Bitcoin Explodes Above $14,000 - Korean PM Fears "Serious Pathological Phenomena"

Tyler Durden's picture

Well that escalated quickly...

Just a few hours ago, Bitcoin surged above $13,000 and now, on notable volume, it has reached the stunning $14,000 level... up 20% today...

The real surge began at 1715ET...

For those keeping track, this is how long it has taken the cryptocurrency to cross the key psychological levels:

  • $0000 - $1000: 1789 days
  • $1000- $2000: 1271 days
  • $2000- $3000: 23 days
  • $3000- $4000: 62 days
  • $4000- $5000: 61 days
  • $5000- $6000: 8 days
  • $6000- $7000: 13 days
  • $7000- $8000: 14 days
  • $8000- $9000: 9 days
  • $9000-$10000: 2 days
  • $10000-$11000: 1 day
  • $11000-$12000: 6 days
  • $12,000-$13,000: 17 hours
  • $13,000-$14,000: 4 hours

As Bitcoin has soared, it appears traders have sold other cyrptocurrencies to chase it as Ether has dropped in sync..

One of the regions in the world with the most active Bitcoin community is South Korea where so many Koreans have embraced bitcoin that the prime minister recently warned that cryptocurrencies might corrupt the nation’s youth.

As Bloomberg reports, while neighboring Japan hosts more transactions by some measures, Korea punches far above its weight: In the 24-hour period through Wednesday evening in Seoul, about 21 percent of the world’s bitcoin trades on fee-charging venues involved the Korean won, according to Coinmarketcap.com. The country accounts for about 1.9 percent of the world economy.

As Korean policy makers grow increasingly worried that the mania has gone too far, the nation could become a focus for bitcoin traders around the world. Korea’s top financial watchdog, which briefly roiled cryptocurrency markets with its ban on initial coin offerings in September, said this week that it has “grave concerns” about overheated speculation and has formed a task force with other government bodies to increase supervision.

While it’s unclear what measures will emerge from Korea’s cryptocurrency task force, the government seems intent on acting. The tax authority is considering a levy on cryptocurrency trading gains, Yonhap News reported on Tuesday, while Prime Minister Lee Nak-yon warned last month that cryptocurrencies could become gateways to pyramid schemes and other illicit activity if left unchecked.

“If we let things continue, I feel some serious pathological phenomena could occur,” Lee said.

Bitcoin’s stateless status appeals to some Koreans who’ve grown wary of keeping their savings in a country that shares a border with Kim Jong Un’s increasingly belligerent regime in North Korea, according to Kwak Keumjoo, professor of psychology at Seoul National University.

“People want to take comfort in something outside and beyond the country,” Kwak said.

Finally, we note that growth continues as Coinbase CEO today noted they currently have 220 customer service reps and will add 400 next year:

"it's very difficult to keep up with the user influx."

As CoinTelegraph reports, since ChinaRussia, and a few others cracked down hard on Bitcoin, it has been relatively quiet on the regulations front as Bitcoin has continued to soar unbridled. However, the head scratching on how to regulate continues.

The next fear, for Former Fortress Hedge Fund Manager Michael Novogratz, is that Bitcoin’s continued rise and prominence in the mainstream media could reawaken the regulation beast.

However, Novogratz still feels that Bitcoin is difficult to regulate and it will be hard for governments to make an impact immediately. Novogratz, who has been outspoken on Bitcoin for some time now, claiming it could be a bubble, but one to profit from has his concerns now.

"I've got concerns that if price movements go higher, we're going to get more regulation," Novogratz said.

 

“But I think it's hard to shut down. ... I don't think that's a probability."

 

"One of the big risks out there right now is that prices are moving so fast that regulators are going to get nervous," he added.

 

"I could legitimately see Bitcoin go $13,000, $14,000, $20,000, $25,000 and see somebody balk."

Novogratz adds:

"We're in a speculative frenzy. Period. Stop. How long can it go? Who knows," Novogratz said. "What's interesting about this is it's global."

