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Bit Coin Bit Off More Coin Than it Could Chow By James Reed

     Most people I know think that I’m crazy:, for not jumping on the Bitcoin train, even a bit. But, in a recent article Mike Adams hoses down the present market euphoria about sky high Bitcoin:
     He makes the logical point that the Bitcoin bubble, like all bubbles will burst, and those who have put their savings in it will be squashed. Not only that, but it is going to be hard to even bail out of Bitcoin. Here is the maths:
“# of Bitcoins currently in circulation: Roughly 16,350,000
Current Bitcoin price vs. the USD: Roughly $2500
1,000 bitcoins represents roughly 0.006% of the total number of Bitcoins that exist
Average drop in Bitcoin price from selloff of just 1,000 bitcoins: $30 (see raw data of price moves at
Estimated drop in Bitcoin price that would occur from the sale of 10,000 bitcoins (just 0.06% of the Bitcoin supply): $300
Estimated drop in Bitcoin price from sale of 100,000 bitcoins (just 0.6% of the Bitcoin supply): $3000 (but wait, Bitcoin is only worth $2,500, so wouldn’t a selloff of 100,000 Bitcoins plunge the price toward zero? YES, it would.)
Value of Bitcoin if just 1% of current Bitcoin owners try to sell all their Bitcoins: Approaching $ZERO

     What percentage of current Bitcoin owners think ALL their Bitcoins are worth the current high price: 100%
Actual percentage of current Bitcoin owners who can unload Bitcoins without crashing Bitcoin values toward zero: Perhaps 1% – 2%
(and that’s generous)
Percentage of current Bitcoin owners who are going to learn a very expensive lesson in “tulip bulb mania”: Perhaps 98% – 99%.”
     Adams says that this is like a Ponzi scheme:, because the only way of sustaining the price of Bitcoin is to find an increasing number of new people buying into Bitcoin. But, this is not sustainable. The bubble is set to burst, as all financial bubbles do.
     Do you still have faith in the system after the Cranston affair, anyway?



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Monday, 06 July 2020
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