From my perspective, watching the markets since 2013, the 2017 boom was caused by Ethereum. Before Bitcoin shot up, Ethereum had shot up from $8 in December 2016 to nearly $50 a couple months later.<p>Now, Ethereum is a novel innovation on blockchain tech. The smart contract hype was very real at the time. (For the record, I still think smart contracts have tremendous potential) ETH had navigated a fork, secured corporate alliances, setup several foundations to promote work and was starting to generate a lot excitement around projects like Augur, Ox, etc. Then on top of that, the ICO boom happened when several projects raised tens of millions of dollars. That caused a run on ETH.<p>ETH boomed and then BTC followed, at least for the 2017 boom. And then the speculators danced between altcoins, Tether, Bitcoin and ETH, trying to maximize their returns while paying little attention to fundamental adoption.<p>I think we've seen certain technologies take over markets very quickly in the past couple decades, like desktops and wifi and mobile and then smart phones and social media...that we've gotten used to rapid disruption in tech. However, with financial tech like blockchain and crypto, it necessitates slow adoption. Why is this? Because it's real money on the line. It's cool to move fast and break things when it's an app or a fitness tracker, but when it's significant amounts of money on the line, maturity, trust, and security are tantamount.<p>I still think blockchain will win in the long run against legacy tech. But it will be a slow disruption.
Some great alternatives Tether and Bitfinex are MakerDAO and Uniswap. The first one offers a decentralised & transparent stable-coin called DAI. The second one is a decentralized exchange that is also 100% transparent.<p>These are transparent because they're running as programs on top of of a blockchain (Ethereum). Each and every state change is recorded and the systems can be audited in real-time.<p>The Maker DAI stablecoin currency is backed by collateral (Ether), and it's currently overcollateralized by about 350%. The system has been remarkably stable, even in the face of the bear market, which resulted on some crazy swings in the price of Ether.<p>DAI also has a few fiat on-ramps, including Coinbase and Kraken. You can also mint DAI yourself - there's a tutorial on Coinbase where they give you $20 DAI for free, <a href="https://www.coinbase.com/earn" rel="nofollow">https://www.coinbase.com/earn</a><p>What's more is that since these systems are essentially programs (they can be used and called by other programs as "library" ) which means that they can be used as lego bricks to build new things. Some examples are "Pool Together - <a href="https://www.pooltogether.us"" rel="nofollow">https://www.pooltogether.us"</a>, which is a no-loss lottery system. It combines MakerDao's DAI coin and a decentralized lending system called "Compound".<p>Please be mindful that all the above projects are still considered experiments and cutting-edge stuff. It will probably still take a few years to mature - however, a lot of new opportunities seem to be opening up in this area.
On a ski trip I took in 2017, I was in line to buy a lift ticket one cold December morning. I remember overhearing the winter bros (the ones that usually talk about gnar and their steezy tricks) talking about installing Coinbase and buying Bitcoin.<p>I wouldn't underestimate the amount of retail investors that speculated on Bitcoin during that time. It was on major news networks in America, but also on national networks outside the U.S. My uncles and aunts were calling me asking how to buy Bitcoin outside the USA. The FOMO was real back then. Did Tether play a part in the grand pump? I'm sure it did, but I imagine it was more of a catalyst, and not the primary driver as the original study suggested.
Having been through that bubble, I'm fairly confident FOMO had a huge effect. Every single person I know was asking how to buy some. You can even see it on Google Trends[1].<p>It's possible that the very first initial bump was manipulated (and crypto is definitely manipulated each and every day...), but the crazy increase afterwards probably wasn't due to a single entity.<p>1: <a href="https://trends.google.com/trends/explore?date=today%205-y&q=bitcoin" rel="nofollow">https://trends.google.com/trends/explore?date=today%205-y&q=...</a>
Thank you for bringing some basic logic back to the table.<p>People love to imagine that odd phenomenon have simple solutions. This whole "tether was the sole cause of the bitcoin bubble" theory is completely ridiculous.<p>Go into a random bar in December of 2017 and you would hear people talking about btc and altcoins...
I was tired of hearing this crap!<p>This is when everyone finally heard about Bitcoin after the runup. And continued it until the overexuberance ran out of steam. Not like it’s the first time that happened.
> Perhaps the takeaway is that when banks refuse to do business with crypto traders, or when a government bans trading altogether, it doesn’t stop traders from trading. It just forces them to find creative solutions. If it were easy for crypto exchanges to use the traditional banking system, there would be no need for Tether at all.<p>This is a point not many seem to understand.
I find it difficult to defend Tether. I leave the investigation to regulators. But assume Tether team has good intention and try to do the right thing, it is easy to make mistake. Tether software may have had a bug that inflates Tether coin over reserve. This is a problem with permissioned money system. It is difficult to audit and verify transactions.<p>I think Libra is an improvement. They use open source software. But it is still a permissioned money system. There's room for error. Who would be responsible for the damage? I think every participants need to share the responsibility. I've advocated for a new category: decentralized and digital native crypto with constant inflation. Permissionless is a key feature. It provides many advantages over permissioned.<p><a href="https://bitflate.org/post/2019/11/05/tether-problem-highlight-the-need-for-inflating-cryptocurrency.html" rel="nofollow">https://bitflate.org/post/2019/11/05/tether-problem-highligh...</a>
article titles are <i>topic suggestions</i> to espouse pre-existing beliefs, exhibit a<p>yesterday had people saying “Aha! I knew it” alongside anecdotes that completely neglected the role of a crowd and media to support their fictional higher standard for a bitcoin pump over how literally any rally works<p>today has different people saying “yeah this makes way more sense” because of the role of actual distinct buyers. this article is just using its platform to surface that explanation higher
The bitcoin "bubble" was caused by an invention in the ecosystem. Bitcoin was "stuck" for a long time around $300, because it is not much good @ 10 mins tx time.
Then a solution was published, the lightning network whitepaper. A mere 5 days later volume exploded and a period of 6 months of accumulation occurred where price was contained by large bid / ask walls. Volume dropped off after this point and the price rocketed up. The ultimate destination was the joint mcap of visa and mastercard, which it would in theory now be able to compete with at some point, which worked out at 18k per coin at the time.
The collapse afterward is due to the fact that it must be used in this way and at that tx magnitude to justify that valuation. Your basic buy the rumour sell the news variation. It might thus range around 10k for a long time.
Whether those who accumulated used bots or tethers or both to drive the price up rather than it being organic price action is debatable, and it seems difficult to prove.
What is interesting to me is how fast money went to work on this after the technical hurdle was overcome.
There was no bitcoin bubble. Bitcoin is currently 50% down from the high mark. That is not a bubble. After actual bubbles, the low mark is may be 90% or more below peak.