Topic: Nobody takes bitcoin seriously: rises 10x in month drops 50% in 10 days? I do. (Read 4155 times)
June 06, 2011, 08:46:31 PM
going by http://bitcoinwatch.com/ there was 844,338.94 BTC sent in the last 24 hours. (not sure how much of that is real trade or just people shuffling money between accounts)
June 06, 2011, 08:31:31 PM
Thank you for providing me an excuse to provide a comic link: http://bitcoinweekly.com/articles/comic-reaction-after-dramatic-rise-of-bitcoin-s-value 
June 06, 2011, 08:01:14 PM
Prices do not move like this. Not legitimately, anyway. Buyers and Sellers need to fight it out on the third and fourth decimal place, not in recognizable fractions and certainly not in integers.
I don't want to see leverage come to bitcoin. Leverage needs to be curtailed significantly. It's already curtailed in American equities at 2 to 1 and most people do not know that until you tell them.
I don't want to see leverage come to bitcoin. Leverage needs to be curtailed significantly. It's already curtailed in American equities at 2 to 1 and most people do not know that until you tell them.
See I think bitcoin is the best teaching tool. Without the leverage it forces you to keep mowing fingernails. Once you are accustomed to calculating the market and making leisurely trades, you can then outperform every middle of the rank forex player because you won't twitch.
Second the ones complaining about hoarding are the ones who would be hoarding if they had been here earlier. If there were really that much hoarding going on the price would not move because there would be no recycling. Some people are happy to be holding BTC for the future. They are getting no gain until they trade anyway. Who knows maybe they are waiting for stores to pop up but do not have the time or interest in babysitting such a business.
June 06, 2011, 05:41:43 PM
19 to 16 to 19… A 30,000 pip range and a 60,000 pip move it one day.
That is more insane than any instrument offered in the casino gulags of lower Manhattan or Chicago.
I would like more BTC players to educate themselves about the existing market rules. They're not reinventing anything and should understand that without this knowledge, they can get screwed.
Prior to Clinton introducing the casino laws at the end of his term, commodities and currencies were the most conservative markets because they lacked the leverage of today's mosh pit.
Leverage has democratized trading. You don't need millions to get in. At the same time, people seem to have this absurd aversion to educating themselves on the most basic rules.
If it wasn't for the fact that people could end up splattered around a utility pole to mark a permanent end to their internet porn habit, I think people would not learn the basics of driving either.
Prices do not move like this. Not legitimately, anyway. Buyers and Sellers need to fight it out on the third and fourth decimal place, not in recognizable fractions and certainly not in integers.
I don't want to see leverage come to bitcoin. Leverage needs to be curtailed significantly. It's already curtailed in American equities at 2 to 1 and most people do not know that until you tell them.
That is more insane than any instrument offered in the casino gulags of lower Manhattan or Chicago.
I would like more BTC players to educate themselves about the existing market rules. They're not reinventing anything and should understand that without this knowledge, they can get screwed.
Prior to Clinton introducing the casino laws at the end of his term, commodities and currencies were the most conservative markets because they lacked the leverage of today's mosh pit.
Leverage has democratized trading. You don't need millions to get in. At the same time, people seem to have this absurd aversion to educating themselves on the most basic rules.
If it wasn't for the fact that people could end up splattered around a utility pole to mark a permanent end to their internet porn habit, I think people would not learn the basics of driving either.
Prices do not move like this. Not legitimately, anyway. Buyers and Sellers need to fight it out on the third and fourth decimal place, not in recognizable fractions and certainly not in integers.
I don't want to see leverage come to bitcoin. Leverage needs to be curtailed significantly. It's already curtailed in American equities at 2 to 1 and most people do not know that until you tell them.
June 06, 2011, 11:15:57 AM
500x leverage would whip this market around like crazy. We need a lot more growth before any leverage is needed.
June 06, 2011, 11:07:25 AM
Dude, mtgox is not the only place that trades the coins, tons of coins are traded privately or on bitcoin-otc.
USD trade has significant volume because traders use extremely high level of leverage. I can trade several million of USD with just a few thousand dollars in the forex account. There's no leverage in BTC trade, therefore the volume is lower. If we were allowed to use 500x leverage like on forex. We'd see volume increase several hundred fold.
