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4523633 No.4523633 [Reply] [Original]

if bitcoin, ether and other alts will crash eventually, we can predict what most likely will cause it by looking at previous bubbles

>dotcom
Dotcoms became a bubble in 97 to '03 because of tax incentives given to investors who held their stock >18 months.
They had a lower tax rate than previous years + they had incentive to go for non-dividend paying stocks for even lower tax rates
the bubble crashed when new laws came, nullifying any tax incentive you could have gotten from non-dividend stocks vs dividend stocks, this meant the big whales left the party and the only people left were those who couldn't pay for Mark Cuban's 57 million dollar yacht and mansion combo, so these companies began failing left and right, causing a domino crash

>tulips
tulips were most like alts because they were almost completely useless for anything other than speculation
Tulips became a bubble because of scarcity and high demand to build up huge tulip bags
They are most similar to CSGO skins: completely useless for anything other than decoration but increase in price because of rarity
Unlike food, where as long as someone is hungry, food will have value, skins don't have value unless CSGO is online, even though the person might still want to play another video game, it's a derivative, food is a fundamental
Tulips crashed when the bag holders all went to cash out, causing a speculative "bank" run, where the bank were the tulip holders themselves

>> No.4523644

>housing
we all know how the housing bubble was caused - banks lowered interest rates to every nigger and single mom in your area,
At the same time, real estate agents could get away with inflating the cost of a home since literally everyone could pay no matter the price,
And niggers could afford the mortgage so long as banks were willing to lend
And banks were willing to lend since they went all-in on securities that were based on you being able to borrow from the bank, and other industries also went in on these securities
The bubble crashed when it came time to collect on many of the lending that took place and no one had money to pay, so the houses began to decrease in price, which meant the banks were no longer getting big bucks from the securities, but then they couldn't give free money to niggers and single moms anymore, which meant almost no one was buying the homes, causing another domino crash

>> No.4523660
File: 135 KB, 1920x1080, leo.jpg [View same] [iqdb] [saucenao] [google]
4523660

>cryptos

clearly we can see a pattern here -

In the first phase of a bubble, people are incentivized to put money into securities and derivatives that appreciate in value so long as more money is being pumped into those same securities/derivatives, similar to a ponzi scheme but in a much more obtuse way. These businesses that are built on top of the incoming flow of cash they are receiving stay afloat as long as there are people trading the sec/der in a healthy manner on the open market and the business is delivering on key promises, causing the price to rise.

In the second phase, people begin to hedge using money they don't have - in crypto this would mean allowing people to get a loan based on how much of a token they have in their wallet

In the third phase, people use those hedged funds to purchase the bubblized security, and the majority of the money in that security's market comes from illiquid hedged funds

In the fourth and final phase, the large bag holders begin to cash out at roughly the same time, causing the price to drop, causing the hedged loans to become nearly worthless, causing the securities those funds are used to purchase to become nearly worthless as they are all backed using phantom money

I'd say from this timeline, we are currently still in the first phase

>> No.4523665

Link is tulipmania 17.0

>> No.4523693

Also weren't all those bubbles x9999 bigger than crypto? Market Cap: $255.076.579.860 is nothing compared to everything you just mentioned.

>> No.4523725

you an athene viewer bro he used that exact same analogy of food and csgo skins haha

>> No.4523728
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4523728

>>4523693
Yeah, we should have awhile.

>> No.4523745

>>4523693
Not x9999, but yeah, the whole crypto cap is still pretty low, thus the crash is still far beyond our timelapse. Then again, it IS OP's argument that we are still in the initial phase, therefore I wouldn't worry about the crash yet.

>> No.4523779

>>4523728
Saved. First time I see this kek.

>> No.4523798

>>4523745
Then again, crypto may crush as a whole because of a different reason: That is, if govs actually start to manifest an interest on them and want to regularize the market. That being the case, the impact of the crash will be dependent on the cryptos cap of that time. If it's still low, the only ones crying will be us and not economy as a whole. Who knows? Ride it while you still can.

>> No.4523801

>>4523728
is that accurate?

