The Bitcoin bubble is second only to the Tulip bubble. The current digital currency bubble is the second biggest bubble in recorded history.
Bitcoin is turning into the mother of all Ponzi Schemes. Below are the criteria that make Bitcoin a Ponzi Scheme:
– It has no intrinsic value. A few merchants might exchange low priced goods for Bitcoins because when the value crashes, they might only be out a pizza, or a gift card. Few if any are exchanging Bitcoins for big ticket items like computers, cars, or houses. The reason is that when Bitcoin crashes, people can handle being out a pizza or a gift card. But no one wants to accept a 30 year house loan paid with Bitcoins to maturity. If Bitcoin crashes and goes worthless, who wants to be out an entire house? Bitcoin's main value is that someone, somewhere, chased it higher and is therefore a greater fool than someone else who bought lower. The catalyst for Bitcoin is the greater fool whose rational thinking was overcome by greed. Continue reading “Bitcoin Ponzi Scheme Bubble Fueled By Standpoint Research Price Target Hike”
Bitcoin has split into two digital currencies, the old bitcoin and the new bitcoin cash. Digital currency miners and developers could not reach an agreement and so now there are two bitcoin currencies.
The new bitcoin currency called Bitcoin Cash has all the characteristics of bitcoin but with the added advantage of a larger block size.
Anybody who holds the original bitcoin will have the same amount of Bitcoin Cash as long as they take the steps needed to convert.
A transaction of bitcoin happens when a block is added to the blockchain database. The problem is that blocks are limited to 1MB every 10 minutes or about seven transactions per second. That means that bitcoin transactions can take hours or even days to occur. In comparison, Visa allows for about 2,000 transactions per second.
Segwit2x versus Bitcoin Cash
Segwit2x will move some of bitcoin's transaction data outside of the block and on to a parallel track to allow more transactions to take place now. Then in November Segwit2x will push for doubling the block size to about 2MB around November 2017.
Bitcoin Cash instead increases the block size to 8MB or about 56 transactions per second. Those pushing for Bitcoin Cash are sceptical that Segwit2x plan of doubling the block size in November will actually happen or even be enough.
Segwit2x has been adopted by enough of the bitcoin community to proceed, but more in leaning towards Bitcoin Cash saying that Segwit2x proposals do not go far enough to fix the transaction time issue.
Coinbase turned me off of buying bitcoin when they used a Latvia bank for clearing transactions which was blocked by my US bank. It comes as no surprise to learn that Coinbase said it will not support the new Bitcoin Cash and it said in an email alert that it has temporarily disabled bitcoin withdrawals and deposits.
Stay out of bitcoin right now. Let all the drama play itself out before you consider taking a long entry in bitcoin.
Do you have any thoughts on bitcoin splitting into two digital currencies? Leave your comments below.
In this week's stock market news update Lance talks about the Comey testimony, the huge 40% win in bitcoin in less than a week, and the Federal Reserve's likely hike of interest rates next week.
Stock Market News Update – All Eyes On Fed Meeting Next Week
The Twiggs Money Flow looks weak on all the major indices but it's not something to be too concerned about yet. We could see the money flow drop and volatility fall heading into next Wednesday's Federal Reserve meeting where it is expected that rates will be hiked by a quarter point.
Looking at the Dow Jones Transportation weekly chart we see that its headed for a test of resistance at 9500. Transports still look very bullish which is a good sign for the US economy and stock market.
Bitcoin value is rising fast after Britain's largest online trading platform, Hargreaves Lansdown, allows its customers to invest in bitcoin, according to the Telegraph (link above).
There are so many amazing things going on that are raising bitcoin value.
Bitcoin Value Up On Swedish ETN
Hargreaves Landsown is providing this service via a Swedish based bitcoin ETN offered by XBT Provider. In other words, Sweden is moving fast to become a leader in the digital currency while back in the U.S., the SEC is busy blocking any type of BTC ETF or ETN on the grounds of transparency.
Hargreaves Lansdown customers can now buy BTC in their personal pension (Sipp) or a normal brokerage account. When did you ever think that you would see BTC being offered in a pension fund? Nice!
My favorite way to buy bitcoin instantly is in OTCBB ticker GBTC and I hold it in my personal trading account.
I've probably responded to at least a dozen questions recently on if I think bitcoin is in a bubble. My answer is no, bitcoin is not in a bubble.
