Topic: Wall Observer BTC/USD - Bitcoin price movement tracking & discussion - page 24509. (Read 26711388 times)
November 16, 2014, 04:02:41 AM
The market invariably chooses to use the best money available. There can only be one.
November 16, 2014, 04:01:19 AM
November 16, 2014, 03:53:26 AM
Steady? As in... fixed? You do know that Bitcoin is a deflationary currency correct? Which means yes, the growth CAN and WILL last indefinitely.
Yes, but not "to the moon". Bitcoin will become deflationary when its inflation will drop below the economic growth rate, under the assumption of constant adoption.
Steady is not as in "fixed" but as in any other mature collectable. It can fluctuate, and it can grow at the rate of economic growth (minus inflation rate, as long as we are not 140 years from now). It will fluctuate as a function of the fluctuations of aggregate demand for "store of value" in general, and as a function of its market share in that demand.
So I propose to make the mental exercise to put yourself in the hypothetical situation where you eliminate mentally that speculative purpose, and try to find out your own drive to put value into bitcoin *for store of value* reasons, and not for "to the moon" speculative reasons. I very well know that the actual situation is the speculative "to the moon" drive. But in order to find out what is going to be the steady state situation, you have to be able to find out what would be the drive to hold bitcoin *without* speculative "to the moon" drive.
Well the list is pretty long, but if you insist here's a few : 1. Deflationary 2. Ideal property as money 3. Distributed and outside the reach of any singular entity (read: government) 4. Programmable 5. Highly secure 6. Unseizable
Yes, but that doesn't give you any idea of its market share in 'steady state', nor as specific parameters such as hold time, and as such cannot be used to estimate a price. Of course bitcoin has good potential. But the price is not determined by that.
Government can kill bitcoin very simply, by rendering it illegal: openly, or by putting regulations on it that make it too difficult to handle. Then bitcoin is reduced to the black market as it was for a good part recently. I think, btw, that government is the biggest threat to bitcoin.
So in order to make that exercise, suppose that six months from now, for one or another reason, the bitcoin price has gone up to $ 500 000,- (and not because the dollar collapsed) and it stays there for 6 other months with fluctuations of 10% or so. Obviously, at that price, the "to the moon" expectation afterwards is gone. You do not expect it to rise to 10 million, do you. You might still hope for a small factor of 2 or 3, but that's it.
I can certainly envision it reaching 10 million per BTC in my lifetime. But lemme play along to your "scenario"....
Are you going to put your savings at that moment in $ 500 000,- coins ? Seriously ?
(or are you going to sell part of what you have to cash in ? :-) ).
(or are you going to sell part of what you have to cash in ? :-) ).
At this point it is clear you have no understanding of the dynamics at stake. At 500,000$ per coin I have no interest for your worthless fiat. No I am NEVER going to cash out because at that point it is clear and beyond evident that BTC has won. So yes, I am going to make sure every single penny I have is used to buy BTC. In fact, disregarding your speculative scenario, I can confirm to you that I am going to make this move MUCH earlier
I'm trying to make you make a gedanken experiment. That doesn't seem to work. I'm asking you how much you honestly would put bitcoin at work as a store of value without huge expectations in gain (eventually just fluctuations and economic growth, which is the normal value evolution of any collectable) ; and in how much you think majority of people are going to act like that. Because *that* is what is going to determine its market share of the "store of value" aggregate demand, and hence part of its price.
The $500 000,- was just a mental exercise to make you think of a situation where "to the moon" growth is not to be considered anymore. My opinion on that is that most people holding bitcoin are mostly into it for the "to the moon" scenario, and NOT as a store of value without much hope of spectacular rise in the next 10 years or so.
There are of course people who think that fiat will collapse and so on, but that is certainly not such a big majority that they can carry a market cap worth of hundreds of billions of dollars. People able to carry such a market cap are probably still into fiat and other stores of value.
