Topic: Bitcoin as an investment (Read 3915 times)

Yep, and it will no doubt be effective to a degree. But next year bitcoin won't have to work very hard to put in very high YOY % gains. The cynical in me might even suggest this will be timed to correlate with the opening up in the US of bitcoin to further investment in products such as an ETF or a US based exchange!

You could say the exact same thing for Gold and Silver... if Russians aren't buying it as a hedge to the ruble, then PMs are surely "finished". But we are not really factoring in market manipulation and perception management. For Bitcoin in particular, the idea is to have Bitcoin portrayed as the worst investment of the year in a large number of financial and mainstream articles.

I know Mark Karples "found" 200000 bitcoins down the back of the couch in an old wallet he had "forgotten" about. Maybe there are some stolen bitcoins hidden down the back of another couch.

Cold storage is simply an address assigned to a wallet that isn't connected to the internet.  The perp could have purchased a laptop, opened a wallet, transferred the stolen Bitcoins to an address of that wallet, saved the wallet to a thumbdrive, smashed the laptop with a hammer and tossed it in the Seine.

A record of the stolen Bitcoins getting to that cold storage wallet exists in the blockchain but those stolen Bitcoins can't be moved to any other address without bringing that address in the wallet.dat of the thumbdrive back onto the internet and getting it seen by the blockchain.

Any other stolen MtGox Bitcoins that aren't in cold storage would have been mixed into some existing online accounts that don't maintain a history of each and every fractional Bitcoin's history giving the holder the argument he can't tell which are which?  But it can be shown that X number of stolen Bitcoins did enter some account address.  If the mixed Bitcoins are held by a company holding Bitcoins for many users and not differentiating which are which the company claims it's not responsible and not to be held accountable for those stolen Bitcoins that it acquired?

Are there any other places the stolen Bitcoins can be?  I understand the double spending of Bitcoins on MtGox was only a small fraction of those stolen.

Only if Mark Karples or one of his employees stole them.

So, perhaps the price had reached its stable low and is rebounding a little.

The latest contact from those handling the MtGox debacle say they've contracted with a company to "recover" stolen Bitcoins.  How I wonder.  Steal them back perhaps?

truth! 
had thought of it the other day

Sounds like a plan.

why not an investment?

you buy bitcoins today  $ 320.00
after about 20 (maybe 10 or less)  days worth $ 400.00

you sell and earn from just over 20%, in well under one month!
opens a loophole to make an investment, so why not do it

Just ignore the trolls, they aren't worth the effort.

Covered lots of bases, really nice summary of a perspective of the current situation.

I find it hard to believe that the "spikes" were the result of BTC being purchased on behalf of those whose money was directly threatened.  That occurred during a time when news events directly catalyzed market movements.  A couple years ago, you could day trade successfully just from reading headlines.

One of the early big spikes in Bitcoin value was when Russian money in Cyprus banks had been threatened.  I can't envision the Russian money completely trusting the Cyrpus banking system ever since but even after almost seeing reverse interest rates on savings (didn't the Swiss just do that?) they perhaps trust it more than Bitcoin.  (Hope Karpeles was looking in a mirror when he gave that finger.)

One word reply: NeoBee.

So?  What does that have to do with anything?  Do you think BTC was the best possible option for Cypriots while accounts were being confiscated?  Almost *any*thing else would have been better.

It's probably a combination of things, really:

(1) Cyclical nature of markets. Biggest bull market ever -> pretty spectacular bear market only to be expected.

(2) Price outran fundamentals means that, eventually, price will be brought back to earth. Maybe too much even, so now fundamentals are starting to catch up with price, and eventually will probably outrun the price.

(3) Professionalization of the entire market: both trading and mining.

(3.1) Professionalization of trading mainly means: the ability to short, to scale, which wasn't really possible until this year.

(3.2) Professionalization of mining means, competing industrial scale actors taking easy profits by selling newly mined coins at a small reliable profit, as opposed to the classical miner who held in anticipation of a less sure but higher profit. Race to the (profit) bottom started as a result: once enough miners sell, it becomes rational for the other, previously "hodling" miners as well to sell.

(4) Growth of network is solid, but possibly not as strong as previously thought. Had enough discussions with Jorge Stolfi about this topic in the wall observer thread, so I don't really feel like arguing why I believe there is significant adoption slash network growth happening. However, I also do believe we saw a "dip" of sorts on several metrics (no. of tx, tx volume, to name two). Network is still growing, but at least over the last 1 and a half years, the rate of growth is arguably lower than in the previous 2 or so years.

(5) OTC transactions distorting price discovery / hiding buying pressure from the public market. This one is more speculative, but it's a point I have been making for now more than a year: there is (maybe by now: was) this naive notion that "big money" would buy into BTC large scale, as a way to secure their wealth in the coming crypto world. The problem is: even if that would be happening (I'll remain agnostic about this going or not), there was never any chance big money would "buy in" on the exchanges in a straight forward way. It would have been always preferable to bind large mining operation's output to you contractually, possibly even sell a portion of the acquired coins to depress market price. NB please: I'm not saying that "big money is buying OTC". I'm just pointing out that if this happens, it will present as lower buying pressure than if it would happen on-exchange.

(6) Mtgox. Enough said.

(7) Various stuff I forget now... ETF still not listed. Looming bear market in general. Correlation with gold price, which isn't doing so hot either lately.


If I only had to pick the three biggest reasons, I would say: market cycle + large scale shorting + professional short term profit mining.

One word answer: Cyprus.

Perhaps the speculators have discovered the price. Maybe it's $300?, that seems reasonable. 

Do you actually expect a strong correlation between the prices of the ruble and BTC?

If you live in a country whose currency's value is in decline, do you think the smart thing to do is to...invest?  Investing is something you do when you have all your immediate needs met and you have the money to invest.

Moving from the ruble to Bitcoin is like jumping off a sinking ship onto an active volcano.  Why on Earth would somebody do such a thing when BTC is so volatile?  High volatility is expected in such a small market whose reach extends to a global scale.  It's perfectly reasonable to establish confidence in BTC's future while simultaneously making the decision that it's currently a risky investment.

So why, then, are venture capitalists pouring hundreds of millions of dollars into infrastructure and business development?