I felt like responding to thank you for making a thoughtful post, if for no other reason than you're predictably getting the broad dismissal from the bulls. I definitely agree with analysis of the fundamentals of the market, though one thing struck me as I visited your site:


This rather plays in to the criticism of many long term bears, in that it's said if you predict a big crash, correction or recession sooner or later you're bound to be right at some point and you can accept your 15 minutes of fame. Trying to act on those regular predictions can be much riskier though, as the classic quote goes "Markets can remain irrational a lot longer than you and I can remain solvent". Which isn't to say that I suggest speculating in bitcoins or participate in it myself, merely to suggest that bubbles are much easier to identify than to time. If you accept a rather straightforward analysis that there is no fundamental value represented by bitcoins and that it's entirely priced by speculation, then that suggests the bubble has been ongoing for quite some time and could easily hold out longer than the recent top might make it seem.


I agree that this makes the entire phenomenon fascinating. The communities openness to such transparent hucksterisms like the pyramid schemes seems to speak volumes about the main interests in bitcoins. And while I'm not schooled in such things, this also seems to be a rather unique twist on the pump in dump where there appears to be no central actor with the pumping actually done by all the market participants themselves through some kind of ad hoc understanding. It really feels to me like it's been taken hold at least in part by penny or otc manipulators. Very interesting to watch, seldom do you get such a raw view of it because of the legal implications. I just hope nobody is risking their retirement of college fund.

Cheers,