Topic: Thinking about buying more coins - page 2. (Read 3642 times)

+1

You're not wrong. In the short term, the variables are too many, and too unknown, for ANYONE to predict what the Bitcoin market will do.

Not to attack any of the posters above, but all this is bullshit.

The reason I'm commenting here on not on the other 1000 speculation threads is just because I have a lot of respect for DeathAndTaxes, casascius and others.

But

Nobody, and I mean nobody, can predict the future. Especially short term, and especially Bitcoin.

Like 99% of the people here, I think I'm smarter than the market. I think Bitcoin's ultimate value is > $100,000, while the market values them at less than $7. So I buy, and I hold.

Any utility that Bitcoin might have right now is completely irrelevant.

My analysis suggests that in thirty years (made up number), 1% of the world (another made up number) will be Bitcoin. This simple statement is enough for me wanting to grab as many coins as I can, while not risking my well being, financial safety, etc...

Short term, it's open season, and chaos is king. Any fool with lots of $ or lots of BTC can move the market. These bubbles and crashes will keep on happening, and each one will smooth things out, take some BTC out and distribute it further.

And slowly but surely, (I believe) BTC value will rise.

No point at all speculating on short term movements. At least with any degree of seriousness.
Any one of us is really not better than the average in predicting short term movements.
The only reason I think I am smarter than the market regarding the long term 30 years price of BTC, is because I am a part of a select group of people, that have the luck to:

 - Understand cryptography at a basic level
 - Understand security at a basic level
 - Understand economy at a basic level
 - Have heard about Bitcoin, and had the luck to have a good couple of weeks to study it.

So, I am more knowledgeable than the average citizen of earth, and therefore I think I am right and they are wrong.

But short term speculators aren't betting that "Joe Shmoe, who has never heard of Bitcoin" is wrong. They're betting that other Bitcoin fanatics are wrong. Well, half of these speculators are right, at any given moment ... but half is wrong (don't get technical, you know what I mean).

I really should stop visiting the speculation forum all together, but I'm weak, and I do care about short term swings even though I'm not going to participate in the game.


Again I ask, please don't take offence by my call of "bullshit" above. I'm only human, and I could be wrong.

Best of luck,

+1

Analysis based on the MtGox orderbook is worthless. 310k coins traded in 24hr and the price is sitting at a point that looked 40k coins away 24hr ago.

MtGox order book does not represent all of the MtGox demand, MtGox demand doesn't represent all formal market demand and formal markets don't represent all fiat based demand, and fiat demand is not the only demand for coins.

There are billions of people, millions who have heard of bitcoin maybe once and thousands who have figured it out. Demand is both strong and an insanely small fraction of it's potential.

We're on the same page. Am waiting 48 hours for support baseline to develop.

I have $100 on the slow boat to dwolla, will increase my position about 40%

I'm postulating a test of uptrend support near 5 in two days...give or take

That seemed true on January 6, and also seemed pretty true yesterday since that appears to be what happened.

I am not trying to say "sell your bitcoins", I am simply trying to say "don't buy now" (unless you are betting on someone coming and swooping them up in bulk very soon!).  This is a thread about "thinking about buying more coins", presumably that means right now, since it's a new thread.  I'm thinking about it too, but not doing it, least not today! =)  I still maintain that Bitcoins are great to hold long.  I just believe there will be better days to buy.

Relevant to that: the sleeping coins from 2009 don't worry me for my personal trading - but they ARE a legitimate reason why we should be skeptical about someone coming along and trotting off with $millions worth of BTC out of the blue.

Does it appear that I have lost a degree of confidence between January 6 and today because of observing it?  You bet.  One notable thing that happened (as I recall it) the day before yesterday was a stacking of a ton of new asks at the 7-8 mark that I don't believe were there before.  I do not know where those came from, nor do I have any way to know.  It's hard not to worry about sleeping coins when you are seeing asks come out of left field.  Left me to conclude, "OK, somebody with a lot of BTC wants to sell, or at the least, really wants to see the price go down in order to buy more".  So if what you find interesting is I've magically gone from a bull to not quite so... well ya got me.  You're right.  It's hard not to, with the smell of fresh beef permeating the air around here.

