Topic: What are the next events to watch that could potentially bring BTC below $500? (Read 5615 times)

I really do believe an economic crash of some sort will hurt bitcoin a lot. Bitcoin doesn't have enough popularity yet and is fairly difficult to use for those uninformed to become the currency of the people. If a there is a crash in the next 2 years which I think is a strong possibility, weak hands will seek to liquidate their bitcoin positions because their wealth is going to be hit and they're going to need more liquid assets as bitcoin isn't widely accepted as money. I can't see people moving to bitcoin as it doesn't really seem 'real' to them as they're stored digitally, people will be moving towards owning real assets like land and gold.

The stability of other crypto-currencies exchange rate will bring BTC below $500.
I predict, in the next few years many countries will have their own crypto-currency with their own style (and with millions of users) where BTC still become crypto-currency parameter.

If someone sticks a fork in that could paralyze it especially if the Big Guns decide to mine like crazy I guess and of course if it gets outdated to the point where no one wants to use it and the demand goes down but I don't see that happening. Look at the U.S dollar and other fiat currencies they are running for years lol.

Most probably government regulation.
I don't know why but my instincts tell me this time it will be american govt. :p

Well, If that happen . It might be DONE by Chinese.

In the spirit of OP, it is a behaviour that *if observed*, should ring bells

Uhm, but bitcoin supply is already large enough to easily handle 5% of the current global ecommerce at the current price. Global eccommerce is about 1.2 trillion dollars per year, or about $100B per month. Bitpay which seems to be the most used payment method in ecommerce handles less than $10M per month currently. Given that even $10M is just 0.2% of the capability, price wise, the price doesnt HAVE to increase for a long time.
And thats not even mentioning that currently the blockchain doesnt even support large enough blocks to support that many transactions.

That's because in those organizations, they gain utility by cooperating.  They can use their power to force others to meet their demands, because the work they contribute is necessary.  No such coercion exists in bitcoin.  Small miners don't care of the big miners stop.  Big miners can stop and tell everybody else "meet our demands or we continue not mining!" and the small miners say "fuck yourself, and thanks for letting me get this block reward!"

Bitcoin is a better way to move value.  Therefore, over time, people will switch to using bitcoin to move value.  In order to accommodate the total value of the increasing number of people using it, the price must increase such that the market cap of bitcoin is equal to or greater than the total value that people wish to move.  Since more people will be using bitcoin, the price MUST increase in order to accommodate them.

Game, set, maths.

Actually, this is a rational strategy, and has been done in numerous situations: unions, guilds, oil cartels, professional organizations with limited membership.

However, in the case of peer to peer Bitcoin, it is completely unenforceable, so Bitcoin is forever doomed to spend miners' rewards on electricity.

No one will try this stunt.
It's like having 100 tractors and using only 2 of them because if the neighbor does the same you'll still get the same production as him ? 2% of what you should ?

Keeping the difficulty low will just increase the rate of which asics are flooding the market , it will not slow down the race even with 0.00001% but the contrary.
Also , it will take a lot of planning , and a lot of trust to pull this , and what are you going to do with the parties that are not in the plan?
They will just mine your blocks and make profit while you are happy the difficulty is low.

There is no trace of common sense in this plan.

Lets say that the 5 largest pools decide to take turns in mining blocks, so as to keep difficulty low, thus saving energy costs, and investment costs, while the payoff are still shared among them. They could "fake" or alt-mine or not claiming the block-found, just for appearances paying the energy, but artificially keeping the difficulty low as to slow the hardware arms-race.
Just a thought man, didn't say it will happen

Really this is ridiculous.
The hashrate comes from people mining. You can't have hashrate unless you mine.

You can't have light without electricity running through the bulb and you can't have a light bulb working , consuming energy but not producing light.

hypothetically
It is "there" because the minners have access to it, but they decide not to use it.
just like say in the California Energy Crisis.

