The Tulip Fever Was Exaggerated
smithsonianmag.com
smithsonianmag.com
merchants really did engage in a frantic tulip trade, and they paid incredibly high prices for some bulbs. And when a number of buyers announced they couldn’t pay the high price previously agreed upon, the market did fall apart and cause a small crisis
The article is more about how many of the anecdotal and narrative myths around it that weren't true.
With bitcoin I know quite a few bitcoin bores, so fun times ahead.
Maybe people don’t talk about it much these days. People in the company I’m with spoke about their experiences working during them. Some got lucky when their financial advisor told them to at least sell their first vesting (their stock would have dropped 80-90% by next sell window), others weren’t so lucky.
Even people who believed in the future of technology and the long term impact of the internet and just invested a portion of their retirement savings in NASDAQ composite index funds watched them take 15 years to recover their value.
After a few years people stop talking about their bad decisions.
That's quite a lot bigger than some merchants in the Netherlands losing their shirts in the tulip crash. It's also a lot bigger than the impact of a bitcoin crash would be if it happened today.
The really suspicious thing is that over the last couple of months almost 1 Billion Tethers have been issued, which is highly suspicious because we wouldn't expect sane people to send such a gigantic amount of money to a shady Bitcoin exchange in the other end of the world, in exchange for a crypto token of dubious value. The most likely thing is that Bitfinex is using these unbacked Tethers that they are printing to purchase bitcoin in their exchange and push up the price.
It feels similar to the last bubble, which started out in MtGOX. MtGOX was insolvent (due to having a good chunck of their deposits lost to hackers and fraud). Eventually, they stopped letting people withdraw their US dollars so the only option people had was to purchase bitcoin and withdraw that instead. This extra demand pushed up the price which attracted outside speculation (the bitcoin price was higher than average in MtGOX but also quickly rose elsewhere) and kept MtGOX afloat for a bit longer than it should (because new investors kept throwing money on the dying exchange to get into the action).
For more Bitfinex news, I would recommend following https://medium.com/@bitfinexed
The simple truth is, an increasing number of people are buying Bitcoin whether those holding on to the past like it or not.
The thing that is harder to explain is that if this theory is true we should expect that the price of Bitcoin in Bitfinex to be higher than in other exchanges. I suspect that what is happening is that the rising prices in Bitfinex are helping attract a new wave of speculation and/or price manipulation, which is what is pushing up the price elsewhere. (This is what happened in the MtGOX bubble)
Also, implying that BTC is somehow "stable" is extremely misleading.
You specifically said 'the only value it actually generates is for X' and I showed that your claim was factually incorrect. Why do you think that is flawed? Because you were wrong?
"But before you even attempt to apply what happened in the Netherlands to more recent bubbles—the South Sea Bubble in 1700s England, the 19th-century railway bubble, the dot-com bubble and bitcoin are just a few comparisons Goldgar has seen—you have to understand Dutch society at the turn of the 17th century."
Why?
It started off as a joke over dinner, but now it's a fully functional product. More info here: sendcryotopeopletulips.com