Especially when that person with lots of coins comes to the conclusion at some point that it's overvalued and that a price crash is imminent whether he sells his or not, realizes that only the first few people out the door have any chance of actually realizing their profit and the rest will be bagholders... and rationalizes that, despite his interests in Bitcoin's success, if someone is going to come out ahead, "it might as well be me"...

It will go down before it goes up.

A killer bitcoin app will eventually emerge that will propel bitcoin into the massive mainstream.  The creation of "Netscape" was the eureka moment that had tons of developers evolved BBS to HTML and web browsing.

I am working on one myself...stay tuned!

the overhang of early mined coins is a real concern

some have surely been lost in the manner of most ones and zeros

some I am sure are held by deep thinking folks with other than mercenary motives, they did, after all, join the effort when it was about the farthest thing from a sure thing one could imagine

still, your point is well taken...the temptation to cash out has to be very strong

Bitcoin value is mostly in its scarcity and anti forgery capabilities. If we take any object, for example ink pen, it has some value. But if would be only three those pens in the world, its price would rise, despite the fact its still the same object.

What im trying to say, its very hard to define what is "right" price for bitcoin, cause there is no mathematical formula to calculate that. For every person value of bitcoin is different and actual price is probably average of that.  

Yes that's true, and that's really the big question for me. Will it be adopted?

There is always the risk that someone holds millions of them and might need some money.  I think we've become fairly accustomed to the idea that this isn't happening - but there's no way to know for sure.  Someone who holds a million bitcoins need only drop 20-50k of them at a time to clear out much of the orderbook (like we saw yesterday).

One thing I find incredibly interesting is: http://ecdsa.org/stats.html

Look what happens to all the coins mined in 2009 as you pass your mouse across June 2011.  I bet only 10-15% of them move.  What about the other 85-90%?  That's a serious question to ponder.  They are virgin coins that not only have never been traded, they have never been used for anything!  They still belong to whoever mined them.  Those coins are out there whether we like it or not.  Either whoever holds all those coins died and took them to their grave (unlikely), or only needed to sell a tiny percentage of their holdings to clean house.  Others have suggested that people mined those coins and forgot about them or didn't care.  Even if that's 90% true (it almost surely isn't), 10% of a million coins is quite a load to be able to dump even in this market...

I've griped about these early coins in the past, but feel comfortable that they'll come out slowly in due time if Bitcoin grows organically to the point of ubiquitous adoption.  Whoever holds them will be damn rich, and the cost of them becoming rich will slowly be spread across all of the people adopting bitcoin to the point they won't even notice.  BUt if anyone decides to drop a few million dollars today and wipe out all the asks on the orderbook, feeling like he "0wned" Bitcoin, I am sure whoever has all those sleeping coins is going to have a hard time not being tempted to cash in.  Why woudn't he - his risk is minimal - drop 5% of his coins and take 50% of the orderbook.  Someone with a million dollars to throw at Bitcoin probably is financially sophisticated enough to see that risk just by comparing the depth of the orderbook with the total number of bitcoins in circulation, which is why I am not counting on it.

Someone with a big load of dollars needs to wait for another bottom before considering a major buy, in my opinion.  Otherwise they are essentially gambling that there will be imminent news out of left field that will bring them sudden luck - which could always happen - but not predictably enough that the odds would be any better than a typical wager at a casino.

The people who set the bottom will be the ones with lots of dollars to draw a line in the sand, and the ones with lots of Bitcoins who will decide whether to take the dollars and run, or not.  Those people (presumably) don't know each other, so in effect, nobody can know where the real bottom is.

If all speculation were taken out of the picture, I might guess that the real Bitcoin economy that depends on Bitcoin to function to exchange goods and services (silk road, etc.) needs only about a million dollars to actually account for the goods and services exchanged within, which would correspond to a bitcoin price under 13 cents.  That's what I consider an absolute floor (that we'll never reach).  $2.00 is close, but there's still probably room for a lower bottom.

