Are Bitcoin and Tulip Mania the same? No way! Here’s why

Investor takes out $127,000 loan to buy cryptocurrency, loses 85 per cent

Investor takes out $127,000 loan to buy cryptocurrency, loses 85 per cent
A 32-YEAR-OLD has revealed his eye-watering $3000-a-month “lesson” after making a seriously poor financial decision.
AN UNFORTUNATE investor who took out a six-figure loan to purchase cryptocurrencies that have since lost 85 per cent of their value says he hopes his story can be a “lesson” to others.
Reddit user Cryptohomie, who identified himself as a 32-year-old living in Abu Dhabi, posted a photo of his brutal repayment schedule to the Cryptocurrency subreddit on Monday.
The document from Emirates Islamic Bank shows monthly repayments of 8194 dirham ($3067) until December 14, 2021. The original loan is listed as 338,000 dirham ($126,500) with a total outstanding amount of 393,296.80 dirham ($147,200) including interest.
“Here is my bank instalment related to the loan I took to invest in crypto,” the user wrote. “Still three-and-a-half years to go until I’m freed. Until then, I’m working for nothing and I’m at 85 per cent loss. I hope it gives you a lesson.”
He said he bought Neo, Stellar, Litecoin, Ethereum “and some shitcoins that lost 95 per cent of their value already”.
For context, Neo has lost about 90 per cent of its value since peaking in January, Stellar is down about 75 per cent, Litecoin is down about 85 per cent and Ethereum is down about 80 per cent.
The price of bitcoin has fallen by around 70 per cent since topping $US20,000 late last year to around $US6000 at the time of writing.
In the same period, the total market capitalisation of more than 1800 cryptocurrencies tracked by Coinmarketcap has fallen from $US800 billion to under $US200 billion.
The Reddit user said he was “now mostly into” Neo, Ontology, Elastos, Stellar and HPB. The user explained that it was a “simple loan” banks give “almost instantly in UAE”. “You can get $100,000 within few days on your account without much verification,” he said.
“I’m 32 and it was my first speculative investment. I think it’s an age where we’re still unconscious and take lot of risk if we don’t have big responsibilities like a kid or bills to pay.”
Just in case, he added that “if there is any ridiculously rich Emirati who doesn’t know what to do with his money, feel free to contact me”.
“Miracles happen sometimes!”
Reddit users were part amused and part sympathetic. “I don’t think there’s anything we can say that you don’t go to sleep thinking about already,” one wrote.
Another said, “So this is why we hit $US20,000.” One noted that “people complained” when the banks stopped allowing crypto purchases on credit cards but it was “because of things like this”.
“Since this last run I’ve wondered how many people did this sort of thing and how much banks have loaned out for crypto,” another said. “I imagine there have and will be quite a bit of credit/loan defaulting.
Last December, at the height of the crypto mania, a US securities regulator warned people were taking out loans to buy digital currencies.
“We’ve seen mortgages being taken out to buy bitcoin,” Joseph Borg from the Alabama Securities Commission told CNBC. “People borrow money. People do credit cards, equity lines.”
Mr Borg said the problem was “innovation and technology always outruns regulation”. “This looks like tulips from Holland back in 1643,” he said.
“That doesn’t mean there’s no real value here, it just means perhaps the value is over-inflated. This is not something a guy who’s making $100,000 a year, who’s got a mortgage and two kids in college ought to be invested in.”
Regulators around the world have repeatedly sounded warnings about investing in so-called initial coin offerings (ICOs), often used by businesses to raise funds.
In February, an analysis of ICOs from 2017 found of 531 out of 902 projects had either failed or “semi-failed” — a rate of 59 per cent. That figure is likely to increase as more ICOs are launched at the same time as retail investors grow more wary.
The vast majority of ICOs typically range from convoluted blockchain solutions in search of a use-case, to outright scams — often both. Worthless digital tokens are derisively referred to as “shitcoins”.
In March, an even more scathing report by Satis Group concluded that a whopping 81 per cent of ICOs were outright frauds, 6 per cent failed, 5 per cent went dead and just 8 per cent made it to trading.
Many of those that do end up listed on an exchange are subject to heavy manipulation.
Due to their thin trading volumes, smaller digital tokens are frequently used in “pump-and-dump” schemes, in which a small group of individuals buy and then artificially boost the price through misleading statements before cashing out.
Many ICOs rely on celebrity endorsements to generate hype. In April, the founders of Centra — an ICO promoted by boxer Floyd Mayweather and music producer DJ Khaled — were charged with fraud by the US Securities and Exchange Commission.
The Australian Securities and Investments Commission has been cracking down on ICOs under delegated power from the consumer watchdog. In May, ASIC said it was “issuing inquiries to ICO issuers and their advisers where we identify conduct or statements that may be misleading or deceptive”.
In at least one case the securities regulator has taken action “to protect investors where we identified fundamental concerns with the structure of an ICO”. “If you are acting with someone else’s money, or selling something to someone, you have obligations,” ASIC Commissioner John Price said.
“Regardless of the structure of the ICO, there is one law that will always apply — you cannot make misleading or deceptive statements about the product. This is going to be a key focus for us as this sector develops.”
submitted by Austacker to AusFinance [link] [comments]

