More Wall Street Pundits Caution Against Investing In Bitcoins (cnbc.com) 177
Peter Boockvar is the Chief Investment Officer of Bleakley Financial Group, a $3.5B wealth management firm -- and he predicts "an epic crash will hit the cryptocurrency market," according to CNBC. "He isn't sure if it'll come to a grinding halt or be a slow and steady drop -- but he says it's coming."
"When something goes parabolic like this has, it typically ends up to where that parabola began," he said on CNBC's "Futures Now." Boockvar, a CNBC contributor, contends bitcoin is in danger of dropping 90 percent from current levels. He calls it a classic bubble. "I wouldn't be surprised if over the next year it's down to $1,000 to $3,000," he added. That's where bitcoin, the largest cryptocurrency player, was trading less than 12 months ago. Friday afternoon it was trading above $11,000.
Meanwhile, today the International Business Times chronicled the predictions of tech billionaire Mark Cuban. In June of last year as bitcoin was climbing toward the $3,000 threshold, Cuban cautioned potential investors about jumping in on the bandwagon... "[C]rypto is like gold. More religion than asset. Except of course gold makes nice jewelry." He told his followers at the time that he wasn't questioning the value of Bitcoin but was questioning the "valuation" and said , "I think it's in a bubble. I just don't know when or how much it corrects." Cuban suggested that when everyone is "bragging about how easy they are making [money]," that indicates there is a bubble happening...
Still, the Dallas Mavericks owner was open to the idea of using cryptocurrencies as a volatile investment vehicle. "If you're a true adventurer and you really want to throw the Hail Mary, you might take 10 percent and put it in Bitcoin or Ethereum," he said. Cuban also cautioned, "If you do that, you've got to pretend you've already lost your money"... Showing just have far Cuban has come on bitcoin and cryptocurrency, he announced earlier this week that his Dallas Mavericks will accept bitcoin and Ethereum as a method to pay for tickets starting next season. Even if the tech investor doesn't fully believe in cryptocurrency, he's clearly willing to try to profit off it...
Meanwhile, today the International Business Times chronicled the predictions of tech billionaire Mark Cuban. In June of last year as bitcoin was climbing toward the $3,000 threshold, Cuban cautioned potential investors about jumping in on the bandwagon... "[C]rypto is like gold. More religion than asset. Except of course gold makes nice jewelry." He told his followers at the time that he wasn't questioning the value of Bitcoin but was questioning the "valuation" and said , "I think it's in a bubble. I just don't know when or how much it corrects." Cuban suggested that when everyone is "bragging about how easy they are making [money]," that indicates there is a bubble happening...
Still, the Dallas Mavericks owner was open to the idea of using cryptocurrencies as a volatile investment vehicle. "If you're a true adventurer and you really want to throw the Hail Mary, you might take 10 percent and put it in Bitcoin or Ethereum," he said. Cuban also cautioned, "If you do that, you've got to pretend you've already lost your money"... Showing just have far Cuban has come on bitcoin and cryptocurrency, he announced earlier this week that his Dallas Mavericks will accept bitcoin and Ethereum as a method to pay for tickets starting next season. Even if the tech investor doesn't fully believe in cryptocurrency, he's clearly willing to try to profit off it...
Of course they do... (Score:1)
Perhaps but... (Score:2)
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"as it can't be manipulated by corrupt goverments and banks.
If governments regulate the exchanges so much that they close, then the value will pretty much drop to zero.
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It's possible to smoke a joint without leaving evidence of it all over the Internet. I don't think you can say the same for using BotCoin.
Re: Of course they do... (Score:3, Informative)
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you consume marihuana, but how do you "consume" your bitcoins if the government shuts all the bussiness accepting it?? You trade them with people who can't use them either?
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If governments regulate the exchanges so much that they close, then the value will pretty much drop to zero.
I don't think so. That sort of authoritarianism is exactly what Bitcoin was designed to circumvent. When governments start turning the screws on their own citizens, the demand and value of cryptocurrencies will soar.
