For twelve years, bitcoin has been an asset bubble. When will that bubble burst?
I don’t know. Here are some charts that track where we’re at. Look out!
Bitcoin Bubble Update—December 12, 2020
“The important thing in science is not so much to obtain new facts as to discover new ways of thinking about it” – William Lawrence Bragg
Below, I present three asset models for bitcoin. No facts, just new ways of thinking.
Anatomy of a Bubble
This model comes from Dr. Jean-Paul Rodrigue. Robert Shiller’s work will help you understand how to interpret the chart. Below, I’ve put a smiley face where we are in the cycle.
Note, “time” is not drawn to scale, as I denote “Stealth Phase” at 2012 and “Return to the mean” in 2026.
Elliott Wave theory postulates that markets move in cycles of 5 waves up, three waves down. After the completion of each cycle, another begins. We are in Wave 3 of bitcoin’s second cycle.
Mock to Flow
Mock to Flow is my own proprietary data model. It enhances the better known “Stock to Flow” model with more bullshit.
Some say any chart that predicts bitcoin’s price as going up and right will be shown correct over time, but they’re wrong. Only mine works. M2Fers know the deal. We are at the blue arrow—WAY overvalued.
Disclaimer: I provide these charts for entertainment purposes only. Never take financial advice from a random blogger with a bitmoji as his profile picture.