Mtgox Hacked - Bitcoin price dips - ouch!

adambaumb said:

High Profile Bitcoin Investors

Richard Branson, well you know sir Branson
David Marcus, Paypal Prez
Peter Thiel, PayPal founder
Chamath Palihapitiya - Early Facebook Exec, Venture capitalist
Marc Andreesen, Ben Horrowitz - #1 Venture Capitalist in Silicon Valley
Michael Novogratz - CEO, Fortress Investment
Winklevii - claimed Facebook originators
Sean Parker - Napster Founder
Shakil Khan - Early-Investor and Head of Special Project at Spotify

Exante (Malta based bitcoin hedge fund) breaking world record returning 5000% to investors within 2 years...
exante. eu/press/news/397/

Basically, just a bunch of idiots..

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All of whom can afford to lose their investment without it causing them too much financial damage.
Most wealthy people diversify their portfolio in a variety of ways.
Their investment in BTC is probably tiny in comparison to their other investments.

condadon said:

i dont think people get the difference between speculating and investing.
I do believe BTC has some intrisic value, but i would never make an investment because some billionaires decided to invest about 1/100000k of their net value.
they are just fucking around because they have nothing better to do

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Exactly.

Having a little gamble on BTC is fine but what worries me is the fact that some people are taking loans out/selling assets to invest into Cryptos and that is just asking for trouble.
Many people don't actually realise that BTC is more of a platform rather than an investment vehicle.
Some people will make money but if people are putting money in they can't afford to lose then I can see a lot of people crying into their pillows at some point.

I'm actually glad MtGox is gone. Sucks people lost a lot of money, but BTC should never be kept in exchanges in the first place.

jazzc - not really an accurate statement

The financial crisis was caused by irrational investment which vastly inflated the total value (gross supply) of the money supply, far past what the market realistically could maintain. The supply was based not on economic utility, but on "exuberance" of investors turned into speculators by mortgage shysters.

That can certainly happen to Bitcoin or other crypto currencies - If speculators run up the value to a level far above its real economic utility. For example if it's "real" value is, say $400, but speculators jump in and run the price to $20,000 - that is a bubble. That is especially true if you have "people running these exchanges who don't really know business," and are selling these currencies based on emotion and fairy tale dreams with little base in economic fact. Yes, crypto currencies are multi-billion industry already. Yes, there is a limit to the number of Bitcoins that can be made. But that is absolutely no assurance that Bitcoins won't bubble. They are not making any more land, and real estate was horrifically bubbled in the US, Ireland Spain and many other places. Many times.

(sigh)

But of course, Bitcoin is different. Crypto currency is new technology, changing the world. So that means all the old rules no longer mean anything.

All I can do is echo a quote 2013 from the then head of MtGox

"If you invest in this you have to face the possibility that it will be worth nothing tomorrow."

rlloydevans said:

jazzc - not really an accurate statement

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I beg to differ.

The financial crisis was caused by irrational investment which vastly inflated the total value (gross supply) of the money supply, far past what the market realistically could maintain. The supply was based not on economic utility, but on "exuberance" of investors turned into speculators by mortgage shysters.

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Not irrational at all. Exactly the opposite. That 's what happens when you have a central bank keeping interest rates abysmally low, inflating the money supply to the clouds and guaranteeing a bail out with a "too big to fail" excuse.

That can certainly happen to Bitcoin or other crypto currencies - If speculators run up the value to a level far above its real economic utility.

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The value is subjective, there 's no real/fake economic utility. It 's been more that 200 years since Adam Smith, one would expect the objective value fallacy to have been buried already, alas...

For example if it's "real" value is, say $400, but speculators jump in and run the price to $20,000 - that is a bubble.

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No. A bubble is a result of mal-investments (i.e. putting money on production of things that there 's no adequate demand of). Malinvestments are created by the government lowering the interest rate from its market value. Creating new money & credit like a mofo fuels the bubbles. All that new money has to go somewhere, and obviously, it doesn't go to every imaginable product instantly. On the contrary, it focuses on some traditional markets first, like housing.

BTC by itself, can neither force the interest rate nor inflate in a whim. BTC as a commodity though, can be a bubble like houses are a bubble if the fiat firehose gets directed there. If tomorrow buying BTC is hip for those who are the first beneficiaries of the newly printed credit/money instead of real estate, of course it will bubble like crazy.

"If you invest in this you have to face the possibility that it will be worth nothing tomorrow."

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That 's obvious. You can also invest in human capital and then the plague comes along and everyone dies. There 's no argument here.