On Wednesday, Bitcoin was less volatile than US Dollar.

DamienBlack

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Quote from: Joqer on July 14, 2011, 07:34:33 PM

Maybe I am wrong but if the USD loses .5% of its value and BTC exchange for the same number of USD, hasn't the BTC lost .5% of its value? If BTC maintained its value wouldn't BTC be worth .5% more USD than before? I don't see how anything can be priced independently of anything else as price is relative? Everything that can be bought is dependent on everything else that can be bought with that "currency" to determine its relative value I would think.

It seems to me that BTC either lost value, or the exchange value hasn't been adjusted due to exchange friction.

You are correct. They cannot be independent in the long run. As soon as there is real money to be made playing on these discrepancies, they will begin to disappear.

Joqer

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Maybe I am wrong but if the USD loses .5% of its value and BTC exchange for the same number of USD, hasn't the BTC lost .5% of its value? If BTC maintained its value wouldn't BTC be worth .5% more USD than before? I don't see how anything can be priced independently of anything else as price is relative? Everything that can be bought is dependent on everything else that can be bought with that "currency" to determine its relative value I would think.

It seems to me that BTC either lost value, or the exchange value hasn't been adjusted due to exchange friction.

sadpandatech

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Quote from: killer2021 on July 14, 2011, 06:53:59 AM

The USD index is an index that is measured against other FIAT currencies. See a problem there? Basically what the index is saying is that the usd decline in value relative to the other currencies. Well if the other currencies also decline in real value (as all fiat currencies do) then the dollar is dropping much more value than just .50%.

If you want to see the real value the dollar is losing then measure it against real things that take effort to produce.

Aye, couldn't agree more, and to that affect it has been said that USD has lost 50%*needs citations ;p* of its value over the past 3 years.

benjamindees

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Quote from: Piper67 on July 13, 2011, 10:45:56 PM

Hmmm if the dollar drops by .42% and the BTC doesn't go up by .42% there's something fundamentally wrong.

It means the market isn't yet big enough to profitably arbitrage between Bitcoin and all the currencies in the dollar index.

evoorhees

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Democracy is the original 51% attack

Quote from: killer2021 on July 14, 2011, 06:53:59 AM

The USD index is an index that is measured against other FIAT currencies. See a problem there? Basically what the index is saying is that the usd decline in value relative to the other currencies. Well if the other currencies also decline in real value (as all fiat currencies do) then the dollar is dropping much more value than just .50%.

If you want to see the real value the dollar is losing then measure it against real things that take effort to produce.

This is a very good point... and how odd that gold is not included in the "basket of currencies?" It's a pretty crappy basket if it doesn't even include the longest-running, most stable money in mankind's history.

makomk

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I suspect this is just a coincidence; Bitcoin prices seem to have followed previous changes in the value of the US dollar quite closely. (This matters to me because I'm in the UK.)

killer2021

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The USD index is an index that is measured against other FIAT currencies. See a problem there? Basically what the index is saying is that the usd decline in value relative to the other currencies. Well if the other currencies also decline in real value (as all fiat currencies do) then the dollar is dropping much more value than just .50%.

If you want to see the real value the dollar is losing then measure it against real things that take effort to produce.

RogerR

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Quote from: sadpandatech on July 13, 2011, 10:54:13 PM

Or something fundamently right since the price of BTC in USD is not dependent on the value of USD......
and if that would affect it, I'd suspect it would lag due to the Mtgox hub being however many hours ahead there in JP.

Edit; BTC is up .50% from previous close right now....

?

Bitcoin denomination on MtGox is in US-Dollars. How does this make Bitcoin not dependant from the value of the US-Dollar??

What you would be looking for is PPP-price stability! That is, a car today will cost the same in bitcoins as a car tomorrow. THAT is price stability. What we see right now is only subjective bunkering at the $14 mark, with few willing to sell below and several be forced to buy there.

