Monthly average USD/bitcoin price & trend - page 25.

bitrider

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Quote from: Zangelbert Bingledack on November 12, 2013, 11:34:37 PM

Just another economic ignoramus. For some reason they like to hang out on the economics forum.

Edit: Worse, a minarchist. Minarchists always think everything is a conspiracy because they still fundamentally believe in the supersition of statism and that therefore all the ills of the world must be about conspirators corrupting it.

AnonyMint thinks Bitcoin is a central banker conspiracy.

Yes, maybe so. His views are certainly paranoid and extreme Undecided

- I definitely don't want to live in his reality. But he seems to have done some very strong thinking on real threats and weaknesses of bitcoin.

Zangelbert Bingledack

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Just another economic ignoramus. For some reason they like to hang out on the economics forum.

Edit: Worse, a minarchist. Minarchists always think everything is a conspiracy because they still fundamentally believe in the supersition of statism and that therefore all the ills of the world must be about conspirators corrupting it.

AnonyMint thinks Bitcoin is a central banker conspiracy.

bitrider

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Quote from: AnonyMint on November 12, 2013, 03:02:39 PM

Quote from: rpietila on November 12, 2013, 12:40:51 PM

*If all the money and stocks and bonds and tax shelter accounts tries to enter bitcoin, I think you can 10-double the valuation of all that tries to fit through the hole (given short enough timeframe) and this will be the final bubble valuation of bitcoin.

Surely then you understand that not even 1% of the masses can ever buy Bitcoin and the dystopian outcome is assured.

Where is your argument for this conclusion? I followed your links and just found more proclamations and hyperbole. I'd like to see your analysis.

bluemoon

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It is interesting how good a fit the least-squares method gives applied to a log graph of bitcoin's price history. How far we can rely on an extension of the line for future projections of value I am unsure: it may all happen sooner than we might expect.

Looking at graphs of historical hyperinflations, it seems to me people will discard a currency very rapidly indeed if they lose confidence in it.

Governments are playing with fire with today's fiat currencies as they borrow heavily from their central banks. If bitcoin continues to grow it may make fiat stability even more precarious as people find they have somewhere better to go.

The German Weimar and recent Zimbabwean inflations became so rapid the log graphs of their currency depreciations are themselves exponential: there is no best fit line. I wonder if that will happen with bitcoin?

Weimar paper mark hyperinflation log graph (Wikipedia):

Zimbabwe Dollar hyperinflation log graph (Wikipedia):

BitchicksHusband

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Doesn't that mean that $300,000 is VERY unlikely, even under the best of circumstances?

Interestingly, the value by the end of 2014 will more accurately tell us the peak.

bluemoon

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Quote from: AnonyMint on November 12, 2013, 03:02:39 PM

Quote from: rpietila on November 12, 2013, 12:40:51 PM

*If all the money and stocks and bonds and tax shelter accounts tries to enter bitcoin, I think you can 10-double the valuation of all that tries to fit through the hole (given short enough timeframe) and this will be the final bubble valuation of bitcoin.

I remembered that you understood math at one time. Surely then you understand that not even 1% of the masses can ever buy Bitcoin and the dystopian outcome is assured.

Speculation fever manipulation (instead of rational speculation where you don't talk at all) is all you will ever be good at my friend? You will destroy the world.

And you have accomplished nothing to actually help.

May the force be with you, you are going to need it.

Bitcoin and other monies are means of exchange: they don't deprive people of the value of their non-money assets, unless, like fiat currencies, they are subject to governments diluting them by printing ever more to spend.

Bitcoin is a way to avoid a dystopian inflationary outcome ...

AnonyMint

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Quote from: rpietila on November 12, 2013, 12:40:51 PM

*If all the money and stocks and bonds and tax shelter accounts tries to enter bitcoin, I think you can 10-double the valuation of all that tries to fit through the hole (given short enough timeframe) and this will be the final bubble valuation of bitcoin.

I remembered that you understood math at one time. Surely then you understand that not even 1% of the masses can ever buy Bitcoin and the dystopian outcome is assured.

Speculation fever manipulation (instead of rational speculation where you don't talk at all) is all you will ever be good at my friend? You will destroy the world.

And you have accomplished nothing to actually help.

