Topic: volitity will continue until... (Read 1081 times)

I hold cash, not because it appreciates, but because I can go to starbucks and buy something.   Why would you repatriate your funds into a local currency that looses value through lack of scarcity if I can buy most of my things in bitcoin (or whatever global currency)?  Your argument is only valid until adoption of a better currency than the scheme being run by the central bankers.

Fundamental value isn't based on adoption. People using it as a currency do the following.

Buyer wants to buy something that's $50. He buys $50 worth of Bitcoins and sends them to the seller. The seller sells the bitcoins and sends the good/service to the buyer.

That transaction, at it's fundamental level, works the same if Bitcoin is worth $5000 each or 5 cents each. Whether the buyer buys/sends 100000 BTC or 0.0001 BTC it doesn't really matter. People using it as a currency aren't buying more then they need and holding. They're using it as a currency not to become an investors/trading. The seller sells the BTC right away, he's running a business not becoming a day trader / speculator. Buying $50 of BTC and then selling $50 BTC a short time later isn't going to drive the market up. BTC currency transactions are pretty much market neutral.

There isn't a rise is BTC value or a drop in BTC value that had ANYTHING to do with adoption or usage. Never. Ever. Hasn't happened. You're a fool if you believe that.

My point was those "players" are driving the price, because there are no fundamentals. It's people playing the market, pushing around the price, influencing supply/demand to make money. Which is the scary part about BTC, it can be wildly popular, 5000% growth in adoption/usage, and the market price could be $5. That wouldn't matter to the people using it as a currency one bit. If BTC crashes to $5 tomorrow, the same amount of people will use to buy/sell goods as the day before. The belief that the exchange / market / mining needs to be profitable in order for BTC to succeed is a fallacy created by those people.

The psychology attributed to adoption... no.  The psychology created by these big swings... yes.

And who is going to allow it to reach over $1000 a coin even if its worth more? It's a matter of a flaw in the infrastructure, that is why price discovery isn't working.

Yes. Fundamental value is based on adoption as a currency, which is driven by its utility.  Bitcoin is better at being a currency than anything else mankind has ever had.  Volatility is only temporary.


What market isn't?  All of these players provide liquidity.

No. This won't change market psychology.


Could be. But the relevant aspect is not market capitalization - it is adoption rate, more specifically adoption growth rate. The lower the percentage of new users entering BTC in relation to its existing user base the less pronounced bubble-bust-cycles will be.

World GDP = $69.97 Trillion US dollars at current prices

EBAY Mkt cap = 73.10B


As of 2008, PayPal's total payment volume, the total value of transactions, was US$60 billion, an increase of 27 percent over the previous year, and US$ 71 billion in 2009, an increase of 19 percent over the previous year. As of 2012, PayPal's total payment volume processed was US$145 billion.


If it captures 1% of global GDP, that would equal 699.7 billion US dollars which would equal $33,300 per coin if there are only 21mil coins.

If it captures the payment volume processed of paypal in 2012, it would be worth $6,908/coin.

If this ever happens.......yes.

Bitcoin?

News flash, the price isn't based on fundamentals. There are no fundamentals. Bitcoin adoption has nothing to do with the price. Bitcoin adoption won't cause Bitcoin USD value to go up. They're not even related.

It's a pretend, unregulated exchange, trading a virtual currency. It's full of day traders, investors, speculators and manipulators. No one is trading based on real data. People are trading to make money by playing the markets swings. It's supply/demand. More sellers then buyers, it goes down. More buyers then sellers, it goes up. Someone with 5-10mil can push the price wherever they want. The only data people use is "price is going up, GOOD!" and "price is going down, BAD". Makes manipulation real easy, you just have to give it a shove and people bite hook line and sinker.

Trying to explain BTC swings is like trying to explain why women bleed for 5 days and don't die. Who the fuck knows.

The good news is, I believe coinsetter and coinlab are working on the futures problem.

No.

75% in one day without something fundamental happening? Which market is that?

So why do other markets with these features also have volatility?

1) BTC is shortable and has a legitimate futures market. It's nuts if you can't hedge your positions.

2) A marketcap of at least 10 Billion