Here is why Bitcoin is no bubble

Some good comments I found on the internet:
"As long as people don't understand the Bitcoin system the spread fear will always cause dumps. Tulip and Bitcoin lol. Even compared to 2009 or the bubble there are many differences to Bitcoin. But the most important difference to understand is the following: The very definition of a bubble in the sense of bankers and "experts" is that a price rises without an appropriate countervalue. This happened with the tulip mania (flowers!), bubble (fomo in companies without any working products) and the housing bubble (granted credits without an countervalue -> to keep it simple). So what’s about Bitcoin? Well, Bitcoin has an countervalue and this value rises steadily. Its the cost to mine one. Every generated Bitcoin costs a significant amount of fiat money which represents its countervalue. - By the way to wipe out the argument "Bitcoin, as a digital currency is, is nothing worth is utter bullshit". A number printed on paper is worth nothing if you see it like that. Bitcoin is here to stay. It’s worth something. The market cap is very high because of demand, yes. This demand is mostly caused by fomo at the moment, yes. But Bitcoin has a significant countervalue and is built on a system which manages itself and is not controlled by a corporation with greedy managers who make money on the back of others. The market decides whats going on.
Bitcoin has been arround for over 10 years. This is nothing compared to tulip bulbs. Lmfao this is hilarious, more like digital gold.
This comparision is stupid. Tulips are easy to grow. They could make a tulip for everyone that’s what crashed the market. There are 21 million Bitcoins forever. That’s it. Bitcoin could be more valuable than gold. We don’t know how much gold there is in the ground, but there are21 million Bitcoins and everyone is gonna want a piece of that.
Bitcoin is a store of value, a tulip is a flower. The ‘Bitcoin Bubble’ is often compared to the tulip bubble that started in 1636 and rose over 6000% in a number of years. The tulip bubble was when tulips were brought into Holland from Turkey and the Dutch loved the novelty of this new, rare flower. As different colours and patterns of this flower emerged into the Dutch market, it became a fashion statement to own such rare flowers. In simple economic terms, the rarity of the flower (supply) was significantly over-weighed by the demand of the Dutch society, and let to the point where people were selling their houses, land and life savings for a flower! Why would they do such a thing? Because they believed that the tulip price would forever rise. The fear of missing out on a potential profit lead the whole nation into believing that a flower was worth more than a house. Many people argue that this is the case with Bitcoin, I strongly disagree with this comparison because Bitcoin and all the other cryptocurrencies use blockchain technology that will revolutionise the way we live. Blockchain technology is not a fashion statement. It is global in scale and once implemented will provides tremendous value to society. Just like the internet did when it was introduced.
They are already doing it. They know there will only be 21 million Bitcoins. Unlike their FIAT which is printed at will and the central bankers can go negative or do a Crypress and do a bail in. Decentralized money is the future. Hate all you want. I don't care I will lost my ass on bitcoin as I have the past 5 years :).
Its users are investors until its hits critical mass then the daily swings will be less volatile and it will function with moderate price swings. At 1% adoption rates this is basically the internet in 1996.
70 million accounts and coinbase alone is addding 500,000 a week. All the Bitcoin HODLers haven't sold they have went out and educated the masses about it the past 5 years. We are at the beginning of the biggest wealth transfer in history as the paper garbage central bankers print to infinity has an alternative.
Absurd. Tulip bulbs are a good, Bitcoin is a currency. The more investors the higher the confidence and the less likely for value to drop.
Isn't Fiat paper money the biggest bubble in history? Considering it's not backed by gold or any property and it can be printed. I would say Bitcoin is Fiat currency 2.0 the only difference is that Bitcoin can't ever become a bigger bubble than paper money due to its limited supply of coins.
My point is that both Bitcoin and Fiat currency is fake money. If you think Fiat currency is real than I have a bridge I want to sell you. In terms of fake money, Bitcoin is better because there is a limited supply. Ask people in Venezuela how their paper money is working for them. They learned the hard way, that's it's paper and a big bubble. I would take Bitcoin over Fiat any day of the week. Gold is the only real money that exists, there's a reason governments stake gold.
The value is that it’s safe, limited, digital and that its decentralized. That is all it takes. I think it’s here to stay. Governments and their media hate it of course.
The banks/fiat currency are the biggest bubble. How much money do "the people" of the world owe? $200+ trillion. That’s a huge bubble, but we allow the banks to continue with their BS. 200 trillion from interest (money from nowhere).
The tulip analogy is a really bad example. Tulips are: A. Perishable. B. Non divisible. C. Not easily transported. Therefore they could never be classed as currency.
1-If internet goes down, BTC will be the least of your worries 2-If internet somehow gets shut down then banks will not be able to make payments. 3- And most important, there are alternatives to sending btc via internet that EXIST TODAY already. Bitcoin can be transmitted via satellite (, via sms ( and there is even secure USB sticks with Bitcoin (coolest tech) (
What is gold's intrinsic value? You make jewelry from it? For $1300 an ounce? How much would it dropped if it would only be used for jewelry, electronics, etc. and not store of value? I would say over 90%. But you are right, gold is backed by its properties, just like Bitcoin.
What’s common with all bubbles it that the commodity has no real value. Tulips are flowers, real estate market was terribly overpriced, pyramidal schemes offer a stupid idea. Bitcoin is an invention, like railroad and electricity it provides a service of digital gold, but it's much more safe than gold and easy to transport. No one can print new Bitcoins. An no one can restrict it.
Everybody looks at Bitcoin, nothing else. Whatever you do, don't look at Central Banks printing confetti or heaven forbid please please DO NOT look at the derivatives bubble. Derivatives are in essence just bets placed upon other bets by gamblers with little to no ethics or morality but this is so considered safe and legit by the establishment, lol."
submitted by Fizsan to Bitcoin [link] [comments]

