Topic: Why $17?? - page 2. (Read 13167 times)

Looking over my Mt Gox trade log, I do not see any single large transaction that caused the move.  Rather there are many small, almost random sized transactions on the way down and on the way partly back up.  Here is one of the larger ones that occurred shortly after the 16.65 level was breached ...

[mtgoxUSD 1309472003463345 2011-06-30T17:13:23.000-05:00 [email protected]]

It would be a chance for certain market makers subject to the .3 % commission rate to make a profitable trade - given how relatively large the spike down was.  I suppose that once the swing began, existing bid limit orders were cancelled and moved lower thus drawing the price downward in the face of continuing market sales orders.  I do yet track Mt Gox open order issuance, matching and cancellation, but once that happens it will be easier to explain this sort of behavior - but only the point of ignoring open orders in the dark pool.

Modern trade execution prefers to break up a single large order into seemingly unrelated smaller chunks.  Even if executed from the dark pool to hide the order, trades become  public knowledge once matched.  Breaking up a such a trade is a tactic to out-game front-running algorithms. 

You guys who keep peddling this bullshit theory are disregarding two things:

a) No one who sees fit to "invest" in Bitcoins from an outside perspective really gives a shit about the cost to mine. If they do any sort of research, they might look at the overall hash rate of the network and compare how much it would cost an outside party to attack the network, but I doubt most even do that. They certainly don't give a shit about what kind of ROI you expect on your mining rig;

b) There are always going to be people who mine cheaper than you do. You're thinking that Bitcoins cost $X to mine because your rig cost this much and you're expecting to pay it off over a 6 month period and the difficulty went up so blah blah blah. No one gives a shit. Johnny CollegeStudent just bought a 2x 6870 rig with his grant for college and his dorm room's power is "free" (in his eyes). He doesn't give a shit that you really need a $15+ Bitcoin this week for your ROI plan not to nosedive - he wants a dimebag and he doesn't have a Silk Road account so he's going to sell it for whatever he can get on MtGox.

Your argument might hold water if all miners held the line and no one wanted to drop below a certain figure - you're a fool if you think that's gonna happen. My 5770 is all paid off, so depending on what the market's doing I'm going to mine for whatever I feel comfortable making a profit at (and stop beating the shit out of my brand new, free GPU if it falls below that), and I don't particularly give a shit to hold some line or another - I'm going to take $16.80 today than risk having to take $13 tomorrow, and I'm sure I'm not the only one.

Hmm.. what happend now? Transaction about 900k happened?

I guess you never did economics :p

The price of anything is not related to the cost of production, only the price decided by the market.  If you're selling widgets, or fish, or whatever, you sell for whatever people will pay. If they won't pay for your cost of production then that's tough, really... you either take the loss or go and do something else (or run an advertising/rebranding campaign to bring the perceived value up).

But stabilization will lead to it being accepted more... thus the price will go up, alas slowly.

Bit-coin really is a win win situation.

Not a fallacy. That's why.

Whilst the cost to mine a bitcoin is less than the price to sell one, there will be an incentive for people to start mining. Difficulty and even technological advances are irrelevant.

It's not only true of bitcoin, it's true of gold and very other natural scarce resource that I've looked at so far. Not precisely but certainly the same order of magnitude.

Price of a fish ~= Cost to get that fish on your diner table.

Everybody and their mother injected money into their Mt. Gox account hoping to catch BTCs on the cheap during the crash expected after the Gox reopening. Since that didn't happen, nothing is happening. Everyone wants to obtain the "early adopter" position.

Proof that this is just a speculation circlejerk with no actual goods/services backing. And no more more money is coming in.
 

This is what I meant by an "ideal" market. With zero commissions for certain active traders, the spreads are very narrow because market making as you describe it can return a profit, e.g. 0.001 BTC on tiny spreads.  The spread should widen only when volatility increases, which according to market theory arises because of the sudden entrance of "informed" traders into the market, e.g. some merchant needing to unload 1000 BTC at market.

Joke?

+1
it is definitely funny to read those wild theories

The FED has put a control loop on the Bitcoin price. That's what they do right... stabalize currency. :-)

It's not as if the volume is tiny relative to the bitcoin economy.  Bitcoin charts shows that over 10,000 bitcoins have swapped around in the last 20 hours.  Obviously we've seen much more than that, but it's not like the volume is sooooo low.  Also, who said "sellers want to push the price down"?

This thread is pure art.

I can't even count. "Market manipulation" is always a great shout, though kind of a classic and thus not very innovative. "Mining cost determines price!" is pretty much a meme now, and is the best replacement for "DERP" I've seen so far. But! A competitor appears! "Da Seller wants to push da price down!"

Wait, wait... one more. "a big hoarder who decided to cash out at 17$" ... whoooaaa big hoarder made the volume go... uh... what volume?

Man, I hope this is the work of trolls... I hope it for the sake of humanity.

I'll tell you what will drive up the price.  One thing:  Increasing the perceived likelihood that Bitcoin will have a long-term value as a currency.

If there are news stories, it will generate interest.  And people will buy in.
If there is a true value as a currency, people will "give it a try".

So get off your butts and start getting Bitcoins accepted by merchants!!!!


Don't think that increasing mining difficulty will increase the price - that's crazy talk.  The ONLY way that increased mining difficulty could possibly have a positive impact is if the miners say "It took me $20 to generate each Bitcoin, and I refuse to sell at a loss, therefore I'm not selling."  (We're seeing this in the housing market right now, but it's more likely in the housing market because people borrow money to buy their houses, and if they are "underwater" with their mortgage and they sell, then they have to come up with the cash difference.   I doubt that anyone is taking out loans that are secured by bitcoin generation.)

17 is about the number of $-cents a bitcoin is worth and should be traded at, so multiply that by 100 for the bitcoin-mania, and there you go 

lol +1

http://i451.photobucket.com/albums/qq234/07GLI/17-dollars-now-thats-gangsta-poster.jpg
I'm disappointed in you guys.

Most members of the crisis got free transaction fees.


If it goes up 10 cents, they profit. So they aren't sitting on their investment as long. They are buying and selling at the same time, kind of like playing pong with your own two hands.

For example: you place 100 buy orders to the left side of the midpoint, and 100 sell orders on the right side.

Let the computer do all the work.

But, wait, why should we expect new buyers to buy up into the asks?  If they have a bit of sense they'll look at the past few days of trade data and realize that sellers are selling down into the buys, so if they really, really want some bitcoins they don't need to attack the asks as they can simply place a lower bid which will likely get filled.  Thus, they spend less than if they had bought into the asks.  But, honestly, seeing this picture, why would they be itching to put their money in in the first place, at least right now?  I'm not detecting a lot of confidence in bitcoin these days, unfortunately.  Those large bids, and there are a lot of them, are pulling the price down, and chances are good the price is going to go (much?) lower than it is now.  

If I really wanted bitcoins right now, after having observed the last few days, I'd be reasonably confident taking the risk of waiting even longer to buy because it looks like more downward movement is in the cards.  People are just looking at the bid/ask graphs and seeing that there's more money on the visible bids side than the visible ask side.  That's true.  But you've also got to look at what's going on on the ground, and that paints the opposite picture from merely looking at the graph.  I'm not a buyer right now, so, honestly, I hope I'm wrong, but things don't look good for those of us who would like to see the value go up.

Let's go for 100 bucks before X-Mass, come on peeps!!!!!!