Bitcoin = Tulips? Not So Much

[GlobalMacro90]

Great report from Man Group on bitcoin/crypto....

Here is a quote that caught my eye for all the people who keep preying these are tulips, beanie babies, pet rocks, etc to make themselves feel better...

"Are cryptocurrencies a bubble? A bubble is a persistent deviation from fundamental value. In this space (and as we will discuss later), it is difficult to define fundamental value. However, there is one distinguishing characteristic between the price behavior of cryptocurrencies and the classic historical bubbles: crypto drawdowns have been (so far) followed by recoveries. Exhibit 3 shows six historical episodes that have been popularly labeled bubbles. Five of these episodes have never regained their boom-phase peak, while the other two took well over a decade to do it. In contrast, over the short history of crypto, the recovery is often very rapid. Some caution needs to be exercised in using the term bubble. We should not confuse bubbles with volatility."

Amen

Table is attached.

You can find the full report here:
https://papers.ssrn.com/sol3/papers...&utm_source=twitter&utm_medium=social-organic

 

[maxinger]

A bubble is a persistent deviation from fundamental value

--->

A mother-of-ALL Tulipmania crypto bubble is when the price falls from 5 digits to 4 to 3 to 1 and to where it initially belongs.

 

[GlobalMacro90]

For those with an open mind, I really encourage you to give the paper a read. I am thrilled to see sophisticated quant shops like this do this kind of work.

The paper goes into some proposed models/frameworks for valuation. Hint its not just "greater fool" (this is completely intellectually lazy)

It also shows the performance of simple trend following on bitcoin/eth. Similiar to backtests I personally have run (and current run on my own money)

Finally, it even touches on custody concerns. While this is focused on custody concerns for institutions, its still very informative.

If you have your mind made up, then don't read it and remain convinced you are right. For the bitcoin haters, there isn't going to be a much better time than this, so get the snarky remarks in while you can

 

[Nobert]

For those with an open mind, I really encourage

- to read this :
https://www.elitetrader.com/et/threads/how-to-manipulate-any-crypto.366795/

 

[Q.E.D.]

Great report from Man Group on bitcoin/crypto....

Here is a quote that caught my eye for all the people who keep preying these are tulips, beanie babies, pet rocks, etc to make themselves feel better...

"Are cryptocurrencies a bubble? A bubble is a persistent deviation from fundamental value. In this space (and as we will discuss later), it is difficult to define fundamental value. However, there is one distinguishing characteristic between the price behavior of cryptocurrencies and the classic historical bubbles: crypto drawdowns have been (so far) followed by recoveries. Exhibit 3 shows six historical episodes that have been popularly labeled bubbles. Five of these episodes have never regained their boom-phase peak, while the other two took well over a decade to do it. In contrast, over the short history of crypto, the recovery is often very rapid. Some caution needs to be exercised in using the term bubble. We should not confuse bubbles with volatility."

Amen

Table is attached.

You can find the full report here:
https://papers.ssrn.com/sol3/papers...&utm_source=twitter&utm_medium=social-organic

Tulips had an actual use case.

 

[cesfx]

Tulips had an actual use case.

It's a pretty useless flower.... I see zero use case for a tulip.

A basil plant, and all herbs in the world, are more useful than any tulip in the planet.
Even shit has more utility than a tulip, as you can use it as a fertilizer and get food from it, and plenty of useless tulips.

If you see zero use case in btc, crypto or blockchain, but see some use in tulips, you should buy tulips.

 

[GlobalMacro90]

It's a pretty useless flower.... I see zero use case for a tulip.

A basil plant, and all herbs in the world, are more useful than any tulip in the planet.
Even shit has more utility than a tulip, as you can use it as a fertilizer and get food from it, and plenty of useless tulips.

If you see zero use case in btc, crypto or blockchain, but see some use in tulips, you should buy tulips.

If you honestly think tulips have more use than bitcoin then good luck to you sir.

 

[Snuskpelle]

Link dead

 

[cesfx]

If you honestly think tulips have more use than bitcoin then good luck to you sir.

I think you misunderstood my post.

 

[zghorner]

Lol sorry guys.