What are the potential bubbles of the near future?

So economic bubbles go way back to the infancy of modern capitalism. It's not surprising that one of the first modern economic states, Holland, also had one of the first bubbles, dubbed "Tulip Mania" in the 17th century. Get modern markets and modern credit in the same room and boom, a chance for rampant speculation.
Investopedia gives three separate definitions for economic bubble. I'm thinking primarily of the second, rather than the more generic first definition.
Typically, every rapid increase in price for some commodity gets labeled a bubble by someone. Sovereign debt, the housing market, even something ongoing like Bitcoin and cryptocurrencies.
Certainly an interesting question is why bubbles keep happening if their consequences are so harsh. Another is whether future bubbles can be predicted well given current data.
So do you see any bubbles, in America, your own country if you're a native of somewhere else, or globally?
In America, student debt has been labelled a bubble by some, though this Forbes piece gives some counterpoint to that argument. The Dow Jones has hit a new record, and the NASDAQ is the highest it's been since just before the dotcom bubble burst. Two current examples.
And from that, if bubbles are to some degree predictable, what policy options are potentially useful but not utilized (or underutilized)?
submitted by Kazmarov to NeutralPolitics [link] [comments]

“Bitcoin a Market for Miscreants & Millennials” Says ‘Commodities King’ Gartman

Hedge fund legend and billionaire investor Mike Novogratz may have viewed last week’s bitcoin price decline as an opportunity to purchase $15 million to $20 million worth of BTC at a discount, but market forecaster Dennis Gartman maintains that there “is no value” in the nascent cryptocurrency. Gartman, who has been nicknamed the “commodities king”, told CNBC’s “Fast Money” that while he believes blockchain technology, which Curriculum Vitae blockchain is based on, “has merit” and is “going to change the manner in which we trade…and invest,” he does have any desire to enter the cryptocurrency, like CVH coin, ecosystem as an investor or trader. “This is a market … for criminals, this is a market for millennials,” Gartman said on Monday. “This is a market for pure punters, but there is no value here whatsoever.” Parroting an oft-lobbed insult, Gartman argued that bitcoin’s rapid year-to-date price climb reminds him of Tulipmania in 17th-century Holland. “This reminds me so much of the tulip bulb mania in Holland, of other bubbles that we have seen and they always end badly,” he said. When pressed to explain his bearish stance, he argued that bitcoin’s price volatility inhibits its use as a currency. “How can you buy or sell a painting using bitcoin, when the change in volatility is 20-30-40 percent in the course of a week? It’s nonsense,” he said. It’s true that the bitcoin price remains highly volatile, but this line of argument does not consider that the bitcoin price will necessarily exhibit volatility as the global market determines its fair value. It also ignores the prevalence of payment processing services such as BitPay, which automatically convert cryptocurrency payments to local fiat currency at the point of sale to shield businesses from price volatility. These services also help companies use cryptocurrency to streamline supply chain payments across borders. Gartman’s skeptical stance on bitcoin is shared by many mainstream financiers, most notably the bombastic Jamie Dimon. However, this legion of critics is beginning to thin, and it is becoming increasingly difficult to claim that cryptocurrency only attracts criminals and young, presumably-inexperienced investors. Just this week, one of the world’s largest hedge funds — the U.K.-based Man Group — revealed that it is prepared to add bitcoin to its “investment universe” once bitcoin futures contracts launch on U.S. exchange CME in approximately one mon
