Topic: what caused the rise to $1100 last year? (Read 5006 times)

Why are we talking about the past, let's talk about the things that will come.

Bitcoin will rise again to that value or even more, with or without help of rumoured bots.

The giant spread was caused by the fact that people were unable to withdraw fiat from the exchange without great delay, causing people to panic buy their bitcoins back

i don't really know a lot about bitcoin! but  i believe that  they rised it to 1100$  so that they get faster attention from people! don't u think everyone would go  crazy about mining in bitcoin after they hear this? also it's quite free so..

that can also indicate that demand was more east based.
i also think trading on mt.gox was strange, but general uptrend was worldwide and across all exchanges, so its possible that the rest of us were only lagging behind.
same thing now with stamp and huobi on one side, and btc-e on another

That market was a strange one at the time
Gox could be 400 to 500 dollars below BTC-E and every other exchange at the time

Perhaps it was the fact you couldn't move the coins out that forced the premium but to me this was classic speculation and bots trading back and forth on their ecosystem before it crashed.

That is the most viable explanation. What else can explain the giant spread, which was seen in Mt Gox? When BTC was trading at $1,100 in Mt Gox, it was trading for three digits in all the other exchanges (Bitstamp, BTC-E.etc). The demand came from Mt Gox only.

so now we need to add India and Brazil and mix it well and will get to 10k

I heard Mt. Gox was manipulating the price upwards via bots. Don't know if this rumour is true.

I think they were just slow with withdrawals, not stopping them completely

There were a lot of people who were not willing to wait that long.

Right, but time to have money was too much longer in Mt-Gox. I remember that the time for a payment in Mt-gox was 3-4 week !

Whoa whoa wait a minute here...you mean you where actually able to withdraw coins late last year and even early this year?  Boy, you must either be really lucky or know somebody.

Also, I disagree with the comment regarding Willy bot not having some serious price manipulation effects on the price of bitcoin up to the $1200 bubble.  Even near it's demise gox still had one helluva large percentage of all the exchange traffic despite the writing on the wall for sometime.

The reason that gox had a premium late last year and early this year is that it took forever to receive fiat form them so people would repurchase the coins they sold, withdraw the coins and sell on another exchange. 

Exactly. Now there isn't much spread between exchanges  Price of Btc-e is very similar to price of Bitstamp !

If the spread between exchanges is large enough then people would start to use arbitrage between exchanges, causing the price to rise on other exchanges.

Bullyish buying created an uptrend in general. It wasn't just those Willys.

Price of Bitcoin rises up from 700-800$ to 1132$ in only one week, and then, in 4-5 days, price dropped on 614$ !

So, Bot is very powerful if you have a lot of bitcoin quantities.

The two bots contributed to massive volumes of BTC trading.

From what I can tell the bots were acting on behalf of large buyers that wanted to buy massive quantities of bitcoin without disrupting the markets.

As many posters in this thread already pointed out. The author of the willy report is misleading his readers.

May be he truly believe what he wrote, and have no idea what he is talking.

Wasn't Mtgox market share already small at the time?  Bitstamp, China, even btc-e was bigger than gox.

Even if mtgox trading was 100% bot, how could a small market have such an impact on bigger exchanges?

Bot can only manipulate short term price on one exchange, they can not manipulate long term price on exchanges all over the world.

Look that two Bot can be much dangerous for the market, especially if you have many Bitcoin.

People are overestimating the power of two bots.

Rise of 1100$ last year was caused by two BOT of Mt.Gox, know you?

I don't think it was bots that caused the price to go up. The bots were essentially acting on someone elses' behalf buying real BTC with real fiat. The bots were trying to buy BTC without charging through all of the offers to sell.

It is likely that a lot of institutional buyers were buying during this time via the bots.

Well, truth be told, not only that....but sellers not willing to sell for lower price is to be blamed too 

As someone already pointed out, buyer (demand) cause it to go up.

It was much more simpler...
Rise was pure speculation that roll itself down from small snowflake to avalanche. And when gox exploded, all speculants run from the boat like rats, causeing price to drop and eventualy stabilize at where it is now.

-US Government Shutdown - USD Death Fear looming - Circa October-November 2013
-Willy Bot @ MT. Gox Took advantage of the situation

However, bots like Willy are not uncommon but let's just say Willy could have been designed to take advantage of the situation. 

Was it good timing thing?  Well, I'd be willing to bet that many people, out of fear were getting into Bitcoin.  It could have been an experiment too...  governments are notorious for that, at the expense of its people.  No government body nor bank can control the Bitcoin network, so this scares them in a sense that crooked governments don't want to see wealth in the hands of its people they are trying to control.

there was alot of new markets, but supply remained the same, pure logic made btc traders to set higher prices, and so the price escaled fast.
By any quick rise , including btc, you dont get volume, and that makes that price bubble pop in the end, evening the price and scaling it down ehere it should be.

Price rises due to bot "painting" the tape do not last.

