My favorite quote from the article:
“as long as enough people believe a lie, it may as well be the truth, until their faith evaporates that is.”
In short, Tether issues (not mines) its own digital currency claiming it is backed by actual dollars in a bank. It then uses its recent issued currency to buy Bitcoin. The Tether digital currency supply surge coincides with the bitcoin price surge.
Sounds like yet another rendition of the bigger fool hypothesis.
2 thoughts on “Bitcoin Only Has One Way To Go If This Is True – coin | Seeking Alpha”
Interesting take Dr. Moore. I agree with you that Bitcoin and cryptocurrency alike are not sustainable, but as writers and experts reach for the one factor that will cause a crash I believe there will be many factors that will contribute to its inevitable demise. Whether it be hackers or the introduction of futures contracts to short the position we cannot pinpoint the pending bubble to one cause and effect. Moreover, as we analyze all perspectives one can argue against the “bigger fool hypothesis theory” at least for now. I believe we can agree that most smart money moved to Cryptocurrency because the transactions are pseudo-anonymous and it is hard for the IRS to monitor capital gains. Well, that is all about to change it seems that the powers to be are getting smart to these tactics (see: https://techcrunch.com/2017/11/29/coinbase-internal-revenue-service-taxation/). When cryptocurrency is no longer a safe haven to hide your money from taxes that will be the breaking point in confidence and we can expect a major correction. Until then I do not see a major change in the current trend.
I agree that there are a confluence of factors,. In fact, you correctly mentioned the tax evasion angle and that adds to the growing list of factors. However, I disagree with the following:
“one can argue against the “bigger fool hypothesis theory” at least for now. I believe we can agree that most smart money moved to Cryptocurrency because the transactions are pseudo-anonymous and it is hard for the IRS to monitor capital gains. ”
From my perspective the bigger fool hypothesis does apply because “uninformed” money has moved into crypto currency. This is textbook “shoeshine boy giving stock tips.” I am sure you, and many others, have heard the fever about buying bitcoin from many people who know little to nothing about investing.
So, I see it as a matter of when, not if, some bigger fool is left holding the worthless bitcoin bag.