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Bitcoin The Almighty Buck

Bitcoin Prices Surge Past $5,000 Three Weeks After Passing $4,000 (fortune.com) 179

Posted by EditorDavid from the moving-magical-internet-money dept.
Less than three weeks after surging past $4,000, Bitcoin reached $5,000 on Asian exchanges Friday. An anonymous reader quotes Fortune: The idea of Bitcoin breaking the symbolic milestone of $5,000 would have been unthinkable to most people at the start 2017, when the price topped $1,000 for the first time. If you're keeping track, the digital currency is up 500% this year, and nearly 2200% since mid-2015, when it was in the doldrums at around $220. There appears to be no single reason for the recent run-up. Instead, it can likely be explained by the same factors driving this year's cryptocurrency bull run: Publicity-driven speculation; New financial products creating unprecedented liquidity; Trading surges in Asian markets; Institutional investors treating digital currency as a permanent new asset class.
"Magical Internet Money Hits $5k" writes Bitcoin News, adding "so far in 2017 bitcoin has outperformed all government issued tender and a vast majority of stocks and commodities."

While the head of the Bitcoin Foundation has urged people to invest "no more than they can afford," Bitcoin now has a market capitalization of $82.6 billion.
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Bitcoin Prices Surge Past $5,000 Three Weeks After Passing $4,000 More

Bitcoin Prices Surge Past $5,000 Three Weeks After Passing $4,000

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  • Remember the dot com bubble (Score:2, Insightful)

    by Anonymous Coward

    Nasdaq hits 5000, everyone started piling in, and then came the big crash. This is no different because many bought stock in companies that are gone or worthless. It's a sham.

    • Re:Remember the dot com bubble (Score:4, Interesting)

      by ShanghaiBill ( 739463 ) on Saturday September 02, 2017 @04:30PM (#55129727)

      Nasdaq hits 5000, everyone started piling in, and then came the big crash. This is no different

      Actually, this is different. A stock is inherently worth the value of future profits. Once it became clear these companies would never be significantly profitable, it was clear that the stocks were way overvalued. Bitcoins have no inherent value, so any valuation is just as "valid" as any other. People were predicting imminent collapse when Bitcoin passed the "ridiculous" value of $1.

      • Nasdaq hits 5000, everyone started piling in, and then came the big crash. This is no different

        Actually, this is different. A stock is inherently worth the value of future profits. Once it became clear these companies would never be significantly profitable, it was clear that the stocks were way overvalued. Bitcoins have no inherent value, so any valuation is just as "valid" as any other. People were predicting imminent collapse when Bitcoin passed the "ridiculous" value of $1.

        Sorry Bill. Stocks do not pay dividends anymore so no future profits. Just some guy MIGHT pay more than what you bought it for. With bitcoin at least you can buy things with it. I think when the next recession hits Gold and bitcoin is going to skyrocket and you are going to kick yourself when you didn't buy in at only $5,000. Serious hundreds of thousands of dollars per coin is right around the corner once all the big banks start buying them up when a recession hits. Where else are you going to put your mon

  • Whatever (Score:3, Insightful)

    by Anonymous Coward on Saturday September 02, 2017 @04:12PM (#55129651)

    It's basically one big ponzi scheme, let's wait and see who's left holding the bag. Can always jump in you think the game will be played a while longer, but when it ends, it will end quickly.

    • Re:Whatever (Score:4, Insightful)

      by ShanghaiBill ( 739463 ) on Saturday September 02, 2017 @04:34PM (#55129745)

      It's basically one big ponzi scheme

      Bitcoin may go up, or it may go down, but it absolutely is not a Ponzi scheme [wikipedia.org]. If you think it is, then you don't understand Bitcoins, you don't understand what a Ponzi scheme is, or both.

      • Re: (Score:2, Insightful)

        by Anonymous Coward

        It's basically one big ponzi scheme

        Bitcoin may go up, or it may go down, but it absolutely is not a Ponzi scheme [wikipedia.org]. If you think it is, then you don't understand Bitcoins, you don't understand what a Ponzi scheme is, or both.

        From the Wikipedia page you linked to: "a Ponzi scheme is a fraudulent investment operation where the operator generates returns for older investors through revenue paid by new investor". Every dollar that comes out of bitcoin needs to be supplied by a new investor. If new investors stop coming into bitcoin the value drops to zero. Bitcoin is the dictionary definition of a ponzi scheme.

      • Re: (Score:1)

        by mentil ( 1748130 )

        If Satoshi were ever allowed to cash in his exclusive pre-owned block of coins, then it would be a Ponzi scheme. It wouldn't collapse Bitcoin outright but the sudden influx of coins would cause the value to dip (or crash, if he'd done it a few years ago).