The value of bitcoin is highly speculative and good points have been made.  However, I also want to point out that the number of total bitcoins ever to come into existence still has not changed (approx 21 million).  The number of coins mined will be halved by the end of the year.  Only 347 days left.

There are a ton of short term speculators here.  Some people are here for the long term so if you truly believe bitcoin will be adopted then any buy in the beginnings of bitcoin is a good buy.

What I might add to this, is that the recent volatility yesterday should translate directly to a temporary lessening of the intrinsic value of the bitcoin.  I'm not expecting $7 soon unless someone new comes in with lots of money and balls.

Basically, volatility scares anybody who needs a stable unit of account to stay profitable.  Someone on Silk Road might be happy selling drugs and might have no interest in sitting on BTC regardless of the direction they go, so they will cash their BTC out for USD the moment it arrives.  In fact, I thought I read somewhere that Silk Road lets their sellers do this automatically... as though they still eventually have to take out BTC to stay anonymous, but that they have an online "silk road" USD wallet where they can hedge their risk while their funds are still in their account.

By doing this, they drastically reduce the demand for holding BTC to do their business.  If BTC is dropping - or even if it's just volatile and unpredictable - that would presumably lead sellers to press the "Fuck this, I'm taking USD" button... thereby bringing the need of the "silk road economy" - their demand for bitcoins - much closer to zero - just enough to get funds in and out of the system.

Seeing yesterday's swing surely must have changed the minds of a few people interested in holding them for fun.

Fewer people with a reason to hold bitcoins = fewer people just shuffling the same btc and usd around just trying to outsmart one another = same fundamentals as a poker game = the only clear winner is the house (e.g. MtGox) in this case.

on the other hand even with small utility if people didn't pile so much asks the price could be in triple digits

it is all relative

speculating and hoarding alone do dictate price.  remove completely utility for instance and look at it as a store of value if it is believed to be the truth people will keep demanding them

I actually think the present rational utility price is less than $2, it's just that there are a lot of people who are good enough at holding them that they are protecting that price point, and might succeed in doing so persistently.  I don't blame them (and me included to the extent I hold mine) - Bitcoins really have a legitimate place in society and their future usefulness is likely to explode over the long haul.  I truly believe Bitcoins are a great thing to hold long - that's speculation - while their utility value slowly but inevitably catches up.

It's just not going to explode overnight.

Let's suppose nobody had an interest in holding them other than for their utility value.  I am guessing out loud here.  Think of how you put cash in your pocket.  You know that cash in your pocket is at risk of loss, robbery, etc... so you put the cash in your pocket that you think you might need as you go about your business.  The rest of it, you keep somewhere else you consider safer.  If you happen to have $5k to your name, you probably don't carry it everywhere you go.

Silk Road, as I understand it, has a couple thousand listings on there.  And people must certainly have bitcoins in their accounts there for anticipated purchases (buyers) or completed purchases (sellers).  That makes a few tens of thousands of bitcoins intrinsically useful.

I like keeping a few bitcoins in my back pocket just so that I have an easy way to pay somebody, the same way I keep some cash.  What might I keep in my wallet?  Maybe $80 is a typical amount I might be walking around with, maybe more if I'm on vacation.  Fair to say, the number of Bitcoins I might keep at arm's length might be approximately the same.  Suppose I like pornography or imported cigarettes and want to pay with bitcoins, then having $80 worth of bitcoins on hand for those reasons might be realistic.  For me, I sell physical bitcoins, and occasionally engage in a few deals where bitcoins are handy (like the video cards I recently sold) so having a few hundred or a couple thousand bitcoins at arm's length to go about doing this is realistic.

Bitcoin's market cap is $48 million, but there aren't 600,000 people like hypothetical porn & smoker with $80 of BTC in their pocket for their usefulness, nor is there even a small fraction of $48 million worth of listings on Silk Road, or gambling activity going on with Bitcoin.

The rest is speculation and subject to behave like speculation any time!