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When do you estimate we'll start valuing the US dollar against the Bitcoin instead of the other way around?
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They don't have to ban any exchanges, they just have to understand blockchains.
Your bitcoins only belong to you if more than 50% of the bitcoin mines agree that they do. A government-level agent with as many nodes as the NSA could easily spoof that if they wanted to "confiscate" somebody's bitcoins.
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Your bitcoins only belong to you if more than 50% of the bitcoin mines agree that they do.
That is really not how it works.
If more than 50% of miners conspire to take your ownership of bitcoin away from you they just made an altcoin. You still have your bitcoins.
Re:Of course they do... (Score:4, Informative)
Even if Bitcoins stay the same in value, it beats the living shit out of gold, and is far more secure against theft.
Probably not a lot of gold owners sweating it out over the fear of their gold being stolen via the internet, or becoming worthless if their computers crash or they forget a password. But now we're getting into the differences between a store of value and a currency. Gold is a store of value, you don't use it for transactions as it's not well suited for that. Bitcoin wants to be a currency, but has its own shortcomings there (and let's not even get started discussing the number of high profile thefts of bitcoin to date ...)
Re:Of course they do... (Score:5, Funny)
You can store your bitcoin private key on a USB stick, next to your pile of gold coins, and it will be just as secure.
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Except gold doesn't self-destruct if you spill a glass of water on it.
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How long does the memory on a USB stick last?
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How long does the memory on a USB stick last?
It's not safe. However, you can also burn it on a couple of blurays, print it and transfer it to microfilm. All these storage methods should easily outlast your lifetime... if you speak German, here's how to get your coins on a vinyl record https://www.heise.de/security/... [heise.de]
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Double the action. It'd be like the Reese's Peanut Butter Cup of value.
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As long as you have the seed phrase it does not matter. If it dies, you buy another, give it your phrase and you get your wallet back.
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"Past performance is no guarantee of future results." This disclaimer is required by the SEC and NASD. It is often ignored by naive investors.
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it goes up far more than it goes down.
The word you're looking for is "went".
it went up far more than it went down.
That's better.
I could point that it went down by 50% in the last few weeks. Is anybody here betting it's about to quadruple in the near future? If so, I've got some Bitcoin to sell you...
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The word you looking for is out. I'll let you figure it...
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5%? It was above $19,000. Now it's about $10,500. Granted I'm no mathematician, but I'm not sure that 5% is correct.
Only a very short term risk. Accepting like Paypal (Score:2)
He's not pricing tickets in BTC, or holding BTC. He's accepting it as a payment METHOD just like Paypal or Visa; it's converted to dollars either shortly after he gets it, or before he even gets it, allowing the payment provider to take the risk of a drop in the hours it takes to convert it.
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With a real currency you could buy options to buy or sell in the future, eliminating the risk (or, more precisely, shifting it onto someone else who will get paid by you for taking your risk).
Does something like that exist for Bitcoins?
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Yup. [cboe.com]
Re: Only a very short term risk. Accepting like Pa (Score:2)
That's just it. You can't always convert it right away. The transaction fees means you only want to do conversions when you have $2000 or so to convert otherwise a business is losing money.
Remember there are two fees for a business to deal with in accepting Bitcoin. The first transaction fee which gets covered by the payer most of the time. The second is converting it back to cash. With high fees and long transaction times . The day in and day voltiity is much much to high.
You want to keep your feed
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One can do things like the Lightning Network, but I would probably say that another cryptocurrency may be better for making transactions, if only due to the overhead of the Bitcoin blockchain, having to pay a "tip" so your transactions are processed reasonably, and the fact that Bitcoin's value is being hit hard by speculators.
What would be ideal would be a currency that has less overhead, perhaps a way of obscuring of who did what in its blockchain for privacy's sake. That way, if someone bought an item t
Uses of gold (Score:5, Interesting)
Except of course gold makes nice jewelry.
And gold also has uses [geology.com] in electronics, medicine, and aerospace applications.
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Goldschlager, like Jaegermeifter, is not medicine.