        • If Satoshi were ever allowed to cash in his exclusive pre-owned block of coins, then it would be a Ponzi scheme.

          Nonsense. Satoshi's coin stash is public knowledge, recorded in the blockchain. There is absolutely nothing fraudulent about it. Claiming that this makes it a "Ponzi scheme" makes as much sense as saying Google is a Ponzi scheme because Larry and Sergey have founder's stock.

          Charles Ponzi ran a Ponzi scheme. Bernie Madoff ran a Ponzi scheme. They lied, cheated, and defrauded their clients, and went to prison. Satoshi lied to no one, cheated no one, and defrauded no one. Bitcoin may or may not be a goo

      • Re: (Score:2)

        by Dunbal ( 464142 ) *
        Down is pretty much guaranteed at this point.

      • Bitcoin may go up, or it may go down, but it absolutely is not a Ponzi scheme [wikipedia.org]. If you think it is, then you don't understand Bitcoins, you don't understand what a Ponzi scheme is, or both.

        Yes, a ponzi scheme is an investment scam from the get-go, because it is mathematically predestined to collapse.

        Bitcoin is more like tulip mania, driven by the greater fool theory [wikipedia.org]. The irony is, unlike tulip bulbs, Bitcoin's rarity could be easily adjusted by forking the coin (yet again) and then, coins for everyone! Everyone can be rich!

        Heck, if I was better at coding, I'd do it. I'd call it "Bitcoin Inflation Totally Couldn't Hurt". When everyone loses their money, then I'd get to say "Well, ain't tha

  • Bitcoin is... (Score:5, Interesting)

    by MindPrison ( 864299 ) on Saturday September 02, 2017 @04:15PM (#55129671) Journal

    ...one of those things in life you'll either stand idle by and watch it like it was a show, you'll think "oh why - oh why did I not invest when it was new and cheap", and when it plummets down, you'll sigh a relief and think to yourself - oh, I'm glad I didn't do that, those fools - or you'll be a part of it, getting free money if you pump it out at the right time.

    • Re: (Score:3)

      by Dunbal ( 464142 ) *

      one of those things in life you'll either stand idle by and watch it like it was a show, you'll think "oh why - oh why did I not invest when it was new and cheap"

      Kind of like the stock market. Why didn't I buy Apple before the 7:1 stock split. Why didn't I buy Google. Why didn't I buy Amazon. Why didn't I buy Ali Baba - oh wait, that one I did.

      But it's ok. Life is a lifetime of missed opportunities. And then you die. The point of life is enjoying the opportunities you DID seize.

    • ...one of those things in life you'll either stand idle by and watch it like it was a show, you'll think "oh why - oh why did I not invest when it was new and cheap"

      Here's the part most people miss: High risk investments are only for the rich, to make themselves richer.

      Most of us who work 9-5 for a living would rather have money in our bank accounts than tied up in wild speculation.

      • Well yeah it is only rich people that generally have money for investments. The whole bitcoin thing was an exception though. In the beginning even a poor person (by first world standards at least) could have mined and/or purchased it when it was cheap and now would be very very very rich. It is money that just came out of nowhere. I think most of us who can remember the very first slashdot stories about bitcoin are kicking ourselves for doubting and ignoring it. It turned out to be more of a speculative bub

    • you'll think "oh why - oh why did I not invest when it was new and cheap",

      There's always another chance to make money. Right now, you can place an order for stock, which by the end of the week will make more money than if you had bought bitcoin. Identifying that stock is of course the tough part, but trying to figure it out will get you more than lamenting the high quality of your hindsight.

    • There are other options: I bought in at about $200 and cashed out at about $2500. It was a good ride but I was not expecting it to behave like this after the fork. There is also the sadness of leaving money on the table.

  • We all know where this is headed.

    • We all know where this is be headed.

    • Honestly, I'm not sure where it's headed. Sure, the value will probably crash back down to a three digit value in the short term, but five years from now it might be worth $20,000 each.

      This really depends on how willing the world governments will allow the currency to exist, knowing that most of the transactions are being used for less than legal purposes (drug buys, kiddie porn, money laundering, cryptolocker ransoms, etc).

  • Might I remind everyone that it is now September, the month when pins are most often stuck in bubbles.

