Is Bitcoin the Next Big Thing?

[RobM]

Just went below $7k/£5k - must be a lot of people starting to worry. I've seen so many people saying it will bounce after a dip... however these dips were at $10k,$9k,$8k, and now $7k. When is the real dip?

 

[ian]

When is the real dip?

Sadly, when the whales say it is. Only when it reaches a point will new investors see the potential upside as an opportunity to enter the market, and that will only come when the whales decide. I'm cost averaging down now, just in case, but if it goes back up before I fully invest again, then so be it, I take the money back out.

 

[RobM]

Buying at stages during a price decline is a sure fire way to go bust. I've seen it in forex where people go bust before price returns (if at all). Even worse if they are paying interest on the money used to buy in as price decreases.

 

[Edwin]

Just went below $7k/£5k - must be a lot of people starting to worry. I've seen so many people saying it will bounce after a dip... however these dips were at $10k,$9k,$8k, and now $7k. When is the real dip?

Chive and herb, or BBQ mustard?

 

[Edwin]

Sadly, when the whales say it is. Only when it reaches a point will new investors see the potential upside as an opportunity to enter the market, and that will only come when the whales decide. I'm cost averaging down now, just in case, but if it goes back up before I fully invest again, then so be it, I take the money back out.

Why will new investors think of something that used to cost $20,000 and now costs $5,000 as a good investment when their neighbour, their colleague, their golf course buddy or their local bobby is filling their ear with tales of woe about how they lost a packet on their "investment"?

Remember, the hype around the peak was massive in the mainstream press, and therefore the hubbub around the water cooler would have been equally engaged. Now? If people talk about it at all (rather than licking their wounds in silence) it will only be to bemoan Bitcoin as the worst "investment" they ever made: "It was worse than during the Great Financial Crisis. Then, my house went down 25% in a year. But I've lost 3/4 of my money in 3 months!".

 

[Edwin]

Buying at stages during a price decline is a sure fire way to go bust. I've seen it in forex where people go bust before price returns (if at all). Even worse if they are paying interest on the money used to buy in as price decreases.

Plus if people use other crypto to buy Bitcoin, they'll owe cap gains immediately if Bitcoin picks up even if they never sell it (at least in the US, though other countries may have similar ideas).

 

[ian]

Buying at stages during a price decline is a sure fire way to go bust. I've seen it in forex where people go bust before price returns (if at all). Even worse if they are paying interest on the money used to buy in as price decreases.

Dollar cost averaging is never a bad way to go in a market that cannot be predicted, providing you are sensible and don't invest more than you can afford to lose. There is no valid historic data for crypto, the value could suddenly go through the roof again and if you've held out too long, you miss the boat (I believe the cool kids call it FOMO); equally, it could go to almost zero and you be left with a high average, no matter how low you buy. That is the gamble essentially. Most experts would suggest buy once a correction has taken place, but that is easier said than done in such a volatile market.

Why will new investors think of something that used to cost $20,000 and now costs $5,000 as a good investment when their neighbour, their colleague, their golf course buddy or their local bobby is filling their ear with tales of woe about how they lost a packet on their "investment"?

Because only a very small fraction of the population are invested, and those that didn't invest at the time of the peak, may now consider this a good entry point and care little for those that got burnt. No different from my entry point into the market, where I saw crypto was increasing in price and wanted to get involved; sadly I didn't sell at the top (as I had little experience of how quickly it can change), but my average was low enough for it to still be profitable now. I guess this is no different; there have been colossal dips before yet new and more investors came to market.

 

[RobM]

'Most experts would suggest buy once a correction has taken place, but that is easier said than done in such a volatile market.'

There is a reason for this. The more volatile a market *that you are already in* the less reason to continually buy on a decline. Your 'gamble' already exists. Look at your risk/reward with each new position. You are risking the whole amount but I very much doubt you are waiting for the price to double from your entry point. Not only are you doing that once you are doing it repeatedly. Sorry Ian but this has moved away from speculating/investing - I would carefully think about your strategy.