My apologies, I in fact was misled by the mtg graph of volume. I expected an end-of-day graph to be volume for the previous day, when in fact it "reset" and was volume for the new day. My bad.
However, the point is still the same. 22,000 BTC volume for a day against a population of 6.4M coins is 0.3% of the available coins.
By comparison the trade volume of ONLY the US Dollar and the AUS Dollar amount to 25% of the total circulating dollars per day (http://www.businessinsider.com/chart-of-the-day-trading-currencies-2010-10). The total US Currency Population is approximately $930 Billion ( http://www.freerepublic.com/focus/f-news/2697687/posts and http://www.visualeconomics.com/the-value-of-united-states-currency-in-circulation/). We need to see trading volumes in the Bitcoin market approach 1.6M coins, per day, to see the same type of "stability" the US Dollar has. Will that drive the price of BTC down? Absolutely. But guess what, that price will be much more stable and much closer to the realistic value of a single BTC. Right now the prices are due to hoarding, and that's not sustainable, it WILL crash.
I'm not a naysayer of Bitcoins. I believe in them. But if we as a community want them to succeed, you have to use them. Otherwise, BTC aren't going to be a currency, they're going to be an asset. I have assets, my MacBook Pro is an asset.
Put it this way. There are people with WAY over 21,000 BTC in their combined Wallets. What would happen if they decided to sell all of them right now at the "peak" of the market?
Only ONE person gets to sell at the peak. Once they've sold, it pushes the prices down. If that sale is large enough, it will devalue the current BTC market itself significantly. Once people start seeing BTC drop significantly in value, guess what will happen? More people will jump to sell because they're seeing the investment they thought was worth X quickly become X-Y, while Y continues to grow.
The smartest people in the Bitcoin market are selling coins every day. Because if they can convert their current stash of coins into US Dollars and do it slowly enough to not impact the market, they'll win.
Lesson: If you aren't selling coins every day, you're running the SIGNIFICANT risk of rapidly losing a significant amount of money.
Your "gains" are unrealized until you have something else in your possession. Doesn't matter what it is, a shiny new MacBook Pro, or an iPad, or Amazon gift cards, doesn't matter. But until you have something ELSE of value that you've used Bitcoins to acquire, your gains are unrealized and you run the risk of never realizing them.
You are
USD trade has significant volume because traders use extremely high level of leverage. I can trade several million of USD with just a few thousand dollars in the forex account. There's no leverage in BTC trade, therefore the volume is lower. If we were allowed to use 500x leverage like on forex. We'd see volume increase several hundred fold.
The TOTAL volume at mtg today was 681 coins. 681.
There are over 6.4M coins in the market (not counting lost coins).
Because the prices are rising, people are holding them. Unfortunately, that means if you want to get bitcoins, you have to pay a premium, because they aren't circulating. No one is USING them.
Silk Road isn't the problem (though a Tor accessible website as the only place to really USE coins doesn't give the soccer mom a warm fuzzy).
If you want the economy to thrive, then sell and/or trade some of the coins you're holding on to.
Guess what will happen eventually? No one will WANT the coins, because they couldn't get any. Guess how much the coins you're hoarding will be worth when no one want them?
There are over 6.4M coins in the market (not counting lost coins).
Because the prices are rising, people are holding them. Unfortunately, that means if you want to get bitcoins, you have to pay a premium, because they aren't circulating. No one is USING them.
Silk Road isn't the problem (though a Tor accessible website as the only place to really USE coins doesn't give the soccer mom a warm fuzzy).
If you want the economy to thrive, then sell and/or trade some of the coins you're holding on to.
Guess what will happen eventually? No one will WANT the coins, because they couldn't get any. Guess how much the coins you're hoarding will be worth when no one want them?
My apologies, I in fact was misled by the mtg graph of volume. I expected an end-of-day graph to be volume for the previous day, when in fact it "reset" and was volume for the new day. My bad.
However, the point is still the same. 22,000 BTC volume for a day against a population of 6.4M coins is 0.3% of the available coins.