Then it's not really "there".

what if the hashrate is there but not used for block mining?

Network hashrate and difficulty are the same thing.

Network hashrate increases but difficulty does not?
Miners decide to manipulate difficulty instead of investing in new hardware?

Well talking about infinite... Yes if you consider the fact that any FIAT that you compare Bitcoin with will go down to zero one day.
Bitcoin is going to infinite.

That $700 was made up number as 75% of current price, but his preordering business is one huge mess.  Mining will be a safe bet as long as you have efficient enough hardware, or low price of electricity.  Even in the case of price falling, not all miners will have to stop, only the least efficient ones.

It will catch up, because, hey, free money. 

This is a very basic economic argument.  New miners will join until it is profitable to do so. 

As for not knowing the future price, you got a point there.   But, if the price stays the same, which was the OP all about, then, 3 to 7 months.   If price falls, perhaps sooner.  If price falls even more, perhaps no catching up will be needed.  If price keeps rising, difficulty will try to catch up, and it could take longer.

But, my argument is all that this electricity cost will put breaks on Bitcoin price, and even if the price rises, the breaks on the price will be stronger and stronger as difficulty rises.

OK, thanks for the link. Just read the thread, very thought provoking. So basically what you are saying is anyone pre-ordering ASICs several months in advance better hope the resale price of BTC is well above $700 by then?

There you go:
https://bitcointalksearch.org/topic/miners-running-costs-must-pass-trough-exchanges-this-limits-the-bitcoin-price-414657

3 to 7 months comes up if you assume the price will stay the same, and difficulty will double each month.  Currently the best mining hardware uses $20 to $100 per Bitcoin in electricity, so we need 10 or 50fold increase in difficulty for it to catch up, and this means 3 to 7 doublings, thus 3 to 7 months.


Because, new tech is so much better, and it costs 2% of bitcoin price to mine one bitcoin. So, not much costs in electrical power. And that is exactly the reason why difficulty is increasing in such huge steps right now. 

Mining tech being more efficient does not mean that the network as a whole will use less power.  It means that only there will be more hashes.  Total power used by the network only depends on the bitcoin price, and on the awards given to the miners.

why do you think it will catch up? you don't know what the price of bitcoin will be at that time.

You'd have to guess a lot of things to estimate the price to mine a coin in 3 to 7 months time. Care to share the calculation?

Also, as *so* many miners will tell you, a lot of them don't pay any electricity charges at all, and I'm not just talking "basement miners" here.

No, I'm saying that some time in the future, my guess would be 3 to 7 months, this event happens:

The cost of one Bitcoin mined finally catches up with the price, and reaches $700 on average.  This means that miners have to sell around $2 million of BTC each day, because they have to pay their electric bills in currencies other than BTC.  This means we need $2 million of daily fresh cash to keep the price at the same level, around $1000.   

You saying it costs $700 to mine a bitcoin???

The cost of one Bitcoin mined finally catches up with the price, and reaches $700 on average.  This means that miners have to sell around $2 million of BTC each day, because they have to pay their electric bills in currencies other than BTC.  This means we need $2 million of daily fresh cash to keep the price at the same level, around $1000.   

Finally, we run out of suckers and BTC easily drops to $500.

See, that wasn't that hard.  In fact, I would even bet on it.

lol, nice one! can I quote you in all the chicken little threads out there?

Looking at the technicals, a fall below $500 again is very unlikely, brought on only by some very bad news .... which I can't currently think of.

More miners being sold and the sellers using auto-convert payment systems that give them currency for the BTC they "claim" to accept. Which just instantly cashes-out BTC for currency, giving them an electronic deposit of currency, for a cut of the selling-price.

More "big holders", looking to expand "the market", who end-up cashing-out large volumes of BTC, (Which is a fraction of what they hold), to buy physical things that will make the remaining holdings they have, more valuable.

