Skip to content




Bitcoin Mania Part II

There are three factual statements to be made about Bitcoin:

  1. It has created Millionaires
  2. It has captured the minds of millions who would like to become millionaires
  3. It will bust again

The last fact is that it is incredibly entertaining to watch.  It is a sideshow that represents market psychology in a small test tube.  The largest daily volume was about $67M which is a microscopic market in the investment world.

bitcoin mania part ii

Hyperbolic trajectory, but relatively small volume

There is another market (and many others in history) that showed a similar trajectory with an ugly aftermath.  The most significant representation is gold in the late 70’s through the mid 80’s:

76-85 gold bust

Gold Price 1976 – 1985

The more recent representation was silver and its quick march to $50:

silver 08-13

Silver Price 2008-2013

My guess is that the size of the bitcoin market has allowed it to skyrocket at a faster pace, but it probably implies that it can go even further than the last Booms and Busts.

Start watching it like the followers at reddit.  They find the experience similar to the following:

A9hq2x5

Be Sociable, Share!

Posted in Markets.

Tagged with .


One Response

Stay in touch with the conversation, subscribe to the RSS feed for comments on this post.

  1. Mac says

    But this time MUST be different ;)



Some HTML is OK

or, reply to this post via trackback.



Get Adobe Flash player
Copyright © 2009-2013 SurlyTrader DISCLAIMER The commentary on this blog is not meant to be taken as an investment advice. The author is not a registered investment adviser. There is no substitute for your own due diligence. Please be aware that investing is inherently a risky business and if you chose to follow any of the advice on this site, then you are accepting the risks associated with that investment. The Author may have also taken positions in the stocks or investments that are being discussed and the author may change his position at any time without warning.

Yellow Pages for USA and Canada SurlyTrader - Blogged

ypblogs.com