This technique is well known in the trading world. The price from Mtgox and bitstamp lag btchina when price was going up the roof.

So, people who think bot has anything to do with coin price went up 11 folds over 2-4 weeks have no idea what they are talking.

Thanks for the explanation! It makes some sense.
But still I imagine that it would only account for a small portion of the bull run.

If you buy @ $100 something that's worth $10, people see that (In exchanges, as bots or people read constant data and most sell/buy orders are displayed) and change their buy (or sell, since they know they can get more for it) which causes the base sell to go up, and the buyers have to increase to meet the new prices. Bots continuosly doing this will drive up all the orders, and thus the overall price increases. Most prices are determined by the lowest "sell" order.

Mostly due to the fact of Mt. Gox.

I still do not understand the concept of bots making price go up.
Bots make volume go up, which then leads to people getting exciting and buying, and then snowball effect.
Or am I dead wrong?

I vote for bots and China!

I think the rise was due to bots, two of which were named "Markus" and "Willy", I believe it was, respectively.

Willy bought BTC for millions of dollars, markus bought and sold at random prices.

So I really have no idea what else to think, but it seems that that is the most logical cause. Price will probably rise (Without bots) to maybe $700, depending on how accepted it gets.

He is not, you can analyze the leaked files yourself. All majot rises were created by at least two known bots controlled by Mt Gox, i did analyze myself before those articles. There is one bot that would only buy at high and sell at low, at large amounts. And another one that could only buy.

The demand of bitcoin largely come from China.

The author of the report is just painting a picture with misleading causation.

The rise that bitcoin had at the end of last year was largely caused by the vast amount of media attention that Bitcoin received after Ross Ulbright got arrested and Silk Road was taken down.

The media brought attention to a vast number of features that Bitcoin offers (p2p transactions, anonymity, near instant confirmation - every 10 minutes, but once a tx is broadcast throughout the network it is nearly unreversible, very low fees).

The decline of the price of bitcoin early this year was the result of MtGox failing similar to how a major bank failing would hurt the underlying currency that it generally deals in.

I wonder if they have a way out of it.
So many years of brain washing and controlling, even if they become a real democracy tomorrow, it would take decades to change mentalities...

http://willyreport.wordpress.com/

Buyers did.

State run media and command economies tend to create an echo chamber. You would think they learned that innovation is a key part of a healthy society when they murdered all the innovators during their revolution.  

I think they'd be stupid not to get on board.
But then, I recall that they have a lot of internet censorship still. So maybe their governments aren't that bright...

If the far East wants to sit on the sidelines of the peaceful revolution they do so at their own peril. It took them long enough to even get within sight of the industrialized economies. To take a step back now would be senseless and tragic for their people.

well i dont believe bitcoin is accesible to the poor people of china - although i hope very much bitcoin will be the currency of choice for the third world countries one day.

in any case it doesnt seem a documentary would make any one but the uber rich of china invest in bitcoin....it seems a lot of people are saying rhe spike in btc price is due to the chinese but why??

I believe it was mostly because of sudden interest from people in China but also with exchange(s) manipulating markets. At the same time there were lil' bit of hype, lil' bit of new partners and all new fresh wave of people that took the step from being speculator jumping in shoes of bitcoin owner.


Poor people wanted freedom (they don't have minimum wages so they really really don't get paid well.. some of them bought some btc in hope that it will raise)

Then there's also the people that have some money (there are also jobs that pay well.. and someone also owns those factories where the "slaves" work for almost free)

Some farmers managed to fulfill their dreams with bitcoin.

--

I believe that we will get Chinawave part 2 and also i think that we could get Russiawave, Indiawave and massadaption in western countries (US&Europe).

Also there are many new spectators.. many of those are sceptic but when someone they appreciate says something good about bitcoin, they will join in btc-community..  

If I remember correctly they had a documentary on the chinese state tv about bitcoin. In late spring I think. It took a while, and for sure many other factors (as an eminent bubble pending with or without china), but I guess that was the start of it.

well what drove the chinese interest in bitcoin?

This rise is starting because major companies are showing much interest in cryptos and because bitcoin was way too undervalued in these months.

It was started by china's interest, and followed by the rest of the world due to panic buying.
Maybe this next bubble will be the same, but started by wallstreet/whatever big business.

I was watching both China exchange and bitstamp/bitfinex at that time.

Can pretty much confirm the rise is close to 100% due to China and people doing arbitrage from the rest of the world.

Senate hearing and Mtgox have little bearing on the rise.

That was pretty negative attention. I think it is the positive stuff that brings new adapters. Luckily in the cases of Silk Road and the Gox meltdown the average westerner has the attention span of a gnat.

Faith and the massive boom in exposure
When it hit $1k it was all over the news....then of course the mtgox crash ruined it all as people were not actually getting coins
If mtgox was legit the price would be through the roof as people would have actually been buying in rather than putting their money into nothing

The primary reason behind the dramatic rise in the price of BTC was the media attention that was given to silk road. In this attention bitcoin was discussed. The discussion of bitcoin lead to more public awareness which lead to greater public adoption. 

