Help me to understand current BTC fluctuation

evoorhees

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Quote from: imanikin on March 06, 2013, 10:59:57 PM

My opinion is that the fluctuations and instabilitiy is caused first of all by the centralization of Bitcoin USD trading at MtGox.

That exposes the entire Bitcoin system to the artistry of every pump-and-dump team that operates at MtGox.

It's great for the professional speculators, but it's not good for the system as a whole.

However, given the usual human herd mentality this idiotic situation persists.

Serves everyone right who continue to perpetuate the trading centralization around MtGox. So, party on! Cheesy

You are completely misinformed about this. MtGox has actually been losing centralization since 2011. It used to comprise about 85% of the market, now it's probably around 60%

But even if everything centralized at MtGox, that still doesn't mean that price would become more volatile. It might indeed mean less volatility, because one larger market means greater liquidity and a smoother trading experience with lower spreads.

There's also nothing wrong with people gathering to one exchange for their trades. It is not efficient to have a million exchanges. Some degree of centralization is market-efficient and we should let the market make that determination (which it's doing).

Stn

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Quote from: imanikin on March 06, 2013, 10:59:57 PM

My opinion is that the fluctuations and instabilitiy is caused first of all by the centralization of Bitcoin USD trading at MtGox.

It happens exactly opposite because there is no centralization going on. Fiat money kept more or less stable because national banks uses their reserves to prevent currency move too much. Stable rate is important for everyday trade. There is none to do so with Bitcoin. It would jump and fall all the time if it would only speculation reasons. Hence it grows all the time.

Stn

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Quote from: rebuilder on March 07, 2013, 09:17:32 AM

Would you expect something as new and fast-growing as Bitcoin to have a stable exchange rate?

Oxymoron detected!

Mike Christ

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Quote from: Odalv on March 07, 2013, 05:22:29 PM

It will stop fluctuate when reach real value $1,000,000 USD / BTC.

This

Odalv

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It will stop fluctuate when reach real value $1,000,000 USD / BTC.

Piper67

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I'll help you OP: Bitcoin values fluctuate... live with it.

Odalv

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Quote from: imanikin on March 07, 2013, 04:34:42 PM

Quote from: piramida on March 07, 2013, 10:39:25 AM

This point is invalid, I am sorry. All exchanges are already artbitraged and have been for couple of years.
...
Welcome to the future where bots trade for us.

This point is not true; i am sorry. If they were really arbitraged that long, the volumes and spreads would tend to equalize, the cheaper exchanges would gain volume, etc. A 1000 exchanges would have to be all preloaded with fiat, because it's not as easy as B to move...

Welcome to the world where there is no exchange transparency, and MtG first and foremost has significant incentive to trade against itself.

Reasonable people can disagree on this though; if 70-80% of a "fully-decentralized" Roll Eyes

currency trading at 1 exchange is ok with you, then run with the herd and party on! Cheesy

I'm not sure there is 1,000 traders trading Bitcoin :-) now.

imanikin

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Quote from: piramida on March 07, 2013, 10:39:25 AM

This point is invalid, I am sorry. All exchanges are already artbitraged and have been for couple of years.
...
Welcome to the future where bots trade for us.

This point is not true; i am sorry. If they were really arbitraged that long, the volumes and spreads would tend to equalize, the cheaper exchanges would gain volume, etc. A 1000 exchanges would have to be all preloaded with fiat, because it's not as easy as B to move...

Welcome to the world where there is no exchange transparency, and MtG first and foremost has significant incentive to trade against itself.

Reasonable people can disagree on this though; if 70-80% of a "fully-decentralized" Roll Eyes

currency trading at 1 exchange is ok with you, then run with the herd and party on! Cheesy

rpietila

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The aggregate liquidity is not a tad greater if the volume were distributed in 10 exchanges, in fact, quite the opposite.

Quote from: imanikin on March 06, 2013, 10:59:57 PM

My opinion is that the fluctuations and instabilitiy is caused first of all by the centralization of Bitcoin USD trading at MtGox.

That exposes the entire Bitcoin system to the artistry of every pump-and-dump team that operates at MtGox.

It's great for the professional speculators, but it's not good for the system as a whole.

However, given the usual human herd mentality this idiotic situation persists.

Serves everyone right who continue to perpetuate the trading centralization around MtGox. So, party on! Cheesy

thezerg

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barbstap, you are the perfect candidate to lose $ trading b/c you self-admit to not having much of a clue. My advice: Sell what you can't afford to lose now, but sell as little as possible. Forget about the rest, don't pay any attention to the market b/c you seem unable to handle the stress of the volatility. Check back 5 years from now; your coins will be worth either 0 or a LOT!

