Reflections on Bitcoin's Broken Parabola

John Hussman makes comments on parabolic charts in general, and Bitcoin specifically.

On a log chart things do not look as messy, yet the parabola is clearly still visible, two of them in fact.

Bitcoin Log Scale

If Bitcoin's third parabola rises as much as the first two, the price target is $100,000.

But will there be a third parabola? If so, from where?

Who cares, just Hodl?

The Hodlers need a third parabola.

Fundamentally, there is no reason to expect one. Bitcoin does not scale (other cryptos claim to). Transaction costs are ridiculous.

Some claim these problems can be fixed. OK, so why aren't they? Will it matter if they are?

What about barriers to entry? Here's the answer: there aren't any.

Volatility makes Bitcoin useless as a day-to-day currency. It is a speculative plaything, even if the technology isn't.

Ideas of mass adoption seem absurd. And finally, what about Central Banks or governments ruling it illegal?

Many Hodlers ignore all these issues, but the earlier believers made a fortune.

Carnival Barkers

Those still Hodling have become carnival barkers. They have to. They desperately need more people to ignore the broken parabolas and buy on belief.

Mike "Mish" Shedlock

Comments
Carl_R
Carl_R

Crypto mining via Malware is on the rise, and one website uses the computers of visitors to mine for crypto during their visit:

Carl_R
Carl_R

And yet, while they may be "comfortable" owning digital currency today, if they take a parabolic loss, they may not be nearly as comfortable owning it anymore. Especially in times of crisis, people will be looking for a safe place to put their wealth, something that is a historically good store of value. With digital currency accomplish that? If it passes the test of time and holds a stable value, perhaps yes. If it continues to crash and people take a big loss, perhaps not.

Blacklisted
Blacklisted

Attitude/demand will take on a whole new vibe when govt confidence collapses. One would think that the gold bugs would understand this basic fact. Oh ya, these are the same people that believe they must bash the dollar to justify a rise in gold.

When budgets explode from a rising dollar and rates, and govt promises evaporate, where are investors going to go? Individuals can go to gold, if they think they can keep govt from confiscating it, but the younger generation is more comfortable with digital currency.