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 (20)
No. 1-20
Carl_R
Carl_R

Your log chart looks a bit odd where it shows the peak as "$1,9345".

Mike33
Mike33

First of all, Hussman is a complete joke and people that bought bitcoin at the peak will likely still have more money than people who've invested with Hussman, let's not forget that.

Bitcoin transaction costs are back near zero though mainly because interest in bitcoin is lower now. So please get facts straight. Not saying bitcoin will be a good method of transactions going forward but it's not an issue now.

Wouldn't shock me if crypto is best asset class to invest in if you buy in a year or so once all the stupid gets wrung out of the system. The fact that it got so stupid and went up so fast and still is sitting at 6k (when you called it a bubble at 2k) indicates some long term staying power even if it's not a buy now.

truthseeker
truthseeker

Apologize off topic: Mish sorry but I’m beginning to consider myself as a contrary indicator because I once again agree with Avi Tiomkin’s article n Barron’s “Fed Rate Cuts, QE Will Resume Soon.” It seems like I’m always going around looking for people who agree with my point of view, so to b objective, that would mean it’s not too late for me to buy the ETF tech stocks which I said to myself many months ago.Anyway I wish you would comment on Avi’s article if possible, but if not I understand.

thimk
thimk

Prognostication aside , Hussman is spot on. Bitcoin was spawned from deranged monetary policy .

SweetKenny
SweetKenny

Bitcoin is the next phase in the monetary system away from real money. Gold based -> gold backed -> partially gold backed -> not gold backed -> imaginary