Category Archives: Bitcoin

The Greatest Asset Bubbles In History

The chart below depict some of the greatest asset bubbles of all time. Among them are the Dutch Tulip Mania and the Mississippi Company bubble. The bubble in gold in the 1980’s and the 1929 stock market bubble look tiny compared to those two bubbles.

The tulip bubble record was set in 1637 and has been beat recently in 2017 by the bubble in Bitcoin. Bitcoin was first introduced around 2009 for a few dollar cent per Bitcoin but the price quickly rose to an all time high of $20,000 per Bitcoin in 2017.

The greatest asset bubbles in history (Bitcoin bubble, tulip bubble, Mississippi bubble, South Sea bubble, Gold bubble, 1929 stock market bubbel)
The greatest asset bubbles in history

Back in 2013 I wrote on this blog how the price action in Bitcoin looked like the price action expected of an average bubble. That was way to early (Bitcoin was only trading around $60 back then). Bitcoin and other cryptocurrencies such as Ethereum and Litecoin ultimately reached their peak at the end of 2017.

Since then the price of Bitcoin dropped from $ 20,000 to around $ 3,000. A drop of 85%. Which can be expected to happen when a bubble pops.

The chart above is showing something different from what normally happens after a bubble ends though. The price of Bitcoin has been steadily rising from the low of $3,000 in 2018 till almost $ 14,000 in 2019. Right now Bitcoin is trading around $ 10,000.

Maybe Bitcoin has more room to run and we haven’t seen the all time high yet?

Bitcoin 1 Year price: September 2018 - September 2019
Bitcoin 1 Year price: September 2018 – September 2019

One Person Sold 195K Bitcoins Today Making $161 Million

The price of bitcoin has gained a lot since last week. Right now the average price of a bitcoin is trading around $800. Bitcoin is being traded right now because bitcoin exchanges are always open. Normal currency exchanges are closed in the weekend.

Today something interesting happend on one of the exchanges. There was a massive sale by one person of 195k bitcoins. The person who did this transaction made a total of $161 million. The Washington Post thinks the transaction was probably done by Bitstamp to reshuffle some of its accounts it holds for people. Like a bank transfering money from one vault to another.

Blockchain.info: 195k bitcoin transaction

Blockchain.info: 195k bitcoin transaction

A transaction like this is very rare because there are only 18 bitcoin accounts in the world that have more than 100k coins in it. The table below is coming from a Paper done by two people from The Weizzman Institute Of Science in Israel.

Biggest bitcoin accounts

Biggest bitcoin accounts

The transaction was so big that the average transaction volume in bitcoins surpassed the transaction volume of an average day on paypal.

Bitcoin transaction volume

Bitcoin transaction volume

Bitcoin Crashes From $900 To $450 In Two Days

After hitting a high of $900 on sunday night bitcoin has now fallen to a price of $450. A 50% drop from the top so far. Some people have been writing that bitcoin can go as far as $10,000 or even $1 million.

Below is a chart of the last three days where you can clearly see the crash to $450. (Chart: clarkmoody)

Bitcoin price chart 900 top to low 450

This Chart Of Bitcoins Looks A Lot Like An Average Bubble

I love reading about bubbles. It’s the psychological aspect of it that I like the most. Greed and human beings.

The price of Bitcoins has gone parabolic in the last few days. The price went up 152% this month alone! The value of all Bitcoins outstanding is now $ 1 billion.

Some say that the way the Cyprus bailout handles depositors and the capital controls forced on savers is the cause for this rise in the last month.

Too much people are flocking into Bitcoins out of fear for another Cyprus style bailout and it is starting to make the Bitcoins chart look like an average bubble. Compare these two charts.

Bitcoin price in USD at Mt.Gox:

Bitcoins mt gox

How an average bubble forms:

average bubble chart

My take is that we are pretty much near the end of the parabolic rise. But ofcourse these things can continue longer than most can imagine..