This is the first pop that I’ve felt is likely to be the last. A lot of people got burnt and are unwilling to jump back in.
https://plot.ly/~unchained/37/bitcoin-utxo-age-distribution/...
There's a lot to dissect in this chart, so take some time with it. Some observations:
* Most of the market is traded during bull runs. Each bull run sees a large segment of year+ holders take profits. Between bubbles, price-discovery is driven by short-term trading.
* Bear markets see remarkably little activity from holders. 'Hold waves' form between bubble cycles that clearly demonstrate that the majority of coins are held by 'firm hands' that bought in bull runs.
* Right now, a large segment of people that bought in the 2013 bull are starting to mature into the 5+ year bracket. A significant amount of coins are still being held in this way. It's remarkable to see it in real time. Neither the crash to $150 or the run to $20k motivated a large selloff.
* It took about 2 years after the 2017 bull for <6month bracket to fall to ~25%. It only took one year this time.
* Age distribution is becoming more bimodal: stubborn holders and large healthy active market.
* The current price crash is rather anomalous. An incredible 4% of coins in existence moved out of 3+ year bands very suddenly. This is among the 3 or 4 largest shifts, the others occurring in much different contexts. Given how sudden it was, and how specific the age band, I have my guess as to whether this is a cause or effect of the drop.
The main takeaway from this is that Bitcoin investors are remarkably willing to hold. "Hodl" is more than a meme, and the current crop seems about the same as previous ones in this regard, with a growing 'hold wave'.
I also think the last 'pop' was a lot worse due to the looming existential scaling threat. This has been addressed in an unoptimal way, but one that is remarkably true to Bitcoin and overall encouraging.
How does this look like in other markets? It sure tastes like survivorship bias. As in: "Investors are willing to hold" because everyone else already quit.
A comparison that's way more appropriate is tulips, but even so tulips aren't used as tokens in money laundering scams.
As opposed to the US dollar which is constantly used in money laundering scams perpetuated by some of the biggest names in global finance?
Let's also make sure we understand that the S&P500 (or any stock ownership) is owning _business(es)_. Businesses make money, and they return that money to their owners. Bitcoin is purely speculative and depends on someone else buying it from you, presumably for more than you bought it for. Good luck finding another batch of suckers to fall for this after that last round.
Crypto is... None of these. Whatever crypto is or will become, gold it, currently, is not.
As far as 5 years from now -- who knows where it will be trading. I suspect it will be higher than it is now, but there's never a guarantee on any of this.
My father-in-law didn't know what Bitcoin was in 2011, nor were the sort of newspapers he read covering Bitcoin in prominent articles. Neither of those things are true in 2018.
Obscure for who? I doubt very much your average grocery store cashier, barber, or airline pilot had ever heard of Bitcoin. The farthest-back data I can find (from 2013) shows BTC had a market cap of ~$800 Million. At its peak, it was over $600 Billion. Amongst the HN crowd, BTC was not obscure in 2011—you're right.
MtGox wasn't a secret. It was relatively well known and covered in the news, and I don't mean tech news. 2011, maybe 2012, was when bitcoin entered the public lexicon and it's only become more and more ubiquitous since.
EDIT: and I stand by my claim.
That said -- eventually the price will drop to the point where the price is entirely driven by Bitcoin's natural customer base -- tax cheats, money launderers, drug dealers, etc, and will probably in fact over correct.
Just for the sake of argument, let's said that 'natural price' is $500 or $600 a bitcoin -- it bottomed out around $300 last time and we've had a 'halvening' since then. So let's imagine the price drops down to below $1000, and stays around that range for a year or more. Then a new halvening happens, the price doubles to $2000. Maybe someone figures out how to do something useful with cryptocurrency? 3-4 years from now, people will have already forgotten about the last bubble and might FOMO again. Bitcoin has a long history of boom and bust with each boom being bigger than the last. It won't take much to convince people that another boom is on the offing.
All their prices are denominated in USD, all they care about is that the exchange rate is stable. As for the launderers, you can launder money with BTC just as well when it is $3/coin, as you can when it is $3 million/coin.
Funny I should read your comment about Bitcoin's use for criminal enterprise after I read about Goldman Sach's alleged hand in a multi-billion dollar fraud in Malaysia, or Deutche Bank's multi-billion dollar money laundering. Or going back a few years the Panama Papers and that entire underground financial apparatus that drummed up exactly zero long term outrage or changes. I'll be more inclined to believe crypto is only for thieves when you convince me that the existing financial system isn't also completely rife with thievery and cheats.
Still, I agree with vkou:
> Ransomware authors, heroin dealers and money launderers don't care how much BTC is worth - they only use it to cash out into USD. For them, the spot price is largely irrelevant.
That is, they'll still want to use Bitcoin, just not necessarily care about the spot price. The price is, I believe, driven up by gamblers.
Nailed that one.
I think the key is more to buy in early rather than near the top. Indeed if you time that ok you can sell half your stake when it goes 2x and so be kind of risk free for the rest.
If history is a guide bitcoin will go nowhere for 6 months to a year, then up up slowly, then have another silly bubble a few years later. So my infallible guide is buy in a years time, sell half when the price doubles, wait till there is a bubble and when it's super hyped but starts crashing sell out, probably about 1/3 below the next peak.
"past performance is not indicative of future results"
So no, it's not a sure thing to "happen again" and leading people on like that is just not right. Stop that.
Edit: I don't care what "claim" you stand by.
You are free to disbelieve, at your own expense.
About crypto, I sometimes make bold claims, that are downvoted [1], but I stand by them. And they come true [2] much more often than not.
Last time was about DOGE. Went quite up as predicted, went a bit down during the last crash but still like at position #21 today. And I still expect it to go higher - at least around #15 soon, unless something similar comes.
Before that, it was against ETH maximalism [3] - that ETH was not going to be #1 even while it was raising. I thought it was a good #2 but even that seems was too generous, as it is now in #3 and I can easily see it sliding down more.
Likewise, I state that BTC will bubble up, again and again, until something else offers better features. I haven't seem that "something" yet, hence my claim. The only question is how low it will go before it bubbles up. I'd say 1000. There isn't blood in the streets yet, the crash is just starting :)
[1] https://news.ycombinator.com/item?id=17684359
Investments aside, you should really try to get your hands on some Bitcoin testnet coins and play around. Alternatively, something like Defcoin (http://defcoin-ng.org/) is intentionally worthless and great for experimenting. It's neat stuff and helps you appreciate the technology, as well as appreciate the currency shortcomings that require smart people to try and fix.
Many of us talk about how this has happened and will happened again not because we want you to invest, but because it's old news and articles like this are super boring. We have spent time working with the technology and community and see value in it. Value you may not see without wanting to go deeper, but value that is real and exciting.