May the force be with you, you are going to need it.

kdrop22

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Quote from: rpietila on November 12, 2013, 12:38:10 PM

What kind of money we are talking about? Bitcoin is growing so quickly and holders tend to hold tightly that the ratio of (market cap growing)/(new money invested) is a multiple of 1.

I have actually estimated this using data from exchanges starting 2012. The most relevant calculation I made is using combined Bitstamp + Gox market volume, multiplied by 33% (assuming that on average 33% of the volume is virgin money and the rest is trading) and relating this to the increase in market cap in the given time. The ratio was 3.9. This means that in order to reach $300k (corresponding to 4.5T market cap), a little bit more than 1,000 billion dollars need to exit the current system and demand conversion to bitcoins.

If it happens too quickly, not even 1,000 billion can enter*. In extreme times such as 1.1.-8.4.2013 ($13.5-143 with six 20-30% flashcrashes but no deeper corrections or negative weeks), the ratio can reach 10. This was even after modifying the virgin money share to 60%.

A corollary is that the current bitcoin holders receive 1,000 billion USD. Miners don't count since they amortize their investment but not much net gain. Traders don't count since they cancel each other with some winning, others losing (in practice most of this money goes to active traders because they lose so much bitcoins in the process, the net loss of bitcoins being large in comparison to the net gain in dollarz).

This post makes an important point. We need to model not just the future price trends, but also the amount of money that needs to flow in.
Can anyone elaborate on any possible models for this, this would be much appreciated.

bitrider

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Holy shit. That blows my mind - just the numbers involved and the speed with which it can happen - and it also shows how BTC has so many unique and unpredictable aspects vs. any "traditional" tech innovation/adoption/value cycle - even compared to another disruptive game-changer. Shocked

rpietila

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*If all the money and stocks and bonds and tax shelter accounts tries to enter bitcoin, I think you can 10-double the valuation of all that tries to fit through the hole (given short enough timeframe) and this will be the final bubble valuation of bitcoin.

rpietila

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Quote from: bitrider on November 12, 2013, 12:04:06 PM

I expect that the "inflated expectations" phase will correspond (closely, but not simultaneously) to the extreme peaks in valuation that rpietila has been hinting about. (Since all current pricing is based on expectations of future value). Followed by a collapse back to much lower valuations, followed by relative stabilization at the more sustainable 300K levels as massive adoption kicks in.

Cool post.

What kind of money we are talking about? Bitcoin is growing so quickly and holders tend to hold tightly that the ratio of (market cap growing)/(new money invested) is a multiple of 1.

I have actually estimated this using data from exchanges starting 2012. The most relevant calculation I made is using combined Bitstamp + Gox market volume, multiplied by 33% (assuming that on average 33% of the volume is virgin money and the rest is trading) and relating this to the increase in market cap in the given time. The ratio was 3.9. This means that in order to reach $300k (corresponding to 4.5T market cap), a little bit more than 1,000 billion dollars need to exit the current system and demand conversion to bitcoins.

If it happens too quickly, not even 1,000 billion can enter*. In extreme times such as 1.1.-8.4.2013 ($13.5-143 with six 20-30% flashcrashes but no deeper corrections or negative weeks), the ratio can reach 10. This was even after modifying the virgin money share to 60%.

A corollary is that the current bitcoin holders receive 1,000 billion USD. Miners don't count since they amortize their investment but not much net gain. Traders don't count since they cancel each other with some winning, others losing (in practice most of this money goes to active traders because they lose so much bitcoins in the process, the net loss of bitcoins being large in comparison to the net gain in dollarz).

SlipperySlope

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Stephen Reed

I added a table to the results page of my shared spreadsheet. Given your own guess as to the maximum bitcoin price - by which I mean the price when bitcoin is fully adopted by financial speculators, the corresponding logistic adoption curve predicts these prices ...