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Says you. But I can vouch that it can cure all sorts of ailments. Especially consciousness.
Much like bitcoins.
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Re:Uses of gold (Score:5, Insightful)
Gold can be confiscated by the government as it crosses a boarder. Also, transferring $5mil in gold might be much more expensive due to security concerns, not to mention time-consuming depending on the distance. Bitcoin isn't perfect, but it does have a several advantages.
Gold doesn't disappear when the exchange vanishes.
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History had enough bank crashes where the gold in the bank vanished ...
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If a bank has their safe deposit items "on the books", if they fail, everything in the safe deposit box can be taken. In fact, some banks explicitly have a warning or recommendation to not store coins in their vault, because of this.
Of course, there is the fact that the government can ban ownership of gold at any time...
Not to say that cryptocurrencies are the be-all and end-all, but gold isn't completely bulletproof either.
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One doesn't need an exchange.
I would say that cryptocurrencies and gold have advantages and disadvantages. Cryptocurrencies can be easily stolen by a compromised app, or lost forever if one loses their password to their wallet, or loses their wallet. If someone has backups of their wallet, has something like a TREZOR or other hardware based item, it can be said that their security is better than having physical precious metals.
Maybe a feature to be added would be the ability to recover a wallet from multi
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because wallets can be lost/stolen/hacked. The exact same reason people don't put all their money under a mattress. if your stupid enough to keep your life savings personally hidden with no insurance that is your business but please don't suggest to others that it is a smart decision. Banks and Governments provide certain benefits and insurance that bitcoin etc do not and most of us prefer that.
Multisignature (Score:2)
because wallets can be lost/stolen/hacked.
That's why they created multisignature [bitcoin.it]. You need cooperation between multiple people to perform an transaction.
You can also make a paper wallet, cut it into pieces and give each piece to a different person.
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What to do with gold? Hold the gold until needed, selling domestically for cash sounds great.
Who is going to give a good cash payment for that gold even with full ID and paperwork?
Do they have to report that payment for gold to the gov?
Steep new tax considerations could be in place after selling the gold?
A short holiday to a more normal nation might allow bit
Re:Uses of gold (Score:4, Interesting)
Industrial use of gold only account for 10% of the mined gold. The rest is hoarded in the form of coins, jewelry and bullion bars. The small amount of industrial use does not explain why it's being sold at such a large premium over production cost.
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Gold plated bullets, dual use (Score:1)
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Its dangerous: Speculators + Deviation from Design (Score:5, Insightful)
But now we have a new variable. Those past spikes were when bitcoin owners were largely geek speculators who were also true believers in bitcoin. This current spike coincided with wall street speculators getting involved and soon followed by speculators from the general public. These "newcomers" may not be as forgiving as the preceding "true believers".
That said, don't conflate blockchain and bitcoin. Blockchain technology is likely to be part of our future. Bitcoin is just one user of blockchain technology, it may or may not be part of our future. "Not" is a serious possibility given that bitcoin has deviated from its design and its assumptions about its blockchain security are no longer valid. Its security required a global distributed community of miners who are regular individuals using their own computers and this has not been true for years. Bitcoin is plausibly vulnerable to mining cartels and government intervention due to the current state of affairs where we have a relatively small number of miners using expensive specialized ASIC hardware that is geographically located in a single country and reliant upon inexpensive government supplied electricity. Are cartels or the government likely to subvert the bitcoin blockchain? Probably not, but it remains plausible, and bitcoin security is based on the assumption that such things are not even remotely plausible.
Bitcoin is entirely replaceable by a another coin with better security, new features and/or better performance. Before anyone makes a "network effect" argument, keep in mind that a network effect needs high switching costs to be effective. There is little to no switching cost to move from bitcoin to a different coin.
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Can you create an algorithm that is sufficiently hard so that coins don't flood the market but sufficiently energy efficient that we don't roast ourselves to death from greenhouse gasses mining computer money? I am opposed to crypto from a purely environmental standpoint, I think there are better things humanity could be spending its limited resources on than a bunch of calculations that prove you did a bunch of calculations.
