Topic: I am predicting a spike above $3 - page 4. (Read 10622 times)

I hope this happens. But do you think that bitcoin could withstand the loss of MtGox, which has managed to establish itself as a crucial cog in the bitcoin economy? I think negative PR on that scale would trigger a massive outflow of goodwill and capital from the system. It may end up being a devastating blow.

Though, with no way of easily cashing out bitcoin for fiat, speculators would then be forced also to take as bullish an outlook for bitcoin as they are currently forcing bitcoin merchants to do. I don't know what the outcome of all that would be, but I think it probably would result in a much better economic environment for everyone involved.

I dont think that will ever happen. People dont stop playing the lottery no matter how often they lose. As long as there is volatility it will attract daytraders, as long as there are daytraders and they are setting the price based on nothing but mood, there will be endless bubbles and bursts.

If anything, I have more hopes that Mt Gox' legal issues and the consequences of that will put a brake on wild speculation. If they are going to be forced to comply to financial regulations, its going to cost them a pretty penny, which I *hope* they will pass on to traders. Not unlike a tobin tax, it wont prevent anyone from taking a long term position, particularly considering the near limitless potential up and down of bitcoin, but it could, and hopefully will kill most of the daytrading casino.

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I agree. From a merchant's perspective, volatility makes bitcoin a nightmare to do business in. Some speculation is necessary, to ensure that hardware, goods and services required for the bitcoin economy (but cannot as yet purchased with bitcoin) can be obtained with fiat currency. But when nobody wants to leave any capital within the bitcoin economy, it is extremely difficult to operate a business under these conditions.

It's hopeless to expect speculators to only take the long view, and since there is no defined floor for the price of bitcoin, any merchant who adopts it is taking a huge risk. As a bitcoin merchant, you have no option but to force yourself to assume an overly optimistic and bullish outlook, whether you believe it or not. So the only merchants who will adopt the system are those who can successfully delude themselves. Do we want to entrust the development of the early bitcoin economy to irrational people?

With speculators buying and selling schizophrenically, sending the exchange rate wild, rational entrepreneurs naturally find it difficult to maintain this optimistic outlook when they see such bearish signals coming from the markets and then feel their balance sheets squeeze and expand within no defined range.

It is going to take some time still for all those irrational speculators out there to get bored of their zero sum game and realize that it is a pointless exercise before we get any kind of economically viable environment for businesses to operate in.

This.
Services like bitpay may help mitigate the volatility to a large extent, but its definitely not helpful to see BTC value fluctuate more then thermometer in the Siberian spring. It does huge damage to its image, it prevents non dynamic setting  of prices and basically makes a bitcoin economy almost impossible. The only way to use it is buy the bitcoins before your purchase, with the merchant selling them for dollars instantly with bitcoins never remaining in the economy. Thats not entirely useless, but really not what it could be.

Anyway, I dont hate speculators, I do hate stupid speculation, and honestly, this is what we are seeing. There is nothing going on in bitcoin land that warrants the swings we have seen. No real increase in commerce, no real threats or opportunities. Whatever you thought in may bitcoin might achieve over time, all that is still valid today. Why price would go up and down by an order of magnitude makes no sense. This daily buying and selling makes no sense, it is a lottery. Its literally a zero sum game. If you want to speculate, at least take the long view.

Ooops - my first use of 'traders' I meant merchants. I used merchants afterwards because I realised using traders would be confusing but forgot to change it there.

I agree though, 'day traders' love volatility.

I also agree that no one can (or ought to) control speculators.

I disagree that speculators driving up the price of Bitcoin will encourage merchants to use it. I would agree if I thought merchants felt the price would be stable or only go up but we all know this isn't true.

I don't begrudge speculators at all either but I do understand that speculation is going to slow down Bitcoin adoption for traditional merchant transactions and if adoption for the sale of services/goods is the primary basis for the value of Bitcoin, I can understand from that, that Bitcoin will never have value (or so limited that it'll be irrelevant).

Ahm. No.

i think you have it backwards.  first of all traders love volatility.  second no one can control speculators or the markets so no sense knocking them.  third if speculators are successful at driving the price of Bitcoin higher, this encourages merchants to jump in with innovative businesses related to Bitcoin.  we saw this excitement in the Spring.  so i don't begrudge speculators at all.  this is how markets work.

Not sure he's against gambling.

Looks like to me he's saying that traders are having a hard time accepting Bitcoin for trading due to the wild fluctuations and if Bitcoin doesn't get traction as a currency then it'll never succeed.

I can see why merchants would have a problem with the volatility.

I can see why speculators want to speculate.

