Posted on 04/03/2013 9:36:48 AM PDT by SeekAndFind
The price of Bitcoin, the bizarre digital currency, has been skyrocketing. And everyone's calling it a bubble. But it's not like most other bubbles.
Art Cashin, UBS' man on the New York Stock Exchange trading floor, contrasts the Bitcoin bubble to the Dutch tulip mania of the 17th century. Here's Cashin: Trading Tulips In Real Time – It is rare that we get to see a bubble-like phenomenon trade tick for tick in real time. Usually it's kind of regional aggregate pricing like real estate reports. But, all that may be changing – before our very eyes – quite literally. The bubble du jour may be something called a "bitcoin."
Business Insider's Joe Weisenthal made this same point earlier today.
"You can go here and watch Bitcoin trade tick-by-tick, which is not something you could ever do with these other unconventional micro-bubbles."
Everyone's trying to figure out what's going on with Bitcoin.
Without explicitly arguing for causation, Cashin points to a correlation.
The bidding for Bitcoins has turned a bit more aggressive since the Cyprus "bailin" and the seizure of a portion of bank deposits. The Bitcoin recently traded at an amazing $100 (it had been $50 just two weeks ago).
We have yet to see Bitcoin make a major down move.
(Excerpt) Read more at businessinsider.com ...
For those who want to know what BitCoin is, see the presentation here:
http://www.businessinsider.com/presentation-what-is-bitcoin-2013-3?op=1
In the last 48 hours, the price of the virtual currency has surged by 50% from $94 to $141 as the rate of expansion goes more than parabolic. This leaves us with the question, which line item on the Fed's Balance Sheet is 'Virtual Currency Transactions'... what better way to destroy an up and coming currency competitor than to blow a bubble in it and explode it?
That is a 14x rise since the start of the year...
Source: BitCoinCharts
Tulips back then, carbon credits, our currently overprinted dollar, now bitcoins. All backed by what real asset?
I think his tendentious use of the word bizarre is unprofessional.
5.56mm
Art is Art - drinks good scotch, knows his stuff, has his own style....
Even digital fiat money isn’t immune from the pump & dump syndrome.
Beware of the bitcoin moneychangers.
if you don’t understand the concept of intrinsic wealth, you will die poor, cold, and hungry in a government sponsored ghetto.
Because of this, statists hate bitcoins. They cannot easily control the supply as does the Federal Reserve with the U.S. dollar (enriching their friends and impoverishing their enemies). Expect to read lots of FUD articles about Bitcoins until the statists implement a way to control Bitcoins.
FUD = fear, uncertainty, and doubt.
Bitcoins always struck me as bordering on a scam. The funny part is how it is embraced by people who complain about fiat currency when bitcoins are fiat on steroids and have the disadvantage of limited acceptance.
So what asset backs bitcoins?
Art recommends Cashin’ in!
the dollar for what it is worth (literally) is backed by the full faith and crdith of the U. S. A., article IV section 1 US Constitution. What is a Bitbite backed by?
Their rarity is what makes them valuable and the fact that they can easily be used for electronic transactions.
It takes extremely powerful computers and a significant amount of electricity to create a Bitcoin but anyone, who is capable and willing to make the effort to do so, can create a new Bitcoin. This makes Bitcoins difficult for the statists who want total control over currency and total control over all financial transactions.
P.T. Barnum could have explained it to them.
Yeah I love Art on CNBC, he’s got that same ruddy complexion I do.
I bet he’d be a great guy to have dinner with.
Ie, they are only backed by faith. A lot of things are rare, it doesn’t make them currency. At least though, most rare things are tangible. Bitcoins aren’t. Heck, even if you strip the monetary value of a dollar, it has some value as paper. Bitcoins are just blips of data in the ether.
While we would be much better off with a currency whose supply only expanded gradually (if at all), bitcoin is a ponzi scheme, through and through. If bitcoins are holding their value, and the dollar isn’t, why in the world would anyone spend a bitcoin? The only way bitcoin takes off is the official currencies become worthless, in which case sellers would simply refuse transactions outside of bitcoin. However, in such a scenario, the government would shut down bitcoin, even if it meant inspecting every packet that traverses the internet.
Bitcoin is an interesting idea, but it has no path in which it becomes anything other than a niche currency (possibly for things like micro-payments). I hate saying this, because embracing a currency scheme not built around perpetual inflation would be such an enormous benefit. But bitcoin isn’t the answer, unless the question is “what is the latest ponzi scheme?”.
So are Treasury Certificates. The Fed quit printing them years ago.
encryption chains and math resulting in uniqueness and non-dilutability
like gold, only digital.. very similar to bonds, tho unable to be counterfeited
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