DamienBlack

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Quote from: Atom on July 14, 2011, 01:54:07 AM

Quote from: DamienBlack on July 14, 2011, 12:48:48 AM

If bitcoin grows, it will evolve a market a lot like the metals market. That is simply how an efficient, well integrated market behaves. Bitcoin is only disconnected in its obscurity.

The gold/silver market are rigged - Didn't you know?

Well, that might also be how large markets work.

Atom

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"Basics Of Generational Dynamics" - Look it up!

Quote from: DamienBlack on July 14, 2011, 12:48:48 AM

Quote from: Atom on July 14, 2011, 12:42:03 AM

Yes! This! this is without a doubt the most exciting feature about BTC which, unlike any of the other popular monetary alternatives (Gold & Silver), it is completely disconnected from the movements of the dollar! Amusingly, this is only possible because the mainstream financial system refuses to participate in funding BTC purchases, not allowing paypal, credit card purchases, etc. and forcing people to take the long way from USD->BTC. it is this difficulty that effectively insulates BTC from all the volitility and money printing and general bullshit that surrounds pretty much every single currency in the world BESIDES BTC.

It is quite exciting, says the man who loves his metals but hates his metals markets.

If bitcoin grows, it will evolve a market a lot like the metals market. That is simply how an efficient, well integrated market behaves. Bitcoin is only disconnected in its obscurity.

The gold/silver market are rigged - Didn't you know?

sadpandatech

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Quote from: DamienBlack on July 14, 2011, 12:48:48 AM

If bitcoin grows, it will evolve a market a lot like the metals market. That is simply how an efficient, well integrated market behaves. Bitcoin is only disconnected in its obscurity.

I can agree that at this early stage obscurity plays a big part in the disconnect. However, when/if bitcoin is more widely accepted that disconnect should become much more self sustaining.

Leon

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Quote from: evoorhees on July 13, 2011, 10:41:31 PM

Fun fact du jour...

Bitcoin on Wednesday moved from $13.95 at open to $13.96 at close on Mt. Gox. This was a change of under .1% http://bitcoincharts.com/charts/mtgoxUSD#rg1zczsg2011-07-13zeg2011-07-14ztgSzm1g10zm2g25

On the same day, US Dollar index fell 0.42% (decent plummet after Bernanke announced more money printing... ***I'm so shocked***). http://quotes.ino.com/chart/?s=nybot_dx

Thus, Bitcoin was less volatile than the mighty US Dollar.

Anecdotal? Sure. But nonetheless quite interesting, no?

Interesting... here we come hyper inflation.. WOO... Sad

DamienBlack

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Quote from: Atom on July 14, 2011, 12:42:03 AM

Yes! This! this is without a doubt the most exciting feature about BTC which, unlike any of the other popular monetary alternatives (Gold & Silver), it is completely disconnected from the movements of the dollar! Amusingly, this is only possible because the mainstream financial system refuses to participate in funding BTC purchases, not allowing paypal, credit card purchases, etc. and forcing people to take the long way from USD->BTC. it is this difficulty that effectively insulates BTC from all the volitility and money printing and general bullshit that surrounds pretty much every single currency in the world BESIDES BTC.

It is quite exciting, says the man who loves his metals but hates his metals markets.

If bitcoin grows, it will evolve a market a lot like the metals market. That is simply how an efficient, well integrated market behaves. Bitcoin is only disconnected in its obscurity.

Atom

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"Basics Of Generational Dynamics" - Look it up!

Quote from: sadpandatech on July 13, 2011, 10:54:13 PM

Quote from: Piper67 on July 13, 2011, 10:45:56 PM

Quote from: evoorhees on July 13, 2011, 10:41:31 PM

Fun fact du jour...

Bitcoin on Wednesday moved from $13.95 at open to $13.96 at close on Mt. Gox. This was a change of under .1% http://bitcoincharts.com/charts/mtgoxUSD#rg1zczsg2011-07-13zeg2011-07-14ztgSzm1g10zm2g25

On the same day, US Dollar index fell 0.42% (decent plummet after Bernanke announced more money printing... ***I'm so shocked***). http://quotes.ino.com/chart/?s=nybot_dx

Thus, Bitcoin was less volatile than the mighty US Dollar.

