As the Bitcoin bubble has burst (Bitcoin price under $400), I wanted to look back on Peter Schiff’s call on the Bitcoin bubble.
Here is one of his funniest moments from November 2013.
bitcoin
Bitcoin Crashes Under $400/Bitcoin
Bitcoin crashing through $400/Bitcoin. This level was exactly the point where the hype started, which means we have come under support levels. And yes, Bitcoin will crash to zero now.
Especially when the government says Bitcoin is an asset and you will be taxed on it, maybe even retroactively.
And China banned Bitcoin completely. Bye Bye cryptocurrency…
Bitcoin Correlation Breaks Down
One correlation in the Bitcoin world I follow has just broken down. I thought that the Bitcoin price was linked to the amount of unique Bitcoin addresses, but something strange is happening.
Even though the amount of unique Bitcoin addresses is increasing, meaning more addresses are being used for Bitcoin, still, the Bitcoin price is going down.
I don’t know what is happening, is this a bug?
Bitcoin Crashes
As predicted many times ago, bitcoin is a bubble. Finally, people are starting to realize this. Mt. Gox has now temporarily suspended withdrawals of money from their exchange. Everyone is now rushing to get their money selling their bitcoins. But the funny thing is, this will take more than a month to do so and it will also take 4 weeks to validate your bank account. So in total you won’t have your money for probably several months and now they suspend your withdrawal.
Do you really think people want to put their money in a virtual currency, knowing that their exchange could crash/go bankrupt at any time and their money disappear in a second?
Needless to say, the bubble has popped and that is visible in the following graph and it’s going to get worse.
Peter Schiff was right… bitcoin is a bubble. You won’t have these problems with gold, I can tell you that.
Mt. Gox Laying Off People?
As Mt. Gox is laying off people, I ask myself the question, why are they laying off staff? Is this just a hoax? Is the ponzi scheme falling apart? Are they about to shut down? Or is it just a little bit of cost cutting.
Technicals for Bitcoin have gotten worse
Remember this post?
It has just gotten worse.
Unique Bitcoin addresses have gone to a new low today.
While the Bitcoin price has gone up slightly.
I wonder when the Bitcoin price will break downwards.
Status on Bitcoin
Today, we have a good example of the importance of correlations. As I noted before in this post, the Bitcoin price is correlated to the amount of unique Bitcoin addresses.
If we look at the Bitcoin addresses, it has hit a new low today, since the bursting of the Bitcoin bubble, which I covered here.
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| Amount of Unique Bitcoin Addresses |
The Bitcoin price on the other hand has not made that new low yet as it would mean that Bitcoin should be going under $500/Bitcoin. But according to our correlation, this is bound to happen soon.
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| Bitcoin Price |
Let’s see if it happens.
And by the way. If you think Bitcoin is the best cryptocurrency in the world, then look at Mr. Ripple. A currency I have never heard before and it almost overtook the Bitcoin market capitalization in begin December. All of the people saying that alternative cryptocurrencies don’t hurt Bitcoin’s price are completely wrong.
Peter Schiff London Real Interview
If you haven’t had enough, Peter talks about Bitcoin again.
Peter Schiff Was Right: Bitcoin Version
As Bitcoin crashes another 10% (edit: now 50%) below $1000/Bitcoin again, maybe it’s time to prepare a “Peter Schiff Was Right” video for Bitcoin.
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| Bitcoin crash |
China doesn’t want the Bitcoin
Today, China announced a war on Bitcoin.
Chinese bank deposits shouldn’t be allowed to be transferred to Bitcoin as Bitcoin isn’t a real currency. I shouldn’t tell you how important this is. This means China is viewing Bitcoin as its enemy and encouraging its citizens not to believe in it. Instead they probably want every Chinese to have gold in its possession.
We saw a 20% drop instantly when the news came out and rightly so.
Because, when China does this, America and the whole world will follow in its footsteps. They basically made Bitcoin illegal. The normal people like me, who don’t want to do all this downloading of programs and all, want “comfort”. Which means, I want to just transfer my money from the bank to a provider like Mt. Gox. But if this is not possible anymore, I lose this “comfort” in trading. Do you really think that people will still want Bitcoins if the government and their banks turn against you? And we’re not even talking about my aunts, who only think about one thing: “What can I do with this Bitcoin, can I buy vegetables with it?”. The answer is “no”. They don’t have interest in transactions in Bitcoin, they want to have cash in their wallet.
Unless you want to trade Bitcoins on the black market by going to Bitcoin trading spots, I would be very wary about Bitcoins after this important event.
Correlation Economics (Backup) 