Another reason that Bitcoin has hit such heights must also be attributed to it finding its identity. Many were scratching their heads as to what Bitcoin is - a currency or an asset - but recent changes have set it straight.

"Bitcoin is winning out as digital gold," Novogratz explained.

 

"I don't think it's going to be a currency... Nothing that volatile is going to be a currency."

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Anopheles's picture

The people who downvoted you don't understand what you said.   They belong to the ranks of "greater fools". 

Bitcoin IS a Ponzi.  There's zero equity in the entire bitcoin system.  Meaning exactly what you said, to maintain the price, it takes a greater fool to buy it at a higher price.

Mining new coins soaks up $10 billion a year in NEW CAPITAL at $15,000 per coin.  So just to maintain a price of $15,000 means a minimum of $10 billion, not including people cashing out coins they bought at much lower prices.  So, likely on the order of $25 billion a year in NEW EQUITY is required to maintain the price at $15k. 

What do you think will happen to the price when people are no longer blinded by "auction fever" and stop putting NEW CASH into bitcoin?

The ONLY way people can get their money out of exchanges is when greater fools put NEW CASH into exchanges.   Exchanges have zero cash reserves.  They get their cash to pay existing customers with cash from new customers putting cash in. 

The very definition of a Ponzi.

Ask Bernie Madoff. 

Nature_Boy_Wooooo's picture

Less than 2% of the world are currently using Bitcoin.

If that increases by just 1% in a year that alone will bring 10 million additional investors. Obviously Bitcoin is huge news these days so an additional 1% adoption annually is extremely conservative. Old goldbugs are dying and passing on their wealth while millennials are coming out of college after growing up in the technology age and will be looking for a new age way to store their wealth.

In the year 2020 the amount of Bitcoin mined per year will once again be cut in half.

Only a fool would predict the death of Bitcoin and not consider it's survival a very real possibility.

 

Anopheles's picture

What's your point?  Nobody acutally "uses" bitcoin.  It's simply a speculative instrument.  Right now transactions cost more than $10 each!

Nobody except a greater fool is going to buy a $20 pizza with bitcoin and pay a $10 transaction charge! 

The price of bitcoin WILL stop going up.  When that happens, interest in it, along with new users, will drop to near zero.  The price will collapse.  That's becasue right now it takes a minimum of $10 billion a year in NEW capital just to pay the miners.   And people "cashing out"?  how much, another $20 billion NEW CASH injections?  And that's just to keep the price where it is. 

So those 10 million new users you speak of must pony up a minimum of $3,000 a YEAR, EACH  just to keep the price of bitcoin where it is. 

Tell me, do you really think you are going to find 10 million people, putting up $3k each year?  How much NEW cash have YOU injected this year into bitcoin?  How much are you going to KEEP putting in, and NOT withdraw any cash?  a minimum of $3k every year?  without any withdrawals?  Ever? 

Becasue that's what it takes to keep the price of bitcoin where it is today! 

 

 

Golden Phoenix's picture

>Right now transactions cost more than $10 each!

If you're stupid, yes, a bitcoin transaction will cost you $10. If you choose to use a Segwit address the same transaction will cost you only 30 cents to get in the first block. 

 

Omega_Man's picture

how else are they going to short it if they don't get it up there?

Juliette's picture

The only argument I ever hear from those no-coiners is "tulips" ... which ain't an argument, after all.

People have simply realized that gold, silver and other metals are under the iron fist control of the bankster elite and get monkey-hammered down all the time, and that it won't change anytime soon. They have realized that they get no interest on the money in their bank accounts, if you factor in inflation. They realized stocks bounce up and down, the central bank fuelled rally of the past years notwithstanding, and even incl. the dividends you get a meager ROIC of around 5 - 20% a year. They know CFDs and other investment vehicles are a scam to enrich the banks only. They realize that houses for rent meana  lot of work and they are out of reach for most. Etc.