By comparison the trade volume of ONLY the US Dollar and the AUS Dollar amount to 25% of the total circulating dollars per day (http://www.businessinsider.com/chart-of-the-day-trading-currencies-2010-10). The total US Currency Population is approximately $930 Billion ( http://www.freerepublic.com/focus/f-news/2697687/posts and http://www.visualeconomics.com/the-value-of-united-states-currency-in-circulation/). We need to see trading volumes in the Bitcoin market approach 1.6M coins, per day, to see the same type of "stability" the US Dollar has. Will that drive the price of BTC down? Absolutely. But guess what, that price will be much more stable and much closer to the realistic value of a single BTC. Right now the prices are due to hoarding, and that's not sustainable, it WILL crash.
I'm not a naysayer of Bitcoins. I believe in them. But if we as a community want them to succeed, you have to use them. Otherwise, BTC aren't going to be a currency, they're going to be an asset. I have assets, my MacBook Pro is an asset.
Put it this way. There are people with WAY over 21,000 BTC in their combined Wallets. What would happen if they decided to sell all of them right now at the "peak" of the market?
Only ONE person gets to sell at the peak. Once they've sold, it pushes the prices down. If that sale is large enough, it will devalue the current BTC market itself significantly. Once people start seeing BTC drop significantly in value, guess what will happen? More people will jump to sell because they're seeing the investment they thought was worth X quickly become X-Y, while Y continues to grow.
The smartest people in the Bitcoin market are selling coins every day. Because if they can convert their current stash of coins into US Dollars and do it slowly enough to not impact the market, they'll win.
Lesson: If you aren't selling coins every day, you're running the SIGNIFICANT risk of rapidly losing a significant amount of money.
Your "gains" are unrealized until you have something else in your possession. Doesn't matter what it is, a shiny new MacBook Pro, or an iPad, or Amazon gift cards, doesn't matter. But until you have something ELSE of value that you've used Bitcoins to acquire, your gains are unrealized and you run the risk of never realizing them.
You are
June 06, 2011, 08:18:37 AM
I have a feeling that any future exchange needs to be in Tor hidden service.
This still leaves the question of how to add or withdraw USD into the service. A service dealing in USD, such as a BTC/USD exchange, can only be so secret.
June 06, 2011, 08:12:06 AM
The TOTAL volume at mtg today was 681 coins. 681.
There are over 6.4M coins in the market (not counting lost coins).
Because the prices are rising, people are holding them. Unfortunately, that means if you want to get bitcoins, you have to pay a premium, because they aren't circulating. No one is USING them.
Silk Road isn't the problem (though a Tor accessible website as the only place to really USE coins doesn't give the soccer mom a warm fuzzy).
If you want the economy to thrive, then sell and/or trade some of the coins you're holding on to.
Guess what will happen eventually? No one will WANT the coins, because they couldn't get any. Guess how much the coins you're hoarding will be worth when no one want them?
There are over 6.4M coins in the market (not counting lost coins).
Because the prices are rising, people are holding them. Unfortunately, that means if you want to get bitcoins, you have to pay a premium, because they aren't circulating. No one is USING them.
Silk Road isn't the problem (though a Tor accessible website as the only place to really USE coins doesn't give the soccer mom a warm fuzzy).
If you want the economy to thrive, then sell and/or trade some of the coins you're holding on to.
Guess what will happen eventually? No one will WANT the coins, because they couldn't get any. Guess how much the coins you're hoarding will be worth when no one want them?
My apologies, I in fact was misled by the mtg graph of volume. I expected an end-of-day graph to be volume for the previous day, when in fact it "reset" and was volume for the new day. My bad.
However, the point is still the same. 22,000 BTC volume for a day against a population of 6.4M coins is 0.3% of the available coins.
By comparison the trade volume of ONLY the US Dollar and the AUS Dollar amount to 25% of the total circulating dollars per day (http://www.businessinsider.com/chart-of-the-day-trading-currencies-2010-10). The total US Currency Population is approximately $930 Billion ( http://www.freerepublic.com/focus/f-news/2697687/posts and http://www.visualeconomics.com/the-value-of-united-states-currency-in-circulation/). We need to see trading volumes in the Bitcoin market approach 1.6M coins, per day, to see the same type of "stability" the US Dollar has. Will that drive the price of BTC down? Absolutely. But guess what, that price will be much more stable and much closer to the realistic value of a single BTC. Right now the prices are due to hoarding, and that's not sustainable, it WILL crash.
