What was the reason behind Bitcoin bear market of 2014-2015?

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Quote from: hatshepsut93 on September 21, 2017, 03:05:25 AM

People usually speculate about the future price, but maybe to predict the future we must first understand the past to see if there are any patters and mechanism that might drive the price. To me the most mysterious period of Bitcoin market is the bear market of 2014-2015, when Bitcoin was sitting at $230 for almost 2 years. So, what caused such a low price? Was is solely an effect of Mt.Gox or something else? I'm especially interested to hear responses from people who were into Bitcoin during those times and were involved in trading discussions. Thanks!

The bull run up to $1300 was a result of market manipulation. Then mt. Gox happened and a lot of people lost money. People got disillusioned and left Bitcoin. They didn't think it was going to bounce back.

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Quote from: BitcoinPanther on September 21, 2017, 03:03:51 PM

Quote from: Febo on September 21, 2017, 12:25:42 PM

Quote from: hatshepsut93 on September 21, 2017, 03:05:25 AM

People usually speculate about the future price, but maybe to predict the future we must first understand the past to see if there are any patters and mechanism that might drive the price. To me the most mysterious period of Bitcoin market is the bear market of 2014-2015, when Bitcoin was sitting at $230 for almost 2 years. So, what caused such a low price? Was is solely an effect of Mt.Gox or something else? I'm especially interested to hear responses from people who were into Bitcoin during those times and were involved in trading discussions. Thanks!

LOL
what do you think?
Sharp growth in 2013. In 2013 were 2 Bitcoin bubbles. With short bear period between them. That is why most of 2014 price was slowly declining. And even in 2015 show little signs of recovery. It showed only depressing stability close to the bottom. Those two years were solid foundation of the 2016 and 2017 strong bull trend.

When we will enter in bear trend, we must not forget that the strength of the next bull trend solely depends how long this bear trend will happen. And if we will have short bear trend same as was in 2013, that mean next one will be way longer.

From you post it seems that this year of 2017 may probably the same year as 2013. So are we looking for another bubble after this decline? Seems history will repeat itself again. But instead of exchanges being hacked, the trigger is the Chinese government shutting down all Chinese exchanges. Anyway, I have read different stories about the reason why Bitcoin price goes down after that 2013 Bubble, isn't the closing of the illegal trades "silkroad" affect Bitcoin price too? I read it is one of the reason why Bitcoin price goes up like crazy during those time though the effect were not felt until the early year of 2014.

I doubt any market could be a reason. I dont even know when silk road was closed. But in July or August this year we had 2 major dark net markets being closed Alphabay and Hansa. Darkmarkets had not had such hit for years.

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Quote from: hatshepsut93 on September 21, 2017, 03:05:25 AM

People usually speculate about the future price, but maybe to predict the future we must first understand the past to see if there are any patters and mechanism that might drive the price. To me the most mysterious period of Bitcoin market is the bear market of 2014-2015, when Bitcoin was sitting at $230 for almost 2 years. So, what caused such a low price? Was is solely an effect of Mt.Gox or something else? I'm especially interested to hear responses from people who were into Bitcoin during those times and were involved in trading discussions. Thanks!

If you ask me, I can say that the market was in decission phase where the participants are deciding if the future will be with bitcoin or not. And this created an uncertainity between 2014 and 2015.

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Quote from: LFC_Bitcoin on September 21, 2017, 05:29:24 AM

MtGox crashed the market, a lot of people lost a lot of confidence in bitcoin & the sell off commenced. It's like a snowball effect but then this created opportunities for people to get in cheap.