Consider your BTC investment a long term diversification -- currently all of your worth is likely denominated in your local govt currency or strongly tied to it (land inside your country for instance). If you own a worldwide currency like BTC, that is no longer true.

humanitee

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Quote from: SkRRJyTC on March 07, 2013, 01:22:15 PM

Quote from: humanitee on March 07, 2013, 01:21:15 PM

Because greed.

and fear.

Truth.

SkRRJyTC

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Quote from: humanitee on March 07, 2013, 01:21:15 PM

Because greed.

and fear.

humanitee

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Because greed.

piramida

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Borsche

Quote from: haitispaceagency on March 07, 2013, 01:12:28 PM

because its not backed by gold or silver thats why it fluctuates more then the dollar and euro

I understand you spent last 70 years in a cave, but please catch up with humanity first

Start here: http://en.wikipedia.org/wiki/Fiat_money

01BTC10

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Quote from: haitispaceagency on March 07, 2013, 01:12:28 PM

because its not backed by gold or silver thats why it fluctuates more then the dollar and euro

?

haitispaceagency

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because its not backed by gold or silver thats why it fluctuates more then the dollar and euro

Elwar

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Viva Ut Vivas

Consider how a 100 million dollar sale would affect Bitcoin vs Microsoft.

Microsoft currently has about 8 Billion shares at about $28/share.

Bitcoin has about 11 million bitcoins at about $45/bitcoin.

A 100 million dollar buy/sell for Microsoft would create a fluctuation in price of 10 cents.

A 100 million dollar buy/sell for Bitcoin would create a fluctuation in price of $22.

Now consider that only around 2% of the total amount of Bitcoins is traded daily (could be similar for Microsoft). The amount needed to fluctuate that much is closer to $2 million.

(A quick check shows Microsoft up 16 cents for the day)

BitcoinBA

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Hey Barbstap...

The reason for today's big fluctuation is that in the early days of Bitcoin (2009 - 2011) it was very easy to mine or buy big ammounts of BTC - hundreds of thousands or even milions. That's how big owners came into place. Some of them didn't sell their BTC and are still holding it. It would be extremely expensive to buy such ammounts of BTC today.

From time to time those big owners sell some of their BTC for USD to have some money to spend (or retire forever) and they sell big ammounts such as yesterday - I think that was about 100 000 BTC. They could sell it step by step in smaller ammounts - they would earn more and wouldn't cause instability, but as they have small dicks and/or egos, they dump and hurt others.

Bitcoin has enormous potential of becomming an internet currency, has a lot of positive press and support of many people and merchants. It's still in it's early days but I wouldn't sell your BTC at all.

Thus it's price is only given by trust of people, when someone sells a lot, price goes temporarily down, and when someone buys a lot, price goes up.

Have a nice day...

piramida

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Borsche

Quote from: imanikin on March 07, 2013, 07:37:07 AM

I think it would be geometrically if not exponentially more difficult to simultaneously manipulate price discovery at 5-10 xchanges, rather than one.

This point is invalid, I am sorry. All exchanges are already artbitraged and have been for couple of years. Whenever price goes up at XYZ exchange, it is immediately reflected on all exchanges. If, for example, there is a huge sell wall at Gox and someone tries to buy through it on another exchange, he would immediately get fed coins by some bot at the Gox wall price (+margin), then the bot would buy the sold amount at Gox.

So, even if there are 1000 small exchanges, they would all play more or less in unison. The only problem with Gox is that it is big and that the technical side is lacking, so arbitrage can be delayed purely because trades can not be executed, as we've seen yesterday. But pump and dump across all exchanges - no, that would happen anyway at exactly the same difficulty level. Welcome to the future where bots trade for us.

hgmichna

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Quote from: barbstap on March 06, 2013, 09:14:56 PM

currently rates are too much fluctuating
what you suggest personally
as i don't have inner knowledge of btc
so i am not sure to hold btc or sell them?

Right now? Sell.

What we just saw and are still seeing is the second big bitcoin price bubble. It is now in the process of bursting, so we will see the bitcoin price essentially shrink over the next couple of months.

The underlying reason is the same as that of the first bubble. New inexperienced and often clueless "speculators" came into the bitcoin market and applied inappropriate methods like trend-following. They all lost their money the first time around, and the new breed that is active now will also lose their money and give it away to the serious speculators.

