Sunday, November 17, 2013

Bitcoin Rises Over $500 - Its Collapse Will Start The New Gold Leg Up GLD, SLV, GDX, MUX, TNR.v


  ZeroHedge reports another amazing development with Bitcoin. While Janet Yellen can not see "Any Bubbles Around" the cryptocurrency is in a parabolic rise and crossing $500 valuation now. Our take is that it is the classic Bubble Ponzi Scheme in the development now and the higher it goes the harder it will fall from the sky. It does not mean that you can not make money or that Bitcoin is bad, just be very careful comparing Tulips to Gold. Everybody who is cashing out their Bitcoins at these or higher levels can receive our congratulations. Everybody who is providing cash for this should be careful.
  We have all classic signs of the Bubble in Bitcoin growing very fast and its collapse will ignite another Bull Leg in Gold. Here where we take Bitcoin as the very serious and positive groundbreaking development in the modern financial history. Nothing less than that. The magnitude and speed of its appreciation are showing that this moment of the real FIAT currencies alternatives can be very close now. 
  Bitcoin appreciation demonstrates in part the level of the real hunger for the alternatives to FIAT currencies now and how high Gold and Silver will go later once they can not be suppressed any more. Bitcoin has given to the Web generation the idea of  the Gold 2.0 and it has exploited it with meme speed of going viral. Its collapse will leave all the driving factors - apart from the pure Buble ones like chasing new buyers buying only because it is going up - in place and exodus from the FIAT based monetary system will continue, but will find its way to the time proven Gold based standard. 
  If you think that Bitcoin will go straight up to the sky and undermine all FIAT monetary system, please consider to make a research on its origins and how it could be manipulated as well. The simple act making its illegal with numerous real and fabricated concerns about its "limited amount" and "security" will do the trick at any time.
  We will throw a joke here as well: how can we be sure that it is not NSA with The FED - who are really behind it now? Who has the real picture of its full code and infrastructure? Who can guarantee that it is not compromised already or will not be in the future? Once we see the headlines that China is accepting US Treasuries redemption in Bitcoins, we will take our joke part out of this statement. Don't you think that it is too easy to get out from 17 Trillion of U.S. Debt?
  And another curve ball to your consideration, with Gold and Silver subject to the ongoing FED's 100-year War and all manipulations, how can you be sure that Bitcoin is not manipulated already? What will be better for the undermined authorities than the success of Bitcoin which will Kill the idea itself? Just run it up to $2000 and crash it to $50 - you can put your own numbers here. Is it possible? We will see very soon.

  Stefan Molyneux provides very good summary on the Bitcoin, his examples about the cost of transfers in the banking system in percentages are wrong, but other material gives very good intro for the subject. Please note the history of e-gold and Libery Dollars - this is where we see the highest regulatory risk: the more successful Bitcoin becomes the more will be the desire of the System to compromise it by all means.
  The video was done at Bitcoin level of 100 dollars. Story about the Pizza sold for 10,000 Bitcoins is particularly amazing with Bitcoin crossing today 500 dollars. This parabolic rise actually is the highest risk for Bitcoin believers to overcome. Will they stay after the run to $2000 and collapse to $50 or just switch to "the new and better" cryptocurrency? Just look what has happened to Gold after its run to $1900 - it is almost a dirty word now, but it is Gold and China is buying record amounts of it at this levels. Who will support Bitcoin after its bust?

Bitcoin Heist And Jim Rickards On Taper, Janet Yellen and Gold GLD, MUX, TNR.v, GDX

   "In this very interesting episode RT is reporting about the hunger for the FIAT Currencies alternatives and how it is driving the Bitcoin Bubble, but it is not The New Gold or even close to it - as we have written before. New security concerns are reported with the cryptocurremcy and Jim Rickards dissects the Currency War situation in the ECB, BOJ and FED race to the bottom. You will find out why Janet Yellen can not Taper and what is behind the Gold and why Gold Standard is still valuable option even today. 

  After our yesterday US dollar chart observations it has fallen out of bed so far today - maybe somebody already has received Janet Yellen's testimony for tomorrow's nomination hearing."

Claims: "Bitcoin Is Broken", "Security Vulnerability" - Bitcoin site is hacked, with $1million of the virtual currency stolen.

"Bitcoin potential fair value is of 700 ounces of Gold" - Not So Fast - it is Not Gold or even close to it. There will be a lot of opinions about Bitcoin and its stratospheric rise. Its wild gyrations of valuation show the appetite for the alternatives to FIAT currencies and ... another Ponzi Scheme in the making fuelled by speculators. Do not be too alert on this one thou: as FED's issued US Dollars are maybe even worse. Everything will be ended in a bubble one day - before it you can play and make some money.
  But we definitely have a very big problem when somebody is coming out - as ZeroHedge reports - with valuations for Bitcoin based on comparing Gold vs Monetary Supply in existence and then compares the potential "Bitcoin fair value" to 700 of ounces of Gold!?"

US Dollar And Gold This Week - Janet Yellen: "There Are No Bubbles And More To Be Done." GLD, MUX, TNR.v, GDX, SLV

 "In all normal circumstances Gold will be flying over $2000 long time ago, but we do not have the luxury of free markets with "The FED's 100-Year War Against Gold." Market can not be manipulated forever, particularly when underlining Demand is growing with the suppressed Gold price. China and other Asian countries are more than happy to accumulate cheap Gold and it is flowing from The West To The East at the disturbing record rate. COMEX is running on fumes now and LBMA banks are exposed to the Gold Bank Run with all-time-high leverage of 69 owners per ounce of deliverable Gold."


Bitcoin Rises Over $500

One day before the Senate's digital currency hearing titled "Beyond Silk Road: Potential Risks, Threats, and Promises of Virtual Currencies", Bitcoin is largely oblivious to any potential regulatory threats, either at the legislative or the city level, where as reported previously the New York superintendent is in a rush to enforce BitLicenses on businesses that accept BitCoin, and moments ago crossed $500 for the first time ever. Instead, it appears that as we also reported previously, the Chinese Bitcoin craze has reached the parabolic threshold, going so far as making Bitcoin an acceptable payment for real estate, which means that while for the time being Bitcoin becomes the alternative inflation protection medium for hundreds of millions of Chinese, all bets on how high it can get are off.

Intraday chart:

1 Year Chart:
1 Year log chart:

Curious where the demand is coming from? A week ago we showed a handy utility, FiatLeak, which shows where the BitCoin transactions are taking place:

Finally, for those curious what a "fair value" on Bitcoin may be, here is what we presenteda week ago, courtesy of Global Macro Investor's Raoul Pal:
So yes: Bitcoin is volatile. Very. That much is clear. But what is not so clear, and perhaps a key reason for this volatility, is just what the fundamental, or intrinsic value of BitCoins is when one strips away the pure euphoric momentum to the upside or downside.
To answer that question, we go to Raoul Pal, head of the Global Macro Investor, and his November 1st recommendation to "Buy Bitcoins"(when BTC was $210 so nearly a 100% return in 1 week) which among other things attempts to "value BTC using a macro framework" or, in other words, the first supply-demand driven fair value assessment of BTC."

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