>> No.4523811

>>4523633
>Dotcom
Complete simplification of the cause
>>4523633
>tulips
Idiotic explanation. Tulips crashed because of an outbreak of the plague.
>>4523644
>housing
The world isnt America and the Housing bubble never popped
>>4523660
>cryptos
Revealing insight in to the “thoughts” of a nocoiner.

>> No.4523843

>>4523660
>I'd say from this timeline, we are currently still in the first phase
Phew, I was getting concerned up to this point. Still, an amazing and thought-provoking read, thanks OP

>> No.4523866
File: 193 KB, 1080x1223, dotcom crash.png [View same] [iqdb] [saucenao] [google]
4523866

>>4523633
>dotcom
Dotcom bubble is a fucking meme. Best thing you can do in a bubble is hold tight.

Pic related. The ""bubble""

>> No.4523867
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4523867

>>4523811
>Complete simplification of the cause
Wrong
>Idiotic explanation. Tulips crashed because of an outbreak of the plague.
Wrong, tell your mommy to give you a better history lesson
>The world isnt America and the Housing bubble never popped
Lol
>Revealing insight in to the “thoughts” of a nocoiner.
Lol pajeet, I've got 645k in the market

I hope no one actually listens to this guy lmao

>> No.4523884

Could have bought Google or Amazon during the .com bubble and make tons of profits. Same with bitcoin, just don't buy any shitcoins and you'll make it.

>> No.4523905

>>4523884
>Same with bitcoin

Bitcoin is the Yahoo of this bubble

Ethereum is Google

>> No.4523934
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4523934

>>4523905
mfw I'm almost all-in in ETH (still need to buy some more LINK and REQ, though)

>> No.4523941
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4523941

Every bubble pops when they run out of suckers to buy at higher prices.

>> No.4523942

>>4523801
Crypto market cap is $250b now
Inflation adjusted dotcom bubble is closer to 9 trillions
The dot in the picture is too small to represent 120 billions to 6.7 trillions
So there's all kinds of inaccuracies, but roughly speaking the image of crypto as a fraction of the dotcom bubble is a sound idea.

>> No.4523963

Crypto is surging bc the market as whole is bull. Crypto over emphasizes market trends. When the inevitable stock market crash happens, crypto will fall harder.

>> No.4523976

>>4523867
The housing bubble never popped.

Right now there are sub-prime "investment" loans that are running rampant in places like Florida that have very shady terms given you flip the house. These are very popular right now.

Anecdotally, I know several people who are house-poor because they've been able to roll over a little bit of equity into a house that is 5-6x their salary, putting almost nothing down, then bitch about how they have no money for anything. They're one recession away from being homeless.

Also, you should watch your cavalier use of "nigger", faggot.

>> No.4524026

>>4523866
Bullshit.
There was a bubble in Microsoft, Intel, Cisco, and Juniper Networks.

>> No.4524027

>>4523941
I doubt this is truly comparable to BTC. You have some shitty tulip seeds versus a completely new and before unknown way to have a digital consensus on data entries, which was a complete revolution. This is historical.
Tulips on the other hand don't have such use cases at all, not even comparable to any reasonable level. Still, it is also historically well remembered as a bubble.
At least we're actively taking part in some form of a digital revolution. There will be losers, there will be winners, but in the end you need to draw your own conclusions and follow your own gut

>> No.4524045

>>4523976
One-off incidents of people not being able to pay their mortgage payments are not what caused the housing crisis in the first place, n-i-g-g-e-r.

Go read a history book, or any economics book from the last couple years and understand the underlying mechanics of why people failing to pay their mortgage could bring down the entire economy of the first world.

>> No.4524074

>>4523660
>I'd say from this timeline, we are currently still in the first phase
your post had me on the edge of my seat the whole time but I left a happy customer

>> No.4524077

>>4523633
>tulips were most like alts because they were almost completely useless for anything other than speculation
That's essentially as true for bitcoin as it is for alts -- nearly everything you need to spend money on cannot be bought with crypto of any kind. The whole thing is just too volatile to make accepting crypto as payment a wise decision, and as more retailers realise this you will see fewer and fewer companies accepting bitcoin as payment.
>They are most similar to CSGO skins: completely useless for anything other than decoration but increase in price because of rarity
Just like crypto, you are paying for pixels.

