The "steady supply of coins = deflation" argument flaw

skyhigh

full member

Activity: 142

Merit: 100

Quote from: marvinmartian on July 06, 2011, 10:07:13 AM

Quote from: EskimoBob on July 06, 2011, 10:03:04 AM

...

Bottom line: BTCs are new. Standard models of analysis that are commonly used for stocks, bonds, commodities, futures and options don't necessarily apply.

Why not? Like all other markets, BTC market is driven by greed and fear. Nothing else, nothing more.

Its human behavior. If anyone thinks otherwise it's pure ignorance.

MKW2012

jr. member

Activity: 74

Merit: 1

I would agree to the point that greed and fear does play a major role in the day to day price action. Technical analysis is the best way to tell where the volatility of this market will led Bitcoins. IMO

marvinmartian

full member

Activity: 224

Merit: 100

Quote from: EskimoBob on July 06, 2011, 10:03:04 AM

Quote from: marvinmartian on July 06, 2011, 09:30:37 AM

...

Bottom line: BTCs are new. Standard models of analysis that are commonly used for stocks, bonds, commodities, futures and options don't necessarily apply.

Why not? Like all other markets, BTC market is driven by greed and fear. Nothing else, nothing more.

But what factors into that greed and fear (in terms of measurable time series) is not yet at all well defined. It's a highly speculative "niche" market where standard rules haven't really applied.

I'm not saying that common sense won't work here. I'm more saying that the correlations that can sometimes work well in the stock market and economic forecasts ... are not well defined.

EG., the supply of peanut m&m's may have more of a correlation to BTC prices than anything else.

EskimoBob

legendary

Activity: 910

Merit: 1000

Quality Printing Services by Federal Reserve Bank

Quote from: marvinmartian on July 06, 2011, 09:30:37 AM

...

Bottom line: BTCs are new. Standard models of analysis that are commonly used for stocks, bonds, commodities, futures and options don't necessarily apply.

Why not? Like all other markets, BTC market is driven by greed and fear. Nothing else, nothing more.

marvinmartian

full member

Activity: 224

Merit: 100

Good to see those threads fall to the wayside now that we're back near $15/btc. I didn't have time to reply to all of them, but wanted to say this:

The supply of coin generation is NEAR CONSTANT

So while many people are mining and wanting to get rid of coins to pay for cost, the above part of many deflationary assumptions is seriously flawed. Also, miners DO wait (I'd guess on the order of a week or so) to sell coins when the market dips. So there are some minor contractions in "production" based on price level.

Anyhow, I had to get that off my chest.

Bottom line: BTCs are new. Standard models of analysis that are commonly used for stocks, bonds, commodities, futures and options don't necessarily apply.

Topic: The "steady supply of coins = deflation" argument flaw (Read 947 times)