Major fall in BTC price (16th Jan)

[jman0war]

Bitcoin and cryto classes now a fundamental part of Finance courses in some Chicago uni's.
More on the way.

Digital currency is now part of the classes’ discussions surrounding the definition of money, a core concept in courses that cover money, banking and capital markets. “My students are starting the class thinking about it now,” Black said.

Just as bitcoin has infiltrated conversations, headlines and financial exchanges, lessons on the digital currency and its underlying technology are springing up in university classrooms around Illinois. Some professors are altering lesson plans that before just grazed the subject, while some schools are adding entire bitcoin and blockchain classes to their course lists.

 

[Brendan Burgess]

Hi jman

I contacted a few lecturers and told them that this was a once in a lifetime opportunity to study a clearly identifiable bubble during the bubble phase and totally irrational behaviour by otherwise clever people. But the reaction seemed to be "Well our course for the year is set".

I am glad to see a few other academics recognise the opportunity.

The problem I face of how to profit from a bubble through spread betting or shorting would be very interesting. And the question I have asked in another thread "What is the right price to cash out at?" It is a really tricky problem of risk vs. reward - when you know something will go to zero, how do you profit by it without getting wiped out by a huge rise in the meantime?

These are theoretical most of the time, but there is a real live experiment underway at the moment.

Brendan

 

[Duke of Marmalade]

Bitcoin and cryto classes now a fundamental part of Finance courses in some Chicago uni's.
More on the way.

So? Academia is like everything else in America, heavily commercialised. In the competition for students a bit of crypto could be a big marketing gimmick, there are probably even those who think a course in crypto is a shortcut to vast riches. There are whole universities in America devoted to Astrology.

 

[TheBigShort]

"What is the right price to cash out at?" It is a really tricky problem of risk vs. reward - when you know something will go to zero, how do you profit by it without getting wiped out by a huge rise in the meantime?

Nothing tricky about it all Brendan, since you have asked the question here is two bits of my advice, take it or leave it - 1) if you are concerned about the real possibility of being wiped out, then cash out your profit now. Because;
2) declaring you 'know' something will go to zero but dont know when, is as about as useful as everyone knowing they will die but not knowing when.
What is the point of 'knowing' that something will return to zero if you have not a clue when that is likely to occur?

I suggest you follow your own advice that you offer for holders of bitcoin, and cash out now while there is profit.

 

[TheBigShort]

? Academia is like everything else in America, heavily commercialised. In the competition for students a bit of crypto could be a big marketing gimmick, there are probably even those who think a course in crypto is a shortcut to vast riches. There are whole universities in America devoted to Astrology.

You could right in fairness, perhaps its just a fund raising gimmick to sell lecture time and make a few bob.
But of all the target audiences they target - academic students studying business!
I dont know about you, but im guessing somewhere along the line either a professor or a student with similar insights as yourself would call this bitcoin stuff out for what it is?
Surely some of them share your views?

 

[TheBigShort]

I contacted a few lecturers and told them that this was a once in a lifetime opportunity to study a clearly identifiable bubble during the bubble phase and totally irrational behaviour by otherwise clever people. But the reaction seemed to be "Well our course for the year is set".

You couldnt convince them then?
Perhaps they already own bitcoin so not in their interest?
Perhaps the Irish housing bubble is part of the syllabus? Making the pitch of 'once in a lifetime' sound somewhat Del-boyish?

 

[jman0war]

So? Academia is like everything else in America, heavily commercialised. In the competition for students a bit of crypto could be a big marketing gimmick, there are probably even those who think a course in crypto is a shortcut to vast riches. There are whole universities in America devoted to Astrology.

Well reputed big, State Universities are not the same as tiny, private, niche ones.

It means that the generation of people coming up through uni today are re-thinking Money, and are into crypto.
My other half processes financial declarations of investors and reports that most people under 25 are listing crypto holdings among their assets.
Starkly contrasted with middle aged ones that don't own any, or don't declare.

There is a generational paradigm shift occuring; try not to get left behind.

 

[Brendan Burgess]

most people under 25 are listing crypto holdings among their assets.
Starkly contrasted with middle aged ones that don't own any

Would you not learn any lesson from that? People with years of experience investing, who have seen fads and bubbles are not buying into this nonsense, whereas people with very limited experience are buying it.

 

[Brendan Burgess]

There is a generational paradigm shift occuring; try not to get left behind.

Did you copy that from a discussion on the dot.com bubble? That's what we were all told then.

Brendan

 

[Sunny]

Well reputed big, State Universities are not the same as tiny, private, niche ones.

It means that the generation of people coming up through uni today are re-thinking Money, and are into crypto.
My other half processes financial declarations of investors and reports that most people under 25 are listing crypto holdings among their assets.
Starkly contrasted with middle aged ones that don't own any, or don't declare.

There is a generational paradigm shift occuring; try not to get left behind.

