Topic: Oh it's far from over... (Read 3205 times)

https://www.youtube.com/watch?v=UBzigaTSPZY

video on bitcoin over  last 2 days

I don't think we would see that large of a flash sale. We may see some kind of a bear whale selling off their bitcoin however I would doubt they would be in so much of a hurry that they sell at whatever price they have to.

It's possible but it could easily go back to more than 300$ too.

I'm a great believer in decentralization in the long run, so many of the problems of today can be solved by not having trusted 3rd parties. All these solutions will have to be powered by a crypto currency, and bitcoin still seems to be the obvious choice. I'm looking an the fundamentals and I'm buying to hold for years to come. But thanks for the warning

I am not sure what is the gist of this thread.
Yeah, price is low when it was high before. You can come up with multiple reasons for it. It does not matter.
What does matter (at least for me)- the price of bitcoin in 5-20 years.
OP talks about mastercard, amex, points, etc. Everybody got tons of plastic, including myself.
GOOD for us all, but fundamentally this is funny money if you can print it at will.
At some point fundamentals will matter, as they ALWAYS do.
Bitcoin is a hedge against this possibility, no more or less. It is silly to have a majority of funds in bitcoin right now, but to have a meaningful % seems prudent.
Bitcoin could be compared to a little Mesozoic mice-like creature from which all mammals had sprung once the dominant dinosaurs went extinct.
However, this development was entirely random (due to asteroid, etc.) and could have not happen.
Hence, Bitcoin is basically a backup system (in case the dominant system goes tits up). I consider it as such and it makes my life easier and more interesting.

Bitcoin could just as easily drop another $25, $50 or even $100. I would play careful. Only risk what you truly can afford to lose.

The estimate trading widget on BitcoinWisdom shows a single flash sale of 20,000 BTC would take the price sub $200.

20,000 BTC sell offs are not unheard of.

Bitcoin is meant to be valued at around 10K in a couple years once celebrities start making it trendy as a motherfuck via social networks. Watch it happen.

Already starting to go up a bit, though maybe just a dead cat. I'll take the plunge now and put it in cold storage. Here's for a fantastic 2015! Btw, you can just edit your posts.


Yeah, really wild, either way. If nothing really interesting happens soon I believe things will turn quite ugly.

I have a feeling there are some really disappointed miners right about now

This is indeed going to be a wild year.  With 2 ETf's coming I'm sure we will see drastic swings. 

i believe, this is right time to Buy (you can wait few more hours). panic sellers through it away,so possible down is $250...

sorry for the above post.

Just one point, Amazon can do whatever they want.  They are in the enviable position of being loaded with cash.

https://hbr.org/2014/10/at-amazon-its-all-about-cash-flow/

Can't decide if I should put another 2000 USD in bitcoin now, or wait and see if it goes even lower

Great post,you say it could go to $100 and that roughly matches the Winki Coin start price

sound about right to me

buy into an asset going up not down

Suicide watch initiated.

The 2 price moves mean different things, the first is just a return to approximately the mining value.  The 2nd price move you mention would mean a change in fundamentals of bitcoin economy.

Insightful post Stratobitz. You raise some very good points. Nice to see some thoughtful content being posted. There's no doubt that 2015 will prove itself to be yet another wild ride for Bitcoin community- which ever way she rolls.

Checking Bitfinex, looks like we've already seen a low in the mid 250s, back now above 260. This could very well end up far worse than originally speculated.

Time will tell.

Welcome to your first bitcoin bubble. I know, many emotions and thoughts go through your head right now But trust me, it will be funny to re-read later on.

I agree with one point though. That for many more years, buying something with bitcoin equals to selling it on exchange. That's why I (and many others) always buy back after spending. As for other things, short-term price is easily manipulated, you should not care much about current prices if only to pick good buy / sell opportunities. You are in a project with year 2140 maturity goal , so what difference does several years of depressed prices make? When old-school businesses will start fighting it for real, when it becomes an issue of survival for them - it could get *much* grimmer than it is now, and not only price-wise. Right now, it is a no-brainer, bitcoin is several times stronger than it was in Jan 2014. The fact that the price does not reflect it does not say anything about bitcoin - but does say alot about people, unfortunately.

