Bitcoin in the News : 2017-06 More++

When you think of bitcoin, what other words come to mind? There are a few associated words in this blog's title -- cryptocurrency, blockchain, mining -- but another word that occurs more and more frequently is 'bubble'. Looking at the price movement for the past few months (see Bitcoin in the News : 2017-06 Price for last month) makes it easy to understand why.

My Google news alerts for bitcoin for the 30 days of June included seven days with the mention of 'bubble'. This compares to five days in May, zero days in April, three days in March, and scattered single references since I started tracking the keyword 'bitcoin' two years ago.

• 2017-06-06: Bitcoin is a 'bubble,' Mark Cuban says (businessinsider.com) • 'When everyone is bragging about how easy they are making money, it's a bubble.'
• 2017-06-09: Is bitcoin in a bubble? This metric suggests there’s more room to grow (marketwatch.com) • 'Bitcoin’s "P/E ratio" looks at the digital currency’s network value -- the number of outstanding bitcoins multiplied by price; this figure is currently $44.69 billion -- against its daily transaction volume.'
• 2017-06-10: Four Reasons Bitcoin is Not A Bubble: Analyst (cointelegraph.com) • 'Decentralization, Supply, Security, Fraud-proof'

Astute analysis or wishful thinking? Probably a bit of both. The next article makes no sense at all. (e.g. 'The main factor that makes a digital bubble impossible is market bipolarity.')

• 2017-06-17: There Will Be No Bubble for Bitcoin and Ethereum, Here’s Why. (cointelegraph.com) • 'Such a thing is impossible due to the market-influencing capabilities of Bitcoin and Ethereum.'
• 2017-06-22: The Bitcoin Bubble Will Turn Into Mania Before It Bursts (forbes.com)
• 2017-06-28: Ignore the Naysayers, there’s no Bubble in Bitcoin (newsbtc.com)

On the path from curiosity to bubble to mania, when does the phenomenon become a 'gold rush'?

• 2017-06-23: It's a gold-rush mentality in bitcoins, and many are at risk of losing big (indiatimes.com)
• 2017-06-27: Bitcoin Development Similar to 1800s Gold Rush: Expert (cointelegraph.com)

Here are two more signs of a bubble, impossible or not. Both stories are from mainstream financial news.

• 2017-06-02: Bitcoin start-up Coinbase aims for $1 billion valuation (cnbc.com)
• 2017-06-23: Bitcoin speculators are the new day traders (cnbc.com)

There's nothing about bubbles in the last two stories, but both are worth noting.

• 2017-06-19: Move Over, Bitcoin. Ether Is the Digital Currency of the Moment (nytimes.com) • Nathaniel Popper; chart comparing market caps
• 2017-06-23: itcoin: Why The 'Flippening' Failed - Winklevoss Bitcoin Trust ETF (Pending : COIN) (seekingalpha.com) • 'Many feel that as soon as Bitcoin is dethroned ... dubbed "The Flippening"'

The word 'flippening' was new to me.

Bitcoin in the News : 2017-06 Price

It's the first Saturday of a new month which means it's time to look at bitcoin price action for the preceding month. For the first month since March, the price at the end of the month was not substantially higher than at the beginning of the month. (For easy reference, my previous report on this blog was Bitcoin in the News : 2017-05 Price.) Here's the chart for 2017-06.

Bitcoin Price Index

Once again, I turn to Bitcoin price analysis (cointelegraph.com) for an explanation of the price movement. The first story echoes the last story in the '2017-05 Price' post.

• 2017-06-02: Bitcoin Price Recovers to $2,400 as Chinese Exchanges Resume Withdrawals

Then it was up, up, and away...

• 2017-06-05: Bitcoin Price Resilient to Economic Uncertainty, Hits $2,600 as Markets Plunge
• 2017-06-06: Bitcoin Price Hits New All-Time High at $2,933, Closing on $3,000

...in my beautiful balloon? So it would seem to some pundits.

• 2017-06-08: Bitcoin Price Can Reach $1 Mln: CNBC's Jim Cramer
• 2017-06-09: Bitcoin Price Will Hit $250,000 by 2020 If Seven-Year Trend Continues

Let's do the math. We'll eventually have 21 million bitcoins, which is 21 x 10^6. If each bitcoin is worth 1 x 10^6 USD, then the total value will be 21 x 10^12 USD, which is $21 trillion. Wikipedia, in Economy of the United States, informs,

The United States' GDP was estimated to be $18.46 trillion in 2016.

U.S. GDP is more than 20% of world GDP, so even then the math doesn't support Cramer's prediction. In any case, 3.000 is a long way from 1.000.000.

• 2017-06-12: Bitcoin Price Made History Again by Topping $3,000

Note that all of the preceding commentary took place in the first half of the month. Then we had a sharp fall of 20% -- in a stable market that would be called a correction -- then a rebound that 'retraced' (another word commonly used in market analysis) 50 % of the loss. So what's next? Up or down, it's anyone's guess.

• 2017-06-24: Bitcoin Price Stabilizes at $2,700, Another Surge Imminent?
• 2017-06-24: Cryptocurrency Bubble Will Burst: Aberdeen Asset Management

The last week of the month saw a slide to the level we saw at the beginning of the month, but there were no further reports. Am I seeing a pattern here? The good news is reported; the bad news isn't. Or is this just my imagination playing tricks on me?