One of the biggest reasons why there is a period of stagnance, though I also like to wear my tinfoil hat and believe in the conspiracy that this event was used by the whales to buy in most of what they have right now. A far-fetched idea, but because of my knowledge on pump and dumps, the concept of silent accumulation couldn't be erased from my thoughts on 2014-2016.

figmentofmyass

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Quote from: hatshepsut93 on September 21, 2017, 03:05:25 AM

People usually speculate about the future price, but maybe to predict the future we must first understand the past to see if there are any patters and mechanism that might drive the price. To me the most mysterious period of Bitcoin market is the bear market of 2014-2015, when Bitcoin was sitting at $230 for almost 2 years. So, what caused such a low price? Was is solely an effect of Mt.Gox or something else? I'm especially interested to hear responses from people who were into Bitcoin during those times and were involved in trading discussions. Thanks!

it didn't sit in that range for almost 2 years... more like 9 months. after a year straight (2013) of monumental, historic gains, it was no surprise that the market headed into a long term correction. some will point to mt gox as officially popping the bubble, but i think that the bear market was set into motion well before it imploded.

like any other hype cycle in markets, speculators bought the market far, far above realistic value. by 2015, we had returned to realistic value in $200s, and accordingly we saw significant accumulation. the rest is history.

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Quote from: Hazir on September 21, 2017, 07:19:17 AM

You said many arguments that support 'inflated price of bitcoin' theory at that time. If the price of $1000 in 2013 was "totally insane" then maybe history will repeat itself once more?
After all, what constitutes current high price of $4k-$5k? Adoption is not that higher than in 2013, there is still more 90% pure speculation going on on the market.

Yes, I agree that the speculation "percentage" is still very high. But some fundamentals are a bit better than in 2013. For example, hashrate is now so high that it will cost about a billion USD (or even more) to 51% attack the chain. That makes Bitcoin a much more secure store of value. (And an 51% attack not necessarily means "the death" of Bitcoin if counter-measures are taken fast).

Also, transaction amount/volume has drastically increased since 2013. In 2013 we had 100-200 kB blocks, while now we have 1 MB blocks. Transaction value is an indication for real usage. However, the market is still not very mature, drops and insane rallys will still happen for some time, making Bitcoin practically unusable as a currency for day-to-day transactions (e.g. as the currency in whose units you get your wage/salary).

Quote

Price of bitcoin is dropping like crazy at the first sign of bad news, maybe next year we will have a permanent price drop to $1,5k-$2k?

I actually expect that price level in the "final capitulation" of the current bull/bear cycle ("bubble"). It could even be the case that we see this figures already in late 2017, but most likely in early 2018. But after that, if adoption grows (e.g. with Lightning Network working) then I expect again a price increase, first slow, and then in some moment we can have a rally again.

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Quote from: manselr on September 21, 2017, 05:12:54 AM

I was there buying bitcoin every month at these cheap $230 prices after I saw it crash all the way down from $1200. While the rest cried about it and said bitcoin was dead, I was buying, now do the math and tell me it didn't pay off.

The price was low because of MtGox in my opinion. When you get hit by a nuke, there's radiation. The low price was the remainders of this destruction, but I knew bitcoin would survive long end. The protocol was intact and everything worked as intended. A big centralized exchange closing was nothing.

I totally can see how Gox crashed the price to $230, but want I don't understand is why it was on that level for so long. It's not like Bitcoin itself got hacked, it was a fault of centralized entity. So I'm thinking what are the other possible reasons? Maybe it was the Chinese who suppressed the price to buy more coins, since most of the volume was in China up until this year. Or maybe there were giant amounts of FUD that scared new investors?

BitcoinPanther

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Quote from: Febo on September 21, 2017, 12:25:42 PM

Quote from: hatshepsut93 on September 21, 2017, 03:05:25 AM

People usually speculate about the future price, but maybe to predict the future we must first understand the past to see if there are any patters and mechanism that might drive the price. To me the most mysterious period of Bitcoin market is the bear market of 2014-2015, when Bitcoin was sitting at $230 for almost 2 years. So, what caused such a low price? Was is solely an effect of Mt.Gox or something else? I'm especially interested to hear responses from people who were into Bitcoin during those times and were involved in trading discussions. Thanks!

LOL
what do you think?
Sharp growth in 2013. In 2013 were 2 Bitcoin bubbles. With short bear period between them. That is why most of 2014 price was slowly declining. And even in 2015 show little signs of recovery. It showed only depressing stability close to the bottom. Those two years were solid foundation of the 2016 and 2017 strong bull trend.