In short, you will never get rich with traditional investments. You might make a nice little profit, but it will only be "nice", with emphasis on "little". Bitcoin offers a way out of this misery. You can double your wealth with it in no time, or triple or quadruple it.

Maybe it is a huge scam, but then it is the best pyramid scheme in the world, since it is of global scale and its reach is unlimited. There are six or seven billion people on Earth. How many are in yet? Very few. There are lots and lots of bagholders out there just waiting to get in. This thing got legs to run for a few years more, minimum. Get aboard while you can!

Silver Savior's picture

I am planning to get ultra wealthy in gold and silver but I shun the USD price because it's meaningless. It's about the number of ounces.Crypto looks to be useful as a bridge to buy more gold and silver for the time being but I see it as worthless otherwise.

Juliette's picture

I am with you regarding the sentiment ... I love gold (silver not so much since it corrodes, and I hate that), but if it yields no profits except for the faint hope that some day, one day it will rise to its true (supposed) value, then what's the point? Central and commercial banks will live longer than us mortals do for sure, and they will keep suppressing the price of precious metals if they can.

Thethingreenline's picture

That’s whynTTGL sold all PM stocks....crap!

TTGL

0valueleft's picture

Thanks creepy first person talker, might revisit the sector now for the first time in 7 years.

Nature_Boy_Wooooo's picture

Gold and silver will never make you rich. They will keep you from going broke if the government destroys the value of the dollar. They will never increase in value like Bitcoin.

 

maxblockm's picture

I'm all for Bitcoin, but that is absolutely not true. Watch Mike Maloney's Hidden Secrets of Money.

Silver Savior's picture
So if the stock market and all other markets besides commodities are in big bubbles of their own then where is all the money coming from to buy crypto? Dude this is fuckin hyperinflation!
buttmusk's picture

where's the hyperinflation in actual tangible assets and goods? and no I'm not necessarily talking about gold and silver. it's a speculative mania.

 

obvious that the price will go up as long as there are greater fools because a huge chunk are hoarded or lost. the float is very small and relatively illiquid which creates these massive moves when speculators come in.

Juliette's picture

Butter price just doubled. Cacao went up a lot, they even changed the recipe of nutella to contain less of cacao now. Then apples and oranges (and the juice) went up  alot due to bad harvests. Etc.

buttmusk's picture

that's a supply issue. if its truly a crisis of confidence in fiat currency then the price of everything should be going up in anticipation of future debasement of the currency or increase in the cost of the government to borrow - which would force the central banks to either print to infinity or raise taxes significantly and scale back the government budget substantially to reduce the deficit and give people a reason to buy government bonds again. that would basically be self-imposed austerity to prevent a collapse of the financial system.

MagicMoney's picture

Bonds don't reflect it. Commodities don't reflect it. Is it hyperinflation or is it a speculatory mania? Which sounds more plausible? I think it is safe to say it is euphoria and nothing to do with inflation.

Thethingreenline's picture

Call it what you like, TTGL loves it!!!

TTGL

buttmusk's picture

if i could go long the suicide rate for the next year right now i would lol. hope you aren't in with any more than you care about losing

Jay's picture

Bitcoin survived exchange bans in China, threats of mining bans in China, a war between the smallblockers and largeblockers, a hostile fork and a failed hostile fork all this year and is still rolling. Dang.

slug200's picture

Aliens will hack shit coin easy

Son of Captain Nemo's picture

What a marvelous conundrum and juxtaposition (http://www.zerohedge.com/news/2017-12-06/largest-crypto-mining-exchange-...) at the same time!...

Keep telling yourselves that the Western Central Banking establishment isn't involved nor too desperate waiting for the U.S. Federal Reserve to pay off it's debt to use it as a safety net in order to scoop up whatever their vacuum cleaners can get ahold of before they LOSE EVERYTHING ELSE!!!

Omega_Man's picture

what's the next bubble to get in on... this one is almost shot

DC Beastie Boy's picture

Rare earth metals. As for precious metals, Ag will be the first element in the periodic table table to go extinct.