Interesting will check that out.  Thanks for the link. It also makes sense as to why Bill Gates is backing it. Hes nearly a full time philanthropist now, Im sure he sees the potential Bitcoin could serve in those underbanked regions of the world.

But then, if this is the case... What is the true value of BTC?  If the value of Bitcoin lies not in retail in the worlds richest nations, rather in micro-payments of the poorest and most isolated populations, where will the value fall?  Most people in the world live on under $2.00 per day.

Need someone with expertise in this area... But if 5 Billion People have X net worth, and changed over to BTC, what would the BTC price be set at market cap wise.

Strato

Doesn't sound terrible at all. You may very well be right. In fact, none other than Andreas Antonopolous himself said virtually the same thing:

On 1:  Well the retailer (accepting BTC as payment) would bear the risk in terms of whether or not the liquidity exists to exit the position. But yes, good point, Coinbase/BitPay of course quite possibly does, or will, put into place safeguards to prevent this. Its also possible that prior to a transaction being approved or even "quoted" by the retailer, factors such as depth penetration and liquidity across the exchanges would be checked.

On 2:  Ive often said that Bitcoin's most becoming feature is the fact that it allows for micro-payments. Bill Gates was recently quoted as saying how Bitcoin trumps fiat currency because it makes transferring money so inexpensive. While yes this is true, its only so to a point... getting back to the liquidity required for large transactions.

This may sound terrible, but I believe that in many ways Bitcoin stands the best chance of both mass adoption as well as utilization in third world economies.

America, in terms of 95% of Americans, (guessing here on that figure), don't need Bitcoin. They like Visa. Its everywhere you want to be. They love their MasterCards, after all the cards are "priceless". And the financially savvy and Top 3% love their American Express, they don't leave home without it.

Jokes aside, thats the truth. I love my American Express Platinum Card, and the fact that I get airport lounge access when I travel. I love the fact the card insures all of my purchases up to $10,000 per item for a full 90 days, if lets say I buy a 80" LED TV and tip it over accidentally setting it up. Fully covered. I love the fact that they refund automatically $200 in baggage fees per year.  And no joke here, someone used my card number last year to buy a $1000 limo ride and $4000 concert tickets. I wasn't liable. I also love my Membership Reward Points, which I accrue faster than I can spend.  First class tickets on the Air France A-380.... Points!

Bitcoin lacks all of these things we've come to love. So where does it make up then?  Well back to the third world. While Im too tired to go hunting for actual facts and figures, we can all agree that the majority of the worlds population lives in absolute poverty. If you're living in any other place than the US, EU, Canada, Australia, or major cities in other nations... Good luck using a credit card for anything. Those societies are still cash based... Entirely.  Bitcoin fills a niche there that the credit card companies cant or have no reason to provide.

Cell Phones, which are highly utilized in these economically disadvantaged nations will become the way people send and receive money in the future, and Bitcoin is a perfect fit for that. The people who live in those countries wont miss their Amex Points or their buyer protection, or even their lounge access. Because they are, to this day, living in a cash based economy.

So while I went off on a bit of a tangent here... The micro tipping aspect has huge possibilities in places where people are already accustomed to living without all the features of plastic.

In a sense, Bitcoin could very well be the instrument that digitizes cash, especially in places where money is hard to come by, and plastic is unheard of.

Strato

Everytime I see bitcoins' price, I think this will be the bottom.
I have been proved wrong again and again during the last 4-5 months.

