Topic: Price Matters... And Here's Why (Read 1365 times)

PS I love debates like this so please don't take it personal haha

I'd also take the growing pains of BTC any day to the blatant manipulation of our world's currencies being seen today. At least I can be sure that SN isn't going to print up 2b BTC tomorrow to pay off a debt, devaluing my holdings in the process. That's one reason I'll always hold some bitcoins.

Well, yes, you could say that, but I don't mean it as harshly as it sounds. In all honesty, I see most markets in this way, whether we are talking commodities, currencies, stocks, or coins. I even see US Medicare as a Ponzi Scheme (totally different rabbit hole for a different day).

It's not so much that it's a scheme intended to defraud, that's not what i mean. I'd mean more like that each one of us is playing the "greater fools game" as in, each one of us is willing to buy now because we believe there will be a "greater fool" in the future to buy it from us for more. I feel like when it comes down to it, the vast majority of us are here to profit and we do that by buying & holding. As more and more join the game, more and more "greater fools" get hooked in. In that sense, it really does take off like a ponzi scheme, and the rally would end when no fresh funds are coming in.

Ideally, bitcoin would be rather frictionless, you need enough liquidity to buy/sell without crazy price fluctuations, as you say. I feel like now though nearly every "trend" is exasperated by the immense amount of speculators trying to get in on the "profit train", of course now that this speculative fire is lit, i have no clue how we'd ever put it out.

Its a bhittersweet situation, because without BTC rising to 1k in the first place, it wouldn't have been so mainstream, yet now that it is mainstream-ish, it's main focus is speculation. Haha. I'm not sure that it could've happened any other way and still became as successful. I can't really complain and love bitcoin to death, so I hope you don't see my views as shaming the idea, I just have a really blunt view on speculation (that I'll admit is probably obtuse at times)

I'm not saying it's a bad thing, but it's definitely a recipe for rollercoaster prices ^^

Technically, your claim, then, is that BTC is a Ponzi scheme (in that its purpose is to go "to da moon"), rather than a currency. A currency just needs to be unmanipulated to resolve its purpose (though we could argue that even fiat is manipulated heavily, as it technically is, but in a different way).

Well, if the US Stock market is any evidence of anything atm, it's that it doesn't matter the size/market cap, it can be manipulated. We've seen single entities break central banks. A larger market cap isn't going to solve this issue by any means. It might make the threshold higher, but believe me, there will always be someone there to control it, no matter the size. There will always be volatility, & large deep-pocketed players.

Imo, the only way Bitcoin warrants a larger market cap is if it doesn't hold enough value to keep things moving. I feel like Bitcoin has become a niche passion that people dump money into "knowing" it will go "to da moon". It's a self fulfilling prophecy. This is the behavior that causes this cycle at the end of the day.

Luckily, there's more people accepting wages, paying taxes, & buying goods/services with btc now than ever. As long as this continues, bitcoin will start to be used more and more from it's true intended purpose. Wallstreet is weaseling it's way into bitcoin though, I can promise as the market cap grows, so will the players involved.

At the moment (and for bitcoins small history) there has been a severe imbalance of speculators versus users. The truth of the matter is that not a single person here is not trying to profit from BTC, it's a self fulfilling prophecy in that everyone here thinks it's going to the moon, so we all buy and it just happens to go to the moon... Tulip bubble anyone? Just because we perceive it valuable doesn't mean it's actually supposed to be THAT valuable.

Whether we like it or not, Bitcoins true value comes from escaping capital controls. Without it, (say if China decided it's pulling the plug tomorrow) it would be much less appetizing to our eastern counterparts and alot of the demand we are seeing at the moment would cease to exist, same with India... At the end of the day, we are all piggy backing off of the panic of capital controls from other countries, mixed with speculators speculating. It's the perfect storm, and I am taking full advantage but by no means do I think Bitcoin actually deserves such a high price without having as much functionality as some of the countries/businesses it currently has a larger market cap than.

PS that doesn't mean I'm not participating in the fun though, I just use human psychology to my advantage.

This thread was resurrected from long ago, but it was posted because at that point in time, the general consensus was that the price of BTC was completely irrelevant since it's a "currency" and not a store of value (therefore, if you want to send $100, it doesn't matter if it's worth 0.01 or 1000 BTC since all you're doing is fiat <--> BTC anyways). It was to help set people straight on the proper way to look at it.

You found a thread 2 years old to bump. How? It doesn't matter where it ends up as long as it gets there and becomes stable in the future which it should do once the market cap has got to the point it is then hard to manipulate compared to how easy it is now. Not to say it won't be, because it will. Just harder to do.

Of course the price matters, one of the reason people interested in bitcoin because the price is keep on rising and it is very valuable, that is why bitcoin being used for trading and currency, it is impossible people will interested if the coin got no value

I agree with OP that price matters with bitcoin. In addition to what he said price is also relevant to attract more users and companies that will accept it. Companies won't accept it if they know that it's price if low and also it got that cap that factors it. Also like he said fluctuations cause more holders and speculators that also attract others to do business with bitcoin offering their services and also exchangers and altcoin's booming because of bitcoin's price that attracts more investors particularly the ones who are investing in the stock market.

