Topic: I am predicting a spike above $3 - page 3. (Read 10622 times)

don't make assumptions about my level of knowledge.  if you want an in depth look at what i do or don't know please visit my thread here which has an enormous following:

https://bitcointalksearch.org/topic/gold-i-smell-a-trap-35956

careful, it will take you a week to get through.

Well even if 99% of all speculators only watch each other 1% does look at the fundamentals and the 99% are looking on them too.  

i think we're just talking past each other.  the market price of Bitcoin encompasses its fundamentals, speculation, prudent investing, shorting, gambling, etc.  no sense trying to parse each component apart b/c its impossible.

either you see the underlying potentials of Bitcoin technology or you don't.  i never cease to be amazed at how two people look at the same thing but see it so differently.  thats all this is.

This is a ridiculous statement for any speculator to come out with, and highlights the level of delusional thinking I have come to expect from these people.

So you have never used a financial chart, or any form of technical analysis then? You don't consider support and resistance levels to be significant in your trading decisions? You don't look at trade volume or any other kind of financial metrics? You don't buy when you see large upward price movement or sell when you see large downward price movement? Did you sell any coin after the CosbyCoin incident or MtGox hack?

You must be a highly unique type of speculator, because all of these things directly reflect what other speculators are doing. Especially when it comes to the exchange rate of bitcoin, which is more directly associated with investor sentiment than any other speculative vehicle currently available. If you don't base your speculative decisions on what other speculators are doing, then why do you even bother visiting the speculation subforum?

What exactly is it you are basing your speculative decisions on then?
Lets hear it... this is going to be good.

Absolute size has nothing to do with it. Look the oil market and other commodity markets. They are certainly big enough, but that doesnt prevent speculation from driving prices opposite of underlying fundamentals and create huge price swings. What matters is the % of pure speculation versus actual trade. In most commodity markets this used to be around 25% but over the past decades this has grown to 50-70% or more through derivative trading, with the known results of huge price swings in things like oil, corn, metals etc, which are more often than not uncorrelated with (expectations of) supply or demand. In bitcoin this ratio is like 99%.  

Bitcoin prices can only stabilize if trade becomes a bigger part of the bitcoin economy than the exchanges and bitcoinica's. As long as demand is primarily created by speculation, price is set by speculation; and so even if you wanted to accurately predict a future price, you simply have to look at the other speculators rather than the 1% that is (what I consider) the fundamentals.

Touché. University never prepared me for this, I am indeed clueless to understand how bitcoinporn's revamped website caused a 100x increase in BTC exchange rates or what other "fundementals" caused the 90% drop over the last months. Since you seem to think its fundamentals driving these fluctuations, maybe you want to share your in depth knowledge with us?

your lack of understanding how markets, speculation, and investing work are starting to betray you.

If you honestly think changes in underlying fundamentals explain even a tiny % of  the price swings in BTC exchanges, I can only LOL.

wrong again.  i'm a speculator and i'm not speculating on what i expect other speculators will do.  i speculate on Bitcoin b/c of what i believe are the underlying fundamentals.

you're once again claiming your world view is the correct one when it could in fact be wrong.

Here is the thing, Ill try to explain so maybe even you can understand. Speculating on future prices or value of things in the real economy is good. It helps establish a "true" price, it helps trade, it makes things more predictable, it can hedge risks etc.

However at some point, if speculation becomes bigger than the real world economy thats being speculated on, then you have a  BIG problem, because speculators are no longer trying to predict real world changes in economy or finance, but are trying to predict what other speculators will predict. It doesnt take a genius to understand how this creates huge bubbles and bursts. This is precisely whats happening in the real world commodity markets (*), and bitcoin is a caricature of this, with speculation FAR FAR outpacing any realworld trade.

(*) Just saw this:
http://therealnews.com/t2/index.php?option=com_content&task=view&id=31&Itemid=74&jumival=7492
Interesting parts start at 4 minutes.

price != value

i said i agree with you that in an ideal world a currency should be rock steady with no fluctuation in value.  but that has to be some positive number thats above zero.  but because that number is above zero, how does the market determine what that specific number is?

i submit that if Bitcoin becomes successful it will stabilize at some number reflective of its useful value as a currency.  b/c its so young, the market is trying, wildly, to determine what that number is.  my opinion, and its just my opinion based on what i know of the technology, is that its way above its current number.  nevermind the volatility which is expected at this nascent stage.

edit:  btw, we don't live in an ideal world.  we live in a world with the corrupt Fed injecting USD's into the system everytime their buddies get into trouble.  this is in part why we have volatility.

why can't you accept the fact that this is all in the eyes of the beholder?  honestly, if investing was so easy, everyone would see the potential and the price would skyrocket w/o any speculator being able to make a profit.  successful investing means spotting an opportunity when no one else sees it.  sure, we bulls, could be wrong but we just as sure could be right based on an intuition you're just not seeing.

I couldnt disagree more. If you see bitcoin as a currency,  like I do, its only reason to exist is to allow trade; and if there is no commerce associated with it, it has no value. All speculation does is anticipate on future economic activity that may or may not happen, and in this case, the speculation itself is preventing the economic activity from happening. That will never stabilize, its inherently unstable.

