Topic: Wall Observer BTC/USD - Bitcoin price movement tracking & discussion - page 32912. (Read 26611307 times)

That's the problem with mining. It's filled with irrational actors. If you're looking to make a profit, you'll be competing with people (like me*) who will mine even at a loss. It might have worked for a while when hardware to hash was rare but now it's out there and cheap and you can't even hope to resell it for alternate use later.

Supply and demand dictates that this means miners end up operating at marginal profits or none at all. The only wildcard is the future price of Bitcoin. If it rises as it should, it turns into a good investment for early adopters. Of course, if everyone is expecting high prices later, that increases the loss miners are willing to mine at. Miners who are operating in this zone are likely to hold since an immediate sell means immediate loss (or they may be believers in which case they are holding simply to have later. Not everyone needs to realize short-term profits on their investments).


*I do a little mining on the side as a hobby but it's insignificant.

Isn't this wonderful? I love it!

yep, so for those people, the selling (via asic manufacturer) of the BTC has already ocurred. Next up: mining like hell without selling.

I'm not sure however, how large that group is compared to the group that wants to recover fiat.

I do not predict the development that we see during the day.
I wanted "only" to highlight the point that tell us more about further development and that increases the likelihood of possible options.
But in my opinion we can:
stay bellow the resistance with side movement for a few hours or days (40:60)
correct current top to down after 50% bounce (35:65)
or continue rally over 104 (25:75)
 

The reality doesn't matter, the perception does.

Hold on! Are you saying we either go up, down or sideways?!
That's one amazing analysis!

I would have to agree with this.  +1

Does David Malki read the Speculation forum here?

Banks are market makers here to make money. They will be able to make money in this (despite the bs in the article) and therefore will participate.

The banks don't want to support Bitcoin ? What a scoop  

July 16, 2013 9:55 am "Bitcoin ETF plan struggles to find support"
 
In the $2tn market for exchange traded funds, they are calling it the “Winkle wrinkle”.
The recent proposal from the controversial Winklevoss twins to launch an ETF that tracks the volatile virtual currency known as Bitcoin has been met with scepticism from industry insiders.
The Bitcoin ETF will probably never hit the market because it is too difficult for “authorised participants” and “market-makers” – the banks and trading firms that typically sustain such funds – to profit from discrepancies between the underlying asset and the ETF, they say.
The suspicions cast over the proposed Bitcoin ETF are perhaps the starkest example yet of the complex cast of financial characters and motivations needed to launch investment vehicles that attempt to provide quick and easy access to sometimes esoteric and thinly traded assets.
“Bitcoin itself is not even a developed market, let alone to build an ETF on top of it,” says Reginald Browne, managing director at KCG Holdings, formerly Knight Capital, and a key figure in the development of the funds, which have surged in popularity over the past two decades.
Mom and pop investors, as well as larger institutional investors such as pension funds and insurance companies, have rushed into roughly 3,400 ETFs in recent years, using the vehicles that trade like stocks on exchanges to place their money into a wide range of assets.
The “Winklevoss Bitcoin Trust” will use fractions of the twins’ accumulated Bitcoin holdings to give investors greater exposure to the virtual currency, according to a regulatory filing made early this month. Investors would initially get exposure to one-fifth of a Bitcoin for each ETF share bought. The Winklevoss twins plan to sell 1m shares, giving the overall fund a $20m value.

A person familiar with the proposed Bitcoin ETF, which still needs to be approved by the US securities watchdog, says the fund has yet to recruit authorised participants, or APs. A spokeswoman for the Winklevoss twins, Tyler and Cameron, declined to comment on the matter.
Authorised participants are essential to building the funds since they create and redeem the ETF shares, usually in exchange for baskets of the underlying securities, from the ETF sponsor.
APs typically sign on to support ETFs because they believe they can profit by “arbitraging” small differences between the price of the fund’s shares and the underlying securities being tracked. “If the ETF price trades above the NAV [net asset value, or the value of the ETF’s securities], the APs buy the underlying assets in the market and convert them into ETF shares,” JPMorgan analysts wrote in a recent note. “On the other hand, if the ETF price trades at a discount relative to the NAV, the APs buy ETF shares in the market and redeem them for the underlying basket.”

