Topic: The correction and recovery in a nutshell. - page 2. (Read 5598 times)

I think you underestimate the hardened nerves of experienced Bitcoiners. Over the past three years the market has been up and down with swings and doomsday scenarios massively bigger than most Wall Streeters have ever seen. This experience counts for something you know, even among people without experience of financial markets, stocks, etc. (probably more so among this demographic actually).

What can I say. That was probably one of the most eye-opening things I have ever read on here. The early Bitcoin adopters were not cut-throat pirate financiers who like to drink babies' blood at the weekends on a full moon. They were wild-eyed libertarian zealots such as sgbett who have seriously lucked out. I made a 'near term price prediction' thread when Bitcoin was hovering at 790, telling people to go long Bitcoin, then short at 815-820 range. Bitcoin then done exactly as I predicted, at which point sgbett jumped into the thread and had a rant at my day-trading antics telling me that I should just be buying as many Bitcoins as I possibly can at these prices cos Bitcoin is going to $10K. Someone who bought Bitcoin at $1, getting ratty at someone successfully day-trading Bitcoin and demanding that the daytrader buy as many Bitcoins as he can, at $800!!

Very telling!

I thought that perhaps he had ran into the blatant bulltrap. Perhaps it is more that fact that him and a few of his cronies set-up the bulltrap, that absolutely nobody walked into and are now a few Bitcoins/USD shorter than they were before. It took a volume of about 5000 BTC (on Bistampt) to ramp bitcoin from 790 - 817, yet just 500 BTC to bring it back down to 795. I don't believe for a minute that fresh capital is what caused Bitcoin to surge up from 790. It was USD from existing whales, trying to kickstart market. Joe Bloggs proved he wasn't so stupid to fall for it when we got up to the huge ask walls at the £820 range. Absolutely zero interest whatsoever.

The zealot theory as opposed to my financial shark theory could also explain the huge stage managed cash-outs being triggered as a result of the engineered frustration of free market price discovery. The whales need ammunition (USD) to throw at coming battles below.

In reality, there will be both sharks and zealots and all other kinds of political implications and interests at work in the higher echelons of Bitcoin or affecting Bitcoin. One thing is clear, is that the public interest in Bitcoin is dead for now. All that is going to prevent Bitcoin from tanking from these wildly overinflated prices achieved on relatively very low volume, is a prevailing of the HODL mentality amongst the well heeled Bitcoin classes. But there is just one problem with that. China.

I would also surmise that if Wall St capital is preparing to get into Bitcoin (a big IF), then those market players will do whatever they can to bring the Bitcoin price down as much as they can so they can take an as proficient an entry as they possibly can......cos that is what they do. It is their job. I wouldnt be surprised if we see a Bitcoin slaughter so big, that it causes even the fattest most zealous whales to squeel and drop a shit ton of coin into Wall St koffers.

Interesting, as I always suspected that people who need to quote the almighty Wikipedia rather than being able to rely on their own brains come across as idiots! 

+1 +1 +1 +1 +1 +1 +1 +1

p.s. btw the original meaning of the word "idiot" (http://en.wikipedia.org/wiki/Idiot) describes a person who is concerned with his own private affairs only. So an "idiot" does not vote, does not post on bitcointalk and is in general, and I quote from wikipedia, an "uneducated or ignorant person". All of which demonstratively you are not. But "infidel" you are

p.p.s. "To the moon!"

Didn't even get through two paragraphs of your shit Impaler. Why is it so hard to avoid getting personal? Whatever validity your arguments might have, nobody cares when you present it that way.

+1

I have seen so many "cultish" beaviour here on the board in the last time, that really worries me most about BTC. Like only true "believers" hold and will be rewarded (coz it might jump to 10000$ in 3 seconds, and nobody should miss the train. Also all the requests that everyone should immediately tell his friends that they should invest money, right now, coz it´s 100% that it´s goin to .. whatever. Most of them don´t see the slightest possibility that it possibly might not go up forever in this rate. All of the bad news are easily turned into good news, in fact every news is good news that show that Bitcoin will 100% go to the moon very soon. Everyone who is not overall positive for the Bitcoin technology itself or it´s actual price is an enemy and liar that must be fought, an idiot and what else. Altough it´s common sense that those enemies will not be able to surpess the rise to the moon, they can at best only delay it. So every true Bitcoiner should missionize as many new so far uninvolved peopele(and their money) as possible, so that they will be able to "see the light" .

Join the Cult!






Btw i am an early adopter and used BTC first about more than 2 years ago and can see some positive advantages of the BTC technology, but i´m still scared of this behavior.