Assume it stays around $3 for a few months now, and merchants start to believe in its stability and start adopting it. What do you think will happen? As BTC adoption finally begins, its price will skyrocket, a bubble will inflate, merchants will get second thoughts, the bubble bursts and we are back at square one.

Since no one knows what the heck bitcoins are worth, I think speculation is actually the most important activity for bitcoin right now as we go through the slow process of price discovery.  Once a price range is settled on, THEN commerce can start.

Seems to me that almost all speculators think they're worth between $0.50 and $10.  That's a smaller range than April-June, where it went from $0.60 to $30.  It's slowly getting better, though I think too slowly for everyone's tastes.  Bitcoin is new by any standard, with the first significant press was in June, and we just need to give things time to settle down.

Thats the irony of it. On another forum someone asked me what solution I was suggesting. I was not suggesting any, frankly, I dont have any.  The only raison d'etre of a currency is facilitating trade. If a currency ends up hurting trade, and only encouraging lottery play, you are doing something wrong.

If people following their instincts leads to a less than desirable outcome, you have to change the system, you cant change human nature, nor can you expect people to go against their nature voluntarily. In this case, the only "fix" I can think off is what most people on this forum consider blasphemy: regulation and taxation.  If anyone can think of a different way to discourage short term speculation, Im all ears, but Im not holding my breath. Even if Mt Gox could and would somehow impose a "tax" on people that convert from dollars to btc and back without there being a real world trade associated with it, all that would do is move everyone to other exchanges. Oh the wonders of a decentralized, deregulated free "currency".

Maybe someone more clever than me will come up with a solution in bitcoin 2.0, but for this attempt, I think we're basically screwed and I will be quite impressed if bitcoin overcomes this catch 22.

I remember buying a PCIE 1x to 16x adapter on eBay to use for mining (using USD$) and trying to sell it (unsuccessfully) on these forums for bitcoins.  Back then I wanted 1.6btc to cover costs.  Now I would need to ask for 8.  If I bought the adapter in bitcoins it's quite possible I would have sold it for the original number of BTC, plus whatever the postage cost would be in my currency.  It's virtually impossible to divorce one's self from every day money.  Postage in $3 bitcoins costs a whole lot more than it used to.


It does very much seem like we're replacing one semi regulated casino (share markets) with a completely unregulated casino. 

Oh no doubt, its use would be limited for quite some time, and BTC wouldnt be an option for amazon&co. But its not like amazon is accepting bitcoins now.

What Im pretty sure off, is that it would spur a slow, but more organic growth, like trade between individuals, "ebay" kind of stuff. Right now even on this forum, most things that are put up for sale are denominated in dollar, and can mostly be bought with dollars. If you no longer have an exchange to buy bitcoins, Im pretty sure a lot of people would sell stuff for bitcoins exclusively in order to get some. Likewise  people with "too many" bitcoins, be it miners, pool operators, merchants, would be more eager to spend them on whatever the bitcoin economy has to offer, even if its just second hand hardware or alpaca socks.  Right now there is very little incentive to do so. You might as well use dollars since everyone just converts the price from btc to dollar and back,  even though the exchange rate is utterly artificial and purely driven by daytraders. I would also guess most of the btc trade (however little it is), is also converted to dollars almost instantly.

Its like the global future markets for oil, commodities, even food; they used to serve a purpose in facilitating trade, future markets, like exchanges are essentially a good thing, helping  trade by protecting producers from price swings etc. But then the gamblers took over and turned it in to a casino, driving up global prices and actually hindering trade. Most economist will tell you you need some speculation, to act as "grease", but more than 25% speculation is a recipe for bubbles and bursts, which hinder the economy, and for instance farmers now no longer use future markets, as it has lost its purpose and has become purely a casino.  In our bitcoin economy its far far worse than that, its more like 99% speculation and 1% trade.  So anything that gets that ratio down, even if only temporarily, I can only see as a good thing.

If the only way to use bitcoins would be to trade them for good or services, how do those goods and service get purchased to make the trade?  There is one, perhaps two degrees of separation at all points in the chain between bitcoins and your national currency.

Then there is the question of why anyone would want to use bitcoins if that were the case.  Why trade in a market with a few hundred, possibly a few thousand participants, where using a conventional currency means you can trade with many millions?

Merchants love the no charge back feature of bitcoins, but customers hate it.  On another BitcoinTalk forum there's debate on whether a very cheap FPGA miner solution for US$499 is actually legit.  Those people who have signed up and paid the money all say 'if it's not legit, I'll get my money back through my card/PayPal'.  I wonder if they would be so keen if they had to pay up in bitcoins.

If bitcoin cant survive the loss of Mt Gox, it doesnt deserve to survive. Sure there will be a PR blowback, but I think it would be one the best things that could happen for bitcoin to not have an easy way to cash in or out, for a while at least. That would really force everyone to use it as banter, as the only way to obtain bitcoins would be mining or conducting trade. The only way to unload your bitcoins would be buying stuff with bitcoins. Circulation of bitcoins would drop dramatically, but actual trade would likely spike and me thinks thats precisely what bitcoin needs.