Topic: Down, down, down, down, down - page 3. (Read 7259 times)

Okay then. So, if bitcoin is a commodity, why do you think you can't really enter a contract "between two parties to buy or sell a specified asset (bitcoin) of standardized quantity and quality for a price agreed upon today with delivery and payment occurring at a specified future date, the delivery date"?

This futures contract (the definition of which is given above) is just one among many other possible types of paper derivatives

A buying opportunity for those with strong hands and convictions.

Well there is difference between mining rate and its cost and speculation that happens right now. Bitcoin will slowly move up, but when it reaches certain price, we shall never know. We probably will be able to mine until around 2100 sooo... yeah. Still it is just past few days. If you bought bitcoin as investment instead of payment vassal , you need to accept there always will be some kind of risk.

In general it shall go up, it depends when.

oh hey, it's like a MONTH later.

I need $5k thank you! 

 UP UP UP UP UP, oh hey.. the price is $650.

I won't sell you my bitcoins sir! 

Overseen the "naked" part, apologies. However, I still believe that manipulation is possible. I do refer to the jump from 580 to 710. This was just one guy buying up all the coins forcing a lot of short margin calls in the 580 to 620 area and drive the market further to spark a buying panic. The guy should have had an average price of roughly 600-610 and I would not be surprised if he already sold his position in the buying panic in the 700 to 720 area. This was in my view a classic cornering of the market and would have triggered alarm bells on a regulated exchange.

Please see the definition of naked short selling.

If any bitcoin exchange allows limited short selling, they are making sure these trades do not exceed the number of bitcoins the exchange stores for their customers and only allow limited leverage. They can't allow short selling to the extent other physical commodity exchanges allow short selling - naked - that is, not having the actual commodity in its reserves.

I don't know what you mean by 'recent jump'. If you have cash and you buy a lot of something and move the market - this is not price manipulation per se. People use the word 'price manipulation' a lot without actually understanding what it means. I tend to understand 'price manipulation' term only when referred to markets with paper contracts only prevailing. Per this definition price manipulation in bitcoin market is not possible or has only very limited extent.

Bitcoins are scarce like many physical commodities, but unlike physical commodities bitcoins are very easy to be taken delivery of, which makes price manipulation of bitcoins very hard, next to impossible.

I think you have missed Mpex where you can trade bitcoin derivatives as well as Bitfinex and BTC-E to go short. Not too sure why you claim that the price cannot be manipulated. The order book is very thin and with only a couple of millions you can manipulate quite easily. Just look at the recent jump. This was not natural demand. It was one guy with a couple of millions in hand.

No confusion here. Bitcoin is a commodity at this point, digital commodity. It does act as money too, but not many merchants and limited liquidity, so I wouldn't refer to it as money yet.

You can't manipulate its price a lot, because you can't issue paper derivatives against it. You either own bitcoins and sell them or you don't own them and can't sell them. Other commodities have storage and transporation issues, thus making possible the practise of trading paper contracts only (which exactly is what 95% or more traders do at commodity exchanges), which in turn opens possibilities for naked short sales, which is used for price manipulation.

With bitcoin you can take immediate delivery to your local wallet, you don't need to store bitcoins on an exchange. An exchange never knows how many bitcoins would be requested to be withdrawn at any time, so it can't risk allowing to sell bitcoins naked short if it wants to remain solvent. Any exchange that requires you to wait to withdraw your purchased bitcoins is a huge red flag.

$10k by 2015, no more than $3-5k in 2014

I can't agree with that. Money as such doesn't make you the owner of anything (save for the money itself). I don't think bitcoin is any different in this aspect. I think you are unintentionally confusing bitcoin as money and bitcoin as a commodity here. If the latter, I don't see how you can't fix its price now for future delivery just like you do with a foreign currency (which can be easily shorted though it obviously doesn't have the delivery problem)...

This is not a problem, but a natural course of events. Any asset in the free market tends to concentrate in the strong hands in the end, who are less likely to panic sell, which results in less volatility. That is why we see higher volatility percentage wise in the initial stages of an asset trading, and lower and lower volatility as the asset matures. That's exactly what is happening to bitcoin, and that's why it's getting easier to predict the future.

Of course, black swan events (sha256 broken?) cannot be predicted, but FUD is a normal thing in markets and strong hands don't tend to panic sell when they hear/read FUD, whereas weak hands do panic sell, that's why assets go to strong hands who understand and follow fundamentals of an asset, and no even distribution is ever possible. If you took all bitcoins in circulation and distributed them equally among all the population, after a year or two you would see about the same distribution as now, only less than 5% of traders or wanna-be-traders do not become net losers. So forget about even distribution, it never existed in the history of mankind for anything and never will.

Another great thing about bitcoin, making it easier to predict the future is that it cannot be sold naked short (yet?). Any commodity can be sold short because traders cannot easily take delivery. Bitcoin doesn't suffer from this issue, which makes it about the only true free market left in the world economy. True free market is very hard to manipulate, because you can only sell as many items of asset as you actually own, you cannot sell what you don't own. In any other commodity you can sell what you don't own, and if you have a lot of cash (blns), you can easily manipulate the market by trading on leverage. In bitcoin you'd first have to buy those bitcoins and possess them to be able to sell them. In other words, these actions are trackable through price charts and future price action can be predicted more or less. Enjoy the only true free market of crypto currencies on the planet while it lasts, it may not be forever.

After all what's happened this year and looking back though all those threads about MtGox exchange and bitcoin at all I am surprised how it turned out. And there are a lot of surprises in future.

The problem with bitcoin is, that it follows no standard normal distribution as of now. Many fat-tail events/outcomes make a lot of noise. So it is very difficult to pin probabilities to certain outcomes.

Forget about MtGox, the noise it makes and the fluctuations it creates will subside in the nearest time...

That's MtGox, though - and the exchange has been closed for over three days, has applied for bankruptcy protection, etc.

OTC, not exchange, but on LocalBitcoins the cheapest BTC is 346.37 GBP: https://localbitcoins.com/

it's already in UK the bitcoin cost only £70 not even £200 any more!!