So, anyone have thoughts on the recent market crash? Are Futures Contracts causing instability? Market manipulation? Seems rather odd how quickly it happened and, how deeply. Also odd how one commercial trader predicted it almost exactly...
There is a lot of politics in the background of course, but honestly a crash was imminent anyway. Bitcoin is a constantly uptrending roller coaster. And a roller coaster sometimes goes a little down to then go up even faster. Bitcoin will recover regardless of Roger Ver and the crap he is talking all day.
I'm going to have to disagree with your roller-coaster metaphor dzonikg28, but stand with you on your intended points. In fact, I'm going to go a step further. Roger Ver is talking about the weaknesses of bitcoin and this seems to be hurting its value. The more the large holders and miners see value being hurt by disfunctionality in bitcoin, the more they are likely to support genuine improvements to its code. And the more the code behind bitcoin improves, and the more useful bitcoin is, the higher its true value can climb.
As for futures contracts and commercial traders manipulating the price, I think it is unlikely. I have no doubt that given the skill and opportunity, they would certainly do it. And I imagine that the current low is a great time for them to buy a reserve to sell futures against. I just don't think they've got what it takes to pull it off. But that doesn't mean there hasn't been an incidental effect. It is hard for the whales to cash-out a significant amount without impacting the price. But selling a chunk to futures traders is a good opportunity and it is possible that taking advantage of that has hit the price a little.
This article from a couple of days ago talks about the concept:
https://www.bloomberg.com/view/articles/2017-12-21/bitcoin-billionaires-may-have-found-a-way-to-cash-outBut I'm most comfortable putting it down to the range of complex influences that have caused previous dips in prices. Some of it might be algorithmic trading. Maybe after watching it climb fast, unreasonable expectations have made the slight slowdown seem worrisome. Possibly the fact that bitcoin has attracted many inexperienced investors to try their hand means the market is more emotional and reactive than more standard types of investments. Maybe the weather has more to do with the price of bitcoin than its functionality does. How about Christmas putting a pinch on budgets causing investors to cash in despite a drop in price? If the Christmas budget theory is correct, maybe we can expect a leap in price as people invest their cash presents where they'd never risk money earned through hard work.
So the only thing I know for sure is that Jamie Dimon is green with jealousy that the market ignored him, but reacts when Roger Ver goes public. But you've got to be enjoying the media circus that spends a month calling bitcoin a bubble, and then when the price dips, writes pages speculating about what strange thing could have interrupted such a strong climb.
It bugs me that people are quick to blame Roger Ver's public statements (or anyone else's) for Bitcoin's major price correction, which it was due for anyway. I agree that the way he went about it wasn't exactly professional. That said, Bitcoin really does have some serious flaws. Someone famous or not famous should be able to speak honestly about those flaws without being called a traitor to the cause. Ultimately, Bitcoin will need to address its weaknesses and adapt or it will over time work its way into obsolescence. Regardless of what Jamie Dimon and Roger Ver say or don't say, 17+ minute block confirm times, $20 transaction fees, and lack of scalability are simply not going to work. So you either address these issues right in the code, or you look for a good opportunity to sell any holdings or use them to buy other coins with better technology. Although I go through Bitcoin to make my trades like everyone else, it's been several years since I've had any significant BTC holdings. Recognizing its inherent problems has been part of the reason.
Roger has his reasons for sure but your right, no one statement from any of the current crop of talking heads can cause such a major correction. There are unseen forces at work as in any public market that are amplified in ours due to it's unregulated nature. Personally, I don't think that is all so bad but, in a business sense, it is a problem. You need to make decisions based on intelligence and projections you can count on. If you base those decisions on the current market, you will, sooner than later, take a major hit.
Solutions? Well, if you're a business owner, change the way you make projections and allocate resources for the future. Learn, listen, watch, use the abundance of information at your fingertips to help you make those decisions. Stay flexible, maintain healthy reserves and don't fly by "the seat of your pants", be careful and listen to your peers. This is the new reality, the old ways are due to fade away along with their stability and, lack of creativity.
In the new paradigm, if it didn't work yesterday, chances are it will tomorrow and that brings up the elephant in the room, accepting change as a good thing and making the most of it. Those who can do that will not only survive but thrive. Embrace new ideas and technology or perish. But above all else, don't be afraid to try a new way of doing things, it just might work better than you expect.
