BTC bubbles (opens in new tab)

> When a worthwhile Futures market hits, then BTC will really stabilize.

I agree that a futures market would be a stabilizing force, but other volatile commodities are still highly volatile even with futures markets.

The reason most currencies aren't volatile is that they have a central bank behind them actively manipulating their supply to make sure they are stable relative to some other asset or basket of goods. In the case of the USD, the dollar is roughly pegged to CPI. Unbacked commodities that aren't pegged by a central authority tend to be on a highly volatile random walk, with or without futures markets.

EDIT: Looks like I mistyped, maybe it looked like I was saying the opposite.

You are talking to the wrong kind on BTC users. Hopefully, most of this type of users are gone after the recent events. Aside from that, there's still a vibrant community of people who make useful stuff with BTC.

I'd almost be surprised if it doesn't hit that within a few weeks.

Not necessarily as a stable value, but in the last few days it's bounced around madly between about 50 and 100 dollars. I think at this point it's fair to say that nobody has any idea of the real 'value' of a bitcoin, and mad speculation is still the order of the day.

The issue with the 2008 bubble is that it was in Mortgaged Backed securities (and related derivatives). The Stock Market crashed because when the MBSes crashed, big banks were unable to give loans out to businesses. Without loans, many businesses were unable to pay their employees, etc. etc.

The bubble was specifically in Credit Default Swaps, a derivative of the bond market. The problem here is that CDSes were untracked and unregulated. No one knew there was a bubble because there was no way to see the "fair price" of a CDS. Companies were making deals on CDSes in their backrooms, away from exchanges.

When all of the companies involved in CDSes failed (because people failed to pay their subprime mortgage loans), it killed the banking industry... even those unrelated to the bubble. When your business partner goes bankrupt, you're also in danger. Again: there were lots of factories who couldn't get a loan to pay their workers... because the bank they relied on died in the whole crisis.

This leads to factory closings, lots of people losing their job, and then a general Stock market crash.

But again, Stocks weren't the bubble in 2008. The Credit Default Swaps in the bond market was the problem.

2008 wasn't a bubble so to speak. It was driven by de-levering contagion.

You'd do better to apply it to a 2001 tech index.

The difference is a bubble is driven by greed, and "greater fool" behaviors turning to fear and panic selling. De-levering contagion is driven by a position going down triggering margin calls which necessitate selling other positions which drive down prices which furthers the cycle.

I don't think that a bubble feels like a bubble to the participants driving it. I remember seeing this same phenomenon with gold prices a couple of years ago. So many people were adamant that "this time its different" even though we have seen gold spike and crash many dozens of times throughout history. Now that some of these people are losing lots of money in gold maybe their views change but it won't matter, next time will be same for the people driving it.

Yeah. Coninsetter looks promising and the beta is around the corner.