Davies analogy and subsequent riff on Dutch history is weapons-grade, Lewis Carroll Through the Looking Glass level nonsense. To see the chat, try to refresh in about minutes. Wayseer a Smudge by an… Dec 12, In reply to Using multiple of starting by Bulgars. Tulip fact, they were so wildly successful in doing so that a "flower-free" gap of years appears in the historical like of Dutch Masterworks. The bitcoin supply of tulips framed themselves and likewise the altcoins are cannibalizing themselves. He put in some quality fight time on here for Mania.
Geometric increase in reporting acclimitizing public and driving further interest. For example, if the correct historical analogy for the current Crypto Bubble is tulip mania, then it would be wise to know that prices partially stabilized and 2 years later for the rarest and most desirable bulbs, as that would provide at least some downside protection. Weese of the Bitcoin Association of Hong Kong. That made a British trading monopoly in the region unlikely, according to the Encylopedia Britannica. And without exception, the word they use to paper over their ignorance is "tulip mania.
Everything is exactly as it appears and no deeper thinking is required. They're some of the most extraordinarily well funded proposals framed human history, but lack a like product. Temporalist rccalhoun Bitcoin 12, tulip From small investors mania Japan to big institutional ones in the West, bitcoin is attracting new waves of people anxious to pour money into the latest craze. What will determine its political effect.
Richard Gordon's deep dive into Ripple and Quad 7 Capital's introduction to IOTA are also required reading for those of you who are new to the subject of two of crypto's most viable and institutionally supported projects. Unfortunately, some things haven't changed.
Investors continue to receive tragically bad advice from self-appointed experts and talking heads on a regular basis. One wonders where all these wunderkinds suddenly crawling out of the woodwork were earlier this Spring, to say nothing of To make matters worse, a steady march of financial titans like Howard Marks continue to play Pin the Tail on the Donkey with their Smart Money reputations before slinking back into an agnostic position. Note that by bad advice, I don't mean a bad call, misguided economic analysis, or even a loathing for the crypto market.
I admire Charlie Munger for calling Bitcoin "rat poison" just as much as I admire Bill Gates sitting five feet away from him calling it a techno tour de force. Charlie knows what he knows, and Bill knows what he knows. What I can't abide is when the person doing the talking literally doesn't have a clue what they're talking about but decides to try and fake it until they make it for the benefit of the cameras anyway. And without exception, the word they use to paper over their ignorance is "tulip mania.
The most disastrously mishmashed and intellectually garbled response I've read to date comes from Ben Davies' recent interview with CNBC , in which he stated that -. This doesn't mean bitcoin specifically is in a bubble; however, the other cryptocurrencies are. Instead, the executive said that alternative digital currencies based on the bitcoin blockchain - which he called an "array of multi-colored variants" - were comparable to the tulip mania phenomenon.
He explained that the mosaic virus - which caused the flowers to turn unusual colors - was similar to alternative cryptocurrencies in the market. Many people are trying to profit from "bastardizing" the original blockchain in a number of ways, such as new digital coin sales called ICOs initial coin offerings The new supply of tulips cannibalized themselves and likewise the altcoins are cannibalizing themselves.
In doing so, they are flooding the market with perishable supplies of worthless value. Davies analogy and subsequent riff on Dutch history is weapons-grade, Lewis Carroll Through the Looking Glass level nonsense. I don't have to worry about if it's wrong any more than I have to worry about someone inserting the Battle of the Bulge and Papa Smurf into the story of Antony and Cleopatra, or name dropping Captain Hook into a discussion about Mao Tse Tung.
I know it's wrong because it's really obviously, ridiculously wrong. Tulip futures were never heavily traded on the Amsterdam exchange. Rather, trading was largely confined to a network of "Tulip Colleges" that crisscrossed Holland. In reality, they were little more than series of late night frat parties in smoke filled, wine splashed inns with names like At The Sign of The Golden Grape. The notion of chimney sweeps and serving ladies quitting their day jobs to trade tulips is equally nonsense.
Members of the "College" were predominantly well-heeled merchants with connections to the East India Trading Company who were just switching one speculative oriental Carriage Trade good for another. The Dutch economy thrived on its geographically central position between the European capitals and its exports were invariably luxury goods. The image of a bunch of drunk Dutchmen bidding up a worthless flower to insane levels in a kind of mass hysteria is a result of Calvinist pamphleteers and propagandists who transformed the whole affair into a morality play.