This is a good point, ie that market depth may not be sufficient when it comes to large value transfers. Again, my counterarguments:
1) The risk that you talk about is assumed by payment processors like Coinbase and BitPay, not by the merchant. I presume that Coinbase and Bitpay set some sort of a limit to the volume that they will process from a given merchant over a given period of time.
2) bitcoin the payment system will bootstrap. In the beginning, it will be useful to process small payments but problematic due to insufficient market liquidity for large ones. Let's say the cutoff is roughly X. That means merchants will continue to adopt bitcoin for purchases below $X. Adoption will cause X to rise, and a rising X will result in increased adoption. Positive feedback loop. This will almost certainly be a bumpy ride with ups and downs, but still a rise over the long haul.

In order for the retailers to accept Bitcoin, there needs to be a stable exchange network where that retailer can then turn the bitcoins received into fiat currency. Chaos in the marketplace could kill bitcoin because if investors are scared to buy in at any price there will not be enough buy support for the retailers who accept bitcoin to liquidate their position at the rate in which they sold their products for.

While this has yet to happen, and perhaps the retailers (or at least large ones) already have safeguards in place to prevent this, but take this for example:

I take my 5,000 BTC (hypothetical here) over to Dell. I place a large order for a number of very expensive servers, etc, to upgrade my business infrastructure.

Now using a strike price of $300 USD/BTC that means Ive got $1,500,000 to spend. Im sure a company like Dell sees orders like this with large companies on a regular basis.

Now provided Dell allows this transaction to happen, I make the purchase, and send the 5,000 BTC to Dell. Now Dell is stuck with 5,000 coins they will never be able to liquidate at the price for which they sold their products.

Just look at today and how much the market can drop on a sell order of a few thousand BTC.

While this may be an extreme and perhaps over the top example, its worth thinking about. It's also worth considering how this exact tactic could be used as an exploit to game the system... Especially from large retailers like Amazon.

Retailers will not continue to accept, and more importantly, new retailers will not adopt Bitcoin as a payment method unless a stable, fast, and highly liquid exchange system exists to back up their transactions. And a market filled with fear is typically thin on the buys, and heavy on the sells.

There are many times on any given day where a single buy, or sell order of BTC in the amount of $20,000 can move BTC 1 or 2 percentage points in either direction. Thats a dangerous place for the retailer to be, as $20,000 is really nothing in terms of sales.

Strato

And why would any consumers use Bitcoin as a currency if the price is so volatile?

It is prudent to consider what you are saying. But, how do you respond to this counterargument: Sure, fluctuating prices will scare away investors; but fluctuating prices won't kill bitcoin. Merchants are shielded from price fluctuations by converting straight to USD. Merchants will continue to adopt bitcoin because 1) it's easy 2) they get their USD faster 3) they save on credit card fees. Once they have 1-2 years experience and feel more comfy with bitcoin, they will begin to provide consumer incentives in one form or another. That's when consumer adoption will occur. And consumers can be protected from price fluctuations by converting their USD to BTC at the time of purchase.

Summary: Price fluctuations may be scary as shit to an investor, but price fluctuations won't kill bitcoin as a payment system.

Seriously I would rather see bitcoin drop to the level where it will find equilibrium where there is little chance for fear or anything. What we need is confidence and when you have price moving down and then up again and then crash the next day, people would start to perceive bitcoin as something unsafe. Rather than projecting it as instrument for investment, we need to have it seen as a currency.

i see devil horns in your post are you the devil?

Volume too low in my books. Maybe if we see another retest and a strong rebound, but I don't buy this one. I think we are going to break below it, still. Not beautiful, but necessary I guess.

Double bottom at 275.  There she is.

Could go further, sure... The thing is: People are pretty willing to pay current prices, and they are even more willing and likely to buy coins at $100 or even double-digits. Those really are cheap coins! And I guess a lot of people have money sitting somewhere, ready to buy exactly those coins!

when price drops all i see is panic posts, when price rises i see pictures of space ships, its just human nature, please just stop talking and lets see what happens

Well fractional reserve banking has wreaked havoc history wise... Hence the term Run on the Bank. If everyone who banked at "Whatever" Bank, Bank of America, Wells Fargo, SunTrust - if all their "depositing customers" walked in and said I'd like to close my account and have my money, I think most people would be surprised to find out that the bank actually doesn't have the money. Their money goes into the bank's fractional reserve requirement account (15% I believe in the US); and then the bank simply enters fictitious money into their computer which it then lends out in ways of mortgages, credit cards, etc.

