BTC bubbles

#1

Post by herrherr » Wed, Apr 17, 2013, 1:26 PM UTC

BTC bubbles
scottlocklin.wordpress.com

Re: BTC bubbles

#2

Post by kiba » Wed, Apr 17, 2013, 1:55 PM UTC

What can we learn from this? You can see a “fair value” of around $20/BTC due to be hit in a few weeks, with perhaps a full mean reversion to $10/BTC.

We now have a testable prediction. Let see if bitcoin actually falls to to 20 and 10 dollars per bitcoin within 4 weeks.

Re: BTC bubbles

#3

Post by Nursie » Wed, Apr 17, 2013, 1:58 PM UTC

kiba wrote: post #2

What can we learn from this? You can see a “fair value” of around $20/BTC due to be hit in a few weeks, with perhaps a full mean reversion to $10/BTC. We now have a testable prediction. Let see if bitcoin actually falls to to 20 and 10 dollars per bitcoin within 4 weeks.

I'd almost be surprised if it doesn't hit that within a few weeks.

Not necessarily as a stable value, but in the last few days it's bounced around madly between about 50 and 100 dollars. I think at this point it's fair to say that nobody has any idea of the real 'value' of a bitcoin, and mad speculation is still the order of the day.

Re: BTC bubbles

#4

Post by dragontamer » Wed, Apr 17, 2013, 2:05 PM UTC

When a worthwhile Futures market hits, then BTC will really stabilize.

He's right. Without shorting, options, and future contracts... it becomes impossible for BTC to stabilize in the wake of media exposure. Add on to the fact that the majority of BTC users seem to be idiots (ie: they look at the price as some sort of indicator of BTC penetration, as opposed to more useful statistics), and you've definitely got a situation where bubbles will continuously form.

Anyway, I don't necessarily think he's right. There will always be some function that fits some data... and he may have gotten lucky this time that data fits his model. Either way, it is certainly an interesting piece to read. And his model seems to have solid theory behind it.

Re: BTC bubbles

#5

Post by joshuahedlund » Wed, Apr 17, 2013, 2:06 PM UTC

Are prices only well described by log periodic power laws if market participants don't know they are well described by log periodic power laws, or does that make things more complicated?

Re: BTC bubbles

#6

Post by jerguismi » Wed, Apr 17, 2013, 2:06 PM UTC

There has been lately some legitimate-looking companies starting options-markets: http://forexmagnates.com/ig-groups-launches-bitcoin-binary-o...

And also a new funded startup coming: http://siliconangle.com/blog/2013/04/11/coinsetter-the-newes...

Re: BTC bubbles

#7

Post by stephencanon » Wed, Apr 17, 2013, 2:07 PM UTC

Nursie wrote: post #3

kiba wrote: post #2

What can we learn from this? You can see a “fair value” of around $20/BTC due to be hit in a few weeks, with perhaps a full mean reversion to $10/BTC. We now have a testable prediction. Let see if bitcoin actually falls to to 20 and 10 dollars per bitcoin within 4 weeks.

I'd almost be surprised if it doesn't hit that within a few weeks. Not necessarily as a stable value, but in the last few days it's bounced around madly between about 50 and 100 dollars. I think at this point it's fair to say that nobody has any idea of the real 'value' of a bitcoin, and mad speculation is still the order of the day.

> I think at this point it's fair to say that nobody has any idea of the real 'value' of a bitcoin.

Nonsense. They have no use, not even as a status symbol or as a practical unit of exchange. The “real value of a bitcoin” is zero, and the fact that this isn’t obvious to everyone is, frankly, astonishing.

Re: BTC bubbles

#8

Post by Nursie » Wed, Apr 17, 2013, 2:10 PM UTC

stephencanon wrote: post #7

Nursie wrote: post #3

Earlier quoted context omitted.

I'd almost be surprised if it doesn't hit that within a few weeks. Not necessarily as a stable value, but in the last few days it's bounced around madly between about 50 and 100 dollars. I think at this point it's fair to say that nobody has any idea of the real 'value' of a bitcoin, and mad speculation is still the order of the day.

> I think at this point it's fair to say that nobody has any idea of the real 'value' of a bitcoin. Nonsense. They have no use, not even as a status symbol or as a practical unit of exchange. The “real value of a bitcoin” is zero, and the fact that this isn’t obvious to everyone is, frankly, astonishing.

I didn't want to say that because people get annoyed. I also didn't want to quote this from the article -

"I have better things to do with my time than play with weird monopoly money"

And say "I like the cut of this guy's jib", for similar reasons, but I guess now I have...

Re: BTC bubbles

#9

Post by tudorizer » Wed, Apr 17, 2013, 2:15 PM UTC

jerguismi wrote: post #6

There has been lately some legitimate-looking companies starting options-markets: http://forexmagnates.com/ig-groups-launches-bitcoin-binary-o... And also a new funded startup coming: http://siliconangle.com/blog/2013/04/11/coinsetter-the-newes...

Yeah. Coninsetter looks promising and the beta is around the corner.

Re: BTC bubbles

#10

Post by steven777400 » Wed, Apr 17, 2013, 2:17 PM UTC

Having not heard of this model before, I'm very surprised how tightly the curve fits, to the point of being sceptical (it's even got the "little" ups and downs" it seems).

Traditionally, the idea with a bubble is that everyone (well, almost everyone) knows it's a bubble, but no one seems to know when it will pop or how far it will fall.

Would this same model have fit the 2008 stock market collapse? Would it have accurately showed when and where the bottom was?

Would this same model have fit the BTC curve as well if the dataset had started 100 or 200 days earlier or later?

Just some curiousity about a model I'm hearing of for the first time.