It's already here and has been around for years. Take a look at Peercoin [peercoin.net]
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Creating and maintaining a currency is actually a profit center for most governments.
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People keep saying blockchain is the future... and I just don't get it. It's a way of preventing forking, so great to prevent double-spending. But, and maybe this is me being dense, absent (a) a lack of a central authority and (b) a need to have one and only one block of data being definitive, I don't understand why we care. Transacting in currency/preventing double spending seems to suffer from (b) but not (a), and almost everything else seems to be immune to (b), and probably (a) as well.
I figure if I
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Bitcoin's proof-of-work is not the only way to implement a blockchain. Real-life applications don't want PoW (and it's an environmental disaster), but you can do interesting blockchain things without it using known identities.
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I've seen some "proof of burn" ideas ,but I'm not sure how else to replace PoW. Any other papers you can show me. Also, what can I do on a blockchain I cannot do without one, other than preventing double spending without a central authority?
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People keep saying blockchain is the future... and I just don't get it. It's a way of preventing forking, so great to prevent double-spending. But, and maybe this is me being dense, absent (a) a lack of a central authority and (b) a need to have one and only one block of data being definitive, I don't understand why we care. Transacting in currency/preventing double spending seems to suffer from (b) but not (a), and almost everything else seems to be immune to (b), and probably (a) as well. I figure if I keep asking, someone will give me the right metaphor, and I can finally grok why blockchain.
A lack of central authority means redundancy of data, avoiding a single point of failure. To borrow from Torvalds who had borrowed form someone earlier: Don't backup data, upload their important data to the internet and let the rest of the world mirror it. It also allows peer-to-peer transactions, middlemen not necessarily necessary.
One definitive block defining ownership of a thing, its not just about coins, its about anything that can be owned. Note that one definitive block avoids the problem of differe
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That said, don't conflate blockchain and bitcoin. Blockchain technology is likely to be part of our future. Bitcoin is just one user of blockchain technology, it may or may not be part of our future. "Not" is a serious possibility given that bitcoin has deviated from its design and its assumptions about its blockchain security are no longer valid. Its security required a global distributed community of miners who are regular individuals using their own computers and this has not been true for years. Bitcoin is plausibly vulnerable to mining cartels and government intervention due to the current state of affairs where we have a relatively small number of miners using expensive specialized ASIC hardware that is geographically located in a single country and reliant upon inexpensive government supplied electricity. Are cartels or the government likely to subvert the bitcoin blockchain? Probably not, but it remains plausible, and bitcoin security is based on the assumption that such things are not even remotely plausible. Bitcoin is entirely replaceable by a another coin with better security, new features and/or better performance. Before anyone makes a "network effect" argument, keep in mind that a network effect needs high switching costs to be effective. There is little to no switching cost to move from bitcoin to a different coin.
Why will blockchain be a part of the future? The future is very difficult to predict with regards to technology. Blockchain is essentially a football stadium filled with accountants keeping ledger books. Someone goes up to a microphone and announces a transaction, everyone records the transaction in the ledger (if the transaction checks out). And everyone's ledger book essentially must hold all the transactions which have ever happened.
This is far too much redundancy for most applications, and the dat
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Any tech created by the alt coins can always be adopted by Bitcoin. As we see happening now.
Except when inertia, politics and greed stop it from happening. You think those folks with the huge ASIC mining farms are going to support switching to a GPU friendly algorithm?
Re:Its dangerous: Speculators + Deviation from Des (Score:5, Interesting)
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The Bitcoin network (and all secure distributed networks) depend upon consensus, whomever controls 51% of the mining effort controls the transactions and in turn dictates how things happen.
I would still think they would consider POS or a lower-cost mining algorithm. They likely already have a large stake, and more efficient mining = less cost of electricity = more profit per coin mined.
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I was agreeing with you there until you got to Ethereum classic - which is a (probably) dead project run by refusniks of the DAO hard fork.
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The only problem I could see here is that the market itself will only grow based on the currency itself. There is no value added aside of the speculation that the value will rise.