We have about four different layers of bitcoin holders:

Traders, who use bitcoin to pay for goods and services
Value keepers, who keep bitcoin for a long time in the hope that their value will appreciate
Speculators, who will use their bitcoins to stabilize the price, i.e. buy low and sell high, for a handsome reward
Clueless newbie "speculators", who will do just the opposite, i.e. buy high and sell low, and thus lose their money

The number of bitcoins actually used as a trading currency is only a small fraction of all bitcoins. Most of them are in the hands of people who want them to appreciate in value or who want to trade for a gain.

As already mentioned, the current price is excessive in the short run, so sell your bitcoins, as long as you can still get $40+ for one. Buy them back for $20 later. Perhaps keep some for the unlikely case that some millionaire comes in and buys bitcoin like mad.

rebuilder

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Quote from: imanikin on March 06, 2013, 10:59:57 PM

My opinion is that the fluctuations and instabilitiy is caused first of all by the centralization of Bitcoin USD trading at MtGox.

That exposes the entire Bitcoin system to the artistry of every pump-and-dump team that operates at MtGox.

It's great for the professional speculators, but it's not good for the system as a whole.

However, given the usual human herd mentality this idiotic situation persists.

Serves everyone right who continue to perpetuate the trading centralization around MtGox. So, party on! Cheesy

Let's assume for a moment no centralization and no market manipulation. Just people trading and speculating, looking to profit. Would you expect something as new and fast-growing as Bitcoin to have a stable exchange rate?

marhjan

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Poorer than I ought to be

"The Manipulator" that is all....

but seriously - I miss all "The Manipulator" talk, it was glorious

kerogre256

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Quote from: barbstap on March 06, 2013, 09:14:56 PM

I want to get a piece of knowledge
currently rates are too much fluctuating
what you suggest personally
as i don't have inner knowledge of btc
so i am not sure to hold btc or sell them?

I am a newbie to btc if anyone feels a bit free
then you can guide me by PM or skype it will
just take your few minutes but i will get a good
knowledge and i really want to understand inner
knowledge of BTC.
Thanks

There is 2.5 bilion internet users world wide and only 10 milion of them can have ONE bitcoin at the time if you include lost bitcoin it even less, bitcoit is SPECIAL its not perfect but it is VERY SPECIAL nothing like this ever existed before. Bitcoin is even special from e-peen point of view, how many people can say I HAVE ONE bitcoin ? No more then 10 milions if you have 10 this number is 100k if you have 100 this number is only 10 000 ...... funny isn't it ?

imanikin

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Quote from: Timo Y on March 07, 2013, 02:30:05 AM

Your argument makes no sense to me.

If the price fluctuations are caused by professional 'pump-and-dump teams', what would prevent those teams from spreading their pump-and-dump strategy across several decentralized exchanges, if mtgox were not available to them?

For one thing, there would not be all these people who couldn't execute their orders because MtG was so overloaded and lagging when it really counts.

More importantly, there would not be a reference price set by the pump-and-dumpers, which the "traders" at other exchanges blindly follow. If you think it would be just as easy to manipulate that reference price at 5-10 xchanges simultaneously, i am not surprised my argument makes no sense to you. Cheesy

I think it would be geometrically if not exponentially more difficult to simultaneously manipulate price discovery at 5-10 xchanges, rather than one.

greyhawk

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Quote from: barbstap on March 07, 2013, 04:33:37 AM

Thanks for everyone's time but my main aim was to understand current unstable situation of btc
I know i can read and spend time to understand it but i needed some fast replies so i can save
myself from a big loss. I have never seen gap of $16 per btc in just one day. I am not able to get
these rapid changes. at once i thought btc is going down but then it stablize a bit between $39 to
$43 per btc. I am trying to get knowledge from others experience that's why i have opened this
thread. Waiting for more good suggestions.
Thanks

Short version: Bitcoin is backed by faith and when Faith wavers -> the price wavers.

Now faith is backing all other currencies as well, BUT the difference is, other currencies have people with guns enforcing that faith.

Solution: Bitcoin needs more guns.

barbstap

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Thanks for everyone's time but my main aim was to understand current unstable situation of btc
I know i can read and spend time to understand it but i needed some fast replies so i can save
myself from a big loss. I have never seen gap of $16 per btc in just one day. I am not able to get
these rapid changes. at once i thought btc is going down but then it stablize a bit between $39 to
$43 per btc. I am trying to get knowledge from others experience that's why i have opened this
thread. Waiting for more good suggestions.
Thanks

Timo Y

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bitcoin - the aerogel of money

Quote from: imanikin on March 06, 2013, 10:59:57 PM

My opinion is that the fluctuations and instabilitiy is caused first of all by the centralization of Bitcoin USD trading at MtGox.

