Bitcoins - about to hit $5,000 per coin today!

[IroNat]

So, let me understand it.

You guys are buying bitcoin/whatever-you-call-it with the hope that the demand from other people/institutions buying it will drive the price up so one day you can cash it out for profit.

Is this correct?

[Mayday]

So, let me understand it.

You guys are buying bitcoin/whatever-you-call-it with the hope that the demand from other people/institutions buying it will drive the price up so one day you can cash it out for profit.

Is this correct?

Correct.
Get rich quick. It works providing you time it right.

How's the crypto market gonna read that I wonder.. If CPI comes out lower than expected will the market go up because they believe stimulus will continue, or will it go down if they think they will raise rates?

The market wants to short BTC but they wanted to wait for the pump to happen first and then go in at exhausted buying pressure. It’ll be an interesting day, Saylor May already be playing with his new money so we could see all sorts of shit happen as he tries to re-ignite the market in order to save himself.

[Flexacon]

So, let me understand it.

You guys are buying bitcoin/whatever-you-call-it with the hope that the demand from other people/institutions buying it will drive the price up so that you can cash it out for profit in the multiples over and over and over again.

Is this correct?

Fixed it for you

And it's only hope if you enter the market without doing your due diligence.

[IroNat]

Ok, I can go with that.

Bitcoin mentioned below. 

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https://www.investopedia.com/terms/g/greaterfooltheory.asp

Greater Fool Theory
By Adam Hayes
Updated May 7, 2021

What Is the Greater Fool Theory?

The greater fool theory argues that prices go up because people are able to sell overpriced securities to a "greater fool," whether or not they are overvalued. That is, of course, until there are no greater fools left.

Investing, according to the greater fool theory, means ignoring valuations, earnings reports, and all the other data. Ignoring the fundamentals is, of course, risky; and so people subscribing to the greater fool theory could be left holding the bag after a correction.
Key Takeaways

    The greater fool theory states that you can make money from buying overvalued securities because there will usually be someone (i.e. a greater fool) who is willing to pay an even higher price.
    Eventually, as the market runs out of fools left, prices will sell-off.
    Due diligence is recommended as a strategy to avoid becoming a greater fool yourself.

Understanding the Greater Fool Theory

If acting in accordance with the greater fool theory, an investor will purchase questionably priced securities without any regard to their quality. If the theory holds, the investor will still be able to quickly sell them off to another “greater fool,” who could also be hoping to flip them quickly.

Unfortunately, speculative bubbles burst eventually, leading to a rapid depreciation in share prices. The greater fool theory breaks down in other circumstances, as well, including during economic recessions and depressions. In 2008, when investors purchased faulty mortgage-backed securities (MBS), it was difficult to find buyers when the market collapsed.

By 2004, U.S. homeownership had peaked at just under 70%. Then, in late 2005, home prices started to fall, leading to a 40% decline in the U.S. Home Construction Index in 2006. Many subprime borrowers were no longer able to withstand high interest rates and began to default on their loans. Financial firms and hedge funds that owned in excess of $1 trillion in securities backed by these failing subprime mortgages also began to move into distress.

Greater Fool Theory and Intrinsic Valuation

One of the reasons that it was difficult to find buyers for MBS during the 2008 financial crisis was that these securities were built on debt that was of very poor quality. It is important in any situation to conduct thorough due diligence on an investment, including a valuation model in some circumstances, to determine its fundamental worth.

Due diligence is a broad term that encompasses a range of qualitative and quantitative analyses. Some aspects of due diligence can include calculating a company’s capitalization or total value; identifying revenue, profit, and margin trends; researching competitors and industry trends; as well as putting the investment in a broader market context—crunching certain multiples such as price-to-earnings (PE), price-to-sales (P/S), and price/earnings-to-growth (PEG).

Investors can also take steps to understand management (the effects and methods of their decision-making) and company ownership (via a capitalization table that breaks down who owns the majority of company shares and has the strongest voting power).

Example of the Greater Fool Theory

Bitcoin's price is often cited as an example of the greater fool theory. The cryptocurrency doesn't appear to have intrinsic value (although this is an area of debate), consumes massive amounts of energy, and consists simply of lines of code stored in a computer network. Despite these concerns, the price of bitcoin has skyrocketed over the years.