That's not sustainable.
Could You Short Them? (Score:2)
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Readers should be aware that Zero-hedge is NOT a mainstream financial publication. Not that it's necessarily wrong. But you aren't looking at the Wall Street Journal or Financial Times here. There's a wikipedia article at https://en.wikipedia.org/wiki/... [wikipedia.org] that doesn't seem to be wildly unbalanced.
Bittards (Score:1)
Sadly, they are driving up the cost of high-end video cards...
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Sure. But if crypto-currencies collapse, you're gonna be up to your neck in cheap high-end video cards, right?
I agree with the pundits (Score:5, Insightful)
The valuation of bitcoin surged on the assumption that it will become a major currency. However, it's hard to see how bitcoin is going to be good for much of anything. Transactions are too expensive and too slow for it to become a regular currency. Early on, people believed it was an anonymous form of payment - but in fact every transaction is public. It was also supposed to be a democratic currency, but that promise has failed as well because now a few big players hold most of the bitcoins. By all reports, it wastes a tremendous amount of electricity and contributes to global warming.
To quote one economist, "It's not a currency until people are paid with it." I don't see it ever getting there, especially with governments against it. And if it isn't destined to become a currency, then it it is destined to crash, maybe even disappear.
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There are actually plenty of jobs that are payed with crypto currencies. ... but did not bookmark it. I guess you find it easy to google.
I was on a web site with job listings a few weeks ago
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Here you go
https://www.bitwage.com/ [bitwage.com]
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I take it you haven't been paid with it yet? Man, you need to get out more. They've even bought Papa John's pizza with bitcoin. Famous example done years ago.
Do your homework. You're a babe in the woods if you don't realize it. No, I really mean it. If you don't know what a wallet is, how to secure it, exchanges, which ones to get on and such, you're like a babe with say $1000 or whatever you have walking downtown in NYC flashing it around. You won't have it long unless you learn how to handle your money. G
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If your that worried, play around with litecoin. (Score:1)
Even on the small drops and increases, a person can make 50 bucks here and there. If your out $1000 it isnt the end of the world and watching the numbers and trying to make that 50 is a lot of fun.
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If your out $1000 it isnt the end of the world and watching the numbers and trying to make that 50 is a lot of fun.
Dunno about you all, but I'm guessing this contribution comes to us from a teenager with rich parents.
Re: If your that worried, play around with litecoi (Score:1)
I don't know where you buy and sell your coins, but in most places the fees will make the small pump and drop useless to try to trade them, because what you could possibly earn will be less than the fees...
Horse breeders warn against Automobiles (Score:1)
1. If the total supply of bitcoin remained the same the price would increase because fiat is inflationary. Although the amount of bitcoin in circulation increases over time the total supply decreases as wallets are lost.
2. The utility of bitcoin increases every time someone new obtains some and every time a business agrees to accept it as payment - 2017 saw an explosion in both of these. The utility of bitcoin will increase farther with improvements to the underlying technology - ie. lightning network.
3.
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1. If the total supply of bitcoin remained the same the price would increase because fiat is inflationary.
Which is exactly why fiat currency is far superior to bitcoin.
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Fiat currency guarantees that everyone has access to fiat currency. My understanding is that bitcoin is limited, there is only so much to go around. The more people there are, the more money that is needed. Bitcoin does not address that dire need.
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How healthy do you think an economy would be if people did not spend money? I swear, taxes should be on wealth, not income. Money trading hands is what keeps everything rolling.
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If currency doesn't maintain or slightly lose value (and a low rate) then it no longer is a viable currency as if it grows it encourages hoarding which has a spiralling negative effect on the economy. Crypto Coins already have this problems as people are buying them as investments to hold rather than currencies to use.
Re: Horse breeders warn against Automobiles (Score:1)
Deflationary currency is terrible for an economy. Money (cash) isn't meant to be an investment vehicle. It is meant to be spent.
You can disagree all you want but thankfully more intelligent people are in charge.
