This "Bubble" Ain't Popping Anytime Soon!

in #steem7 years ago (edited)

HODL your horses! Crypto is still in its infancy. A lot of you Steemians have been here for awhile and are YUGE believers of crypto, so this might not be new info/speculation for you, but this might be useful for a lot of new guys/girls. The term "Bubble" is being put out there everyday and I wanted to talk about it. But first check out this awesome video :

This is just my own opinion and I can easily be wrong, but I will show you how I make sense of all this...

I will start out with the most recent badmouthing.

I do not know if Mark Cuban's tweet is the reason for this Short term top
OR if it is because it just moved 1000+ points from the low wick on that green arrow without making any big pull back
OR if this is just the 3000 psychological barrier resistance.
It is probably a combination of all three, but Mark Cuban and other popular business professionals that are showed on TV are all wrong

In fact they were wrong 129 times + and counting: http://www.zerohedge.com/news/2017-06-02/they-tried-kill-bitcoin-129-times-each-time-it-came-back-even-stronger

One day they might get it right when they keep calling it a bubble pop every 100 points up, but that doesn't count and we will all be very well off by then =)

Once again this is just my personal beliefs. My parents came to the US and barely knew English let alone technology and culture etc here. But they still knew about stocks at the dotcom era and invested in internet stocks. They also told me all their friends who were also immigrants doing the exact same thing. My dad told me it took roughly 1 year and a half before that bubble popped and he lost all his money... So my first point is that someone who should be one of the last people to catch on to a trend (my parents) was able to get involved for a year plus before it died. Crypto has definitely not gotten to that point yet. Majority of the population have not heard about it yet, but just seems that way due to the accelerated rate of people learning about it. ()
Here is a very rough estimate... in 2014 there is about 1 million wallet user count divided by 7.3 billion people population = .0136%
Now in 2017 there is about 14 million wallet users/ 7.3 billion people = .19%
There are obviously people who know about it and do not make a wallet, but this paints a picture of how little this new technology is adopted so far.

Another inference I want to make is that in a bubble everyone is on the same side (to dah MOON). Everyone knew about internet stocks and everyone believed it was a long and nothing else. Here in crypto world, few people know about it and many of the few believe this is a fad,scam, and at the end of a bubble. So the dotcom bubble sentiment vs crypto sentiment is not equal.

Not sure if this is exactly how it works, but how I see it is that the valuations back in the dotcom bubble was centralized and the massive profits were mainly in just a few people. The profits in crypto are greatly spread throughout the world. The values of a decentralized asset should have a higher potential/price ceiling than one centralized company.

Comparing the dotcom bubble to crypto is like comparing apples to oranges since one is centralized vs one is decentralized... BUT lets just compare it anyways. According to this : http://cnnfn.cnn.com/2000/11/09/technology/overview/ , the peak of the dotcom market cap was $2.94 trillion and then it crashes to $1.193 trillion. The current total marketcap of crypto is around 100 billion. So that valuation is nowhere close to even the LOWS of the dotcom bubble crash. Next point will be the value of dollars, our dollars were worth a lot more back . According to http://www.in2013dollars.com/2000-dollars-in-2017?amount=1, "The "purchasing power" of $1 from 2000 is $1.42 in 2017" Now we multiply just the peak and low of the dotcom bubble market caps -> Peak = $4.17(2.941.42) trillion and the Low = $1.69 (1.1931.42) trillion.

If crypto can provide the technological revolution that the internet has done we can estimate 40x returns from current crypto market cap levels. There will obviously be SOOO many more catalysts that will affect the future, but I just wanted to share my bigger picture idea. Also definitely believe the stock market that has also been in a long stretched bubble will pop in the near future. During the 2008 market crash crisis, cryptocurrency was not around to be played with. Asset managers and people alike rushed to safe havens. The next stock market crash might have that extra money flowing and experimenting with crypto.

The concerns of a crypto bubble definitely has merit. A lot of people are clueless and are putting money with no due diligence and only emotions/fomo. Right now with the ICO craze it is really quite absurd and a lot of these sh!tcoins will die and so will a lot of ICOs. You just have to be smart, careful, and patient with your conviction on the sound projects you believe in. Risk/Reward in this market is absolutely beautiful so take a swing with what you can afford to risk.

I spent a lot of time and thought into this post, I hope you all enjoyed this.

Please Upvote, Resteem and Follow me @ichoponions for more crypto news/trades.

THANKS!

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Really good points here! Of course there will be local bubbles like the ICO's, where the profit goes to a chosen few, but in general I agree with you.

In addition there's this interesting aspect, that in the dotcom bubble the valuations were of illiquid assets measured in terms of money, but now we are measuring very liquid assets which are money themselves. Anyone can leave anytime, but why leave? We are changing the foundations.

