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Why the ‘Big Short’ Guys Think Bitcoin Is a Bubble

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Re: Why the ‘Big Short’ Guys Think Bitcoin Is a Bubble

#21
post #8
post #5

Is it really a bubble or is it driven by market demands as more and more applications and use-cases emerge? In the end, a lot of the blockchain infrastructure relies on bitcoin hence it moves in sync. China's real estate market is a bubble because there is a excess of 500 million dwellings that are not needed.

> In the end, a lot of the blockchain infrastructure relies on bitcoin hence it moves in sync. Does it, though? I’m on the sidelines, but it seems like all the excitement/money flowing into crypto these days is into blockchains with higher transaction throughput and more advanced smart contract interpreters. I know there are some maxis trying to build things like DeFi and NFTs on Bitcoin but it seems to have really t…

> DeFi and NFTs on Bitcoin

There are DeFi and NFT platforms on Bitcoin? I haven’t heard of those. Are you talking about Ethereum?

Re: Why the ‘Big Short’ Guys Think Bitcoin Is a Bubble

#22
post #12

It has honestly surprised me that a bunch of people I thought were smart really think NFTs are a good long term investment. It clearly has no value beyond speculation and the bubble will pop.

The exact same thing happened with Ethereum (and crypto in general) in 2017. But look how much it's rebounded after that crash. I still don't think it's a good long term investment, but it's been an amazing way for some people to make life-changing money. Sadly, I'm not one of them.

Re: Why the ‘Big Short’ Guys Think Bitcoin Is a Bubble

#23
post #12

It has honestly surprised me that a bunch of people I thought were smart really think NFTs are a good long term investment. It clearly has no value beyond speculation and the bubble will pop.

> It has honestly surprised me that a bunch of people I thought were smart...

Nobody is universally brilliant. Newton spent as much time on alchemy as he did physics. Maybe NFTs are just the modern alchemy, as they do seem to turn random items into digital gold.

Re: Why the ‘Big Short’ Guys Think Bitcoin Is a Bubble

#24

Tether is a fraud and everyone knows it. More than half of all crypto trades involve tether so the fraud is pervasive. But the most damning aspect of all is the fact that despite common knowledge of the pervasive fraud, USDT maintains it's peg. This indicates collusion by the market making exchanges in perpetrating this widespread, pervasive fraud. This essentially makes the entire crypto marketplace as we know it on…

Tether can temporarily keep the peg to $1 so long as a lot of people don't cash out at once. Given that they have cash reserves, they can buy back tethers that cost less than $1 themselves to keep the peg afloat. If they are legit, (lol) this would make great business sense since you are literally given a dollar and only have to pay back 99 cents. Everyone would love to be in the business of paying back loans for less than the principal amount.

Re: Why the ‘Big Short’ Guys Think Bitcoin Is a Bubble

#25
post #5

Is it really a bubble or is it driven by market demands as more and more applications and use-cases emerge? In the end, a lot of the blockchain infrastructure relies on bitcoin hence it moves in sync. China's real estate market is a bubble because there is a excess of 500 million dwellings that are not needed.

We're still waiting for the first application or use case.

Re: Why the ‘Big Short’ Guys Think Bitcoin Is a Bubble

#26
post #4

Michael burry is correct. The others (e.g talib, paulsen)... Are just hot gas. What distinguishes a bubble from a mania is the high degree of leverage underlying the price support. To date none of the Bitcoin price peaks in the past Exhibited the hallmark sign of a bubble popping, which is 2x faster price drop relative to rate of climb, if anything most of them were 2x slower. However, if you look at the motion that…

When btc becomes overleveraged, we simply see a -25% flashcrash. They happen every couple months.

Re: Why the ‘Big Short’ Guys Think Bitcoin Is a Bubble

#27

Tether is a fraud and everyone knows it. More than half of all crypto trades involve tether so the fraud is pervasive. But the most damning aspect of all is the fact that despite common knowledge of the pervasive fraud, USDT maintains it's peg. This indicates collusion by the market making exchanges in perpetrating this widespread, pervasive fraud. This essentially makes the entire crypto marketplace as we know it on…

As fraudulent as being able to lend at an arbitrary multiple of your reserves. A run the bank would bring it all down. Just like in real life.

Just like in real life.

Real life has safeguards in place to prevent a bank run from "bringing it all down".

Crypto has no safeguards.

Re: Why the ‘Big Short’ Guys Think Bitcoin Is a Bubble

#28
post #12

It has honestly surprised me that a bunch of people I thought were smart really think NFTs are a good long term investment. It clearly has no value beyond speculation and the bubble will pop.

What surprises me is the constant negative drum beat against Bitcoin on Hackernews. Mostly based on speculation.

Re: Why the ‘Big Short’ Guys Think Bitcoin Is a Bubble

#29
post #2

> “You can’t be short it in scale,” agrees the short seller. Like some of the others who fundamentally dislike it, he even has a small position in bitcoin. “If it goes up, I’ll make a little bit of money. If it goes to zero, I’ll be so happy, I will gladly lose the money.” The attitude that pervades HN in regards to crypto. This website is not a good place for discussion regarding blockchain technologies.

I don't think that's an accurate read at all. HN appears to me more full of people (like me) who were fired up by the initial promise of (a) blockchain technology (b) intermediary- and free-free transfer of value. What happened instead was that the technology turned out to be one of the worst threats to global warming since farting cows (yes,yes, i know, ethereum makes it all better), the intermediary- and fee-free p…

> What happened instead was that the technology turned out to be one of the worst threats to global warming since farting cows (yes,yes, i know, ethereum makes it all better)

This has been overstated by critics. It's currently at something like a half a percent of world electricity usage. Which as an absolute number is really big, but as a contribution to global warming it's just not a meaningful percentage. And even ignoring something like proof of stake or Chia, it gets solved the same way as the rest of the problem -- replace generation capacity with non-carbon sources. Institute a carbon tax. Then people will mine Bitcoin using renewables and that'll be the end of it.

> the intermediary- and fee-free part never actually worked out at all (because people need accounts somewhere, sorry, wallets)

It turns out people often want this because they don't want to lose all their money if they accidentally drop their phone in a river.

The key is to make sure that it's still possible to do it without an intermediary, because that's what keeps the intermediary from becoming an abusive chokepoint for authoritarian policies, since any attempt to implement them there would only overtake the benefit of their convenience and cause people to switch to direct transactions.

> bitcoin and others turned into a speculating collectors' frenzy that while technically, perhaps, not as absurd as beanie babies or dutch bulbs, is generally adjacent to such historical fancies.

This was made significantly worse by the design of Bitcoin in particular since there is a limit to the amount of Bitcoin that will ever exist. Which makes it not only not inflationary but heavily deflationary, which promotes speculation.

It's plausible that some other cryptocurrency that limits volume only in proportion to some scarcity (whether or not it's still compute) but has no fixed maximum number of coins would be less subject to speculation and therefore less volatile. And then the lower volatility might cause it to have higher adoption in the long term.

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