Bitcoin (Score:1)
Bitcoin was never a serious contender for replacing the dollar. What we need is a cryptocurrency that can maintain a very large volume of transactions. There's a problem with the size of the blockchain. We need the blockchain to maintain trust, but it quickly becomes a serious impediment to new comers. Further, we need a way to reward processors of transactions even after the currency becomes stable and there's no need for new coins.
Re: Bitcoin (Score:1)
Bitcoin is now useless as a currency (Score:2)
Bitcoin's high-cost high-latency transactions make it a lot less useful as a currency than everyone hopes. Without some sort of centralized credit agency backing it to amortize those transactions, it'll never be able to take off for e.g. buying a cup of coffee.
It seems obvious the bubble will burst and I'd question how many more bubbles it'll be able to recover from without major changes.
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Lightning Network is spinning up as we speak, with near zero transaction costs, and without need for trust in centralized parties.
Re:Bitcoin is now useless as a currency (Score:5, Interesting)
As much as I'd love Lightning to be a panacea, I don't see how it'll work out. It's too easy to anonymously bring your competitors to financial ruin by challenging the off-blockchain ledger, forcing the ledger to be posted to blockchain, costing your competitor a huge transaction fee every time you do this. Now, say you have a bot challenging the ledger every 5 seconds, or 5 milliseconds; those savings become a huge liability very fast. This just brings us back to the real problem: posting to blockchain is way too expensive. If Lightning fails to work as advertised, Bitcoin will be out of magic bullets.
Believe ? (Score:5, Insightful)
He doesn't have to hold the currency longer than a few seconds. So, he doesn't have to "believe in it" at all.
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He doesn't have to hold the currency longer than a few seconds.
More likely, there's a cryptocoin-processing middleman who is guaranteeing that Cuban will get a certain amount in USD for a transaction, and he doesn't have to hold the coins at all.
Sounds like someone is grumpy (Score:1)
Missed the bandwaggon, eh Petey?
It’s irresponsible not to caution against it (Score:2, Insightful)
Profiting off Bitcoin? (Score:3)
Showing just have far Cuban has come on bitcoin and cryptocurrency, he announced earlier this week that his Dallas Mavericks will accept bitcoin and Ethereum as a method to pay for tickets starting next season. Even if the tech investor doesn't fully believe in cryptocurrency, he's clearly willing to try to profit off it...
Many/most retailers that previously accepted Bitcoin have walked away from the cryptocurrency because the valuation is too erratic - there is a fair to better chance any bitcoins accepted today as payment for goods and services will go down in value before the retailer can convert them to US currency tomorrow, costing retailers rather than profiting them. .
Tulips are free.. (Score:2)
..and, after the BC bubble is over, so will Bitcoin be.
OPEC sells Oil (Score:1)
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Apparently they either don't think so, or they think that it hasn't reached its low before the eventual rise again.
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FWIW, tulip bulbs -- which have some utility -- seem to be selling for about $200 USD per bushel. There are a LOT of tulip bulbs in a bushel (35 liters). AFAICS, Bitcoin has less utility than tulips and you can probably put millions of Bitcoin into a bushel basket. On that basis, I expect the post mania price of Bitcoin to be pretty low.
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You know, except for 2007-2010, during the financial crisis, when home values plunged about 30%.
https://en.wikipedia.org/wiki/... [wikipedia.org]
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Except the housing market. House prices will never drop, and there is absolutely nothing wrong about that.
National Association of Realtors advertising BS aside - housing actually tracks wage growth pretty closely. It doesn't actually appreciate in value, just price. It's an inflation hedge.
Another poster noted the drop a few years ago - note that housing payments stayed pretty close to constant. The amount individuals could pay each month for their mortgage stayed the same, but since interest rates increased, the price of property had to drop to keep payments constant. When interest rates went back down, the 'p
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Umm... what disruption?
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You sound like so many poor people I know. Unwilling to take a chance and that's fine. Don't get upset when I make a million or so because I took a chance. Also, don't try to steal my money because you don't have any later. Choice is yours to make. Live with it.