I will tell you what was the most important IMO in this case :

"Demand".

Isn't what is making prices on a markets go up?


but not only demand. People understood how great bitcoin really is. Difficult is goin' up. Hashrates are going up. Imagine mining if price of BTC would be 80% lower ROI.


This is just a sum of few indicators which are operating  a price

ps. I am not any economy expert so mind me if I forgot about something very important in this case.

I would say China was the main factor involved in the rising bitcoin prices during November 2013
The breaker was mtgox and several legal regulations regarding Bitcoin being set
Although the USA senate hearings were part of the bull run at that time.

Rises and falls are never one single factor. Events drive markets. No single bot can drive a bubble like that nor can any single country. 

For me it was 100% CHINA.

I think there were many many factors. To name just a few. (These are in order of importance based on only my personal opinion)

• Chinese discovered Bitcoin
• Gained the attention of big investors
• Media attention increased
• Actual usage was starting to happen on a significant scale (even if it was for illegal things)
• Many small businesses were adopting
• Software had matured to a place were an average user could do it.
• Mining hardware had recently specialized (You can't do anything but mine Bitcoin or other SHA-256 coins with the ASIC hardware that people spent thousands of dollars on)
• The Willy bot

The introduction of bitcoin to the chinese and Asian countries made it spike and more panic buyers made it increase even more

The last rise was mostly caused by the chinese people who discovered the bitcoin and its potential, they leaded the uptrend and the following fall.

agreed, excellent post Melbustus.

i almost feel like (or hope) that scenario 2 will cause a massive and long lasting spike in the value of bitcoin. as though the more effort governments backed by corrupt banks puts into squashing bitcoin - it could almost act conversely as a kind of legitimisation on the disruptive power of bitcoin in decentralizing the monopoly of wealth.

it may be a longshot but i think bitcoin is here to stay, at least on at least on the black market and/or as a form of currency in developing nations.

Excellent post Melbustus. I have nothing to add and couldn't have said it better if my life depended on it.

fake purchases at mtgox promoted all rises not only the mentioned one

Bitcoin is a finite-supply asset with a potential market size as big as the planet. Every 6-18 months since trading began in 2010, there have been these huge boom phases where new groups of people discover bitcoin, read up about it, and realize that's it's near-perfect electronic cash; something that had not been possible until bitcoin. Then other less-diligent people pile on.

Bitcoin has potential applications for ultimately handling huge payment volumes across the internet, as well as replacing some portion of traditional store-of-value assets (gold, silver) since it exhibits all of the same properties without the tangibility bug.

So there are these phases of people realizing the above and buying bitcoin, which then creates a positive feedback loop which eventually starts to suck in get-rich-quick folks and momentum traders who don't really understand the above but just see an asset appreciating in value and they don't want to miss out. So those crazy spikes occur.

The boom/bust cycle is likely to continue happening until one of two things occurs:
1) Bitcoin achieves a large enough market-cap and user-base that everyone who is going to has heard of it, researched it, and understands it to a reasonable degree.
2) Bitcoin fails completely (either an unresolvable technical issue, or governments all over the world coordinate in an extremely aggressive crackdown with far-reaching consequences for western-style freedom and democracy in general).

thanks for link minerpart.

@nickenburg - what makes me a little sceptical of this is that rise happend in such a short duration of time and also that it occured so close to the sharp drop in jan 2014. although you make a good point that where was a lot of buzz and media attention around bitcoin at the specific time.

yes it does seem to be a combination of factors. i'm hoping to be a long term investor in bitcoin so of course i hope the price stabilises and increases gradually as more and more people become aware of its paradigm changing ability.

there are multi factors... Chinese investors, cyprus banks failures, willy bot at mt.gox
above all , accept it that's the true potential of bitcoin...

In the other topic, they said it was because of market manipulation.
But I like to think it was because of bitcoin was getting popular because of the bitcoin atm's.
And just because of the positive things it brings to the table instead of fiat money.
Also around that time it was summertime and I think people around that time are free and are searching for investments.
But that's just my opinion.

http://moneymorning.com/2013/11/18/why-bitcoin-prices-are-rising-so-quickly-and-will-keep-going/

Panic buying/bots.. you'll see it again.. sooner than later.

hello, i'm relatively new to the bitcoin scene and wanted to ask a kind of noob question to introduce myself to the forum.

what is the general consensus around the cause of bitcoin reaching a valuation of around $1100 in november 2013 - looking at this chart it seem like a pretty accelerated spike in a short period of time.
http://bitcoincharts.com/charts/bitstampUSD#rg730ztgTzm1g10zm2g25zv

i'm guessing the 50% drop in january was related somehow to the mt.gox fiasco but i wasnt too sure what had caused the price to go up so much in the period of roughly 1 month around november 2013, any insights would be appreciated!