    • Re: (Score:2)

      by Dunbal ( 464142 ) *
      Nope, I give it a good couple years yet. The bubble pops when the last idiot isn't willing to pay 1 million for a BTC, and the idiot before him is wondering how come he can't get his money out.
  • Comment removed based on user account deletion

  • Keep in mind (Score:3)

    by Interfacer ( 560564 ) on Saturday September 02, 2017 @04:43PM (#55129775)

    In the case of bitcoin, it is used to trade with. exchanges like Bittrex trade everything against bitcoin. All money has to funnel through bitcoin either directly or indirectly. All other arguments and benefits aside, as long as bitcoin remains the de facto gold standard backing the entire crypto world, and as long as money goes into the crypto world, the price of bitcoin is not going to go down (volatility aside).

    • Re: (Score:2)

      by Ecuador ( 740021 )

      But it has some serious limitations, like the number of transactions per second - even with the recent upgrade it still seems dismal. I won't do any predictions though - I am completely mystified by the continuous price increase, I was pretty sure the price would have "corrected" by now...

      • Oh, I know. The way bitcoin is used currently is way outside of the scale it was used even just a year ago. Both Bitcoin and Ethereum are working on projects to get fast transfers. When that finally happens, we can send large transfers around the globe near instantaneously without having to give the banks or paypal an arm and a leg.

        • So when it is time to convert that Bitcoin into actual cash - who does it, and why don't they take a cut (like banks or PayPal does today)?

          • They do: but most of the exchanges are taking smaller curs than the traditional banks e.g. 0.25%.

            • So kind of like when I send $500 to my buddy via PayPal. Of course, he doesn't pay a dime, and neither do I, so... I guess paying 0.25% is better than paying zero?

      • It's not even that, there are fundamental limitations to cryptocurrency that I'm not sure *can* be eliminated. Blockchain size, for example. The design of cryptocurrency is such that to known the amount of coins in a wallet, you need to know the entire blockchain. Currently, the Bitcoin blockchain is 130 GB, for 250 million transactions (incidentally, that's about as many transactions as Visa handles per day). That's already fairly large for consumer miners (it means you can't realistically store the chain

        • Re: (Score:2)

          by Kjella ( 173770 )

          The only way around that is to use some technique that trims the blockchain, but I'm not sure if that's even technically possible.

          Sure it would, just have the blockchain sign a complete account balance and everyone could restart from there. It could be vulnerable to a 51% attack totally rewriting the balance but you probably also make some sort of rejection mechanism saying that if >1% of the blockchain rejects the account summary you continue from the last universally acknowledged one. And some nodes would probably stay in full history mode anyway. That doesn't seem like a particularly hard problem, compared to all the other ones.

        • There are a couple of ideas for trimming the blockchain.

          One is "segregated witness", seperating the signatures from the actual ledger. The idea being that while old ledger information needs to be kept forever there is no real reason to keep signatures around forever.

          The other is the "lighting network". The idea is that small transactions can take place mostly off-blockchain with the blockchain used as an enforcement mechanism in the case of misbehaving parties and as a mechanism for processing the final net

    • If you had not already arrived at the conclusion that currency is a fiction, this should bring you there.

  • People aren't getting rich off of Bitcoin... (Score:3, Insightful)

    by ebrandsberg ( 75344 ) on Saturday September 02, 2017 @04:50PM (#55129805)

    They are getting rich by cashing out while others put their money in. Bitcoin is like a stock with no inherent value, but which is pumped in a pump and dump scheme. The only difference is that the people buying into it KNOW that the stock is a pump and dump, but are hoping to get off before everybody else stops piling in. Because it has no inherent value with which to compare it to, nobody can say that it is "overpriced", unlike a pump and dump stock however, so keeps going up. People will say "all currency has value simply because people trust it has value" but most currency is used to actually buy and trade for goods and services. Bitcoin, while it has SOME value for goods and services, is generally traded against other currencies. You get rich because the price of bitcoin goes up, vs. currency, you don't get rich just because you have Bitcoin.

    That said, I expect that it will continue to go up, as people pile on the hype train, but at some point, the train will have a last stop, and everybody left on it at that time will realize that the last stop is just a cliff. Consider this--what happens if someone realizes there is some inherent flaw in the bitcoin blockchain system, and can corrupt it? How much value would be left?

    • Re:People aren't getting rich off of Bitcoin... (Score:4, Insightful)

      by Interfacer ( 560564 ) on Saturday September 02, 2017 @04:58PM (#55129845)

      It's inherent value is that it is limited in supply AND used as a gold standard on exchanges to trade all other crypto coins against. The only way bitcoin will suffer lasting drops in price is if the entire crypto world diminishes. Until then, its use for trading is what gives it its increasing value.

      Maybe in the future there will be a different standard. Some exchanges implement trading pairs against ethereum. So it may happen. But until then, bitcoin is safe.