When we will enter in bear trend, we must not forget that the strength of the next bull trend solely depends how long this bear trend will happen. And if we will have short bear trend same as was in 2013, that mean next one will be way longer.

From you post it seems that this year of 2017 may probably the same year as 2013. So are we looking for another bubble after this decline? Seems history will repeat itself again. But instead of exchanges being hacked, the trigger is the Chinese government shutting down all Chinese exchanges. Anyway, I have read different stories about the reason why Bitcoin price goes down after that 2013 Bubble, isn't the closing of the illegal trades "silkroad" affect Bitcoin price too? I read it is one of the reason why Bitcoin price goes up like crazy during those time though the effect were not felt until the early year of 2014.

Febo

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Quote from: hatshepsut93 on September 21, 2017, 03:05:25 AM

People usually speculate about the future price, but maybe to predict the future we must first understand the past to see if there are any patters and mechanism that might drive the price. To me the most mysterious period of Bitcoin market is the bear market of 2014-2015, when Bitcoin was sitting at $230 for almost 2 years. So, what caused such a low price? Was is solely an effect of Mt.Gox or something else? I'm especially interested to hear responses from people who were into Bitcoin during those times and were involved in trading discussions. Thanks!

LOL
what do you think?
Sharp growth in 2013. In 2013 were 2 Bitcoin bubbles. With short bear period between them. That is why most of 2014 price was slowly declining. And even in 2015 show little signs of recovery. It showed only depressing stability close to the bottom. Those two years were solid foundation of the 2016 and 2017 strong bull trend.

When we will enter in bear trend, we must not forget that the strength of the next bull trend solely depends how long this bear trend will happen. And if we will have short bear trend same as was in 2013, that mean next one will be way longer.

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Psychological barriers (It cant be worth more than gold)
Too much growth (Bubble-fear)
Political uncertainty (China ban)
Technology untested/untrusted (How does it work.. what if hard fork...)
Big whales (Pump&dumps)

and mostly

People got burnt and wanted out!

iqlimasyadiqa

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Quote from: hatshepsut93 on September 21, 2017, 03:05:25 AM

People usually speculate about the future price, but maybe to predict the future we must first understand the past to see if there are any patters and mechanism that might drive the price. To me the most mysterious period of Bitcoin market is the bear market of 2014-2015, when Bitcoin was sitting at $230 for almost 2 years. So, what caused such a low price? Was is solely an effect of Mt.Gox or something else? I'm especially interested to hear responses from people who were into Bitcoin during those times and were involved in trading discussions. Thanks!

there must be a big event that could change the price of bitcoin. when the first news about mt.gox is clearly terrific to make the price of bitcoin decreased very drastically. for the future of course we do not expect to happen the same thing.

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Quote from: d5000 on September 21, 2017, 06:13:53 AM

The reason is that in 2013 - just a year before - there was an insane rally that inflated the price!

There is more: While the early-2013 rally was mostly caused by real growing demand, the late-2013 rally was mostly driven by MtGox's market manipulations (google the "Willy" bot to know more Wink

). So the price of $1000 or more in 2013 was totally insane. There are many indications that Bitcoin was grossly overpriced then: The network was much more insecure (much less hashrate; paying about 1% of the supply you already could buy hashrate to 51% the network), and there were much less transactions than e.g. in 2016 when the price was lower.

There was, that is true, a lot of buzz - there were, as far as I remember, more companies that adopted Bitcoin in the 2013 rally cycle than in the 2016-17 cycle. But many of then dropped Bitcoin support afterwards, because users didn't want to use their Bitcoins for real world commerce. It was 95% speculation, or even more.

If you take that all into account, then the $200-500 price range in most of 2014 and 2015 was not at all a "low" price for that period. It was a fair price - most of the time it was much higher than in the early 2013 bubble.

