Saturday, December 23, 2017

Is Bitcoin in a bubble?

Is Bitcoin in a bubble?
In November 2009, an article explained the second Rahu major period in the SAMVA USA chart. It discussed the boom of the 1920s, the "Roaring Twenties", which ended in a stock market bust, the collapse of banking and "the Great Depression of the 1930s".

Amongst other things, Rahu rules materialistic greed, manipulation, deception, confusion, and crisis. This influence is also felt in the sub-periods of Rahu. In the Venus-Rahu period (June 2003 - June 2006), a bubble developed in the housing market, based on corrupt mortgage securitisation practices, which ended in a bust, a banking crisis and a recession. In the ongoing Sun-Rahu period (June 2017-May 2018), we are witnessing a sudden eruption of popular interest in cryptocurrencies, which the public does not fully understand. While this is an international phenomen, its expression is being fully felt in the USA. Moreover, this bubble may now be in the process of bursting. Or as the well known economist Nouriel Roubini opined on Twitter on December 22:

"The first question that EVERY man or woman I meet asks these days -  even the many who can't tell the difference between stocks and bonds, ie who have ZERO financial literacy - is whether they should buy Bitcoin. True sign of The Mother of All Bubbles..."

The four stages of a bubble
This week, Bitcoin plunged below its $19.300 high attained on December 17, to $11.600 a few days later, before recovering some of the drop - which amounted to almost 60 percent at its trough. Many "investors" took a bath and for them this was a burst of the bubble. For others, the drop may be seen as a reflection of Bitcoin being a volatile investment vehicle, and thus a buying opportunity, to get their foot in the door for more gains. Whether Bitcoin surges again, the Rahu sub-period ends on May 8, 2018. By that time the investment euphoria will likely have run its course.

The founder of a top five ranked cryptocurrency (LiteCoin) had been commenting about its price and was criticised for having "a conflict of interest." He then sold his entire founding stake in the cryptocurrency, at the peak of the cycle. In doing so, he likely became a billionaire. Clearly, there are a few winners among the many losers. 

The results of the Rahu major period were dire for many households loosing their homes and jobs. The same was true, but to a lesser extent, in the sub-period of Rahu in the major period of a weak and badly placed Venus. In the far stronger major period of the Sun, the results of the Rahu sub-period are likely to be less serious, even if many may loose a lot of money. The key lesson is that in Rahu periods, people need to be cautious with their money! This is more so when transit Rahu, the current sub-period lord, has just gone stationary at 20° 50' Cancer and the most effective point of the 1st house of self in the 20° Cancer rising SAMVA USA horoscope. The transit station will last for three months. From this sensitive area of the chart, Rahu will also aspect the 5th house of speculation, 7th house of partnerships, 9th house of higher ideas, as well as the natal 2nd lord Sun at 23° 44' Capricorn and 7th house MEP. There will likely be significant tension with regard to these indications of the nature of Rahu during the stationary period.

And, yes, Bitcoin has been in a bubble (mania) phase. But the blow-off stage may have begun.

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