Bitcoin: A Currency? Or a Speculative Security? Hmmm...

Correct me if I am off-base with anything I'm saying here - but to me Bitcoin's performance right now leads me to believe that it is no longer so much a "currency", as it is a speculative investment.

In my personal life: I've heard a lot of colleagues, friends, and even strangers talking big about Bitcoin, boasting about the current values and potential for the future. But a lot of these individuals don't even seem to understand cryptocurrencies. Many of the people I personally know well who are talking it up don't even know how to intelligently manage their investments, and don't own a lot of real assets (for example they may be in thousands or tens of thousands of dollars in debt - credit card or student loan debt, own no real-estate, etc).

At the same time, I believe many people are waking up to the real value of these Fiat Currencies, and perhaps others (and some of the same) are waking up to the global debt crisis.


Looking at the bigger picture of Bitcoin in general:
I feel that the Central Bankers must have a lot more difficulty manipulating Bitcoin, unlike Precious Metals where they can flood the market with tens of thousands of paper contracts which artificially keep the value of Silver/Gold/etc. down. So it does pose a legitimate threat to the current system and its manipulators.

Now... as I understand it, Bitcoin was created to be a peer-to-peer electronic currency. Which begs the question, as a currency in relation to other currencies (Dollar, Yuan, Euro), by logic Bitcoin should be moving in opposition to these other currencies. But Bitcoin has gone up at the same time the dollar was strengthening. It is acting in every single capacity like a security, like a speculative investment.

It's value has shot up, but personally I believe it is a bubble right now and it will correct at some point, it may very well get much greater in value as well. However, I'm currently subscribing to the belief that right now, money has moved into Bitcoin as a speculative investment and like the Real Estate Bubble, like other bubble before it, Bitcoin's value will need to be corrected at some point in the near-ish future.

ATS friends... thoughts?

I do think it's a bubble, for now... But an interesting one.

Bitcoin is a world wide currency​ widely manipulated by spook agencies, huge corporations, and private investors alike.

What's interesting to me, though, is that it reflects the faith in currency of those that have some money.
I personally can't afford them right now, but the was a time when I kept bit coin. After the reset, once the dust settles and the power comes back on, they might still hold value... But in the mean time they're an international currency gaining acceptance.
Their downfall is in the design, they were never built to get this valuable this fast. As the number of global transactions goes up, so does the processing time for each transaction-. The next BTC crash will be fantastic to watch, and will likely spark the development of its replacement.

Still though, wish I hadn't sold all mine

a reply to: lordcomac

Japan is now accepting Bitcoin as legal currency (they had to do something with their debt and money-printing problem). Other places like India are afraid of Bitcoin and are trying to crack down.

It's certainly interesting times. I agree that it was never meant to gain this much value this fast. All good things must come to an end. I own zero bitcoin but if I did, I would likely be moving out of my position.. maybe after waiting it out for another short-term gamble but I do see it coming back down in the near future.

Thanks for your comment Lordomac

I don't hold any Bitcoin atm, but I do have some holdings in a few alt coins. I'm new to this world of crypto currencies, but it is certainly fascinating. I got into trading just before the crazy p&d action going around, oh a month or so ago perhaps. I've made some dumb choices. Definitely ill informed ones. For the past few weeks I've put a little money from each pay check into it. So far, I am in the green.

If and when Bitcoin moves from its top position, I hope one of my investments is there to fill the void.

ETA: I'm also making more informed decisions with where I put my money.

a reply to: WakeUpBeer

Have you heard of Steemit? It ultimately needs to be converted into Bitcoin before you can "cash out", but it is a social networking platform that allows you to "create" value through your participation, and it is unique in the sense that it is one of the only social networking platforms I know of that has this dynamic. It's certainly worth looking into if you're interested in alternative digital currency/cryptocurrencies

Excuse my ignorance here. How does one even purchase bitcoin or an equivalent?

a reply to: Lolliek

Simply lookup "Bitcoin mining" on Google or any other search engine.. this is the process of adding transaction records to Bitcoin's "public ledger" of past transactions

There are many types of "cryptocurrencies" out there. Bitcoin is currently valued at $1,800 per unit

Holy buckets, BTC is over 2400 AUD for 1 coin.

And to think I sold mine years ago for 700...

It goes up, it comes down, it is an investor game, for sure. And it is manipulated, all you need to do is watch sites like btc-e where suddenly things shift to favour the market. usually by china.

I blew up my pc mining litecoin and converting to bitcoin when the market was good. well, as my stupid mind thought was good. but it is right now, at an insane price.. Expect a crash any time now...

Anyone interested in seeing the trend, this is my go to site.

BTC-E

a reply to: FamCore

"The country's legislature passed a law, following months of debate, that brought bitcoin exchanges under anti-money laundering/know-your-customer rules, while also categorizing bitcoin as a kind of prepaid payment instrument."

www.coindesk.com...

So it's the same status as an Amazon Gift Card, and just like the Gift Card there is now formal transparency/traceability of buyer and seller in Japan

My take, is this move effectively side lines Bitcoin to a niche of convenience.

When it comes down to it, Bitcoin in its own right has always had the worth of a piece of a yesterdays winning lottery ticket, so enthusiast value only.

The underlying technologies are, however, a different kettle of fish all together.

originally posted by: Doxanoxa
a reply to: FamCore

"The country's legislature passed a law, following months of debate, that brought bitcoin exchanges under anti-money laundering/know-your-customer rules, while also categorizing bitcoin as a kind of prepaid payment instrument."

www.coindesk.com...

So it's the same status as an Amazon Gift Card, and just like the Gift Card there is now formal transparency/traceability of buyer and seller in Japan

My take, is this move effectively side lines Bitcoin to a niche of convenience.