I'm not a naysayer of Bitcoins. I believe in them. But if we as a community want them to succeed, you have to use them. Otherwise, BTC aren't going to be a currency, they're going to be an asset. I have assets, my MacBook Pro is an asset.
Put it this way. There are people with WAY over 21,000 BTC in their combined Wallets. What would happen if they decided to sell all of them right now at the "peak" of the market?
Only ONE person gets to sell at the peak. Once they've sold, it pushes the prices down. If that sale is large enough, it will devalue the current BTC market itself significantly. Once people start seeing BTC drop significantly in value, guess what will happen? More people will jump to sell because they're seeing the investment they thought was worth X quickly become X-Y, while Y continues to grow.
The smartest people in the Bitcoin market are selling coins every day. Because if they can convert their current stash of coins into US Dollars and do it slowly enough to not impact the market, they'll win.
Lesson: If you aren't selling coins every day, you're running the SIGNIFICANT risk of rapidly losing a significant amount of money.
Your "gains" are unrealized until you have something else in your possession. Doesn't matter what it is, a shiny new MacBook Pro, or an iPad, or Amazon gift cards, doesn't matter. But until you have something ELSE of value that you've used Bitcoins to acquire, your gains are unrealized and you run the risk of never realizing them.
June 06, 2011, 02:31:56 AM
There does seem to be hoarding. Perhaps more selling to reduce volatility and additional exchanges like Mt Gox would reduce volatility and increase credibility.
"Animated graph showing from which point in time coins have moved and stayed unused. Analyzed directly from the complete blockchain. You can see some fairly large (+200kBTC) chunks of coins being moved forward at once multiple times around the end. Coins from the first 240 days are barely moving. About half of the coins generated between the 300 and 700th day after the chain started have been transferred forward at this point. 22% of all the coins have moved in the past 30 days."
http://www.youtube.com/watch?v=9q3UtmhR9G8
"Animated graph showing from which point in time coins have moved and stayed unused. Analyzed directly from the complete blockchain. You can see some fairly large (+200kBTC) chunks of coins being moved forward at once multiple times around the end. Coins from the first 240 days are barely moving. About half of the coins generated between the 300 and 700th day after the chain started have been transferred forward at this point. 22% of all the coins have moved in the past 30 days."
http://www.youtube.com/watch?v=9q3UtmhR9G8
I swear I'm not hoarding any coins. All the ones I haven't spent yet are being saved.
June 06, 2011, 02:18:31 AM
There does seem to be hoarding. Perhaps more selling to reduce volatility and additional exchanges like Mt Gox would reduce volatility and increase credibility.
"Animated graph showing from which point in time coins have moved and stayed unused. Analyzed directly from the complete blockchain. You can see some fairly large (+200kBTC) chunks of coins being moved forward at once multiple times around the end. Coins from the first 240 days are barely moving. About half of the coins generated between the 300 and 700th day after the chain started have been transferred forward at this point. 22% of all the coins have moved in the past 30 days."
http://www.youtube.com/watch?v=9q3UtmhR9G8
"Animated graph showing from which point in time coins have moved and stayed unused. Analyzed directly from the complete blockchain. You can see some fairly large (+200kBTC) chunks of coins being moved forward at once multiple times around the end. Coins from the first 240 days are barely moving. About half of the coins generated between the 300 and 700th day after the chain started have been transferred forward at this point. 22% of all the coins have moved in the past 30 days."
http://www.youtube.com/watch?v=9q3UtmhR9G8
June 06, 2011, 02:09:47 AM
Lend out your coins. Help people pay bills. Get your coins back.
how can you be sure you will get your coins back, considering its rapid appreciation, and the high interest rate (20% in 2weeks, 520% annualized simple rate)? Lend out to traders you already know. How can you be sure you are getting your product?
June 05, 2011, 11:26:57 PM
Lend out your coins. Help people pay bills. Get your coins back.
how can you be sure you will get your coins back, considering its rapid appreciation, and the high interest rate (20% in 2weeks, 520% annualized simple rate)? June 05, 2011, 10:43:39 PM
People hoard gold all the time too. I don't see a bunch of people complaining about that, everyone wants gold.