>> No.4524091
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4524091

>>4523976
>The housing bubble never popped.
retard

>> No.4524101
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4524101

Reminder

>> No.4524107
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4524107

>>4524026

>> No.4524117
File: 38 KB, 1423x682, mining.png [View same] [iqdb] [saucenao] [google]
4524117

>>4523660
Your analysis is good but I think we're more likely in the second phase. Most of the buying isn't done on margin - yet, but it still looks extremely dangerous. The volatility of crypto can only be compared to the most volatile equities and ETFs. It is illegal to get a loan backed by your securities to buy more securities, but it's okay with crypto since it's so unclear to regulators which ones are securities
.
Scenario: 5000 people with accounts on Poloniex, which doesn't even have that high of leverage, decide to short ETH/BTC using a ton of BitShares collateral. Bitshares takes an unexpected dump with the China drama, their positions all get liquidated, tons of ETH is bought back at market. Brief moments of volatility like this can set of chain reactions of volatility across exchanges.

Scenario B: 5000 people on Bitfinex are shorting ETP/BTC, the short interest is through the roof and it's a very crowded trade. ETP on HitBTC has a mere fraction of the volume and the order books are far thinner. You can draw up the price for almost no cost there compared to Bitfinex, and doing so would cause a nasty reaction of short squeezing caused by arbitragers keeping the price at an equilibrium.

Scenario C: 10000 people on Poloniex short DOGE/BTC because it's free money. Chinese exchange BTC38 forces the price up in a similar manner as Scenario B and as long as they consistently draw in just a few more gamblers, the price will continue to go up as stimulant addled chinese gamblers compete for hundredths of a yuan with 0 trading fees. It eventually hits a critical level similar to Scenario B and people long the squeeze just because it was free money going down, so it will be going up too.

The nature of this boom has pure speculative trading far outpacing the growth in mining and actual adoption. Pic related.

>> No.4524175

>>4524117
I agree, however I should have been more clear in that I'm referring to borrowing of fiat cash backed by token collateral, and not token/token loans.

My bad, but I still agree

>> No.4524237

>>4524026
Yes, there were a bunch of literally who companies who got pumped up way too high. Stick with the big dogs and you can't get hurt.

Microsoft is worth a lot more than it ever was during the bubble btw.

>> No.4524295

>>4523644
loans were being given to anyone. That and low interest rates created the higher property values. Not real estate agents. Because the loans that were being made were all adjustable this caused the collapse. After a certain amount of time the interest rate for millions of loans was set to adjust higher making it impossible for people to pay the new amount. This sent everyone into default and all the mortgage back securities lost value. The lending environment allowed for shitty loans to be made to shitty people. The same banks that the government bailed out were the same ones that bought all this shitty debt.

>> No.4524304
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4524304

>>4524101
mfw

>> No.4524337

Tulip mania is a myth you fucking idiot. It's what grandpa tells as good night story.

>> No.4524359
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4524359

It's all one giant debt bubble.

>> No.4524383
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4524383

>> No.4524399
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4524399

>> No.4524491

The bubble was caused by people investing in EVERYTHING dotcom related, even startups that didn't have a clear mission statement and no one even knew what they were. If they were dotcom, people invested in them, end of story.

The easiest parallel are the alts. These are purely speculative and the only reason anyone is investing in them is because of BTC. Whereas Apple, Microsoft, Intel and Google are still around, the "alts" of the dotcoms didn't survive the bubble.

Alts are not a wise long term investment. Day trade, sure, but the objective should be to get out while the getting is good. There will be a crash. BTC will survive it, because it's actually being used as money

>> No.4524738

>>4524359
Didn't that Leonardo sell for something like $0.5bn? That's 1/6 of Trump's wealth, what is the size of these bubbles based on?

>> No.4524926
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4524926

>>4524101
Reminder

>> No.4525026

>>4523976
NIGGER!!!! Get use to it.

>> No.4525069

>>4523660
>we are currently still in the first phase
good. money to be made. make hay in the sun. get while the getting is good. thanks desu. very nice analysis IMO as I have experienced all of these events first hand, the lending of coins will be the beginning of the end.

How do we stop the lending of coins in an unregulated market? We cannot. This creates an inherent problem with the decentralized system, does it not?