Bitcoin On The Up Topping $34,000

[engine]

Can this rise of Bitcoin continue? It topped $34,000 on Sunday.

It was only in December it was at $20,000 [webmasterworld.com...]

[lammert]

From my previous life in Kazakhstan, I still have some original wild tulip bulbs to sell. I will consider any offer to trade them 1:1 to Bitcoins.

We Dutch have centuries of experience with this :)

[lammert]

With Bitcoin currently tipping $42,000, I am changing my offer to two tulips for one bitcoin.

But on a more serious tone, what we see in my opinion is one of the results of the current pandemic where one part of the economy (leisure etc) is stalled and kept alive with global money injection measures, while the other half of the economy (like on-line businesses) is soaring.

This has created a flow of liquidity into society and an excess of money in parts of the economy with not many opportunities to actually spend that money. The excess money is now temporarily stored in products like stocks and digital currencies, but I expect that money to flow out of those temporary storage locations as soon as the world gets back to some sort of normal. The pandemic money is not more than money borrowed from the future generation(s) and must be paid back eventually. And as long as it hasn't been paid back, interest must be paid. Central banks can create money out of thin air, but it still comes at the cost of interest in most countries.

Looking at the intrinsic value of Bitcoins and other digital currencies, the only physical money which is flowing is the payments of the hardware investment and electricity bills of the mining computers. The infrastructure itself is losing money, so IMHO in the long run, these are not much more than large-scale Ponzi schemes.

[engine]

Ponzi schemes. That's how I'd seen it.
It can't keep going at the current rate and must be due to crash.

[NickMNS]

But on a more serious tone, what we see in my opinion is one of the results of the current pandemic where one part of the economy (leisure etc) is stalled and kept alive with global money injection measures, while the other half of the economy (like on-line businesses) is soaring.

That appears to be the case. But this (massive rise in Bitcoin) is not that. This is pure speculation.

Looking at the intrinsic value of Bitcoins and other digital currencies, the only physical money which is flowing is the payments of the hardware investment and electricity bills of the mining computers. The infrastructure itself is losing money, so IMHO in the long run, these are not much more than large-scale Ponzi schemes.

Given the amount of printing that has been occurring at the Fed, it seems that your description may apply equally to some non-digital currencies. That fact, is likely fueling Bitcoins rise.

My tulip bulbs are buried in the frozen ground, I will need to wait until spring before being able to trade them. By then there will likely more value in my appreciation for the beauty of their flowers.

[tangor]

Is there a 1929 in the future? This seems a bit overblown... and we know that what goes up MUST come down, eventually.

[lammert]

Between the period of the Spanish Flu and the First World War which caused massive global debts, and the Great Depression, there were the roaring twenties. Therefore I am still optimistic there is enough time to push the future in the right direction.

But some parts like digital currencies may come down faster than others.

[NickMNS]

The thing which is absolutely crazy about this whole Bticoin "craze" is the inherent but not fully knowable risks involved in transacting and to a greater extent speculating in the "currency". I am working on a project and as part of that project I am using live Bitcoin data that I am streaming from an exchange (that I wont name). Well that exchange just went off line. Had I been trading (which I wasn't and wont) my trades would currently be in state of limbo. The exchange has been down for over 15 minutes. Imagine if the Nasdaq went down for 15 minutes.

Now to be fair this isn't the only exchange, and it isn't every exchange. A quick Google search revealed that other exchange have been down also in the past few days. How can you transact or speculate if at any time the platform you are using is going to stop working and you will be sitting on hook in the dark for tens of thousands of dollars (or more). Mind boggling!

At least if you get stuck holding tulip bulbs you can always plant them and enjoy their beauty for few weeks each spring.