      • All you are doing is extending the value to other things that also don't have value and saying that is why it has value. Everything in the crypto-currency markets have the same problem. Just because one pump and dump stock is used to trace between other pump and dump stocks doesn't make any one of them valuable. Until crypto-currencies are actually used to drive a reasonably significant percentage of transactions between consumers and businesses, there won't be any real inherent value. For this to happe

        • Re: (Score:1)

          by Anonymous Coward

          I've been spending $10k worth of crypto a week because of the reduced transaction costs. It has value. Only the stupid don't see that. It's got value in all sorts of ways. I don't have to pay 3% to the credit card companies when customers pay me in bitcoin. I'm making as much as 26x as much profit because we're accepting bitcoin and purchasing our raw materials in it. We both save 3% AND we get between 19-33% off of raw materials for my business because of it. This is over any other discounts. Bitcoin has m

        • Re: (Score:3)

          by Kjella ( 173770 )

          All you are doing is extending the value to other things that also don't have value and saying that is why it has value. Everything in the crypto-currency markets have the same problem. Just because one pump and dump stock is used to trace between other pump and dump stocks doesn't make any one of them valuable.

          That's what *all* currencies are about... are there going to be telltale signs of people retreating to "safe" currencies... there's a reason why in times of trouble people invest in USD, swiss francs (I forget the TLA) and EUR it's because they're massive economies that won't fail without an economic Armageddon. Also precious metals like gold and silver that people assume will "always" be valuable without any real reason except for thousands of years of history.

          While the price of bitcoin keeps surging people won't use it for things outside of the crypto-currency markets. It must stabilize, and the entire design of it won't allow that. It will either keep surging or it will fall, stable is not what it is designed for.

          You're casually dismissing all the actual thin

    • It's probably more accurate to compare it to a Forex exchange. It behaves similarly, it has similar value.

    • Re: (Score:2)

      by Rolgar ( 556636 )

      Right now, a lot of people in China are trying to move money offshore, and Bitcoin is the way to do it with the least losses, heck right now, you get an increase while you hold the bitcoin before you get the money into it's destination currency. Since there are a limited number of Bitcoins, and a huge amount of money that is being moved, the extremely high cost of the Bitcoin is actually a feature because it allows a much greater amount of currency to be moved through Bitcoin. If this continues to be the ca

  • Asking for a friend.

    Not safe in terms of the volatility or the bet going bad, that's risk I'd be happy to assume. But if the bet goes good, a place where you can cash out 5+ digits of actual money without being raped on fees or a risk of some rando website shutting down and taking your real money with it?

  • Firstly, let's clear things up.. I consider crypto currency a highly speculative and highly risky thing to invest in. However, I think a lot of people don't fairly it. I was a sceptic at first and still remain one, but I think it needs to be described more accurately. Statement: Bitcoin is a ponzi scheme. Fact: No it's not. It is open and it's not fraudulent. A ponzi scheme by definition is fraud. Statement: Bitcoin has no intrinsic value. Retort: Bitcoin is a brand name. Brand names can have intrinsic

  • A man leaping from the roof surely passes another man taking the stairs.

    Much depends upon a rucksack of Houdini Handkerchiefs 2.0 sandwiched betwixt our hero's blades.

  • The original pyramid investment scheme takes it's name from this phenomena.

    http://www.historic-uk.com/His... [historic-uk.com]

    http://www.investopedia.com/fe... [investopedia.com]

  • Let's say that I had bought (or mined) 200 bitcoin back when they were practically free(*), and now I want to transition from "Bitcoin millionaire" to "actual US dollars millionaire" by selling all my bitcoins at their current value.

    How would I realistically go about doing that? Is it really just a matter of going to a Bitcoin exchange site and clicking "sell 200 bitcoins"?

    (*) to be clear, this isn't actually the case; if it was, I would probably already be Bitcoin-savvy enough that I wouldn't need to ask

    • First you sign up with an exchange. They need to verify your account againdt a real world identity to comply with money laundering laws. This involves exchanging id and takes a couple of days. Then you transmit the bitcoin to them. Then you convert it via them to a bank deposit in a real world account.

  • Never did it break $5000 on a major exchange and it's sitting at like $2650 right now. Hurray for accurate journalism. Take one tiny little spike and report it as the norm as if it's real.
  • To do what it would have to be linked some sort of performance process, or economic indicator. Hint : it does not. Bitcoin at this point is solely a commodity, a very speculative and volatile one, chinese money manipulation or not (see above post on Chinese money policy) it could drop toward 1000 dollar or much lower at a moment notice, indeoendenteky of world economy.

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