At the end of 2017, it touched a peak of $20,000 before retreating. Attracted to the lure of profiting from its price appreciation, traders and investors rapidly bought and sold the cryptocurrency, with many market observers positing that they were buying simply because they hoped to resell at a higher price to someone else later. The greater fool theory helped the price of bitcoin zoom upwards in a short period of time as demand outstripped supply of the cryptocurrency.

The years 2020-21 saw Bitcoin rise to new highs, topping $60,000 and hovering above $50,000 for weeks. This time, however, large institutional investors and corporations such as Tesla and PayPal have been involved in the buying—and it is debatable whether or not they can be considered fools. So, perhaps Bitcoin is not an example of the greater fool theory, after all.

[Flexacon]

Ok, I can go with that.

Bitcoin mentioned below. 

>

https://www.investopedia.com/terms/g/greaterfooltheory.asp

Greater Fool Theory
By Adam Hayes
Updated May 7, 2021

What Is the Greater Fool Theory?

The greater fool is the one failing to take advantage of it all 

[Mayday]

Fixed it for you

And it's only hope if you enter the market without doing your due diligence.

Yup.

One could argue the larger it gets the riskier it gets as the odds of shut down/govt tampering increase.

El Salvadore adopting is a milestone event and will encourage a US reaction now.

[Flexacon]

Yup.

One could argue the larger it gets the riskier it gets as the odds of shut down/govt tampering increase.

El Salvadore adopting is a milestone event and will encourage a US reaction now.

I'm not particularly "real world" bullish on these Latin American countries adopting Bitcoin. Looking at the timing of it all. Banana republic nonsense.

I'm still waiting for the XRP V SEC verdict. If XRP win then it will be very difficult for the SEC to ever go after anyone else (those were the very words the SEC told the judge). The odds of things ever getting shutdown reduce drastically after that. It will be the launch key to finish this cycle with a parabolic bull run.

[IroNat]

The greater fool is the one failing to take advantage of it all 

As long as you understand the risks I have no problem with it.

Live long and prosper!

[Flexacon]

As long as you understand the risks I have no problem with it.

Live long and prosper!

But do you understand the rewards?

I've never cashed out profit on anything under a 100%. I consider 300% profit about average and I've taken much bigger profits, up to 4000% (I had to settle for 4000% and was actually disappointed I didn't get 5000%)

I've had losses, my biggest was around 50%, usually it's between 10% to 33%. Most of those wouldn't even have been losses if I chose to hold longer, but I  decided to close those positions and move my money elsewhere as I  believed I'd get greater returns there even with the losses factored in.

Most of us here are fully aware this profit model won't last for ever and we're just trying to maximize the the opportunities we have left. It's why I find it hilarious when people randomly chime in when bitcoin takes a dump. You imagine burnt fingers because of "The Greater Fool Theory". I see an opportunity to load back up and turn over even more profits!

[IroNat]

Flex,

You are someone who is on top of it which you have to be.

You may have (I don't know you) the knowledge, experience, and temperament to succeed.

Could be stock trading, options, bitcoin, penny stocks, commodity trading, real estate, tulips, etc.  All the same.

What's going on with bitcoin speculation is the same old, same old that has been done umpteen times in the past, albeit in different ways with different things.

If you are sharp you'll have some success.

Most will be chumps and will get fleeced.  That's the way it always goes. 

Survival of the fittest.

It's not something for me as I'm in a different stage of my life. 

I wish you great success.

[Grape Ape]

Fixed it for you

And it's only hope if you enter the market without doing your due diligence.

While I have not purchased $BTC, been watching it long enough to know that the spreads are there if you pay attention to keep making gains.

[Pray_4_War]

Greater Fool Theory can rightly be applied to shitcoins like Doge but coins like Bitcoin and Etherium have a lot more supporting them than that.

The US dollar is in deep shit.

[IroNat]

Greater Fool Theory can rightly be applied to shitcoins like Doge but coins like Bitcoin and Etherium have a lot more supporting them than that.

The US dollar is in deep shit.