Silver Savior's picture

Yep it just makes sense to buy a lot of it now. It's crazy how more people don't catch on. 

 

seek's picture

Stuff that's not in a bubble. A this point it's probably PMs, it's the only asset class that doesn't seem to have gone up to insane levels.

Stawks, Real Estate, cryptos... everything else is in some stratospheric nosebleed fiat fairyland.

Someday Wile E. Coyote is going to look down.

 

buttmusk's picture

real estate prices are elevated but i wouldn't call it a bubble, at least not from what i'm seeing. its only in a few certain cities

EcoJoker's picture

Only four countries pumping it.  Nowhere near a bubble.  

x86cowboy's picture

Be careful with this run-up in price.

Wall Street will have their chance to short bitcoin on Dec 10th. Big money is running up the price. 

It's not far-fetched to think that once future contracts are ready that shorting the price of bitcoin, will happen.

With such a fast run up in price, there's no support levels, so we could just as easily drop as fast as we go up.

Juliette's picture

Wallstreet got no power over Bitcoin. Their futures will not help them controlling Bitcoin, unless people really start to believe in these futures. But why would they? Bitcoin did not have any "futures" for the past 8 years and we don't need them now. If people see through this charade as being a cheap Wallstreet attempt at rigging the Bitcoin price and consequently just ignore it, it will exert no power whatsoever over Bitcoin. And odds are good that the futures will indeed be ignored.

HRClinton's picture

Futures are designed to make the futures controllers rich, at the expense of everyone else.

Nature_Boy_Wooooo's picture

They had better get the Koreans on board.

USA USA's picture

Wall Street does not give a rats ass which side you are on, they still make money.

If you think Bitcoin is just air, Wall Street will trade in cash settled only, no Bitcoins involved.

If I you have a Bitcoin and Wall Street pretends to have a Bitcoin, who is the bigger fool?

TeraByte's picture

An ultimate proof than people are both nuts and desperate.
Next time you log in to your account “error 404”

 

Grandad Grumps's picture

It is a shame that Zero Hedge is involved in pumping this scam.

Exponere Mendaces's picture

Yeah, why they pump gold is beyond me.

But I guess they want people to give govt their money via treasury sales and approved coin dealers.

Go ahead, buy some gold - they need to finance another war.

 

EcoJoker's picture

I'm just here to announce that tmosely is a chooch.  That is all.

dsty's picture

bitcoin is backed by    rainbows

Juliette's picture

That is the beauty of it. Not backed by anything. That means zero counterparty risk.

buttmusk's picture

the lack of liquidity isn't a risk? hoo boy you're gonna be in for a surprise

 

not backed by anything means it is vulnerable to government attempts to destroy it or make it very difficult to transact with it outside of a peer to peer exchange. who would put their life on the line to save bitcoin?

RaoulDuke66's picture

Rubbish. It's backed by unicorns. Which are floating on top of the rainbows.

CashMcCall's picture

Actually, it is backed by a South Korean Fire Drill! 

Lazane's picture

Comex Bitcoin comming soon

unsafe-space-time's picture

There will be no inflation because of bitcoin. That's why bankers created it. If they wanted they would freeze bitcoin it by transferring  it back and forth billions of times per second. Bitcoin will go to trillions and everything else will be worthless and you will starve. The beast has been revealed .

buttmusk's picture

or on the contrary, maybe its a cleverly designed honeypot to destroy all the excess liquidity in fiat currencies from the failed qe experiments, and once it reaches the identified target market cap they will take it to zero overnight. a government agency could have created it and already have the decryption key for bitcoin. all they would have to do is announce it was decrypted overnight when the time is right and the value is instantly zero.

 

iamrefreshed's picture

The true winner in the end will be blockchain. The implications are tremendous in health care alone. I've bought my Bitcoin in the form of IBM, Cerner and Nextgen. I won't get rich but I'll sleep and not toss my cookies when the Exchange says "closed for maintenance".

Aubiekong's picture

Get ready for bitcoin one million and don't blink you might miss it...