Fluctuation of the Bitcoin Price | Bitcointalksearch.org

dominicus

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Quote

This appears to be a rather short-sighted analysis.

Yes, agreed. There are no prior or current instruments that parallel BTC in which to base long-term performance expectations. That was part of my point.

People wish to attribute BTC with expectations of long-term appreciation and price stability, but I've yet to learn where these very desirable properties will actually come from. Unlike other properties of bitcoin, neither of these are encoded or enforced. So what gives the claim of future price stability credence?

Until someone comes up with some plausible mechanism, I think this goes in the category of unicorns and free energy. Buy-and-hold strategies may be great advice for a basket of stocks, but this is hardly sound advice for BTC. Even if someone gifted you a large stash of BTC, holding that position in BTC long-term isn't rooted in any sound logic or real comparison.

Just because BTC is attractive for global low-cost transactions doesn't in and of itself give bitcoin any inherent minimum value per coin, or curb the price volatility of those that need to transact instead of hoard.

DannyHamilton

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Quote from: dominicus on July 04, 2013, 10:49:29 AM

Quote

Give it time and you will see the price stabilize.

What is the basis of this claim? While BTC may have some similarities to precious metals, it's not gold.

From where I stand, cryptocurrencies lack any long term mechanism of value stability:

No book value or mechanism to establish minimum unit price or market valuation
No central regulatory body or central reserve function with the goal of price stabilization.
No exclusive real/functional usage (aside from trade) to drive minimum ongoing demand
While there might be a BTC scarcity mechanism, there is no scarcity of crypto's. Evidence is clear computing and knowledge resources can and will migrate to other cryptos: Ripples, Litecoins, Feathercoins, Namecoins, etc etc. Open code means creating new cryptos has low barrier to entry.

Higher needs of transactional volume (driven by higher adoption) may provide some short-term price stability, but all signs point to crypto adoption being hampered by current price instability among many other legal factors. The slow resolution of legal factors is chipping away the anonymity of cryptos, further reducing its unique market interest. Creation of a derivatives market will increase volatility.

This hope of future price stability stands on air.

This appears to be a rather short-sighted analysis.

DannyHamilton

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Quote from: BitCoinNewGuy on July 03, 2013, 06:08:25 PM

Quote

I believe that a currency cannot have such fluctuation for it to succeed

BitCoin is NOT a currency. It is used 99% for investment & hoarding.

Do you have a reliable source for this statistic, or is this simply a random guess presented as an opinion?

dominicus

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Activity: 97

Merit: 10

Quote

Give it time and you will see the price stabilize.

What is the basis of this claim? While BTC may have some similarities to precious metals, it's not gold.

From where I stand, cryptocurrencies lack any long term mechanism of value stability:

No book value or mechanism to establish minimum unit price or market valuation
No central regulatory body or central reserve function with the goal of price stabilization.
No exclusive real/functional usage (aside from trade) to drive minimum ongoing demand
While there might be a BTC scarcity mechanism, there is no scarcity of crypto's. Evidence is clear computing and knowledge resources can and will migrate to other cryptos: Ripples, Litecoins, Feathercoins, Namecoins, etc etc. Open code means creating new cryptos has low barrier to entry.

Higher needs of transactional volume (driven by higher adoption) may provide some short-term price stability, but all signs point to crypto adoption being hampered by current price instability among many other legal factors. The slow resolution of legal factors is chipping away the anonymity of cryptos, further reducing its unique market interest. Creation of a derivatives market will increase volatility.

This hope of future price stability stands on air.

truelitecoin

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We are still in the early stage of Cryptocurrencies. Give it time and you will see the price stabilize.

dominicus

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Merit: 10

Lacking fundamentals or any significant ongoing transactional demand, BTC is fully at the mercy of the ongoing crisis of trust and broken expectations with respect to funds fluidity and privacy at the big exchange.

My view is lots of "investors" picked up BTC during the run-up, but since then, the coin has proven unable to sustain any significant demand gains. Instead, a constant dribble of less-than-comforting news on any progress in the development of the BTC "ecosystem", instead it gets various forms of government harassment.

Holders are weary of accumulated losses and trigger-happy to sell. At this point, lots of parallels between BTC and the behaviour of so-called penny-stocks. In panic mode. Buying feels like catching a falling knife.

aklintsevich

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My theory is that all the new Asic miners are dumping their coins on the market causing the price to decrease.

Lethn

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Quote from: davidw926 on July 03, 2013, 06:05:21 PM

The only thing I can think of is that a substantial sale must have pushed the price down. I suspect that BTC is not exempt from the laws of supply and demand.

Nothing is exempt from the laws of supply and demand as long as there is more than one of it and even then if there's only one unique object in the world people will still want it for all sorts of reasons.

BitCoinNewGuy

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'That Guy'

Quote

I believe that a currency cannot have such fluctuation for it to succeed

BitCoin is NOT a currency. It is used 99% for investment & hoarding.

davidw926

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The only thing I can think of is that a substantial sale must have pushed the price down. I suspect that BTC is not exempt from the laws of supply and demand.

jonoiv

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🐺Dogs for President🐺

Quote from: aklintsevich on July 03, 2013, 02:44:22 PM

I have been monitoring bitcoin after the price of the currency collapsed from over $200 per coin. After the collapse I thought that the price would stay steady at around $100, however, this is not the case-it has gone down to about $84 currently.I believe that a currency cannot have such fluctuation for it to succeed What is the reason for this drop from $100 to $84?

To be honest at the moment bitcoin is not being used very effectively as a currency for the reasons you pointed out. Since the start of 2013 it became more of a trading commodity. Other coins might have a better chance as a future trading currency (litecoin) and bitcoin may be used in the future as a store of wealth. Thats my take on it!

Bananery

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The reason is someone is dumping their bitcoins. Some got in earlier, maybe at 30 or even 5. And also companies that mine (AsicMiner, Avalon) might be selling their bitcoins.

aklintsevich

newbie

Activity: 9

Merit: 0

I have been monitoring bitcoin after the price of the currency collapsed from over $200 per coin. After the collapse I thought that the price would stay steady at around $100, however, this is not the case-it has gone down to about $84 currently.I believe that a currency cannot have such fluctuation for it to succeed What is the reason for this drop from $100 to $84?

Topic: Fluctuation of the Bitcoin Price (Read 2662 times)