My point is not to argue what people *should* do, but what they are *going* to do. And my claim is, that today, and in the coming few years, there's not enough aggregate demand for store of value in bitcoin (without the speculative 'to the moon' aspect) that could sustain a high bitcoin price. That can only come much, much later in my opinion, in at least a decade or a few decades, and on the condition that bitcoin has had *another* support, namely as a means-to-buy-stuff.
But that is just my opinion, and to find out for real, you should try to find out for real what is the market cap right now that could be sustained by JUST "store of value" and NOT "speculation to the moon".
This, to find out if you *really* consider bitcoin a good store of value for your savings without any "to the moon" speculation anymore, just a reasonable potential to rise somewhat, like other stores of value like gold, real estate and the like.
Bitcoin is a GREAT store of value, the best there is in fact. The reason for this is it is simply the best form of money that has ever been created. Gold pales in comparison to Bitcoin. Real estate can be seized through coercion or devalued by speculative market.
Yes, all this is true in theory. The question is how much people RIGHT NOW and in the few coming years are going to take that argument and are going to put their value according to that statement.
I don't see many people selling their real estate to buy bitcoin because they are afraid it might get seized. Because the opposite side of the medal is that government renders bitcoin illegal. Then they cannot seize it, but what are you going to do with your coins ? Flee to a country where you can still exchange it against something ? Against what ? Fiat ? Real estate ?
You see, I also agree with all those potential aspects. But the price is made in the market, and is a matter of offer and demand. The part of demand that is speculative "to the moon" is not sustainable. So one has to have other steady state demands that are the ultimate drive to base speculation on.
My claim is that right now, these fundamentals are:
- the stuff you can buy with bitcoin (growing, but still small, except maybe black markets)
- store of value in the long term, of which I think that for the moment, without speculative "to the moon" drive, there is not much, and there won't be as long as "the stuff you can buy with bitcoin" is not the main carrier of the aggregate demand.
You are obviously missing the point, right. *Of course* the speculative drive is the strongest one. But it cannot last, of course. Once it is over, I'm trying to find out what would be the drive. Because ultimately, *that* drive is what is going to give bitcoin any value as store of value. Otherwise, it is indeed, just Ponzi, if nothing holds it up once it cannot grow anymore. Just to be clear, I don't think it is Ponzi. But in order for it not to be, one has a clear view on its fundamentals. Fundamentals are never "growth to infinity", but are "steady state" arguments that are sustainable.
In the long term, fundamentals always win. That is why a real Ponzi, which has no fundamentals, always collapses.
So I'm trying to find out what are the fundamentals of bitcoin. As I said, my opinion is that it is "money to buy stuff". Some think it is "store of value". My *opinion* which can be wrong, is that that can only come much later. But "expectations to the moon" are never fundamentals by themselves.
In the long term, fundamentals always win. That is why a real Ponzi, which has no fundamentals, always collapses.
So I'm trying to find out what are the fundamentals of bitcoin. As I said, my opinion is that it is "money to buy stuff". Some think it is "store of value". My *opinion* which can be wrong, is that that can only come much later. But "expectations to the moon" are never fundamentals by themselves.
The fundamentals are that Bitcoin is the best form of money that exists. Point blank. Period.
https://www.youtube.com/watch?v=gKkfhi8Eaiw
So your claim is essentially, that bitcoin will take over all of the money market, and the store of value market.
That the 50 trillion dollar equivalent worldwide of M2 fiat money will completely turn into bitcoin. And you think that governments will let that happen any time soon. And that most of the rest of store of value will be in bitcoin (gold, ...).
When do you think that will happen ? A century from now ? 50 years from now ?
How many people do you think will think that way, say, 20 years from now ? Because that is what will determine their speculative attitude at that moment.
Because it is an extreme claim. It will give you the upper limit of the potential price of bitcoin.