WOW! A generational paradigm shift with crypto currencies? That is the most extravagant claim yet. Most people under 25 are holding crypto currencies??? Really standing by that claim??

 

[newirishman]

My other half processes financial declarations of investors and reports that most people under 25 are listing crypto holdings among their assets.

Society and live must have really changed in the last 20 years if most people under 25 actually have *any* assets to speak of.
Most under-25's I know are busy spending their entry-level salaries on paying back student loans, rent, and whatever is left afterwards, booze.

 

[TheBigShort]

Would you not learn any lesson from that? People with years of experience investing, who have seen fads and bubbles are not buying into this nonsense, whereas people with very limited experience are buying it.

Is that what drove the dot.com bubble? Inexperienced investors?

 

[Duke of Marmalade]

There is a generational paradigm shift occuring

Ahh, so that explains why the Nobel Prize winners and all mainstream economic commentators have rubbished bitcoin.

 

[newirishman]

Is that what drove the dot.com bubble? Inexperienced investors?

That is pretty much true. As you will find, most (all?) bubbles are driven by inexperienced investors. Also known as the "greater fool" theory.

Warren Buffet, arguably somebody who clearly is not an inexperienced investor, did for example not buy into the dot com bubble.

Buffett suffered a 49% loss from Jun 1998 to Mar 2000. At the same time, the NASDAQ rose 140% and SP500 rose 28%. Despite heavy losses and public ridicule, Buffett stuck to his guns and wouldn’t touch internet stocks. Buffett’s ability to stay disciplined might be more admirable than his analytical skill.
At the time, I’m sure people were wondering if Buffett had lost his golden touch or if he would ever outperform the market again. A near 50% loss for a stocks investor during the biggest bull market in history doesn’t inspire confidence. But he had the last laugh after the bubble burst, gaining 80% over the next two years while the NASDAQ lost 72% and SP500 lost 28%.

 

[jman0war]

Most people under 25 are holding crypto currencies??? Really standing by that claim??

That's not my claim, stop attempting to put words in my mouth.

 

[PMU]

I contacted a few lecturers and told them that this was a once in a lifetime opportunity to study a clearly identifiable bubble during the bubble phase and totally irrational behaviour by otherwise clever people. But the reaction seemed to be "Well our course for the year is set". I am glad to see a few other academics recognise the opportunity.

I doubt there is much here for academics. Saying certain assets are in a 'bubble' is just an emotional statement, usually said after the fact. There is no standard model or framework, that I am aware of, that can be applied generally to asset prices to determine if the asset is or is not in a 'bubble'. There is no model you could have applied to Internet stocks in the dot.com bubble, i.e. from 1997 to 2001, to determine if they were in a bubble and then applied the same model to Irish property prices to 2006, and at that time determined whether or not a bubble existed. Similarly, when Irish property prices bottomed out in 2009 and 2010, and the Nasdaq in 2002 – 03, did a 'negative bubble' exist, or are bubbles a perceived 'high price' phenomena only? And if so why? Paul Samuelson said that bubbles occur when the efficient market hypothesis breaks down, but why should this occur? From this, if a definition of a 'bubble' doesn't take EMH into account it's lacking a theoretical foundation. So you can see why this is a path few lecturers would gladly go down.

 

[TheBigShort]

That is pretty much true. As you will find, most (all?) bubbles are driven by inexperienced investors.

This is a complete fallacy. The notion that inexperienced investors, in the main, can drive a bubble is simply not true.
Take the Irish property bubble for instance, and the associated bank failures, bank bailouts, high profile developers and investors who all got stung, badly.
All of whom were experienced in their respective fields.
Inexperienced U25's are not capable of driving a bubble, the market value of which stands around $250bn...where would they get that capital from?

 

[Sunny]

Well reputed big, State Universities are not the same as tiny, private, niche ones.

It means that the generation of people coming up through uni today are re-thinking Money, and are into crypto.
My other half processes financial declarations of investors and reports that most people under 25 are listing crypto holdings among their assets.
Starkly contrasted with middle aged ones that don't own any, or don't declare.

There is a generational paradigm shift occuring; try not to get left behind.

That's not my claim, stop attempting to put words in my mouth.

Where did I put words in your mouth?

 

[jman0war]

Where did I put words in your mouth?

Your reading comprehension is poor.
My other half processes financial declarations of investors, and reports that most people under 25 list crypto.

Do you believe that all 25 year olds are investors?
And of those investors, all of their financial declarations actually cross my wife's desk?

 

[Sunny]

Your reading comprehension is poor.
My other half processes financial declarations of investors, and reports that most people under 25 list crypto.

Do you believe that all 25 year olds are investors?
And of those investors, all of their financial declarations actually cross my wife's desk?

Right so you are now talking about generational paradigm shifts based on paperwork that crosses your wife’s desk. Really useful contribution. Thanks for that.