In the grand scheme of things I'd say if you let the merchants do their thing first, Bitcoin gains traction as a currency, everyone wins. If you let the speculators do their thing first, there might not be anything left.

if you're so against gambling why are you hanging out in the Speculation Board?

If there are as many as you say there are, you wouldn't be pushing subscriptions.  You wouldn't have to.  Everyone would be suggesting it to their friends.

Volatility =! decreasing prices. Perhaps you think a 100x increase in price in mere months was somehow stable?
Bitcoin exchange rates have been extremely volatile since day 1. And yes, thats to be expected from something new and unknown, but as long as it remains this volatile, its going to have a damn hard time gaining any sort of traction aside from gamblers and allowing bitcoin to achieve an exchange rate that is more reflective of its performance as a currency rather than purely the combined panic/hype sentiments and self fulfilling prophecies of gamblers.

of course for the average business a currency which has zero fluctuation would be ideal.  yes, i own my own business thank you.

you seem totally incapable of admitting that Bitcoin volatility has been only 6 months old in a currency that has only been around since Jan 2009.  

Again you seem utterly unable to see the difference between investing/gambling and the usefulness of a currency as a facilitator for conducting trade. Yes, I think gold is a bad way to conduct trade, no one uses gold to pay for their bread.


Why on earth would he risk his profitable business on the moodswings of a bunch of daytraders? Clearly you have never done any actual business.

Agreed.  One cannot expect all merchants to also be speculators/gamblers.  This is very much like expecting all miners to mine solo.  Some merchants will only use Bitcoin if they are able to enjoy its benefits without taking on the risks.

However, speculators and traders colluding to create an artifical stable Bitcoin price is not a solution; this would be akin to building a house upon sand.  Instead, Bitcoin has to go through this phase of wild speculation where some win big and others lose big.  This will kill off the day traders who don't know what they are doing and leave those that profit and create drag on the price.  This process will take a long time but it is an essential step toward a healthy kind of stability.  I believe it is unlikely that a level of stability that is acceptable to most merchants can be reached in the next 10 years and so I expect a series of competing companies offering options to merchants (basically taking the sting of market volatility out of the equation for a fee) will arise.

Of course, this all assumes that Bitcoin manages to dodge various devastating scenarios such as being hacked past the point of recovery or being declared illegal to trade in most countries.

spoken like a linear thinking, uncreative, narrow-minded conservative.  but thats ok.  you act like Bitcoin has had many decades to prove itself but failed.  the market is thin b/c its so new.  of course theres volatility.  do you think gold is a bad investment given its volatility over the last decade despite it being close to the best investment over that period of time? 

IMO, the easiest or safest way to "gamble" on the future of Bitcoin is to offer services or goods for it, put them away for safe keeping, then wait.  of course he can't do this for 100% of his income but if he has a profitable USD business and he believes in Bitcoin, why not do it this way?

Spoken like a true gambler. A merchant has to pay for his stuff in $/EURO/Yen whatever. Gambling on the rise of "foreign" currencies is not what a merchant does, its what a speculator does. A merchant will want to protect himself from currency swings through hedging, even for swings as minor as what have between dollar and euro's etc. The volatility of bitcoin makes that a complete joke.

this is just your opinion of things which could easily be wrong.  i submit that any merchant who believes in Bitcoin, especially if he has speculative juices in him, accept Bitcoin in payment hand over fist to accumulate as many as possible now w/o expending USD's before the true equilibrium value of Bitcoin is achieved, which IMO is WAY higher than what it is today.  thats my opinion.

thats just not true.  look at all the recent developments and improvements:  encrypted wallets, better DDoS protection, improved blockchain download times, Android apps, BitPay, Casascius's POS system, Casascius's Physical Bitcoins, increased mtgox security with direct cash deposits services, death of the altchain competitors, etc, etc, etc.

bears have blinders on.

No; what I mean is anyone wanting to use bitcoin as a currency and trade tool, rather than a lottery doesnt like this volatility.  Its one of the major factors holding bitcoin from gaining more widespread acceptance (and thereby also, from increased price stability, nice catch 22).

Anyway, im not naive enough to expect posting will make anyone stop playing the lottery, but Im gonna voice my opinion whether you like it or not.

Who is this Bitcoin you speak of and how do price changes hurt its feelings? What you mean to say is that YOU don't like volatility. Speculators that lose money are the ones who increase volatility. Speculators who are making money are like a tax on fluctuation. They are friction in the system. Anyways, you might as well go join a gun forums to tell them that guns are ruining America, or go to a car forum and espouse the benefits of public transport. Good luck on your quest to define and control exactly what Bitcoin is and should be.