RE: Why I Buy Bitcoin During Crashes Despite Calling it a Bubble
Have loved all your content and, on the whole, agree with your analysis. The one point I would disagree with though is that the bubble has not popped (or that bubbles instantly "pop" at all.)
Looking at the dot-com bubble, which I believe cryptocurrency most closely resembles, the peak of the market was in March 2000 and then there was a long downtrend until September 2002. There wasn't one clear, major trigger for the change in sentiment but sentiment seemed to change. We actually didn't see new highs in the Nasdaq until November 2014. (When all of the hype of the dot-com era had actually come to realisation 14 years on). The inflation adjusted Nasdaq only just reached its new high this January. (Michael Lewis' book Panic is amazing on this)
Other bubbles fuelled by wild speculation to consider: US Housing Bubble - Peaked in July 2006, bottomed out in Feb 2012 and finally reached new highs in Dec 2016. (Using CORELOGIC CASE-SHILLER U.S. NATIONAL HOME PRICE NSA INDEX)
The Japanese Asset Bubble: peaked in 1989, the Nikkei225 then fell until March 2009 and it's still never reached those previous highs. (Nikkei 225 has peak at 38000, today sits at 24000.)
I can't see new money coming in to the space until these coins / tokens have actual utility - all of my friends which i would imagine taking a gamble on this, have. The rest of my friends will only buy it if required to and some point in the future to actually transact. I think we've seen the point of maximum speculation and it is now a good idea to get out while you can. Because, using previous bubbles as an example, this could fall for a lot longer, to a point much lower. Given how long it can take bubbles to hit their lows, it can be particularly difficult to deal with psychologically if you lost a large chunk of your money AND had ample opportunity to get out.
The point of mass-adoption where I see new highs being set is also so far away. I'm from the UK and I can pay and receive money instantly for free using my bank account so this system is going to take a lot of beating. (I believe there is a delay in the US system). There are very very few people that are seriously worried about the centralisation of banks. Certainly not to an extent where they want to keep a significant portion of their wealth attached to a password or private key they cannot reset or retrieve from a customer support line if needed.
The whole of society needs to change to adapt to this new technology. In 2001 the sites of the dot-com bubble had to wait for high speed broadband, cheaper hardware and trust in onine payment methods to develop. Similar infrastructure changes and change of public mindset will be required for bitcoin/other cryptocurrencies to actually be used.
Keep up the great work. I find your opinions very useful when it comes to forming my own and I think your channel is one of the best i've found in this space.
You should be worrying about the mega bubbles in the stock market and bond markets. When they coming crashing down and that is only a matter of time then the whole world is going to feel alot of pain.
You really don't get why bitcoin was created judging by your comments. It was not created so that greedy people could speculate on its price. It is meant to be an alternative to the fiat money system that has failed the world so miserably and created gigantic debt problems that threaten the world economy with disaster.
You should read the blogs of Nomi Prins, former managing director of Goldman Sachs/Bear Stearns or David Stockman who was in charge of Reagan's budget department in the 1980s.
They clearly explain the dysfunctional nature of our current economic model that has created a situation where 8 billionaires own as much wealth as the poorest 3 billion people.
As Dr.Chris Marenson and Professor Michael Hudson have pointed out, this is creating enormous political volatility that has been responsible for the Brexit fiasco in Britain and the election of Trump.