It is a way to look at things, but I would give it a rather low probability. It is probably much more realistic that bitcoin will take a small share of the market, and try to estimate that. That will happen much sooner, a few decades from now at most.
November 16, 2014, 03:53:10 AM
you bitches ready for this?
set a course, for the moon.
set a course, for the moon.
Finally some common sense into this topic, good to have you back Adam.
Now lets hunt down that 10k bitcoin/page!
November 16, 2014, 03:32:58 AM
looking good! Retest of 370 happened, now Bitcoin is back in CHOO CHOO mode:D
trend reversal... I happened!
edit: I want to post on the epic page 10000
trend reversal... I happened!
edit: I want to post on the epic page 10000
November 16, 2014, 03:28:07 AM
cup and handle inc
November 16, 2014, 03:01:16 AM
November 16, 2014, 02:53:03 AM
going up and down too much per day. manipulators feeding on peoples longs and shorts.
BitcoinWisdom: 30 Day Change%: +1.14
November 16, 2014, 02:49:51 AM
This is why I think that that cannot be the support for the bitcoin price for a long, long time. I think that the main steady state drive will be "buying stuff", with my formula.
Speculation will be the driving force for Bitcoin until mass adoption.
It was designed by Satoshi to be so. Speculation is the bootstrapping method for Bitcoin to gain mass acceptance and only then will it realize its promises as a mean-of-exchange
Of course. But speculation is always based upon an expectation in the future, and if that expectation is wrong, the speculator looses. So rational speculation is based upon a long term estimate of the fundamentals.
And my aim here is to find out what those fundamentals are. As you say, it can be mass adoption as "means-of-exchange", and then the "quantity theory of money" jumps in to indicate what will be the price of things in bitcoin, which will inversely indicate what will be the market price of bitcoin (as compared to other monetary assets such as $ that can buy the same stuff).
The market value of bitcoin "as a means of exchange" will then be the fundamental, and it is determined by how much stuff one can buy with it, and what is the average holding time between such buys, as that will determine the aggregate demand for bitcoin, and hence determine its market value.
The *other* fundamental is "store of value for the long term". In my opinion, that can only come in once bitcoin is established as a means-of-exchange for some time. Maybe I'm wrong here.
But speculation by itself, cannot be a fundamental. It has to AIM for a fundamental. And I'd like, in this discussion, to find out what it is.
Read this here : https://bitcointalksearch.org/topic/m.9247581
These are the fundamentals we are dealing with.
November 16, 2014, 02:46:06 AM
You seem to miss the point. Growth ('to the moon') can obviously not last indefinitely. At a certain point, steady state will have to set in. Every form of speculation is essentially based upon a bet on that steady state value which is expected to be higher than right now, so that kind of speculation (which is now the main drive) will have to stop one day.
Steady? As in... fixed? You do know that Bitcoin is a deflationary currency correct? Which means yes, the growth CAN and WILL last indefinitely.
So I propose to make the mental exercise to put yourself in the hypothetical situation where you eliminate mentally that speculative purpose, and try to find out your own drive to put value into bitcoin *for store of value* reasons, and not for "to the moon" speculative reasons. I very well know that the actual situation is the speculative "to the moon" drive. But in order to find out what is going to be the steady state situation, you have to be able to find out what would be the drive to hold bitcoin *without* speculative "to the moon" drive.
Well the list is pretty long, but if you insist here's a few : 1. Deflationary 2. Ideal property as money 3. Distributed and outside the reach of any singular entity (read: government) 4. Programmable 5. Highly secure 6. Unseizable
So in order to make that exercise, suppose that six months from now, for one or another reason, the bitcoin price has gone up to $ 500 000,- (and not because the dollar collapsed) and it stays there for 6 other months with fluctuations of 10% or so. Obviously, at that price, the "to the moon" expectation afterwards is gone. You do not expect it to rise to 10 million, do you. You might still hope for a small factor of 2 or 3, but that's it.