That may prove difficult to do when it comes to Bitcoin, despite the Winklevoss’s claims that APs to the fund will “have an opportunity to realise a riskless profit” by arbitraging the price of the fund’s shares with the underlying price of the cyber coinage, ETF insiders say. Many Wall Street institutions remain suspicious of the virtual currency, especially now that it has attracted the scrutiny of various regulators. It may also be hard to encourage big financial institutions that typically act as APs to trade such an uncommon asset as a crypto-currency.
ETF experts estimate there are roughly four dozen APs in the market. These include: Bank of America Merrill Lynch, Barclays, BNP Paribas, Citigroup, Credit Suisse, Deutsche Bank, Goldman Sachs, JPMorgan Chase, KCG, Morgan Stanley, Nomura, Société Générale, UBS and Virtu Financial, which specialises in high-frequency trading.
“Most ETFs are going to have somewhere between five and 20 [APs],” says the head of ETFs at one large investment bank. Some market-watchers are worried that APs may choose not to support ETFs in times of intense market stress. Last month at least one authorised participant suspended redemptions on ETFs after bumping up against its own internal risk limits during an intense sell-off in the market.

“There’s not a lot of legal responsibility [in being an AP],” says the investment bank’s head of ETFs, meaning most of them act as “at will” participants. “It’s the combination of the real time arbitrage with the ability to balance out your inventory that’s really the basis of the ETF market.”

Still, many ETF issuers, market-makers and APs insist they will be there to support the exchange traded funds, even in turbulent times. Many expect that during bouts of intense market volatility, the price discrepancies between ETF shares and their underlying securities will simply intensify until they attract APs back into the arbitrage trades at the heart of ETF mechanics.
“I don’t think we’re ever going to have a situation where everyone just decides we don’t want to make money,” says one AP who declined to be named. When it comes to the Bitcoin ETF, however, that moneymaking opportunity for Wall Street banks and trading firms is harder to find.

Mr Browne, of KCG, says of the Bitcoin ETF: “There has to be some investment merit to bring an ETF to the marketplace and without that it is not going to be successful. Investors won’t expand it, market-makers can’t trade it.”

The amount of coins mined each day doesn't change much with the appearance of ASICs, I agree with that part. However until ASICs are 'cheap' and abundant those newly mined coins will be distributed among fewer hands and those hands have expensive hardware and electricity costs to recoup. So I do think there will be more selling pressure from miners during this time of transition into the ASIC age, but you also shouldn't overestimate its influence on the price. There are much bigger forces in the market imo.

I've been considering building a multi-GPU mining rig, even though it'll be barely profitable but cheap second hand cards would make a difference.  Here in the UK where we're getting badly ripped off over energy costs all the heat that such a rig kicks out in winter would be useful as opposed to waste - I'd just effectively be heating my house with electricity instead of gas and getting paid a little to do it too, rather than me having to pay a huge gas bill.  Maybe that's not what most miners want but in a country that's normally too cold for comfort it has to be taken into account.  (It'll be handy for gaming too)

Edit:  Obviously I'd have to mine something like Litecoin, with all these ASICs appearing mining SHA256 with GPUs won't get me very far

EDIT:  And I'll probably be waiting forever to get my 7GH/s miner from BFL, by then it'll be up against so many other ASICs that it'll be fairly useless.  Because of the way the mining difficulty increases with the rate that people mine at we should soon reach the point where the ASICs aren't producing any more BTC than the GPUs were before them, making the winners the companies that made them, not the people who bought them.  I wonder if it's possible to cancel that order....

EDIT:  Doesn't the increasing difficulty mean that the appearance of ASICs on the scene is nothing much for speculators to worry about, other than its effect on how other speculators behave?  All that's going to change in the long run is who gets to mine the coins, not how many they get.  It still doesn't make it like fiat currencies where the government just keep printing more (QE) and devalue the money that everyone already holds.  There's about 11 million coins already mined, no matter how good their ASICs they can never get more than 10 million more and that's not going to happen overnight either.

Those GPU's have no resale either....who is buying used computer electronics for more than 10c on the dollar?

Do you trust open packaged used product being sold presumably on eBay and craig's list? I know I don't trust that they are anything less than severely abused and possible non-functional. Every high end ATI for sale will be suspect to have been used in btc mining and run to the max for months on end...

The used market is/will soon be flooded with cheap powerful graphics cards and no GPU miner is getting out with any significant part of their investment back.

 

Yes, I guess I should quote about the traps (just check the dates, all these quotes are from the massive dip to $66 before the last trap, which started on July 6th):





And the bounce finally arrived, the day after (July, 6th) - and that's why I bought at $68 to play that bounce. FYI: I already sold. Did you?

these waters are far too calm for my tastes