Not to beat a dead horse, but I think most people are completely unaware of how the US, EU, CA, and most modern banking systems work. That most of the money simply is made up out of thin air whenever the bank has an opportunity and finds the risk acceptable to lend it out. And these banks really are the devil and an angel in one. I run and own a business. We do a few million gross per year. And in looking back, the times when business was tight, money supply low, cash flow down - were the times when I could never get credit extended or approved. But during the times of gangbusters, I've literally had bankers come to my business to meet me to, not joking here, give me money... operational cash flow account line of credit. But that's only when I didn't need the money. Knock on wood I'm still in business and the lights are still on. (As are my miners).

Back to Bitcoin. Agreed they would find it hard to buy up the entire supply. Impossible. But they could easilly create absolute chaos in the marketplace and exchanges. The market cap of Bitcoin is so small. I mean, hey Zuckerberg is personally worth what 5 times the value of all Bitcoins... It's really not that big of a currency pool. These banks could simply buy up as retailers dump - which they will - they have to... and then flash crash... rinse repeat.

To them the losses would be nothing, chump change so to speak. And this tactic would make the bitcoin markets toxic to any sane investor. People would flock.

Scary thoughts is all I am saying. I just think we all need to remember that that as groundbreaking as Bitcoin is... and how new technology is in fact disruptive and can change the world we live in... that the global banking system has real and absolute power. Businesses rely on that system for loans, merchant services, expansion. Consumers rely on that system for every aspect in which they use money. Mortgages, car loans, ATM withdrawals, security.

Bitcoin is, and will be for as far as I can tell, the very, very little fish in the very, very big pond.

Strato

op good post.

A well-written, thought provoking piece.  First I've seen on this forum in months.

I'm surprised there's no shilling involved: no website links, no whoring out your signature space, no faggotry.

The idiots who bought when the mainstream media liars and deceivers had something to write about in late 2013 have probably gotten out by now.  Good riddance, I say.

Trolls gonna troll, shills gonna shill, and fudsters gonna fud, but I'll never sell.

Yep, sure.

But I think it won't come....

This new btc price below 300 is sad indeed. I got into bitcoin when it was double digits but do not want to play with it if it reaches that low. Bitcoin needs positive news and companies getting involved is not really a huge price incr but the opposite since none actually hold it. We needs companies which will hold and believe in btc to hold it.

Nobody. This would mean the collapse of the Bitcoin, transactions would stay in queue for hours / days.

And who will mine the coins for 75$?

A touch of realism is very much needed here. Thanks for this topic, Strato.

Fractional reserve banking is ok per se as it provided a way to use capital and production, as long as your allowed to do it as well, eg be a bank. Otherwise banks tend to abuse position, which has happened. Banks/Govs have abused their monopoly position. This is where BTC comes in.


Banks nor gov's can buy out BTC. All they can do is increase the price to. That is one of the issues they face its t he first thing they can't buy it out. This is a new concept for them.

Not despair... just open to realistic possibilities.

Which isn't necessarily a bad thing.

Strato

despair thread +=1

Today, those involved in the crypto-community have once again been met with a flurry of news and speculation over the current and future price potential of Bitcoin in 2015 and beyond. We've been here before, and more than once. Where is Bitcoin headed? Where is the floor? Has it bottomed?

Closing out 2014, we all found ourselves sitting by our Christmas trees, staring at the Bitcoin charts bouncing along from the 400s, to the mid 300s, to the low 300s - and all the while I can't but help remember how earlier in the year; so many of us here were still adjusting to the collapse of Bitcoin's highs near $1200 USD, the fallout of MtGox, the collapse of Silk Road and countless negative news stories surrounding Bitcoin and the people who used them.

