I red a bunch of financial books including some history of financial systems to learn to invest but also because I am just curious about how we got where we are.
It is interesting that the waves that we are experiencing are nothing new, everything has been repeating every 20-40 years for the past three centuries or more.
Yeah, bitcoin is nothing new. It is the roughly similar thing happening all over again -- people buying something they absolutely do not understand just because they see the value is going up. Investing is hard and here is this golden opportunity -- just put your money in and see it multiply. And for a long time this works because more people are putting their money in and expecting returns. Then suddenly for whatever reason the positive returns dry up (at the very least you have to run out of new capital at some point) and those same people who were only in to speculate now want to get their money back. But as the first are able to do it, the price starts to fall.
Then you get companies or individuals swarming nearby the stream of money because, hey, for every greedy person with capital you will find a greedy person without it. And lots of these people also want to get rich quick.
It really is just another pyramid scheme that lures in people who do not understand finances but want to get rich quick (and some who do understand but are just too greedy to pass on the opportunity or play with somebody elses capital), the difference being it looks way more legit and legal because of the number of investors and amount of capital.
The cycle length has something to do with how long people remember the previous painful lesson before they forget and do it all over again. Remarkably stable over centuries...
It is interesting that the waves that we are experiencing are nothing new, everything has been repeating every 20-40 years for the past three centuries or more.
Yeah, bitcoin is nothing new. It is the roughly similar thing happening all over again -- people buying something they absolutely do not understand just because they see the value is going up. Investing is hard and here is this golden opportunity -- just put your money in and see it multiply. And for a long time this works because more people are putting their money in and expecting returns. Then suddenly for whatever reason the positive returns dry up (at the very least you have to run out of new capital at some point) and those same people who were only in to speculate now want to get their money back. But as the first are able to do it, the price starts to fall.
Then you get companies or individuals swarming nearby the stream of money because, hey, for every greedy person with capital you will find a greedy person without it. And lots of these people also want to get rich quick.
It really is just another pyramid scheme that lures in people who do not understand finances but want to get rich quick (and some who do understand but are just too greedy to pass on the opportunity or play with somebody elses capital), the difference being it looks way more legit and legal because of the number of investors and amount of capital.
The cycle length has something to do with how long people remember the previous painful lesson before they forget and do it all over again. Remarkably stable over centuries...