No, there is nothing supporting Bitcoin.

There are 11 nuclear aircraft carriers and a bunch of nuclear submarines, each with 16 or so Trident nuclear missiles supporting the U.S. dollar.

[Flexacon]

Greater Fool Theory can rightly be applied to shitcoins like Doge but coins like Bitcoin and Etherium have a lot more supporting them than that.

The US dollar is in deep shit.

Greater Fool Theory does kinda apply to price valuations. More so BTC than ETH. ETH may even be undervalued.

[Mayday]

The rule for 2021 is the half of the month is for rallying. Second half is for correction.

RSI right at resistance now just as we come into a weekend. Next week is the back half of the month. Correction phase.

[Theoak*]

Flex,

You are someone who is on top of it which you have to be.

You may have (I don't know you) the knowledge, experience, and temperament to succeed.

Could be stock trading, options, bitcoin, penny stocks, commodity trading, real estate, tulips, etc.  All the same.

What's going on with bitcoin speculation is the same old, same old that has been done umpteen times in the past, albeit in different ways with different things.

If you are sharp you'll have some success.

Most will be chumps and will get fleeced.  That's the way it always goes. 

Survival of the fittest.

It's not something for me as I'm in a different stage of my life. 

I wish you great success.

I've  been as high as 32000%+ recently and still have not cashed out btc.  Each individual is different,  I do however earn yield and DCA roughly 1k a week into btc and will be that way for years to come.  If I want to purchase an income producing asset or need money then I borrow against btc.  I wont sell!  Eventually BTC will level out and then maybe ill sell to consolidate some debt.

[gib]

I DCA roughly 1k a week into btc and will be that way for years to come.  If I want to purchase an income producing asset or need money then I borrow against btc.  I wont sell!  Eventually BTC will level out and then maybe ill sell to consolidate some debt.

Nice. This is EXACTLY what everyone should be doing. And which we will see more doing in an automated way as payment cards and providers get more integrated.

[Mayday]

G7 conference happening on this weekend…….. and charts are looking for any reason to puke.

Knowing that the US has invaded countries to defend the USD will this weekend’s outcome be:

a) Bullish because Biden will embrace Bitcoin and ask others to do the same
b) Bearish because Biden will suggest restrictions on a Bitcoin and ask others to do the same

[gib]

G7 conference happening on this weekend…….. and charts are looking for any reason to puke.

Knowing that the US has invaded countries to defend the USD will this weekend’s outcome be:

a) Bullish because Biden will embrace Bitcoin and ask others to do the same
b) Bearish because Biden will suggest restrictions on a Bitcoin and ask others to do the same

Its a very interesting issue. Does the US, as the land of the free and dominant currency take the lead and embrace, or resist?

I suspect, whilst in a dilemma, they will eventually get to the former.

[IroNat]

I've  been as high as 32000%+ recently and still have not cashed out btc.  Each individual is different,  I do however earn yield and DCA roughly 1k a week into btc and will be that way for years to come.  If I want to purchase an income producing asset or need money then I borrow against btc.  I wont sell!  Eventually BTC will level out and then maybe ill sell to consolidate some debt.

Hmm...do you consider your purchases of bitcoin to be an investment?

[Mayday]

Its a very interesting issue. Does the US, as the land of the free and dominant currency take the lead and embrace, or resist?

I suspect, whilst in a dilemma, they will eventually get to the former.

G7 is going down the legal route on El Salvadore regarding their adoption stance.

Quite interesting when a country isn’t allowed by others countries to determine what they deem as currency. El Salvadore gunna be reminded this weekend that they need to keep the Empire happy.

[Humble Narcissist]

Its a very interesting issue. Does the US, as the land of the free and dominant currency take the lead and embrace, or resist?

I suspect, whilst in a dilemma, they will eventually get to the former.

They will resist if they are smart.

[Thin Lizzy]

Markets as a whole have been dead. Next week is the fed interest rate decision. Business should pick up one way or another.

[SOMEPARTS]

Markets as a whole have been dead. Next week is the fed interest rate decision. Business should pick up one way or another.

Sell in May and go away is stronger this year since people can travel  for vacation.

[French]