Kill the naysayers!!!

Considering that you yourself posted in the thread in which that theory was presented by me and positively received by a number of people

https://bitcointalksearch.org/topic/miners-running-costs-must-pass-trough-exchanges-this-limits-the-bitcoin-price-414657

your incredulity is surprising.  I am indeed not a miner, I am an observer of miners and a student of macro-economics which puts me in a better position to predict the overall trends then an individual miner who thinks micro-economically.  First you confuse 'declining profitability' with 'unprofitable', as you said the unprofitable miner ceases to mine and the miners as a whole stay profitable but JUST BARELY.  And just barely profitable miners still have costs that need to be paid, so the percentage of your daily take that can be hoarded declines.  It is as simple as that.

There it is with that chexit meme again.  WTF is this?  Exactly what does it mean for "China" to "exit"  bitcoin?  Is China trapped inside bitcoin, sending messages in fortune cookies that I never get?  I question that it actually has a meaning.  I'm beginning to think that it is actually just a sequence of syllables computed to create some desirable emotions in the readers, but it doesn't actually *mean* anything.


I'm certainly don't want to imply that anything else you said made sense, but this is particularly incomprehensible to me. Miners will not sell coins unprofitably.  They will hoard them until they are profitable.  A miner who did otherwise would be bankrupt very quickly, and thus forced out of mining, in a word, non-miners.  I'm quite convinced that Impaler is not a miner.  If you were, you would quickly become a bankrupt non-miner.  I am a miner.  I hoard until my gains allow me to multiply the size of my mining operation.  In this way, I am constantly iterating to higher and higher cashflows.

Nice analysis. True believers in Bitcoin don't have any fiat and they certainly don't keep any coins at an exchange.

Very good analysis Mat, I'd like to voice my speculation on WHO the manipulators are and WHY they act as they do.

First off WHO, the simple answer is 'deeper pocketed versions of the same zealots who have been railing against you in this thread', I know this seams almost anti-climactic doesn't it.  You normally think of manipulation as being done by people who are fundamentally different from the 'small fry' both in the depth of their pockets AND a more 'predatory' nature.  We don't expect manipulators to be delusional zealots but in BTC I think they are.  First off we know for sure the big holders of BTC are early adopters who drank the kool-aid very early, these folks have now accumulated sums of USD in the several million range (all still on exchanges mind you) and they thus have leverage on both sides to control the price.  'New' investors might come in with huge sums of USD but they can never match the BTC holdings of the early adopters so they can't do the kind of narrow-holding range manipulation your seeing, they can only cause a price spike as China effectively did when it entered the market.

And the WHY should be evident from some of the posts earlier, the manipulators feel they are 'saving' BTC from the evil forces of the Persian Army  THIS IS BITCOIN!!!  HODL!!!!!  This meme is very telling, we see that people equate the price of BTC with the success of BTC, this view is reinforced by the detractors that call BTC a bubble.  If the supporters 'HODL' the price up high enough then they are 'right' about BTC and everyone else is wrong, and most importantly their Libertarian wold-view is right and everyone else is wrong.  And these people see libertarian/Austrian economic theory as something that needs to be promoted and defended at any cost.  All of this is to ultimately as you said yourself fell that this is the "result of something inherently great about themselves", an ego trip that completely validates their political beliefs and ideologies.

Now what dose this mean for the long run price, are they preparing to crash the market some day and leave the rest of us holding the bag.  NO!!  These people will WILLINGLY go down with the ship if BTC ever finally tanks, nigh they would flaunt their martyrdom saying they 'lost everything because they had FAITH and held to the end, if only the wretched weak-handed fools had not crashed the price of BTC we could have defeated the evil gobermint and the FED and the USD and ushered in a libertarian Ann Randtopia!!!  The know that a fast-crash attempt to empty the exchanges and exist with the USD will net at most a ~40 million in exchange CREDITS which have very little chance of actually being redeemed for real USD at that scale, indeed most of the credits are on Gox which may not even be solvent and which will de-facto force them to put thouse credits back into the market, so for the whales BTC is like a tuna-net in the ocean, they can swim around and seem liquid but are really quite constrained, they realized their BTC AND exchange-credit wealth is illiquid and they like it that way, weakness should be PUNISHED not rewarded after-all (I wouldn't be the least surprised if their are intentional retaliations against anyone who breaks ranks and tries to cash-out).  So they are happy to just get a trickle of USD as they so very slowly sell, it's still enough for them to practically live off and it's more then they deserve anyways so why not keep this whole BTC thing going as long as possible, when it looks like 'stability' is what is needed then they create stability until it looks like another crop of new adopters is ready to be lured in, to them BTC is like that Spartan army doing a simple 'charge', 'fallback (as little as possible) and 'hold' pattern, claiming 'ground' is the goal and ground is measured in exchange rates.