submitted by Yililai to Bitcoin_News [link] [comments]

What is so Bad About Tulips?

Despite tulip mania, which is likely an exaggerated myth, what is so bad about tulips?
Tulip Bubble Mythology?
In the year 2015 tulip sales in the USA amounted to $50,000,000 usd.
The flower industry of which tulips are a part of accounts for 5% of the Netherlands gdp.
The tulip industry hardly dried up and blew away in the wind. It is still with us today playing a part in the world's economy.
Tulips are not indicators of bitcoin's future success or failure. It is like comparing apples to oranges. Or should I say bitcoin to tulips?
submitted by chronicwastage to Bitcoin [link] [comments]

Bitcoin - Digital Gold or Tulip Mania 2.0 Bitcoin Bubble Vs Tulip Mania. Are They Really Comparable? BITCOIN + TULIP MANIA + DOT COM MILLIONAIRES = FAKE NEWS Tulip Mania The first economic bubble Bitcoin and Tulip Mania, The New World Reserve Currency.

Many times we hear people say that Bitcoin will crash like the Tulip Mania in the 17th century. Imagine, close to 400 years later, people still talk about one of the oldest if not the first speculative bubble. Tulip Mania is when in the 1637, the contracts of Tulip bulbs in Netherlands went to unprecedented prices and later collapsed dramatically. Historians are still debating whether or not ... Related: What is bitcoin? Tulip mania . In the early 17th century, speculation helped drive the value of tulip bulbs in the Netherlands to previously unheard of prices. Newly imported from Turkey ... The distance of the Tulip Mania setting was basically isolated to Amsterdam and Holland with Turkey playing a role in the affair. Along with convenience factor, the extent that Bitcoin has reached cannot be paralleled to one nation, let alone a continent. Bitcoin has made an impression on the world and, although this can be attributed to the internet, it’s a fundamental difference between a ... Bitcoin's critics say the digital tokens are like the tulip bulbs of 17th-century Holland. They generated a wild, speculative rush that quickly disappeared, leaving behind nothing but pretty flowers and wrecked bank accounts. Bitcoin believers, on the other hand, want us to think about cryptocurrencies as if they were the Internet: a broad technology category that took some time to reach its ... Bitcoin’s critics say the digital tokens are like the tulip bulbs of 17th-century Holland. They generated a wild, speculative rush that quickly disappeared, leaving behind nothing but pretty ...

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Bitcoin - Digital Gold or Tulip Mania 2.0

Jamie Dimon, JPMorgan chief executive, says the enthusiasm for bitcoin is worse than Dutch tulip mania in the 1600s. But is the comparison between the two fair? But is the comparison between the ... Dec 15 – Demelza Hays, a cryptocurrency researcher at Incrementum and the co-author of their inaugural Crypto Research Report, discusses comparisons between bitcoin and the 17thcentury tulip ... Holland; 1637; the peak of the Tulip mania. A house cost the same as one single exotic Tulip bulb. Many analysts consider Tulip mania as the first ever economic bubble. Like all bubbles it was set ... In 1637 the price of a single lot of ten variegated leaf tulip bulbs reached that of an Amsterdam town house, the equivalent of Euro 2-3 million in today’s money. This was the era of Tulip Mania ... CORRECTION: I say India in the video, I mean Turks/ Ottoman empire. The Bitcoin Bubble VS Tulip Mania. Which one is worse? Are we going to recover with the crypto market or are we going down from ...