Then we were all faced with the Alt Coin pump and dump season, where countless coins, pools, and exchanges all participated in a huge and unquestionably calculated plan of defrauding 1000s of cryptocurrency investors out of an uncountable amount of BTC/Fiat Currency.  Coins we're created nearly every day; listed on "reputable" exchanges; and then it was proved the coins were pre-mined, a scam from the start, a giant setup - all to get your BTC.  

Now, while many of us are even still adjusting and rebuilding from losses we incurred - I look at the price of Bitcoin and think to myself - it can very well, and most likely will, go much lower.

The truth is:

- There are people, companies, even governments out there, that hold and control large quantities of Bitcoin. Those large stakeholders could at any given moment; for reasons too numerous to count, decide it is now time to exit, and crash the price into the double digits.

- The big banks, credit card processors, American Express, Visa, MasterCard, hate- I'm sorry-- HATE- the concept of Bitcoin. They hate the idea of transparency. They are in no way fans of "low to no transaction fees". Big Banks work off the fractional reserve banking system. This is how they stay in business. They literally make money simply by typing numbers into a computer, and with Bitcoin- that will never be possible. These institutions control the money supply. And large companies MUST maintain strong and positive relationships with them, because without them they would cease to operate.

- Those large financial institutions could buy out Bitcoin in a heartbeat. A billion dollars is nothing to a company like Visa. And these companies, make no mistake, have teams in place dedicated to see that Bitcoin does not succeed. Lobbyists have been hired, think tanks assembled, and these guns for hire spin disinformation, dig for the worst news stories, and preach that Bitcoin is nothing more than a method for criminals to buy drugs, launder money, or hire hitmen; which 99.99% of the population find simply frightening.

- The huge drop off today was caused by a rather small drop in the bucket "total coin supply" wise. It doesn't take much big picture wise to drive the price of the entire BTC market down 20% - and for this reason, even big merchants who have been pioneers - companies like Dell, Overstock and Gyft, will never "hold" on to their bitcoin revenue. These companies work in industries where profit margins are razor thin. Amazon - which may very well at some point begin to accept Bitcoin, operates on a profit margin not more than 1-2%. They will never "hold" their coins. They can't. Their margins, nor will their bankers, allow it. This means spending bitcoin at a retailer really means selling to the exchange. And selling to the exchange means driving the price down.

While $293 may seem like a great price to pick up some Bitcoin - and it may turn out to very well be; the truth I think is that it should be viewed as nothing more than a short play. Will Bitcoin head north above $300 again? I think it's likely. But I think the long term outlook, 6 months, 1 year, 2 years, and so forth is going to see major price swings and likely much lower price points.

In April of 2014 everyone was saying the next big run up would be the end of 2014- leading up to the holiday season. How wrong were we. Bitcoin has in very many ways acted like nothing more than a vacuum for fiat money where people who wan't to chase gains, get in on the action, and get rich quick become the dirt it sucks up and spits right out.

My opinion; and call me crazy - is that Bitcoin will at some point or another see $100. A bitcoin is divisible into 100,000,000 units - and $100.00 USD just seems to fit nicely.

Perhaps one day we can add a zero to that number and $1000.00 bitcoin prices will become a reality. I am still to this day a believer in cryptos. I truly believe that the future will see see wide adoption of crypto and virtual currency technologies. But I've learned quite a bit in this last 15 months of being involved in this world.

If Bitcoin can go from $1200 to $293... there is no reason to think that it can't also go from $293 to $75.

2015 will be quite a year either way.

Strato

Post Script: For those that would like the truth about the floor, the bottom, the actual real honest to God number to which a bitcoin might fall too, that number is zero. We'd all like to say impossible. But I'd hope we all agree that we'll never really know what's around the corner. Technology... here today- gone the next.