The question is now, can they keep this up?  And for how long?  I think it will eventually break them, the waning availability of new suckers, the exodus of China, and the declining profitability of mining hardware which will force more coins to flow into exchanges will exert enough pressure to break out of this ~850 band and bring a correction down to a more sustainable level.  Sustainable here simply meaning how much actual USD per day that libertarians can find out of their own pockets to throw at buying up the ~5k new BTCs per day that come into existence.  This should not be confused with the LONG term sustainability issue which involve a whole slew of legal and economic factors beyond the scope of just throwing USD purchases at BTC.  But for the short and mid term I feel we will see corrections in which small fry run for the doors but whales do not.

0 value is elusive.  I paid 4USD for a quadrillion in Zimbabwe notes.  Think of it more like this:  Which one will destroy the most exchange value in the next 20 years?    I think USD will not be a reserve currency in 20 years, but BTC will.  I think USD might not be usable for paying taxes in 20 years, but BTC will.  I think 20 years may be very very optimistic, and I hedge for 2.5 years.

What's the probability that BTC goes below parity with a reserve currency basket valued 10 $USD2012 in a given time increment, as a function of time horizon?  It's the sum of three threat models:  Social exogenous, social endogenous, and technical.

Exogenous:  de minimis until the next sovereign crisis, rising fast to a peak around 2%/year, then dropping dramatically, and rising gradually over subsequent years due to macro risk.

Endogenous:  linear upslope from 2%/year to around 3%/year, until a political reorganization of nation states or of the bitcoin infrastructure,  unknowable thereafter.

Technical model:  de minimis, rising to approach a peak at some low value, say 1%/year, then decaying over time.

Endogenous threats are dominant in the current regime, I think.

Thank you for this Mat, I was struggling to see why our subconscious minds were at such polar opposites. Now I understand completely.

I appreciate your sharing of your dreams and your feelings about this market, so I thought I'd share mine.

My feeling is that "big Wall St capital" can go get fucked.

I am completely out of this market for the time being. I took all my bitcoin and left the casino. Lets me sleep at night. This thing could drop to 600, 300? who knows? but in my not-so-subconscious, this is a binary bet.

what will go to 0 first? bicoin? or the dollar?

Why do bitcointalk users always assume that bears are bitter or missed out on previous runs? Many of us actually bought in very low and are still way up in profit. Nevertheless, you can still be pessimistic about the BTC price for the near term (weeks/months).

You are passive fodder on the very bottom of the pile that the rats will happily feed on. Anyone with a semi-significant stake in Bitcoin is not thinking or acting like you do, although you did state yourself, that you own BTC because it could go up in value. Perhaps your saving grace is that you don't have enough of a stake to get in a tizzy about.

To the top of what? I have a minuscule amount of BTC because I believe in the concept and that it could go up in value.

You are projecting your character and motivation onto a very diversified group of people.
In my eyes you are only interested in the short to medium term value swings and have no real notion of how significant this technology is.
For what it is worth you'd probably invest in Tulips if they were as volatile.

Cryptocurrencies will change the world, like it or not.

No.

By my logic people who start personally ridiculing anyone who happens to say beep against Bitcoins or the market, get the same back, and then some.

Believe in Bitcoins?

I used to, but these days Bitcoin smells more and more of death to me. Whether that is because with Bitcoin being the first of its kind, its a near statistical certainty that some kind of technological headache will crop that may just render it untenable, or because greed if not outright avarice are central tenets of the Bitcoin ethos I don't know.

The Bitcoin world consists of a pyramid heap of rats vying with one another to get the top, and I include myself with that. I hate Bitcoin, but I will continue to make money trading it, because I can.

So by your logic your greatness comes from the fact that you know you were lucky while others who don't attribute their (good) decisions to luck are idiots?

I'm sorry but the fact is that just because you personally don't believe that bitcoin as a technology will succeed doesn't mean it won't.
People hodling because they believe in the technology are not idiots. They are speculating on something other than what you believe in.
At this stage history is mostly in their favour. If that will remain so is to be seen.

Dude, you got problems.

It is called deliberate antagonisation. You can find it all over this place. I like to take it step further than most....but only with those whose vibe is not to my liking.

You are kind of an ass, mat. What's up with that?