That exposes the entire Bitcoin system to the artistry of every pump-and-dump team that operates at MtGox.

It's great for the professional speculators, but it's not good for the system as a whole.

However, given the usual human herd mentality this idiotic situation persists.

Serves everyone right who continue to perpetuate the trading centralization around MtGox. So, party on! Cheesy

Your argument makes no sense to me.

If the price fluctuations are caused by professional 'pump-and-dump teams', what would prevent those teams from spreading their pump-and-dump strategy across several decentralized exchanges, if mtgox were not available to them?

fancy_pants

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quarkchain.io

I think today's correction was a simple healthy correction probably triggered by the mpex exchange. Mpex.co was under ddos attack all morning and partly as a joke they pointed DNS to whitehouse.gov. some on the message boards immediately concluded that mpex was seized by the us government and pulled the trigger to get away from bitcoin. prices had gone up so much prior to that that there was no supprt and it thus btc tanked fast. mpex never went down, and remained accessable via various proxies throughout. Mtgox however got bogged down and exacerbated the market uncertainty. It appears to be over at this with only a day or two worth of paper profit having been lost by people who held tight.

niko

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There is more to Bitcoin than bitcoins.

Quote from: evolve on March 07, 2013, 12:48:40 AM

Quote from: barbstap on March 06, 2013, 09:14:56 PM

what you suggest personally
as i don't have inner knowledge of btc
so i am not sure to hold btc or sell them?

The worse thing you possibly could do is take financial advise from strangers on the internet.

The best thing you can do is spend a little bit of time reading and understanding how bitcoin works, how traditional currencies work, and how markets work. Do not waste time on people's opinions and wishful thinking, just try to get facts straight and develop your own understanding.

evolve

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daytrader/superhero

Quote from: barbstap on March 06, 2013, 09:14:56 PM

what you suggest personally
as i don't have inner knowledge of btc
so i am not sure to hold btc or sell them?

The worse thing you possibly could do is take financial advice from strangers on the internet.

ufmace

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In my opinion, the price is pretty unstable mostly because there's much more traffic in speculation than in normal commerce. When the market is dominated by speculators hoping to make some money by buying and selling at the right time, then it'll tend to vary widely for any reason at all. Hopefully, the number of merchants accepting bitcoin will grow and the commercial traffic will grow with it, and that will tend to stabilize the price.

As for whether to hold or sell now, that's your call man. By asking the question, you are essentially speculating yourself, and whether you make or lose money depends on how your guesses line up with the guesses of all of the other speculators out there. This is essentially more of a financial market discussion than a bitcoin discussion.

If you want to help the situation, work to increase bitcoin commerce. Buy something you need with bitcoins, ask a merchant to support it, accept bitcoins yourself if you have any kind of store, whatever is practical for you.

EndTheFed321

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Dude, I agree with you 100% Party on! Grin

imanikin

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My opinion is that the fluctuations and instabilitiy is caused first of all by the centralization of Bitcoin USD trading at MtGox.

That exposes the entire Bitcoin system to the artistry of every pump-and-dump team that operates at MtGox.

It's great for the professional speculators, but it's not good for the system as a whole.

However, given the usual human herd mentality this idiotic situation persists.

Serves everyone right who continue to perpetuate the trading centralization around MtGox. So, party on! Cheesy

Stn

full member

Activity: 227

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It is not really "fluctuation" as with other traditional currencies. It is more like growth which explainable by the fact that this instrument is gaining higher and higher popularity worldwide. Theoretically it should stop growing sometime and start fluctuate but it is never clear when the world become "full" of Bitcoin. Population of the planet is growing too.

Herodes

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There's no easy way to understand how the price moves, sorry.

barbstap

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I want to get a piece of knowledge
currently rates are too much fluctuating
what you suggest personally
as i don't have inner knowledge of btc
so i am not sure to hold btc or sell them?

I am a newbie to btc if anyone feels a bit free
then you can guide me by PM or skype it will
just take your few minutes but i will get a good
knowledge and i really want to understand inner
knowledge of BTC.
Thanks

Topic: Help me to understand current BTC fluctuation (Read 4524 times)