I can certainly envision it reaching 10 million per BTC in my lifetime. But lemme play along to your "scenario"....
Are you going to put your savings at that moment in $ 500 000,- coins ? Seriously ?
(or are you going to sell part of what you have to cash in ? :-) ).
(or are you going to sell part of what you have to cash in ? :-) ).
At this point it is clear you have no understanding of the dynamics at stake. At 500,000$ per coin I have no interest for your worthless fiat. No I am NEVER going to cash out because at that point it is clear and beyond evident that BTC has won. So yes, I am going to make sure every single penny I have is used to buy BTC. In fact, disregarding your speculative scenario, I can confirm to you that I am going to make this move MUCH earlier
This, to find out if you *really* consider bitcoin a good store of value for your savings without any "to the moon" speculation anymore, just a reasonable potential to rise somewhat, like other stores of value like gold, real estate and the like.
[/quote]Bitcoin is a GREAT store of value, the best there is in fact. The reason for this is it is simply the best form of money that has ever been created. Gold pales in comparison to Bitcoin. Real estate can be seized through coercion or devalued by speculative market.
You are obviously missing the point, right. *Of course* the speculative drive is the strongest one. But it cannot last, of course. Once it is over, I'm trying to find out what would be the drive. Because ultimately, *that* drive is what is going to give bitcoin any value as store of value. Otherwise, it is indeed, just Ponzi, if nothing holds it up once it cannot grow anymore. Just to be clear, I don't think it is Ponzi. But in order for it not to be, one has a clear view on its fundamentals. Fundamentals are never "growth to infinity", but are "steady state" arguments that are sustainable.
In the long term, fundamentals always win. That is why a real Ponzi, which has no fundamentals, always collapses.
So I'm trying to find out what are the fundamentals of bitcoin. As I said, my opinion is that it is "money to buy stuff". Some think it is "store of value". My *opinion* which can be wrong, is that that can only come much later. But "expectations to the moon" are never fundamentals by themselves.
In the long term, fundamentals always win. That is why a real Ponzi, which has no fundamentals, always collapses.
So I'm trying to find out what are the fundamentals of bitcoin. As I said, my opinion is that it is "money to buy stuff". Some think it is "store of value". My *opinion* which can be wrong, is that that can only come much later. But "expectations to the moon" are never fundamentals by themselves.
The fundamentals are that Bitcoin is the best form of money that exists. Point blank. Period.
https://www.youtube.com/watch?v=gKkfhi8Eaiw
November 16, 2014, 02:37:50 AM
going up and down too much per day. manipulators feeding on peoples longs and shorts.
I thought day tarders liked volatility.
November 16, 2014, 02:32:00 AM
going up and down too much per day. manipulators feeding on peoples longs and shorts.
November 16, 2014, 02:30:05 AM
Should I go long or wait for a dip?? 
November 16, 2014, 02:04:57 AM
This is why I think that that cannot be the support for the bitcoin price for a long, long time. I think that the main steady state drive will be "buying stuff", with my formula.
Speculation will be the driving force for Bitcoin until mass adoption.
It was designed by Satoshi to be so. Speculation is the bootstrapping method for Bitcoin to gain mass acceptance and only then will it realize its promises as a mean-of-exchange
Of course. But speculation is always based upon an expectation in the future, and if that expectation is wrong, the speculator looses. So rational speculation is based upon a long term estimate of the fundamentals.
And my aim here is to find out what those fundamentals are. As you say, it can be mass adoption as "means-of-exchange", and then the "quantity theory of money" jumps in to indicate what will be the price of things in bitcoin, which will inversely indicate what will be the market price of bitcoin (as compared to other monetary assets such as $ that can buy the same stuff).
The market value of bitcoin "as a means of exchange" will then be the fundamental, and it is determined by how much stuff one can buy with it, and what is the average holding time between such buys, as that will determine the aggregate demand for bitcoin, and hence determine its market value.