Thank you. Yes definitely some people will leave probably because they need the confirmation of institutions. But they will also buy back in when the public finally understands the potential

I like how many people so busy, so invested in their economic models of reality, and not really open to new ideas, that I get to skim so much cream from the top and just smile and let my best friends know how I do it..

I completely agree surfyogi. They're angry that there is a flight of 'their money' away from them and into crypto.

LOL, love the "In fact they were wrong 129 times + and counting:" OMG. What's up with that? LOL! Crypto is doing great. Time will tell. I am in, in, in.

Please follow! THANKS!

: )

Yes I went 110% in last year =p. the extra 10% does help

I'm a newbie crypto-excited and I thank you for this post

Loved it, Awesome! "The next stock market crash might have that extra money flowing and experimenting with crypto." Im predicting the same thing, the stock market will definitely be affected once the big sharks let go out their shares to add cryptocurrencies to their portfolios. (Especially the hedgefund managers). Great post my cryptobrother! Thanks for sharing

Thank you appreciate the support. It'll be a bumpy road, but hopefully we will be rewarded heavily.

@ichoponions - thanks for taking the time to write this. I agree a lot with what you say especially about ICO's - check out a post I wrote a few days ago. https://steemit.com/ethereum/@amexperts/all-ico-s-are-scams

Thank you, I'll check it out. Followed you

Thanks for the article. I see some good insight in what you are saying about the Alt Coin bubble and how far from the precipice we are. I agree that the Crypto market may see some days of pull back, thats when I like to invest. I also agree about the Shit coins that are out there, trying to grab a quick buck and letting it die. I could name one in particular that one of the major controlling parties has had lawsuits slapped on him for breaking the law, and he is proud of it, he said, "Its great media coverage, free TV coverage, I couldn't afford to pay for this kind of attention".

Well, Good luck to you. I believe Steem will always have value because of the great community its backed by. This community will grow and so will the value of Steeming!

Have a good one!
Q

Thanks for the kind words! Whats the shit coin you talking about?

I hate to toss that one under the Bus just yet. I am still a part of the community and found out this information researching the coin. I hope to do a full write up on all of my findings. The coin seems more promising as of late but there are a lot of crypto Noobs getting in on all the youtube BS. The engaging thing about Steem is that it makes me feel like a Investigative Reporter! Get the dirt, Post the dirt, Get payed! hahaha. I follow you now. Looking forward to more articles.

Have a good one!
Q

Followed you back. Will look forward on your future posts

Great Article, Thank you Upvoted !.... Please check out my profile, https://steemit.com/@ashokaks Please upvote and follow if you are interested ! Thank you again

Be careful at all times!

Mark Cuban was just bear-mouthing, not bad mouthing. Everybody better hop on the lambo bull-train to the moon before it leaves the station! HAHA

Yeah I do not mean to talk crap about a lot of these smart people, its just very new and I do not blame them for not fully understanding everything yet . Cuban said hes long 20 bucks worth of bitcoin trololol

Any one who says cryptocurrencies will fail are either under-educated or spreading FUD.

I also share these views. I just wrote a post on why cryptocurrencies are NOT in a bubble.

these cryptocurrencies are cray! :D

Lots of Scam coins out there. Bitcoin is going to go through the roof when people try to get out because its the funding currency.

Great info. thanks for posting - Voted & Following!

Thanks I appreciate it!

Well written and lots of intriguing thought to back up your stance.

Definitely agree that the ICO market is saturated right now. It a bit overwhelming to pick out the worthwhile ones. So far only Civic and Tezos are looking very interesting to me.

Yes Civic looks very nice to me, but seems like the lock up to August is decently illiquid. I wish Tezos wasn't unlimited cap because its a nice project, but I am greedy and wish to get in a better advantage right off the bat

Very interesting post. I really liked it. I think we are in the early ages of this "bubble" and maybe will burst in 3 or 4 years but I am sure will burst only after will be mainstream because right now there are less and 50 milion people around the world that knows what a cryptocurrency is.

Please invest only in good projects and do not invest in every ICO out there because for every ICO that will fail all the cryptocurrency will go down.

Sorry for my english but I am Italian :)

Some good points there. Still bitcoin is in a bubble. But many don't know that the best feature of the bitcoin is that the bubble never bursts.

Bitcoin has been riding a crazy bubble and it will burst soon. I'll be writing an article on my thoughts about, including some chart analysis and the problems of bitcoin that are getting worse.

I agree!

I'm going to make my first BitCoin purchase next week...Cheers!

Nice, you'll in for a ride

Hello, I noted your posting: it is informative. I added you to my follow list. Look forward to your blog.

It would take another massive hacking to derail cryptos. Unfortunately, recent history is replete with big failures in crypto security. E.g., Mt. Gox hack, Poloniex hack, DAO hack and most recently, Freewallet hack.

https://steemit.com/ethereum/@hoyareb/usd8-million-in-cryptocurrency-ethereum-stolen-from-freewallet-scam-or-hack