Bitcoin Crashes Again, Coinbase Suspends Trading: What, Me Worry?

Bitcoin is down over 20% in wild trading. Coinbase suspended trading. Did the bubble finally bust?

Coinbase, the most popular site for cryptocurrency transactions in the U.S., has suspended all trading activity today amid a crash in cryptocurrency prices.

A statement on the company’s website this morning read, “Due to today’s high traffic, buys and sells may be temporarily offline. We’re working on restoring full availability as soon as possible.”

Senseless Statement

The statement regarding "working on restoring full availability" makes little sense.

What does it take to restore availability? A decline in traffic? You got one. There is zero traffic now.

Bubble Finally Burst?

Did the bubble finally burst? I have no idea, but the true believers are out there wishin' and hopin'.

Despite the plunge, many of the top 16 cryptocurrencies are still up for the week.

Feelin' lucky dude?

Proponents still claim Bitcoin will get to $1,000,000. Their rationale makes as much sense as the myriad of dotcom-bubble justifications we saw in 1999.

Buy the Dip?

Be my guest. Someone, somewhere will always buy the peak of the bubble. Don't worry, this may not be it.

Mike "Mish" Shedlock

"The statement regarding "working on restoring full availability" makes little sense."Actually the statement makes perfect sense, its just a matter of interpretation, if cryptocurrency scam is going down, there are availability issues selling your1010101, if cryptocurrency scam is going up, availability issues are non-existent and you can buy 1010101010101010101010101010101010101 to eternity.

“It’s not a bubble, it’s not a bubble, it’s not a bubble...”

5 days ago my Uber driver was talking bitcoin bitcoin bitcoin. lol.

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Buy the dip!!! Sell your kidney, take out a second mortgage and buy the dip! To the mooooon!

A good time to swap Bitcoins for Euro Junk bonds? At least the CB's will buy in the bonds. Reward free risk. The new normal. Party hardy.

20% is just a few weeks’ worth of gains. The clear majority of coins are held by people who bought them in the hundreds at the latest; most with little to no exposure to trading in other assets. So, while 20% may be significant in large, established asset markets consisting primarily of seasoned traders; for Bitcoin it’s just another day at the make-believe, dayumm-I’m-rich-now, office.

Much more fundamental problems remain wrt lack of provable, or even default, anonymity. 50 years from now, the blockchain in it’s entirety will still be available for anyone to mine. Utilizing the kind of computing power and mining advances that will be available at that time. Potentially unraveling, in minute detail, entire lives’ worth of everything someone spent. Concerns like that is what does, and will, keep people from adopting Bitcoin, as currently constituted, as a currency for serious use.

Another fundamental problem, this time pertaining not to Bitcoin as a currency, but rather as, today, a Casino: You’ll never have truly fast, semi instantaneous, settlement, broadcast and network wide acceptance of transactions in a distributed currency; where fixing transactions for posterity require real work. So, you’ll always be prone to “flash crashes,” lack of access, indeterminate pricing etc., during minipanics and other spikes in desired trading volume. Gold speculation would be problematic as well, if every little trade required moving the physical metal from location to location around the world, with no one knowing exactly who owned what for the duration of transit. Hence, if Bitcoin speculation is to have another leg up in volume, the action will likely have to be in centrally traded and settled derivatives, like the ones created in Chicago. Which are tough to price efficiently, hence reserve and hedge for, hence make efficient markets in; in a market with huge, unpredictable, ownership concentrations in underlyings, owners with few externally imposed inhibitions against behaving irrationally, and historically almost comical volatility.

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