Bitcoin Mania’s ‘Secret Sauce’


For better or worse, bitcoin has everyone’s attention. Anyone even remotely aware of the cryptocurrency’s increasingly wild price swings would recognize a full-blown mania, just as those on the periphery of the Dutch tulip bulb craze of 1636-37 must have known that it would end badly. For now, however, bitcoin has been a big winner for virtually everyone who bought before Monday and held onto it. But it is attracting a growing following of speculators who think they can do even better by trading the swings. When the CBOE and CME unleash their respective bitcoin futures contracts over the next two weeks, it is likely to reduce intraday volatility, at least initially. But watch out if the mania lasts long enough for bitcoin option markets to build up a head of steam. Premium levels for bitcoin puts and calls will be stratospheric, tempting short sellers to get in over their heads. Way over. The Mother of All Short Squeezes is most surely out there, lurking behind a product that paradoxically will settle in cash. Although short sellers won’t have to cough up actual bitcoin, they will still have to cover positions gone dangerously awry whenever bitcoin fever spikes. When that happens, $1500 swings like the one that has occurred this evening will seem as mellow as church bingo.

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BDTR December 9, 2017, 12:18 am

Thanks, Rick, I’ll just point in response to the obvious insanity of any further reliance on the banker contrived monetary Ponzi effectively crippling all authentic, non-algo driven price discovery rendering lunatic market valuations and an utterly destroyed paper market of $ denominated gold.

I now see BTC as the revolutionary technology that it is. Revolutionary not merely as novel, but as the perfect weapon to segregate and protect capital. It’s untouchable by derivative schemes and while it may be officially banned somewhere or everywhere, it’s demonstrating excesses not of nominal $ BTC price, but the insane $ inflation propping bonds, equities, real estate and irredeemable student, consumer and government debt. Those are the real bubbles, BTC is but the reflecting barometer now of those hyper inflationary excesses that was once gold’s prime function.

Just as an ounce of gold will remain so irrespective of FED policies, BTC is finite, yet divisible, un-hackable and global money independent of all central banks. Since liquid monetary wealth has no prospect of value preservation in the current diseased monetary milieu, ..BTC is good money driving out the bad.

The response from the government may come as a shock, and very soon, according to golden boy carney barker Jim Rickards who contends with due urgency that we’re about to see the long awaited return to $ gold backing. It’s forced both by the death of the petro $cheme, death of the Saudi regime, and with a BTC nail in the coffin to shelter massive $ wealth during monetary reset volatility back to global gold backing of all major currencies.

So, for bugs the long wait may soon be over just at another forced nadir. Hard holdings are to find reset @ $10k Au oz. and we won’t have long to wait, ..says Jim with career ending confidence if he’s wrong.

60 days, tops. Likely sooner. Bitcoin is the future,
gold is hard insurance. Bitcoin forces this move to salvage the ruin of America by failed globalists. BTC does have intrinsic value as safe store of mined energy. It may not be tangible in an elemental or aesthetic sense, but if it successfully brings down and spanks kleptocrats, ..that’s intrinsic value enough, imo.

In any case, buckle up, and best wishes.

BDTR December 8, 2017, 4:00 am

Hey Rick,

So these musings on BTC are perversely amusing. I haven’t been around for discussions on any subject hereabouts for years now, only monitoring mailings these days. Until now, having been invited to retire my darkish rants long ago I’ve acquiesced. However, I’m still unrepentant on that score, I’m afraid, this market being the mere velvet side of hell. Nuffsaid on that.

Feeling oddly cheerful, I’d just like to point out that BTC is tech with a real difference. No tulip, a true closed-circut of monetary functionality, however limited at the moment, immune from arcane measures of typical, Fibonacci retracing behaviors common to traditional trading markets that will devastate any idiots salivating over shorting prospects using the coming derivatives.

The simple brilliance of this adaptable, blockchain use as protected from centralized banking’s monetary authority manipulation mechanisms is inspired by sheer blatancy of the dominant kleptocracy and its greedy market minions seeking mere exploitive opportunities to suck value. Well, they can go suck on this algo.

Admittedly, it does have some functional speed weaknesses, but nothing so debilitating as to render it worthless nor, for that matter, destroy it’s security in clear counterpoint value to all insanely inflated fiat and planned blockchain pretenders.

When one ponders the fantastic notional quadrillions in derivative instrument fiat out there defining ‘bubble’ to shield value from, the mere 7 figure prospect of BTC is no laughing matter nor unlikely despite the ‘wisdom’ of what now passes for ‘conventional’ markets technical analysis.

So, short of stripping BTC from electronic reality by force of systemic infrastructure destruction, the 17 million or so total remaining bitcoins, divisible to 8 decimals are, I think, capable to prevail against all efforts to dilute, discount or destroy its far yet to be realized force of secure, functional value retention and preservation of anonymous transactional integrity.

I’ve read so many criticisms that decry the ‘tulip’ quality of price action, but that’s where flowery comparison dies. No tiptoe relationship beyond that familiar parabolic superficiality exists. Here we have a different crypto-flora altogether than anything heretofore presented as currency in this or any other era of which we’re aware.

Then, a real bargain still under $100K. There’s nothing else like it absorbing/reflecting the true excesses of central banking’s mad money matrix.

This ain’t no party, ain’t no disco, ain’t no fooling’ around. It’s more a do or die proposition for transitional purposes of wealth preservation to what comes after the fall. The cliff looms.

There are many pretenders to avoid in the token arena, Bitcoin is a class of its own. Ironically, it will prove gold’s best friend as authentic money liberated as well from its paper prison.

No worries, bite that bullet, git some bit, ..and soon.


Rick Ackerman December 8, 2017, 4:27 pm

Nice to have you back in the forum, Ralph. While I agree that bitcoin is a welcome alternative to official money, I hesitate to compare it to something so real, beautiful and useful as gold. The thing that most troubles me about bitcoin is that it has no intrinsic value. This makes it inferior, even, to fiat dollars that ultimately could be valued as “shares” of USA, Inc. As to comparisons between bitcoin mania and Tulip-o-mania, I think the cryptocurrency craze more closely resembles the South Sea Bubble. Many companies sprang up to exploit the public’s hunger for investments in trade with the New World. In this instance, we should all be uncomfortable with the growing crowd of companies that have been created just to exploit the insane demand, much of it purely speculative, for digital currencies. RA

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