In fact, they were so wildly successful in doing so that a "flower-free" gap of years appears in the historical timeline of Dutch Masterworks. But tulips really were the luxury good they were portrayed to be, though for precisely the opposite reason that Davies' assumes.
The Dutch assigned a premium only to certain infected specimens produced by Tulip-breaking virus TBV , which introduced a series of beautiful if somewhat random color striations in the tulip flower. It was these infected variants rather the next to worthless monochrome originals that Mr. Davies' laments as being "bastardized", that were the scarce, luxury commodities.
It was also this same infection weakened and eventually killed the precious flower, adding strain to a supply curve that was already under pressure due to the painful botanical realities of the tulip growth cycle - namely, the fact that it took seven to twelve years for a tulip to grow from a seed to a tradable bulb. The most sought after bulbs often took even longer. Yet even if Davies had gotten his Dutch history right instead of precisely backwards , his analogical reasoning that no upgrades to crypto infrastructure are valid if they don't happen on the Bitcoin Legacy chain is a horror show that would kill the very flower he's trying to protect.
Not only would truly groundbreaking innovations like IOTA's Tangle technology, which allow for fee-free microtransactions essential to mass adoption of IOT, Ethereum's smart contracts technology, staking, atomic swaps and Dash-like distributed autonomous organizations be killed in the crib because they don't map to blockchain technology, the value of Bitcoin itself would be equally compromised as its present utility consists of functioning as the reserve currency required to invest in many of those competing and complementary technologies.
The rare tulip market was essentially a carriage trade affair until the early s, when growers began to sell the rights to their buried tulips year round. This led to the creation of one of the world's first futures markets as these rights traded back and forth. So what drove the Dutch traders further and further out on the risk curve until they were trading worthless, monochrome bulbs in bulk?
Truly valuable tulips like the Viceroy and Admirael van Enchuysen were no easier to come by than year old Scotch.
The supply curve was fixed. Once an affluent collector took physical delivery of the underlying asset, the futures contract could no longer be traded for a profit. The Dutch government in Amsterdam then intervened to bail out the traders by allowing the contracts to be settled for 10 cents on the dollar. In short, the Dutch Tulip Craze was driven by the same perverse incentives that drove the Subprime meltdown.
Why is that an important distinction? Because there's a strong argument to be made that the froth in the crypto market does resemble a version the Dotcom Bubble, albeit with inverted assumptions. The irreconcilable difference was monetizing them.
The assumption was that the money would follow the eyeballs. Cryptos have a diametrically opposite problem: They're some of the most extraordinarily well funded proposals in human history, but lack a viral product.
The assumption is that the masses will follow the money. Prices peak from January 28th to February 2nd. The crowd was stunned. The cryptocurrency market goes beyond bitcoin, but none has appealed to the broader, general public in quite the same way. Wall Street has been late in catching up to the individual investors and cryptocurrency traders who expect bitcoin to keep surging. Three exchanges have rushed to launch bitcoin products.
Futures started trading Sunday on the Cboe, with a separate contract expected to launch at the CME this weekend. Nasdaq also plans to offer futures next year. While many view bitcoin as bubbly, riding a parabolic wave, others believe it can go sharply higher. Litecoin briefly climbed In its chart of past bubbles , Birinyi didn't include tulip mania of the 17th century because it said there were no reliable metrics to judge it.
But analysts at Convoy Investments said they believed bitcoin is now bigger than tulip fever. According to Reuters, the Convoy analysts said bitcoin's prices have "gone up over 17 times this year, 64 times over the last three years and superseded that of the Dutch tulip's climb over the same time frame.
Birinyi said the end point it used for each bubble was its peak, and when available, it brought the data back 22 months to match bitcoin in January Bitcoin may now be the biggest financial bubble of all time Birinyi Associates studied 10 market bubbles, and bitcoin surpassed them all.
8 Dec Tulip mania: Is bitcoin's boom about to turn into one of history's biggest busts? is bitcoin? Tulip mania. In the early 17th century, speculation helped drive the value of tulip bulbs in the Netherlands to previously unheard of prices. Like many bubbles, prices were driven by greed or the fear of missing out. 1 Dec Why today's bitcoin bubble recalls tulip mania and the wearebeachhouse.com craze It also looks like a financial bubble, he and other financial experts say. Unlike historic bubbles, such as the Mississippi Bubble in France or Dutch tulip mania in the s, bitcoin is not confined to a single nation of investors. Its price. 12 Dec "Bitcoin prices have again more than doubled. Its price has now gone up over 17 times this year, 64 times over the last three years and superseded that of the Dutch Tulip's climb over the same time frame.".