June 05, 2011, 10:43:21 PM
pickerin,
Put a bid at 20$ (maybe 50$ in a week or two) and some of those damn hoarders will be tempted enough to fill your order.
P.S. why people complain that free market sets the price wrong all the time is beyond me... if you know better than the market you can get filthy rich in no time.
Quote
Damn hoarders do not sell me coins for 15$, bastards!!! This is why bitcoin is doomed!
Put a bid at 20$ (maybe 50$ in a week or two) and some of those damn hoarders will be tempted enough to fill your order.
P.S. why people complain that free market sets the price wrong all the time is beyond me... if you know better than the market you can get filthy rich in no time.
The dynamic is however a legit concern. As I said above, I'm lending out my coins now.
I agree with you. All this is is a failure to evolve.
Lend out your coins. Help people pay bills. Get your coins back.
June 05, 2011, 10:33:47 PM
pickerin,
Put a bid at 20$ (maybe 50$ in a week or two) and some of those damn hoarders will be tempted enough to fill your order.
P.S. why people complain that free market sets the price wrong all the time is beyond me... if you know better than the market you can get filthy rich in no time.
Quote
Damn hoarders do not sell me coins for 15$, bastards!!! This is why bitcoin is doomed!
Put a bid at 20$ (maybe 50$ in a week or two) and some of those damn hoarders will be tempted enough to fill your order.
P.S. why people complain that free market sets the price wrong all the time is beyond me... if you know better than the market you can get filthy rich in no time.
June 05, 2011, 10:33:11 PM
The problem is people are hoarding coins.
The TOTAL volume at mtg today was 681 coins. 681.
The TOTAL volume at mtg today was 681 coins. 681.
mtg must not be MtGox, because there are single trades that exceed that number.
June 05, 2011, 10:32:08 PM
If you want the economy to thrive, then sell and/or trade some of the coins you're holding on to.
Exactly. It's an unrealized gain until you spend them. June 05, 2011, 10:32:02 PM
The problem is people are hoarding coins.
Or freaked out so they switch to being committed and holding.
Wish they'd realize that loaning, buying with BTCs, and exchanging for services is the same as holding.
Quote
Silk Road isn't the problem (though a Tor accessible website as the only place to really USE coins doesn't give the soccer mom a warm fuzzy).
So invade that market place. I once went to a computer fair where people had other things on sale. On one side were people selling virgin Mary figurines. The other had penis shaped cigarette lighters. I'm not joking.
Quote
If you want the economy to thrive, then sell and/or trade some of the coins you're holding on to.
I loaned 3.9 (full loan 10) BTC today. 20% over two weeks. Priced in bitcoins. No USD exchange or anything.
Quote
Guess what will happen eventually? No one will WANT the coins, because they couldn't get any. Guess how much the coins you're hoarding will be worth when no one want them?
We call that a reboot. I'll restart bitcoin all by myself if it happens. Phenomenal power, itty bitty living space.
June 05, 2011, 10:30:04 PM
The problem is people are hoarding coins.
The TOTAL volume at mtg today was 681 coins. 681.
The TOTAL volume at mtg today was 681 coins. 681.
mtg must not be MtGox, because there are single trades that exceed that number.
June 05, 2011, 10:29:25 PM
The problem is people are hoarding coins.
...
Guess what will happen eventually? No one will WANT the coins, because they couldn't get any. Guess how much the coins you're hoarding will be worth when no one want them?
...
Guess what will happen eventually? No one will WANT the coins, because they couldn't get any. Guess how much the coins you're hoarding will be worth when no one want them?
I dont see this as a problem. I think people are not selling bitcoins because the demand is making the price go up, and naturally no body wants to sell something that will be twice as valuable a week from now.
There is no problem to get bitcoins if you pay the current price to get them. The current problem for the bitcoin economy right now is not the availability of bitcoins, but the current volatiliy. Prices of goods and services expressed in bitcoins must be adjusted daily, which is inconvenient, but I think as time passes and more people get into the bitcoin economy, the volatility should not be an issue.
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