Anecdotal? Sure. But nonetheless quite interesting, no?

Hmmm if the dollar drops by .42% and the BTC doesn't go up by .42% there's something fundamentally wrong.

Or something fundamently right since the price of BTC in USD is not dependent on the value of USD......
and if that would affect it, I'd suspect it would lag due to the Mtgox hub being however many hours ahead there in JP.

Yes! This! this is without a doubt the most exciting feature about BTC which, unlike any of the other popular monetary alternatives (Gold & Silver), it is completely disconnected from the movements of the dollar! Amusingly, this is only possible because the mainstream financial system refuses to participate in funding BTC purchases, not allowing paypal, credit card purchases, etc. and forcing people to take the long way from USD->BTC. it is this difficulty that effectively insulates BTC from all the volitility and money printing and general bullshit that surrounds pretty much every single currency in the world BESIDES BTC.

It is quite exciting, says the man who loves his metals but hates his metals markets.

Oldminer

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Yea funny you mention this because I recall looking at the price of BTC and trying to figure out 'why' it was so low then opened up my morning news site to see reference to a large share value plunge on the MSM. I'm thinking maybe that caused some cold feet all-round.

Valalvax

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Wait... when the fuck is market close and open? I guess x:00:00.000 is market close and x:00:00.001 is market open

sadpandatech

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Quote from: evoorhees on July 13, 2011, 11:01:46 PM

Quote from: Piper67 on July 13, 2011, 10:45:56 PM

Hmmm if the dollar drops by .42% and the BTC doesn't go up by .42% there's something fundamentally wrong.

Long-term, in a mature market, you'd be correct. But BTC is not traded on the global forex markets with the type of liquidity needed to display that type of correlation just yet...

Maybe in 3-4 business days, after the Dwolla transfers, we'll see the .42% increase we expect Grin

Aye, that definetly would explain the lag i was implying much better. But even then it is not a sure thing as the btc/usd price is only very loosely tied together. Another few days will show better and even then there will likely be other factors to consdier as well. *Points out the weekend is approaching!* which will make any kind of correlation that much harder to show.

evoorhees

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Democracy is the original 51% attack

Quote from: Piper67 on July 13, 2011, 10:45:56 PM

Hmmm if the dollar drops by .42% and the BTC doesn't go up by .42% there's something fundamentally wrong.

Long-term, in a mature market, you'd be correct. But BTC is not traded on the global forex markets with the type of liquidity needed to display that type of correlation just yet...

Maybe in 3-4 business days, after the Dwolla transfers, we'll see the .42% increase we expect Grin

kiba

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http://bitcoinweekly.com/articles/the-calm-after-the-storm

Vitalik Buterin's analysis of the not-so-volatile bitcoin price.

sadpandatech

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Quote from: Piper67 on July 13, 2011, 10:45:56 PM

Quote from: evoorhees on July 13, 2011, 10:41:31 PM

Fun fact du jour...

Bitcoin on Wednesday moved from $13.95 at open to $13.96 at close on Mt. Gox. This was a change of under .1% http://bitcoincharts.com/charts/mtgoxUSD#rg1zczsg2011-07-13zeg2011-07-14ztgSzm1g10zm2g25

On the same day, US Dollar index fell 0.42% (decent plummet after Bernanke announced more money printing... ***I'm so shocked***). http://quotes.ino.com/chart/?s=nybot_dx

Thus, Bitcoin was less volatile than the mighty US Dollar.

Anecdotal? Sure. But nonetheless quite interesting, no?

Hmmm if the dollar drops by .42% and the BTC doesn't go up by .42% there's something fundamentally wrong.

Or something fundamently right since the price of BTC in USD is not dependent on the value of USD......
and if that would affect it, I'd suspect it would lag due to the Mtgox hub being however many hours ahead there in JP.

Edit; BTC is up .50% from previous close right now....

Topic: On Wednesday, Bitcoin was less volatile than US Dollar. (Read 2624 times)