You can view, and copy for your own editing, the bitcoin logistic spreadsheet here:
https://docs.google.com/spreadsheet/ccc?key=0ArD8rjI3DD1WdGhDN3FBWFptTlZTREN0cFkxZ3JHTnc

Four sheets are included: commentary, calculations, chart, and results. The calculations are performed using the $1000000 maximum price, but the parameters for the other three cases are in the results sheet.

bitrider

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He just meant triple the price from when he sold till now.

xxnewbiecoinerxx

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Quote from: rpietila on November 12, 2013, 06:43:02 AM

Quote from: dserrano5 on November 12, 2013, 06:38:48 AM

Could we have quarterly vertical lines? It's difficult to pinpoint the exact moment we "will" reach $1000 Wink

.

Sure, since I am not the one doing the charts anyway

Currently it seems to be postponed until May 2014...

No seriously, the value of this analysis is to give you ideas on when we are ahead or behind the trend. Objectively, not based on handdrawings. For example, my decision to time the selling last September was stupid, since the trendline was so much behind that any downside was very unlikely. As I did not have imminent need for the money, I better had waited and sold for example now, as we are ahead the trend (and at triple the price!).

Confused here Huh

. The trendline shows that oct/nov price ise around 300 USD/BTC? You say you say that we are at triple over the trend price? I do not understand that part. Are you predicting that the price is gonna fall?

bitrider

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I love this thread too. This where my mind has been for many months now, and it is great to see some better numbers being put on the long-term charts with better data (by better minds). Thank you.

Many of you have seen this before, but thought I would post so that new readers to this thread might have an understanding of some of the underlying terminology and theory for the longer-term adoption cycle.

and to give a sense of where we might be in this cycle and expected time-frames (now very early in the "trigger" phase):

I expect that the "inflated expectations" phase will correspond (closely, but not simultaneously) to the extreme peaks in valuation that rpietila has been hinting about. (Since all current pricing is based on expectations of future value). Followed by a collapse back to much lower valuations, followed by relative stabilization at the more sustainable 300K levels as massive adoption kicks in.

I wonder how you think this may align with Slippery's excellent analysis?

Zangelbert Bingledack

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Quote from: SlipperySlope on November 12, 2013, 08:54:31 AM

The family of logistic curves I made, and the log growth chart presented by rpietila, probably do not change much if we leave off the last six months of data. The addition of China, and later other countries yield a higher maximum bitcoin price, extending the exponential phase of the logistic curve, not necessarily changing its slope.

Right, I forgot this wasn't the speculation subforum, but for spec purposes it seems to mean we can expect nearer-term prices to be pushed a few weeks or months to the right. That is, a bit higher price targets (maybe between 30% and 100% higher) than what the trend would otherwise predict for this time.

rpietila

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Yes, the most recent changes to the OP were from today:

- dree12's data used (more accurate volume weighting, did not change a lot)
- as a result, redrawn trendline with equation: y = 0,092x - 2,9124 ; R² = 0,91466 (x=1 <=> Jan2009).

Interesting thing is that the trendtargets were revised upwards a little. Despite this, the current price is higher than the trendtarget. It does not mean that you should sell or even abstain from buying. Care should be taken when the price significantly overshoots the target. The April high was 3.6x the target.

- If there is a rise to a high plateau above the trendline, the trendline will auto-correct higher + rise towards the price at 23% monthly pace.
- If there is an intermediate top, there will by definition be a correction below the trendline also, and this will be the premier entry point.

Trendtarget for Nov2013: 328
Trendtarget for Dec2013: 404

mccoyspace

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Great thread. Thanks to all the participants. Is the first post being updated to reflect OP's current thoughts/data?
just trying to identify the "latest info"

MaxBTC1

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Nice graph!

Thanks

rpietila

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Quote from: SlipperySlope on November 12, 2013, 08:54:31 AM

I believe that bitcoin speculation is way ahead of the underlying bitcoin economy. What will radically change in 2-4 years accordingly, is mainstream perceptions and expectations.

That is the role of speculation. Bitcoin is still world's most undervalued investment. The exponential value appreciation phase will last until bitcoin's price is on the same ballpark as its future value (not present value).

I think even $10,000 bitcoins now are very affordable. Future looks much brighter than in March when I estimated the fair price as $2200.

You miss the gains if you base your estimates on what is available now. It is possible that bitcoin bubble will consummate at about the same time as the early adoption turns into mass adoption. So it was with Internet and Internet stocks in 1999.

Topic: Monthly average USD/bitcoin price & trend - page 25. (Read 118255 times)