When it comes down to it, Bitcoin in its own right has always had the worth of a piece of a yesterdays winning lottery ticket, so enthusiast value only.

The underlying technologies are, however, a different kettle of fish all together.

Exactly.

Bitcoin has use as a payment method like PayPal.

It's investment value however seems entirely driven by the greater fool theory.

I see bitcoin as a long term investment. I started buying some about one and a half years ago at $235.57 my average price per bitcoin is $444.29. Anyway I started studying it way before that and came to the conclusion its price is propelled by demand. I noticed after the mtgox scandal a lot of people lost confidence and got out, resulting in a price drop. Then after the Greek debt crisis a lot of them went to bitcoin which was more reliable then their banks, resulting in price rise. I think this new price hike is from a combo of Venezuela and online poker using bitcoin a quick and anonymous way to add and withdraw money.

But anyway I plan on buying and keeping bitcoin for a long time. It's literally the best investment I've ever had. I'm not scared of it collapsing. Any dive will just be a buying opportunity in my opinion.

originally posted by: Lolliek
Excuse my ignorance here. How does one even purchase bitcoin or an equivalent?

You can download an app like Coinbase and add money though a bank account then convert it to bitcoin. BTW you can buy any amount you want for example $20 is 0.01078749 of a bitcoin right now. A lot of people I talk to think you have to pay the $1800+ to get bitcoin. But for example if you wanted to invest in the US dollar using a different currency, but don't want a whole dollar you can just get pennies or nickles.

a reply to: FamCore

Yes, though I haven't spent a lot of time checking it out. Yet.

Bitcoin use as a currency is a niche market now. The skyrocketing value of BTC is going to keep it from ever becoming currency except in grey/black markets where it is used as currency now. Those markets are only going to get bigger as the value of BTC grows. The first time a politician is connected to a 5000 BTC account is going to be interesting, to say the least.

Some other alt-coin will become currency. My speculation is that once bitcoin becomes very valuable (perhaps a hundered times or more than current, who knows) and stable, it will be possible to create and market a crypto as usable currency worldwide. Bitcoin can't do that because of limitations on numbers of transactions, or something like that. Bitcoin is well positioned to be the 'gold standard' though. It is limited in supply and thus deflationary. Perfect for hoarding and speculating.

Don't take this as advise to invest in any crypto currency.

I suspect there is more chance if bitcoin going to a hundredth of its current value rather than.a hundred times.

Scarcity is no guarantee of value.

a reply to: FamCore

I totally think bitcoin is similar to a penny stock scam. It is a nothing that is selling for tremendous prices.

originally posted by: ScepticScot
I suspect there is more chance if bitcoin going to a hundredth of its current value rather than.a hundred times.

Scarcity is no guarantee of value.

The value is that it is a secure, worldwide peer-to-peer banking system with no central control. You can send a million dollars in an instant for about a penny, no oversight or flags raised. You're right about scarcity but scarcity makes large price increases as demand increases. Bitcoin currently has a market cap of $28 billion USD, and crypto currencies collectively are valued over $50 billion with an ever-growing user base. I dont think it will be anywhere near its peak for at least another decade, maybe more.

originally posted by: SouthernForkway26

originally posted by: ScepticScot
I suspect there is more chance if bitcoin going to a hundredth of its current value rather than.a hundred times.

Scarcity is no guarantee of value.

The value is that it is a secure, worldwide peer-to-peer banking system with no central control. You can send a million dollars in an instant for about a penny, no oversight or flags raised. You're right about scarcity but scarcity makes large price increases as demand increases. Bitcoin currently has a market cap of $28 billion USD, and crypto currencies collectively are valued over $50 billion with an ever-growing user base. I dont think it will be anywhere near its peak for at least another decade, maybe more.

As a payment system it does have value but that value is there regardless if 1 bitcoin is worth 1 dollar or a thousand. As long as the rate is sufficient to cover current transactions.

As new (an better) crypto currencies become more used then the required rate will decline.

The speculative value comes from people buying it as an investment. As there is no inherent value and interest payable I don't see any future as an investment.

The price of Bitcoin is driven exclusively by a very, very, small number of whales who control the vast majority of the current Bitcoin supply. If anyone wants to know when to get out of BTC (Bitcoin) just watch when major trades happen. That is to say watch for when whales dump massive quantities of BTC for conversion to fiat. The price always plummets. Then they wait for the bottom to fall out and go back out and buy back all of the small BTC owners who have tried to cut their losses and sold at a loss.

I've been following and "investing" in BTC for about 5 years now. I've made some great money and I've also had accounts hacked where my BTC was stolen. I was around during the Mt. Gox scam of the century and when the feds took down the Dread Pirate Roberts of Silk Road.

I don't trust BTC exchanges...at all. The amount of personal information being collected by the BTC exchanges is highly invasive. BTC is no longer a viable crypto currency to hold due to the invasion of privacy perpetrated by the BTC exchanges. The IRS now knows who holds BTC and they will come for their blood.

Why the blockchain was created is still a philosophical debate. I personally believe the original narrative was a ruse. I personally believe the blockchain was created by intelligence organizations seeking a means to transfer vast sums of crypto in an untraceable manner.

BTC is headed for some major issues due to scaling. It was the first crypto but it was the proving ground. Reddit is full of trolls so don't go there.

If you want to buy into crypto just be prepared to turn over a wealth of personal information to the crypto exchanges when setting up an account. And also be prepared to have all of your crypto either stolen or frozen. If there is a run on BTC in the future watch for the news articles about how BTC exchanges have stopped trading "due to a security issue". Then you are screwed.

If you want to park $50K into crypto then do so on a hard wallet that is shielded.