 

[ian]

'Most experts would suggest buy once a correction has taken place, but that is easier said than done in such a volatile market.'

There is a reason for this. The more volatile a market *that you are already in* the less reason to continually buy on a decline. Your 'gamble' already exists. Look at your risk/reward with each new position. You are risking the whole amount but I very much doubt you are waiting for the price to double from your entry point. Not only are you doing that once you are doing it repeatedly. Sorry Ian but this has moved away from speculating/investing - I would carefully think about your strategy.

It is an ever evolving process, I'm as far from an expert as you can get, but am speculating on the future of this technology. My strategy has evolved over time, if I knew at the start what I do now etc. I have managed to sell out of a few positions and re-enter 30 to 40% lower, so that gamble paid off to an extent...providing it doesn't continue lower. You might be right, we'll just have to see.

 

[websaway]

Perhaps bitcoin should be regulated under the gaming laws so as to identify what it really is.

 

[bonusmedia]

.

 

[martin-s]

Interesting read relating to ICOs:

https://medium.com/@coinlist/the-current-state-of-initial-coin-offerings-96896a094d00

A bit Americanised, but still...

 

[Edwin]

Epidemic modelling suggests Bitcoin may already have hit its all-time past/future high back in December (because most investors are now "immune" to its appeal following the post-December crash)
https://www.theguardian.com/technol...rs-infectious-disease-barclays-economists-say

 

[martin-s]

Sorry Edwin, but I call total BS on that analysis.

 

[websaway]

Epidemic modelling suggests Bitcoin may already have hit its all-time past/future high back in December (because most investors are now "immune" to its appeal following the post-December crash)
https://www.theguardian.com/technol...rs-infectious-disease-barclays-economists-say

That's bang on for me. No regulation meant ads could say whatever they liked and people are vulnerable, that's why we have regulations to protect people against scams.

 

[dee]

That's bang on for me. No regulation meant ads could say whatever they liked and people are vulnerable, that's why we have regulations to protect people against scams.

Regulation will come. It's already underway with ICO's and treating them as futures/investments. I think its a good thing....even though the bitcoin purists think the whole point is that its deregulated/decentralised. It will help filter out the scammers and rip off merchants. It's like the wild west at the moment. HOWEVER. People have short memories and I think it could quite happily head skywards again if there was a decent trigger and people thought the train was heading up without them. There is now a precedent with a high to beat.

 

[websaway]

Regulation will come. It's already underway with ICO's and treating them as futures/investments. I think its a good thing....even though the bitcoin purists think the whole point is that its deregulated/decentralised. It will help filter out the scammers and rip off merchants. It's like the wild west at the moment. HOWEVER. People have short memories and I think it could quite happily head skywards again if there was a decent trigger and people thought the train was heading up without them. There is now a precedent with a high to beat.

This is where the concept loses me. If bitcoin is a method of transaction with all the benefits it purports to provide, why should it also be a vehicle for investment ? OK I know that only 20 million will be mined but did someone overlook the fact you could have infinite amounts of competitor coins. I get a bit lost with my limited knowledge, but then again is the jargon designed to do just that.

 

[dee]

This is where the concept loses me. If bitcoin is a method of transaction with all the benefits it purports to provide, why should it also be a vehicle for investment ? OK I know that only 20 million will be mined but did someone overlook the fact you could have infinite amounts of competitor coins. I get a bit lost with my limited knowledge, but then again is the jargon designed to do just that.

I don't know how they can deal with what's already out there efficiently.It's purely on new ICO's. I think it just stops every bloke and his dog cleaning up on launching a white paper and then legging it with the cash. As you say, bitcoin is supposed to be a maythod of payment, not a futures contract so who knows. One things for sure though, it wont get away without some form of regulation. Governments don't like anything they can't control.

 

[Admin]

That's bang on for me. No regulation meant ads could say whatever they liked and people are vulnerable, that's why we have regulations to protect people against scams.

People should protect themselves without a nanny state getting involved

 

[Admin]

BTW... Bitcoin transactions are now in seconds and at a cost of céntimos