Just today we have more news coming out that shows growing demand for the cryptocurrency.
BITPoint Japan Co. is planning to give hundreds of thousands of Japanese retail outlets the ability to accept the digital currency according to a report by Bloomberg. I have linked to the Bloomberg article above.
Think about what is happening with this digital currency. In just the last few months we have Japan being the first country to recognize bitcoin as legal tender. We now have a yen bitcoin carry trade where as the Japanese government prints and devalues the yen, Japanese citizens can buy bitcoin to preserve their wealth. We will have more and more retailers in Japan accepting the cryptocurrency. We will be seeing lots of new reports coming out of Japan about how bitcoin is taking an expanded role in the monetary system. I would not be surprised to see bitcoin banks opening up in Japan like the kind we have in Austria. Bitcoin can't be in a bubble because the catalyst is massive growing demand for the digital currency.
The best way to buy bitcoin instantly is to use your online brokerage trading account and to buy OTCBB stock GBTC. You don't need to deal with any risky currency exchange service with a third-party provider that has the right to shut down your account at any time and you don't have to wait days for a bank transfer to show up in your account from so remote bank in Latvia or somewhere. You can buy bitcoin instantly in your own currency using Etrade or whatever online brokerage firm you use.
Everyone wants to know how high can bitcoin will go in 2017 after the internet bubble like appreciation over the last few months. The search phrase how high bitcoin go 2017 has exploded higher over the last week.
So many people are still bashing bitcoin (BTC) today. I use to be a basher. I was proven wrong.
How High Bitcoin Go 2017
Bitcoin (BTC) can go a lot higher by the end of 2017. Most people I talk with our still in a pre-2016 mindset about BTC. You know, BTC is crazy and it's not real money. My favorite is: it's the currency of malware developers and so that makes me too afraid to buy it. With so many people still bearish on BTC, the market can't possibly be in an irrational bubble.
I think BTC will hit $10,000 but not by the end of 2017. I prefer a more conservative guestimate of $4,000 by the end of 2017. My main reason for predicting that BTC will be higher at the end of the year than it is today is that the BTC boom from the mainstream media running stories last week about how $100 turned into $75 million in BTC hasn't even hit the market yet. This is the first long-weekend that Americans will have to research BTC and to get the process started of buying it. The authentication process for websites like Coinbase take days if not a week or more to actually get signed up. Then an additional 2 to 4 days is required to move funds from a US bank account into a BTC wallet.
How High Bitcoin Go 2017 and Japan's Yen-Bitcoin Carry Trade
BTC will keep going higher because the upward move is not being driven by speculators but instead by growing demand. Strong demand for BTC is coming from Japan and South Korea. Demand for BTC is soaring after Japan passed a law to accept BTC as a legal payment method which came in effect on April 1, 2017. Japan's SoftBank is making big BTC investments with tens of millions of dollars in different BTC related companies. Japan is the first economy to adopt BTC at the large corporate level and that's driving demand higher.
Think about what the people of Japan are doing. A major Japanese forex company is now letting people trade BTC and so there is a yen-bitcoin carry trade where you borrow yen at 0% interest rates and buy BTC. With the BOJ devaluing the yen, why would you want to hold yen when you could hold appreciating BTC?
How High Bitcoin Go 2017 and Beyond
Governments are increasingly looking at how to monitor BTC transactions. If governments are successful in their push for regulatory oversight of BTC transactions, we would see rapid mainstream adoption of BTC. Russia is adopting regulations on cryptocurrencies. The Deputy of the Russian Central Bank Olga Skorobogatova has called for virtual currencies to be treated as digital commodities. Russia is calling on its central bank to adopt regulations with a specific focus on tax, controls and accountability. What Russia wants to do is to make BTC transactions capable of being monitored by the government. If there’s a transaction, the people who facilitate it should understand from whom they bought and to whom they were selling, just like with bank operations. If Russia is successful at bringing oversight to BTC, you could see Russia and many other countries adopt BTC. In fact, the reason the SEC did not approve a BTC ETF last month was due to lack of regulatory oversight.
Jeremy Liew, the first investor in Snap Inc., sets a price target on BTC of $500,000 by 2030. The mathematics behind Liew's estimate are that currently there are 20 million BTC wallets provided by service providers like Coinbase and Blockchain. Liew expects the user base of BTC to grow 20 times in the next 13 years. If the user base grows to 400 million by 2030, that would put a price on BTC of about $500,000.