Yess price do really matters at all .here u see the price of bitcoins have reached 964 dollars and it has reached new heights .it is likely to reach more and by the end of 22 nd century it will reach 60k dollars .

I think bitcoin will a)collapse b)raise even more than before.
Question is who and for what reason sell big amount of coins at the same time, if effects of this move is obvious

Bubbles are somewhat what caused me to write this. We'd be better off if Bitcoin had hit $5 and stayed at $5 than it hitting 60, then 1200 and then crashing. Each time it drops, people are losing. And people that have lost this much are far less likely to ever continue on as a result. Hemorrhaging people in a niche market is always a bad thing. But for whatever reason, most people seem to not understand that. Bitcoin is basically a business. If it's not treated like one it's going to crash. It really is that simple. Pissing off customers (i.e., crashing their investments) leads to a loss of business, which ultimately leads to the business' demise.

That kind of thinking is what causes bubbles. It is not sustainable and it is not beneficial to Bitcoin. The value of Bitcoin lies only in its usage and its utility. If usage and utility of Bitcoin grows, everything else (including price will follow). If usage and utility go to 0, then so will the price.

It's not so much about the rush... it's more that this is a niche market. People are blindly refusing to accept the truth. The more these things continue to happen, the smaller the market will become. Most of the new additions (in Bitcoin) revolve around dumping coins on to the market. Places like BitPay only serve as a middleman that dumps coins, for example. I do feel that there are some alts that have a lot of promise.

Basically it all revolves around the fact that people are blindly refusing to accept the fact that these events that are recurring are NOT helping and are making things worse. And this is coming from a holder that refused to dump at 1200 and still refuses today. With that said, I'm not naive enough to think that these things happening over and over are going to magically make Bitcoin successful. They aren't. Things have to change. That's an absolute must. And a huge part of this, if we want MAJOR adoption, is to create a system where someone's grandma can use Bitcoin. Someone that doesn't even know how to use a smart phone. Because in the real world, the vast majority of people (and that includes young people) don't know the first thing about this stuff. And until we can cater to them (which companies like Apple and Microsoft have been trying to do for many, many years now), we're going to be stuck in this rut.

What's the rush?

Give it some time.

If you're worried that you're going to lose some cash, just take a quick look at the volumes on MtGox prior to the implosion, current volumes on Bitfinex and Bitstamp, and most important, current volumes at BTC China:

http://www.bitcoincharts.com/charts/mtgoxUSD#rg730ztgSzm1g10zm2g25zv

http://www.bitcoincharts.com/charts/bitfinexUSD#rg730ztgSzm1g10zm2g25zv

http://www.bitcoincharts.com/charts/bitstampUSD#rg730ztgSzm1g10zm2g25zv

http://www.bitcoincharts.com/charts/btcnCNY#rg730ztgSzm1g10zm2g25zv

There is a lot of unleashed demand for freedom in East Asia.

:-)

Look at how many people (protip: a TON) still don't mess with smart phones and only know basics about computers. Cryptos are FAR beyond their time right now. You can rarely even toss around "Windows tablet" without people confused about how it has Windows when they only come in Android.

If the price is $1, it's going to be volatile. Speculation ensures this is the case. The only way around it would be a centralized agency, and then we run into centralization. Plus people would create an alt market where they sell cheaper anyways.

Price and volatility with Bitcoin are directly related. As long as it's cheap enough for manipulation to occur, it's going to happen. That's an inevitable part of the currency. Market cap deals with the price because coins are being created at a constant rate. If each coin is $1 and 25 coins are added, $25 has to be added to the market to sustain it. Otherwise each coin just got devalued. i.e., 100 coins at $100 total = $1 each. Add 100 coins and now there's still just $100 so $100/200=$0.50. Basic economics.

Yes, but every time there is a hike and crash, there is also more publicity. Any publicity is good publicity. Give it time for adoption to have a more natural growth. It has only been 5 years. Do you think any other currency had this quick of a boom in its early days?

#1. You are talking about volatility, not price. If the price is steady at $1, it does not have the problems you describe.

#2. As volatility attracts more speculators, the price will become less volatile.

#3. Market cap is not the same as price.

#4. Again, market cap is not the same as price. We could raise the price by cutting the number of bitcoins, but that would not solve anything.

As price goes down we lose more and more existing users. This is actually detrimental to the overall growth. There are already far too many stories about hacks and scams, with one site after another being included. Anyone I've talked to about BTC just refers to the numerous articles that show how insecure it is (with things like Mt. Gox, Bitstamp, etc. on the list) and how they would never put a cent into a dying system.

Anyone else think a lower price is going to spread adoption more. No one wants to buy high & there are plenty of Newbies like me ready to catch some sub $200 coins we could have a more natural growth after this. Bitcoin will be well over 1000 near the end of 2015 when it's more widespread.