You said many arguments that support 'inflated price of bitcoin' theory at that time. If the price of $1000 in 2013 was "totally insane" then maybe history will repeat itself once more?
After all, what constitutes current high price of $4k-$5k? Adoption is not that higher than in 2013, there is still more 90% pure speculation going on on the market.
Price of bitcoin is dropping like crazy at the first sign of bad news, maybe next year we will have a permanent price drop to $1,5k-$2k?

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Quote from: BitcoinHodler on September 21, 2017, 06:27:37 AM

Quote from: LFC_Bitcoin on September 21, 2017, 05:29:24 AM

MtGox crashed the market, a lot of people lost a lot of confidence in bitcoin & the sell off commenced. It's like a snowball effect but then this created opportunities for people to get in cheap.

it is true but it should be mentioned that MtGox crashed the price they have fakely pumped.
price was about $200 when they started their willy bot to fake pump bitcoin and by that time MtGox controlled almost all the volume that came in bitcoin so they controlled bitcoin price easily. they pumped it to $1200 in less than a month and then because of their scam and running away, market was left without any proper exchange and in a big bubble then the rest of what you said happened.

Do we know what happened with MtGox? Who is behind that? I was here in that time and I remember how some people blamed hackers, others blamed governments, and all ones and others were sure that MtGox was an job from the inside.
Many people lost a lot of money, different alts, who ever had something there he lost it. Maybe that was just an experiment and someone wanted to check what will happen to the community. After that some other exchangers went down, and but bitcoin didn't drop like that first time, and recovery was faster then before.
What happened with MtGox will stay mystery, and I'm not sure will we find out what happened and who took the money.

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Look at the life and times of Zhou Yongkang and ask yourself what mechanism you might have found to extract illegally gained wealth beyond the reach of Chinese authorities during the anti graft crackdowns of late 2013 and early 2014, how much money you might have squirrelled away and how long it might have taken to cut your position.

This is all speculation of course but the timing of the 2013 Bitcoin boom sits well with the graft crackdown - and it would also explain why senior figures in the Chinese communist party might have a reason to punish bitcoin

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Quote from: BitcoinHodler on September 21, 2017, 06:27:37 AM

Quote from: LFC_Bitcoin on September 21, 2017, 05:29:24 AM

MtGox crashed the market, a lot of people lost a lot of confidence in bitcoin & the sell off commenced. It's like a snowball effect but then this created opportunities for people to get in cheap.

it is true but it should be mentioned that MtGox crashed the price they have fakely pumped.
price was about $200 when they started their willy bot to fake pump bitcoin and by that time MtGox controlled almost all the volume that came in bitcoin so they controlled bitcoin price easily. they pumped it to $1200 in less than a month and then because of their scam and running away, market was left without any proper exchange and in a big bubble then the rest of what you said happened.

indeed it should not be that high aka it was not the real 'value' of the Bitcoin,
actually it's not bear market or something like that,but instead the real 'value' of Bitcoin itself was around that price.
that is why when a huge dump came up,Bitcoin price goes down to $100~$200 level or around that and stabilize.
about silk road,it's not really matter for Bitcoin anyway back then.
not really many people using it and only some people(not like today),even if it closed by the goverment the price will only down a little bit and recover back to the real 'value' at it was.
the biggest reason why the price is very hard to recover because of investor confident/morale had been lost due to Mt.Gox scam exit,
and replaced by another new investor(might be an some of them still believed in it)
in conclusion,Bitcoin price back then was not in the Bear trend but instead it's in the real trend.

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Quote from: LFC_Bitcoin on September 21, 2017, 05:29:24 AM

MtGox crashed the market, a lot of people lost a lot of confidence in bitcoin & the sell off commenced. It's like a snowball effect but then this created opportunities for people to get in cheap.

it is true but it should be mentioned that MtGox crashed the price they have fakely pumped.
price was about $200 when they started their willy bot to fake pump bitcoin and by that time MtGox controlled almost all the volume that came in bitcoin so they controlled bitcoin price easily. they pumped it to $1200 in less than a month and then because of their scam and running away, market was left without any proper exchange and in a big bubble then the rest of what you said happened.

d5000

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The reason is that in 2013 - just a year before - there was an insane rally that inflated the price!