Big-shots, looking to buy big-toys, which requires withdrawing for currency. (Since big-toy producers are big, because they are paying taxes and not taking risks on BTC. They already make a killing just selling over-priced things to big-shots.)

Also more thievery, like the last massive viral BTC ransom that happened. Big drops there.

Next price-hike is income-tax time... when many people get returns, which they treat like "investment money", or "play money"... and will be willing to "buy a few coins", just because they can. In hope of it giving them a similar return, like it did the previous years. (Feb-Mar-Apr-May) By January, most know how much they will have to "play with", and some start spending money before the actual return comes.

No new technology worth buying this year... So, I imagine this will be "The year of saving and investments". A boom on all exchanges, including stocks and banks.

P.S. BTC is being added to many "regulated" forex markets, and some unregulated fores exchanges too. By the dozens each week. Those "difficult" exchanges will die-off, because forex trading will be a lot easier to get money in and out from BTC.

a zombie apocalypse  

Actually that might make the price skyrocket or stay the same, who knows in that case yeah?

Time slowly starting to reverse direction. Kind of like that Red Dwarf episode.

If this world went back to 100s yearlier mean. In the perior without internet connectivity then it could happen if not bitcoin price will never come down and if come down some dollars or some hundreds it will be temporal for hours or a day.

Whether a country will tolerate or ban cryptocurrencies depends on whether it is good or bad for its economy.China and India have already decided that they do not like it at all. Most countries will likely follow suit.

The US presumably still likes bitcoin, assuming that the successful speculators are, on balance, bringing money into the country. But that may change if some bank or other powerful investor gets burned by it. See the Madoff example.


Marijuana should be unstoppable since anyone can grow it. Yet the US pressures the whole world to outlaw it.  The same could conceivably happen to cryptocoins.

India is India. Every country is different. I don't see many countries arresting people for trading a few bitcoins. Most governments have other more pressing concerns.

Easter and Pentecost. Celebrated. On the same day! 

My concern is India making more arrests based on the 'evidence' they gathered of those "400 traders making 10000 transactions". That was a clear threat put out through the Indian media. If India needs to ratchet up to defend their capital controls, then look for this. People going to jail just for trading BTC is bearish imo. But also oddly bullish, in that it will prove the central banks are that concerned about their system being so shit that they need to persecute a new technology that is clearly superior.

Great ideas in here though. Even though it's a bit crank pot I don't doubt a false flag event being blamed on bitcoin too too much given the current refrain from the mass media of it being the "currency for crime". So even that idea for below $500 wasn't bad.

Great stuff from the community here on Bitcointalk.org. Thanks so much.

Now that china is out for a while and fincen is "happy" maybe the EU could spit on bitcoin a little bit
And don't forget satoshi can come back, disgusted by the greedy trend which bitcoin has taken, and sell off all his coins and bring the price down

Stop using that word "mathematically" when its not appropriate. Its your opinion that "bitcoin is going up to infinite" (I won't even go into your use of "infinite"), but its not based on maths. Mathematicians write proofs using funny squiggly symbols you know

The posters above are right, the illuminati does exist.

A mere guess:

Number 1 -- The well known false flag attacks, staged by governments and blamed on Muslims and Islam. Sharpening of anti-terrorism legislation, blaming funding from cryptocurrencies and therefore for the safety of all nations they convince people to let it be controlled or they convince people to leave it and use a new cryptocurrency protected by the governments  

Number 2 -- The government will be taxing people (when cashing out to a bank account) or fining businesses (declaring it illegal) for using Bitcoin and other cryptocurrencies  

Yes, we know that the price of Bitcoin is very volatile on short/mid term. We've seen it with the China's bubble, I am not denying it.
We also know that nothing will ever stop the greed of the Central Bank and the financial institution so the value of FIAT money will always go down. As time goes on you need more FIAT money to buy the same amount of Bitcoin. Moreover the awareness of Bitcoin increase which increase demand.
So mathematically the price of Bitcoin is going up to infinite on the long term.

