Quote from: drewster on December 31, 2013, 04:57:52 AM

Quote from: Athom on December 20, 2013, 07:43:18 AM

by Victor Kerezov

Mark Williams, a risk management and capital markets professor at Boston University, is out with a bold call he predicts that the price of one bitcoin will crash to $10 or even lower by the first half of 2014.
Williams is a risk management practitioner and academic with tw-decades of experience from working as a bank examiner at the US Federal Reserve to a commodities trading floor senior executive.
The finance professor observes that the buying and selling of the digital currency is controlled by only a handful of exchanges in places like China, Slovenia and Bulgaria. Exchange bankruptcies are not uncommon for the roller-coaster bitcoin market. In addition, the exchanges are based on a peer-to-peer model and regulation is virtually absent.
Bitcoin has not been bear-market tested and if enough sellers try to run for the door it is not clear that existing infrastructure is capable of executing trade orders without significant time delays and price risk, clarifies the former commodities trader.
Some bitcoin aficionados claim that the digital currency would replace the US dollar as the new global reserve currency, while others believe the digital form of money would provide a cheaper alternative to expensive payment platforms such as Western Union. Adding more helium to the story, the Winklevoss twins of Facebook fame, not being shy about talking up their own book, predicted prices would rise to a staggering $40,000 per coin, notes Williams
At the start of this month, bitcoin peaked at over $1,200 as e-currency evangelists trumpeted the endless possibilities to be unleashed. However, the price more than halved since then as the Chinese regulatory pin burst the hyper bubble. In the view of the risk management expert, the market has finally realized that hype alone cannot support lofty prices.
Mark Williams then goes on to say that every asset bubble has three phases: growth, maturity and pop. He believes that 2013 was the maturity stage and we are now entering the time when the bubble pops. Ironically, China, the second largest economy in the world, helped push Bitcoin prices to the clouds and now is pulling prices back to earth, observes the former Fed bank examiner. In the last two weeks, the Peoples Bank of China banned local banks from accepting the digital currency and then forbade third-party firms from transacting with bitcoin exchanges. In between the two announcement, Baidu, Chinas Google equivalent, announced it would no longer accept bitcoins. Other major central banks and banking watch-dogs have taken a similar position like the PBoC, warning against the risks of the e-currency.

Williams then goes to proclaim that if bitcoin was allowed to proliferate as a currency it would produce greater economic uncertainty, reduced trade and lower individual standard of living. Retailers typically work on tight margins and the immense volatility of the e-currency could eliminate all their profit or even result in losses. In this bitcoin world of uncertainty and risk, commerce would ultimately decline and stone-age bartering would increase. Naturally, as bitcoin price swings increased, the number of businesses willing to accept e-currency risk would decline, assumes the former commodities trader.
Bitcoin is not a legitimate currency but simply a risky virtual commodity bet, argues the academic at Boston University. Even Winkleviis call that it is a commodity currency may be unfounded because the wannabe currency does not have a tangible value like gold, which is a widely accepted alternative form of money.
Bitcoin is just backed by dreams and it is only worth what people are willing to pay, opines the former Fed bank examiner. As it becomes increasingly evident that Bitcoin will not be the global currency standard, but simply a novel idea that will be improved upon by more nimble competitors such as Litecoin, restrictions and new regulations will be imposed and prices will plummet.
I predict that Bitcoin will trade for under $10 a share by the first half of 2014, single digit pricing reflecting its option value as a pure commodity play, concludes Mark Williams.

http://invezz.com/news/forex/7726-bitcoin-usd-will-plummet-to-dollar-10-by-first-half-of-2014-predicts-risk-management-expert

I am personally a big fan of making brash and bold predictions, because they are a no-lose situation. If you are wrong, as most suspect, your crazy proclamations are quickly forgotten. On the other hand, if you happen to be right, everyone will be impressed and amazed.

In this post I am immediately drawn to the words that are included to create credibility: professor, University, executive, trading floor, risk management, federal Reserve, platforms, bank examiner, senior executive.

Removing all the extraneous tripe and drivel, there's no new opinions here we haven't heard dozens of times before. The two most misguided ones are:

1- bitcoin will never be seriously used by businesses because it's too volatile

2- infrastructure is not enough to support widespread use

First, as a "commodities floor senior executive", certainly you've heard that "past performance is not a guarantee of future returns".

Yes Btc has been recently volatile. As a commodity, Btc is only a bit more volatile than gold. It is currently quite illiquid, but that is improving almost every day. Many services already will auto-hedge to fiat for businesses. As such, this will end up as a non-issue. If Btc continues to grow as a reserve currency, which it really could since just about every country spends every day trying to devalue their currency, volatility will continually become more dampened, further increasing the desire to hold Btc assets, and further supporting the price.

The infrastructure comment is just retarded. Obviously if Btc grows to wide worldwide adoption, the infrastructure will grow with it.

How do you suppose we do that after all the mumbo jumbo news media put on bitcoins? As in other words "Criminal Currency"