drama behind SegWit2x tripping over its face?

South Korea. China. Russia. The countries currently driving a lot of the growth, who are building roots, watching and making their own plans to dominate the market.

I live in Australia where the AUD has been overheated for nearly a decade thanks to the mining boom. I’m not inclined to believe that the trending value of a currency is the real value of a currency just because that’s what it’s always been all along.

I think that unless BTC gets its act together, it’s going to run out of steam, and a stronger, more dependable currency will arrive. There’s so many altcoins out there trying to be The One. You can’t tell me that every one’s chance of success is 0%…

Kate Gilles

Kate Gilles

Répondu il y a 46w

For Americans, the soaring value might seem like a puzzle, since it doesnt seem like the payment network is any closer to mainstream acceptance here. But experts tell me that the currencys recent growth is driven by soaring demand in Asia.

Vidéos: Crypto TV

If history is any guide, the latest surge in Bitcoins price is likely to end in tears for many of the people who are frantically buying up the virtual currency. There have been three previous times when Bitcoins value soared like this once in 2011 and another in 2013. Each boom was followed by a dramatic crash.

Those early Bitcoin booms were US-centric, but Bitcoin has become more international since 2013. And data suggests that the big boom weve seen over the past month has been driven by surging demand in Asia.

This kind of big spread between currencies doesnt happen in mature currency markets. Traders are supposed to capitalize on the arbitrage opportunity buying in one market and selling in the other until the price gap goes away.

But Adam White, the head of a Bitcoin exchange called GDAX, said that this hasnt happened rapidly enough in the fledgling Bitcoin market. Traders who buy bitcoins with dollars and sell them for South Korean won have to find a way to convert the won into dollars. Regulatory and logistical obstacles prevent them from doing that quickly enough to meet surging demand for bitcoins in South Korea.

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The spread between bitcoins value in dollars and in its value in yen and won has narrowed in the last two weeks. Still, there continues to be intense interest in the virtual currency in Japan and South Korea.

Hileman points to Japans formal recognition of Bitcoin as a significant factor behind this boom. Bitcoin has long enjoyed de facto recognition from governments around the world. But the Japanese legislature went a step further and passed rules specifically spelling out how Japanese financial regulations would apply to Bitcoin and other cryptocurrencies.

I’ve seen varying estimates of how much money has been fleeced from ransomees, Hileman tells me. Some people think that victims have paid hundreds of millions of dollars, he says, but its hard to collect accurate data about an underground criminal activity.

All of these applications contribute to the overall demand for Bitcoin, but Hileman emphasizes that recent price increases are driven by speculation, not practical uses of the currency. A growing number of people are becoming convinced that Bitcoins price is going to go up in the long run. And this has become self-fulfilling prophesy.

Its also possible that the latest price rise is a mere speculative bubble. People might simply be buying bitcoin with an expectation that theyd be able to sell it at a higher price. For a while, that can push prices higher and higher. But eventually the process runs out of steam and starts to go into reverse, causing a panic.

Craig Scheiner

Craig Scheiner, Retired TV news & doc cameraman, editor; vid producer; semi-pro still photog.

Répondu il y a 45w · L'auteur dispose de réponses 265 et de vues de réponses 267k

This article answers that pretty well.

You Might Be Near a Crypto-Top If …By Elisabeth Dellinger, 11 / 28 / 2017

Holy booming bitcoin, Batman! As the cryptocurrency flirts with $10,000 (that’s ¥1 million if you’re in Japan), we bring you the latest bubble chatter. No, we aren’t calling a peak—we aren’t market timers or commodity forecasters (or cryptocommodity forecasters). But it sure seems like we’re seeing a modern version of Joe Kennedy’s infamous “shoeshine boys” and Hetty Green’s “good-looking bankers.” So, in proper Jeff Foxworthy style, here are all the latest signs that bitcoin, while perhaps not peaking, is sheer speculation at this point.

If you don’t know what futures are but are sure you want to buy bitcoin ones, you might be near a top.

Si vous avez quit your job to trade bitcoin and other cryptocurrencies full-time, you might be near a top.

If issues of new cryptocurrencies—aka initial coin offerings—have jumped 3,600% in less than a year, you might be near a top.

If you’re happy to buy bitcoin at a P/E of 708—even as cryptocurrency supply is skyrocketing—you might be near a top.

If a guy accidentally steals and deletes $300 million in ether (a bitcoin rival), but people keep buying anyway, you might be near a top.

If everyone knows initial coin offerings are really an end-run around securities laws, but people keep buying anyway, you might be near a top.

If hip-hoppers, Bjork[Ii] and Paris Hilton are driving the bandwagon, you might be near a top.

If retail investors have an epic case of bitcoin FOMO, you might be near a top.

If bitcoin soars after a hackers stole $31 million worth of tokens from Tether (a crypto peer)—which also boasted its tokens were “dollar-backed” while admitting in the fine print that they “were neither money, nor stored value, nor currency” and didn’t guarantee redemption—you might be near a top.

If speculators happily buy $370,000 worth of new cryptocurrency from a start-up so flimsy it could literally disappear off the face of the earth days later, you might be near a top.

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If “the average investor” says they won’t sell bitcoin until it rises thirtyfold, you might be near a top.

If bitcoin jumps 11% because a mobile payments system is testing support for people who want to buy stuff in bitcoin (which they’d probably do only if it stops zooming), you might be near a top.

If one bitcoin trading platform adds 100,000 users in a single day over Thanksgiving weekend (no doubt seeing dollar signs after hot tips from young family members), you might be near a top.

If major financial publications spill a few hundred words arguing bitcoin is “safe” even though it is quite hackable and capable of falling 30% in a single day, you might be near a top.

If people are making new economy-type arguments about bitcoin, you might be near a top.

If you’re desperate to buy bitcoin in your IRA, you might be near a top.

Si "acheter bitcoin avec carte de crédit” is trending on Google, you might be near a top.

Or not! Markets are fickle, funny things. Prices always rise until they don’t. In a bubble, the breaking point is often just as illogical as the run up. That’s the problem, though. If something isn’t rising for fundamental reasons, then anything can make it go bust, making your only timing tool sheer luck. If you’re feeling lucky, great—but maybe go to Vegas instead. There, at least you can have fun whether or not you win.[Iii] Or, alternatively, you can forget gambling and invest in diversified portfolios targeting your long run goals. Boring, we know! But not nearly so speculative as guessing the future of a crypto-asset enveloped in crypto-froth.

Manmohan Singh

Manmohan Singh, DevOps Commando, QA Regiment

Répondu il y a 46w · L'auteur dispose de réponses 279 et de vues de réponses 741.1k

If you have seen the movie “Wolf of the wall street” , you can probably make out that inflating a stock price is not a big deal. It involves time , effort and most importantly wealth from people.

So Bitcoin is something which has huge value and no substance behind it. Its like a fugati (something fabricated out of thin air). There is no official banking institution that claims to have exact information on total number of units released by the creator of bitcoin in the market. Its a rumor based sham that has attracted all eyes on planet. There is no information how the invested money is generating income/interest and how it is growing itself?

Probably, some insiders (black-marketeers) might be holding a huge lot of bit coins under their arsenal and have created artificial demand in the market that has led to sky rocketing price of bitcoin per unit. The demand is so huge that people are buying it in fractions.

I believe the collapse will be initiated when any public sector bank recognise it as a denomination. This move shall expose the ledgers and all transactions in the reconciliation process. Once the total units are assessed and properly valuated as per the total invested money, the price per unit will drop abruptly.

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