Really? Maths is based on proofs. What proof can you offer to guarantee that the price of bitcoin can only go up mid/long term? Never heard of risk?

Prove that he is a fool. Or try again without getting personal. Didn't read your post beyond the first couple words.

Let me get this straight: Some fool spouting off about how the other side is all just indoctrinated, bought off, or has an agenda is trying to tell others how he is more 'informed' than others? Why, is playing the contrarian 'revolutionary' the only rationale you need to justify whatever you feel like mouthing off?

Are you sure you are not being cartoonishly naive?

Also, if you want to see 'cartoonish villainy', I suggest actually trying to live under a real tyranny and dictatorship. To come to understand what it means to fear informers and your own family because of 'public security' informers. To truly understand what it means to feel a fear of real torture, not the kind of 'torture' that involves the EBIL government employee trying to get a permission to 'bellyslap' a prisoner.

Wait, are those kinds of villains too much for you to actually take on? Because they couldn't care less what anyone thinks about their 'human rights' and 'civil liberties'?

So instead of real villains, you cowards point fingers and bitch at 1st world governments, laws, and societies whose character you don't even fully understand, never mind fully appreciate. I laugh at each and every one of fools who think Iraq and Afghanistan wars are 'atrocities'. More people died from auto accidents in quarter of the globe in a year, than all the supposed 'indirect civilian' casualties who were too busy killing each other in a festival of sectarian violence and usual warlord behaviors.

Listening to you anti-government fools is really no different than listening to OWS kids.

Does it really matter ?
If you are interested in the mid/long term value of Bitcoin, it can only go up mathematically speaking.

'cept the dude is right. The western governments, and especially the US government, really are that cartoonishly villainous at this point. And we need a pretext for invading Iran/Syria, at least one that won't provoke China and Russia into retaliating and triggering WWIII.

And what's an expert anyway nowadays? It's someone who has been indoctrinated, bought off, or has an agenda in almost every case. I have found it far more informative in the past few years to listen to the common internet man while comparing it to the available objective data than to listen to any mainstream experts.

Yep that's possible. But I see a lot more possible "upside" stories. Bitcoin will take off whether or not the States plays ball, big player as it undoubtedly is.

Yeah or a US sell off caused by yet another FinCen "guidance"

I think it's way more likely that the NSA is behind bitcoin rather than it starting a witch hunt against it.

Also, we don't need to come up with ludicrous ideas for a sub-500 price. Another China sell-off caused by policy changes and were are easily there again.

When a non-expert starts spouting off pseudo intellectual non-sense gleamed from some books and articles, that does FAR more damage to the cause of fighting against actual government conspiracies than any government action could ever hope to do.

This isn't a game. Stop making a scapegoat of the 'guberment' for everything. People who indulge in that type of shit typically have a very selective view of what should be attributed to whom, especially in regards to their own personal obligations.

Weakness in SHA_256 found

Regulation of cryptocurrencies by government.

Time? 

Critical bug in Bitcoin client or SHA-256 weakness can bring BTC/USD rate to zero.

Agree with Bono, too many cortices on bitcoin, which will produce new apps and services nobody thought of. Cool and interesting stuff.


Remember that guy who outsourced his job, and his bosses found out and sacked him. I'm thinking he was just ahead of his time. It would be something I'd consider (currently I work behind a computer all day) if it could be done on the fly and anonymously, only bitcoin could pull that off.

Well, let's see...

- Adolf Hitler resurrects and publicly endorses Bitcoin.

- Satoshi reveals that he intends to double the amount of BTC in circulation.

- Some really, really gullible whale reads one of the trollposts here and triggers a massive sell-off.


...

In case you couldn't tell, I'm pretty optimistic about BTC's immediate AND long-term future. With no really impactful negative news on the horizon, I expect modest gains until some cool shit starts happening in early-mid 2014.

What are the next events to watch that could potentially bring BTC below $500?

Let's make some predictions!