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Comment by jpmattia | Hacker News Reader

For comparison, he also thinks it's going to $40K by EOY 2018.

http://www.businessinsider.com/novogratz-bitcoin-could-be-at...

For further comparison, he ran an $8 billion fund that utterly failed to weather the 2008 financial crisis [1]. Prior to the IPO, he and Fortress' management "borrowed money, used $250 million of it to pay themselves a dividend, and used part of the I.P.O. proceeds to pay back the loan."

[1] https://www.vanityfair.com/news/2009/04/fortress-group200904...

Can you post your [1] link?

paying yourself with borrowed money sounds good to me. as along as its not recourse that is...

Old trick among big-money managers ... the other fun piece about giving yourself a questionably-recourse (or questionably-to-ever-actually-be-collected) loan is that it's not taxable until it's forgiven. But it's still plenty spendable before that!

This is called a dividend recap, and there is not necessarily anything wrong with it if you have a profitable firm and if used prudently.

And he also says "It is going to become the biggest bubble of our lifetime" in the video embedded with the bloomberg article.

Truly a Janus!

Well, if you predict every possible outcome, you will be right at least once.

He is just hedging.

But halts hedge fund

possibly temporarily.

What he's saying is that in the next few weeks it's going to drop as low as 8k, it will be as much as 40k by the end of the next year, and within 5 - 10 years it will be the biggest bubble of our lifetimes. It's really not that complicated.

The internet was a big bubble, and quite a few stocks survived and made handsome returns.

What an awfully disingenuous comment. Just because some random so called "cryptocurrency" may still hold any residual value after this bitcoin pump-and-dump scam blows up it doesn't mean it makes any sense to keep pumping, let alone enter the fraud at this stage.

What is Bitcoin supposed to be worth? The only way to determine true value is to go through these phases of price expansion and contraction until equilibrium is reached.

If you don't want to participate in volatile speculation, that's fine, the average person shouldn't. But there is no other way around it.

> The only way to determine true value is to go through these phases

You're referring to a pump and dump scheme as "phases". You don't set high values by scamming unsuspecting fools.

What scheme are you talking about? It's an unregulated market, so yes, there are scams and dumps occurring. However BTC has huge volume, so it takes huge volume and risk to manipulate it. Or manipulation from the exchange itself. Those are risks that the informed trader is aware of.

Any and all securities go up and down, whether it is justified or not.

Nearly every cryptocurrency followed Bitcoins scheme, wherein massive quantities of the supply were produced for the first few weeks to a small group of users, so any later users entering these systems must than buy from those horders or spend more and more capital on the increasingly expensive and reducing output of mining.

It's not exactly a ponzi or pyramid scheme, but the manipulative intent is clear so a new term is needed.

It's a Satoshi scheme.

Yeah, there were relatively more coins produced early on. Those coins were also pretty much worthless early on.

> Those coins were also pretty much worthless early on.

...hence the "pump" stage of the pump-and-dump scheme being conducted quite extensively, with all forms of scammers publicizing the immense virtues and magically perpetual low value of bitcoin, hoping that the next batch of fools and idiots open their wallets to finance the value pumping.

> publicizing the immense virtues and magically perpetual low value...

This happens every day in securities. Those "pumpers" are called "analysts". They sometimes work for investment banks and research firms. You can choose to follow their advice or you can bet against it.

Apple shares were $0.50 (unadjusted) in its early history. By your definition, anyone espousing the future of Apple and computers at that point is a pump and dump scammer.

Apple doesn't generate more shares every 10 minutes.

Apple and stocks also generate value, whereas Bitcoin and PoW software burns electricity/value.

Literally every investment is a "ponzi" or "pyramid" by your definition. If I invest in a company I can get a hell of a lot more shares for cheap now than when they IPO.

No.

This is specific to crypto currency supply production algorithms.

Coin supplies are created by running the software. Bitcoin and many other cryptocoins use a rule that lets the first users take control of the supply very easily by generating the coins for very low CPU/GPU difficulty. After a few weeks, the work required to produce more coins doubles. This just lets a few users control the supply, wait, and attempt to convince new users the coins are rare because the production/mining has become significantly more expensive.

tl;dr: early miners generate most of the coins inexpensively, and try to sell to greater fools because the software stops creating coins as easily as the first few days

Shares are fractional ownership of a company that can grow or shrink. The whole point is that their value corresponds with the total value of the company.

It becomes a ponzi scheme when the only value from early shares comes from investment in later shares. That's what's happening with bitcoin.

It's also simply how the supply is produced.

Satoshi made a machine that prints money if you do work. He made it so it only required a small amount of work to begin with and as time goes on, someone else with the same machine and the same work gets less. It's made even worse because there were less users battling over the larger easy production near the start, and more and more users fighting over less and less output.

tl;dr it's even more malicious than a ponzi

haha still you are waiting for it to crash so you can call it a pnd scam. emotions > logic

He doesn't care about survival. He's a speculator who wants to pump up the bubble, ride the wave, and cash out billions in a few years. Nothing wrong with that though, as long as he doesn't do anything illegal.

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