The *other* fundamental is "store of value for the long term". In my opinion, that can only come in once bitcoin is established as a means-of-exchange for some time. Maybe I'm wrong here.
But speculation by itself, cannot be a fundamental. It has to AIM for a fundamental. And I'd like, in this discussion, to find out what it is.
November 16, 2014, 02:01:16 AM
November 16, 2014, 01:49:25 AM
Honestly, would *you* store value in bitcoin right now, if you didn't have any expectation of growth of its value ("to the moon") ?
I wouldn't but the reality is the expectation of growth in its value exist and you cannot simply pretend to remove it from your equation because it fits your argument.
You seem to miss the point. Growth ('to the moon') can obviously not last indefinitely. At a certain point, steady state will have to set in. Every form of speculation is essentially based upon a bet on that steady state value which is expected to be higher than right now, so that kind of speculation (which is now the main drive) will have to stop one day.
So I propose to make the mental exercise to put yourself in the hypothetical situation where you eliminate mentally that speculative purpose, and try to find out your own drive to put value into bitcoin *for store of value* reasons, and not for "to the moon" speculative reasons. I very well know that the actual situation is the speculative "to the moon" drive. But in order to find out what is going to be the steady state situation, you have to be able to find out what would be the drive to hold bitcoin *without* speculative "to the moon" drive.
So in order to make that exercise, suppose that six months from now, for one or another reason, the bitcoin price has gone up to $ 500 000,- (and not because the dollar collapsed) and it stays there for 6 other months with fluctuations of 10% or so. Obviously, at that price, the "to the moon" expectation afterwards is gone. You do not expect it to rise to 10 million, do you. You might still hope for a small factor of 2 or 3, but that's it.
Are you going to put your savings at that moment in $ 500 000,- coins ? Seriously ?
(or are you going to sell part of what you have to cash in ? :-) ).
This, to find out if you *really* consider bitcoin a good store of value for your savings without any "to the moon" speculation anymore, just a reasonable potential to rise somewhat, like other stores of value like gold, real estate and the like.
Quote
Bitcoin is absolutely a secure store of value. More secure than any alternatives on the market. Stable? Obviously not but is stability a requisite to qualify as a store of value? I do not think so. Especially when considering this growth expectation it makes even more sense to store the value of your wealth in such an asset.
You are obviously missing the point, right. *Of course* the speculative drive is the strongest one. But it cannot last, of course. Once it is over, I'm trying to find out what would be the drive. Because ultimately, *that* drive is what is going to give bitcoin any value as store of value. Otherwise, it is indeed, just Ponzi, if nothing holds it up once it cannot grow anymore. Just to be clear, I don't think it is Ponzi. But in order for it not to be, one has a clear view on its fundamentals. Fundamentals are never "growth to infinity", but are "steady state" arguments that are sustainable.
In the long term, fundamentals always win. That is why a real Ponzi, which has no fundamentals, always collapses.
So I'm trying to find out what are the fundamentals of bitcoin. As I said, my opinion is that it is "money to buy stuff". Some think it is "store of value". My *opinion* which can be wrong, is that that can only come much later. But "expectations to the moon" are never fundamentals by themselves.
November 16, 2014, 01:40:13 AM
Welcome back Adam.
i just stopped here to make a buy,
back into the time machine i go.
http://tiki.oneworld.net/time_machine/images/timemachine.gif
... and a new poll, maybe?
November 16, 2014, 01:26:48 AM
Seems like you're right. And now the weekend is coming to an end.
And yet 370 was so close.
I've missed many times on this kind of shit, by only a couple dollars, and what I've realized is, at some point, you need to just take a position and quit quibbling over the nickels by the tracks while the train is gaining speed.
Again, I can't advise and I only wish you luck.
November 16, 2014, 01:19:22 AM
Welcome back Adam. 
November 16, 2014, 01:09:52 AM
Seems like you're right. And now the weekend is coming to an end.