Goldbug view on bitcoin BitSwan

What geeks need to learn from gold market

“By 2005 or so, it will become clear that the Internet’s impact on the economy has been no greater than the fax machine’s.”

~Paul Krugman

Social transitions are unpredictable. Nobody knew how internet would change society. Nobel laureates confirms that perfectly.

Now IT continued to develop at ever increasing rates since then. And the Dot.com bubble didn’t stop this evolution. The evolution of technology continued uninterrupted. This is good news for bitcoin but at the same time says nothing about the sustainable price level.

Dot.com bubble burst

Stock prices after Dot.com bubble burst didn’t come back in minutes. So the big question regarding bitcoin is where are we in the bubble cycle?

Where are we now with bitcoin. Who knows? I don’t think public understands but also can’t get in on $1000 easily?

Did we take off? 1.Sure we can say that after hitting $1000 dollar barrier. 2.Yes, there were many sell offs. 3.Bitcoin has a lot of media attention and enthusiasm involved. 4.Greed hard to define, but sure lot of people are greedy about bitcoin now, mostly those who lost their hardware:}.

My feeling is that we are in a Delusion phase with bitcoin right now. But what I can’t say now is that public is somehow involved. The participation in bitcoin is minuscule versus other asset classes.

That would play well for further bitcoin price rise but on current levels above $1000 for bitcoin, it is very hard for public to get in.When “some” don’t even understand how to be secure on internet not to understand concept of crypto-currency.

So to say, bitcoin market potentially got ahead of itself because the widespread masses don’t have that much capital for gabling if they were not involved in lower prices.

That means that there may be very little supporting barriers on the way down? Maybe yes, maybe not.

Technology will not stop and will continue to bring unexpected social changes , positive or negative as they can’t exist in isolation. But that was the same with Dot.com, only the price valuations were not sustainable in terms of average subjective opinion on value.

5000 years vs. 4 years of history

Goldbugs can’t get their heads around the unbelievable surprise of crypto-currencies. Their “thing” is 5000 years proven medium of exchange. And still gold wasn’t able to become transparent non-controlled market for long decades.

Now suddenly crypto currencies in few months beats performance of all asset classes in the world. Seeing gold to bitcoin ratio fluctuating around 1:1 must bring tears to eyes to longterm precious metal investors.

Bitcoin Now Worth More Than Gold

But more than ever after this unexpected Tulip like rise in bitcoin, we must not forget how small bitcoin market is in regards to those with money.

Look what was done to gold by controlling markets with unlimited fiat money. This is something bitcoiners need to keep in mind.

Great resource for Precious metals investors http://jessescrossroadscafe.blogspot.sk/

Bitcoin market capitalization around $15 billion is very small in comparison to other markets, so any of big financial players, or big funds, not to say central banks can corner that market very easily. As I have said in my research Questioning bitcoin, concentration of power in bitcoin market is the most threatening aspect of bitcoin.

Confirmed by the list of top bitcoin holders which represent over 20% of the entire outstanding amount of the alternative currency.