There is more: While the early-2013 rally was mostly caused by real growing demand, the late-2013 rally was mostly driven by MtGox's market manipulations (google the "Willy" bot to know more Wink

). So the price of $1000 or more in 2013 was totally insane. There are many indications that Bitcoin was grossly overpriced then: The network was much more insecure (much less hashrate; paying about 1% of the supply you already could buy hashrate to 51% the network), and there were much less transactions than e.g. in 2016 when the price was lower.

There was, that is true, a lot of buzz - there were, as far as I remember, more companies that adopted Bitcoin in the 2013 rally cycle than in the 2016-17 cycle. But many of then dropped Bitcoin support afterwards, because users didn't want to use their Bitcoins for real world commerce. It was 95% speculation, or even more.

If you take that all into account, then the $200-500 price range in most of 2014 and 2015 was not at all a "low" price for that period. It was a fair price - most of the time it was much higher than in the early 2013 bubble.

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Quote from: hatshepsut93 on September 21, 2017, 03:05:25 AM

People usually speculate about the future price, but maybe to predict the future we must first understand the past to see if there are any patters and mechanism that might drive the price. To me the most mysterious period of Bitcoin market is the bear market of 2014-2015, when Bitcoin was sitting at $230 for almost 2 years. So, what caused such a low price? Was is solely an effect of Mt.Gox or something else? I'm especially interested to hear responses from people who were into Bitcoin during those times and were involved in trading discussions. Thanks!

Usually the price of bitcoin cools down dramatically in between the years of halving. 2012 was the halving year when the block rewards went down to 25 BTC per block and 2013 was when the price rose dramatically.

2014-2015 were pretty quiet years.

Similar trend this year, it's a year from the halving and price is going nuts. This is why i think next year, price could cool down just like it did in 2014, potentially to $2k or less.

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There were two shocks - MtGox went bust and the people who had coins there felt burned and took a step back from cryptocurrency (i.e. they decided not to buy any more).

And Silk Road got closed down by the FBI. This was probably a bigger deal, because at the time there wasn't much natural demand for bitcoin, merchants weren't accepting it and the big investors thought it was a fad, so the price was being supported by people who bought bitcoin in order to either buy stuff on Silk Road or to gamble.

The closure of Silk Road removed a lot of buying pressure.

It took two years for other souces of buying pressure to come online (Overstock, Microsoft, and some hedge fund guys who were buying on their own account because they thought it would go big).

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MtGox crashed the market, a lot of people lost a lot of confidence in bitcoin & the sell off commenced. It's like a snowball effect but then this created opportunities for people to get in cheap.

manselr

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Quote from: hatshepsut93 on September 21, 2017, 03:05:25 AM

People usually speculate about the future price, but maybe to predict the future we must first understand the past to see if there are any patters and mechanism that might drive the price. To me the most mysterious period of Bitcoin market is the bear market of 2014-2015, when Bitcoin was sitting at $230 for almost 2 years. So, what caused such a low price? Was is solely an effect of Mt.Gox or something else? I'm especially interested to hear responses from people who were into Bitcoin during those times and were involved in trading discussions. Thanks!

I was there buying bitcoin every month at these cheap $230 prices after I saw it crash all the way down from $1200. While the rest cried about it and said bitcoin was dead, I was buying, now do the math and tell me it didn't pay off.

The price was low because of MtGox in my opinion. When you get hit by a nuke, there's radiation. The low price was the remainders of this destruction, but I knew bitcoin would survive long end. The protocol was intact and everything worked as intended. A big centralized exchange closing was nothing.

hatshepsut93

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People usually speculate about the future price, but maybe to predict the future we must first understand the past to see if there are any patters and mechanism that might drive the price. To me the most mysterious period of Bitcoin market is the bear market of 2014-2015, when Bitcoin was sitting at $230 for almost 2 years. So, what caused such a low price? Was is solely an effect of Mt.Gox or something else? I'm especially interested to hear responses from people who were into Bitcoin during those times and were involved in trading discussions. Thanks!

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