Topic: why price so low - page 3. (Read 3986 times)

IMHO bitcoin prices right now are too high.  When I first heard about this, I was expecting BTC to be trading for less than dollars, or at the very most, around dollars, but $8 per bitcoin?  I think that bitcoin is a great idea, but I think its far from being a full fledged currency.  Most of the sites that I seen are selling a tightly limited number of common products, nothing that makes me want to jump ship of my dollars just yet.
As far as people jacking up prices, look at it from their prospective.  They are taking a much larger risk, accepting BTC than USD.  They deserve to be compensated for that risk, which you probably don't mind if you mined them, and you're happy that you don't have to waste your time going through one of the exchanges to get the cash to buy on a regular site, plus its kind of exciting to buy stuff with BTC.

Most likely refers to speculation on my part and my evidence is common sense.
Use it some times  

How do you know?  Is there evidence?  Or is it just implausible that people who spend tens of thousands of dollars on mining rigs need to recoup at least some of their money to pay the bills?  Lets be generous and say the cost of mining is half the value of the coins...that means collectively bitcoin miners are spending $25k per day on electricity...that's $10M per year...that's a freaking lot of money to spend on electricity...why are you so sure that everyone doing this is so rich that dropping a few hundred thousand dollars in the short run is no big deal?

I can't quite parse that sentence, but the price has been below $12 for over a month now.  According to bitcoin charts, MtGOX has traded 1.2M BTC in that time.  That's quite a lot of volume to say that prices are below $12.

Why is this 'most likely'.  Do you have any evidence to support it?  It could be, I don't know...I'm just wondering why everyone seems so sure it's the explanation.  Anyway, it doesn't actually follow that old coins don't have to be sold by miners.  If you mined old coins and new coins and you need to pay some USD bills, why would you necessarily trade in your old coins rather than your new coins?

Nobody is selling over cost here.
At first currently the price is irrelevant there is no volume at all right now.
Second, these are most likely old coins and these doesn't even have to be sold by miners. Those could just be speculators who bought earlier this year and decided to get out. Might even be the most likely scenario.

I do think current miners are selling to cover costs.  I think it may be a while before new "non-miners" start to see BTC as something to start buying again.

Why do you class buying as legitimate but selling as somehow malevolent?  Could the sellers not just be miners trying to pay their electricity bills?  I mean in the context of 5k bitcoins being mined every day, the 5k dumps you see on MtGOX every fortnight or so are really not large at all..it's just one day's worth of mining.  Or 3% of one month's mining.

In any case, if these people had cashed out in April when we were at the same levels as we are now, bitcoin would never have reached $30, we wouldn't have had the big crash, bitcoin would have been far less volatile and everyone would have been happy.  So would that have been evil in your PoV?  As in all markets, cashing out at the right time reduces overall volatility - calling it 'greed' is just childish.

IT around 9 USD right now. it was 15USD not to long ago so its probably a good time to buy.

Well the volume has almost vanished completely now.

Because somebody is pumping and dumping. Or rather, just mainly dumping when the price reaches a certain threshold driven by legitimate buyers. If you analyze the volume it is really interesting. When bitcoin reached 11~12 recently, it got there with relatively low volume (ligitimate users buying the commodity). Then the dumper strikes and the volume spikes like crazy. The dumper stops just before causing a crisis, then patiently waits until the market self heals again and repeats the process.

I attribute this to people with a lot of bitcoins cashing out in an ordered manner to get the most for their money. People by the way, that clearly do not care about the bitcoin economy, but purely about their own greed.

I think it probably has something to do with our spokesman being revealed as a fraudster? Just my 2c

I agree.

Now about low prices, is simple, more people selling than people buying.

the price looks to be increasing again, now is the best time to buy i would say

Every day there are around 5,000 bitcoins mined.  Assuming the miners have a fairly small margin and they have to sell bitcoins to pay their electricity bills*, that means that a similar number will have to be sold daily.  For a $10 price to be maintained, that means the bitcoin economy requires $50,000 worth of outside investment every day, or $1.5M per month.  If you think this rate of new investment is unsustainable, then you would expect prices to fall.

It looks like the largest source of outside investment (other than peoples electricity bills - see below) comes through MtGOX.  So if you want to know whether the price is going to go up or down, just ask Mark Karpeles, or his (real-world) bank how many deposits they get.  You'll see a lot of people say things like "yeah I hope the price falls to $x because then I'll buy", but are they really talking about spending > $10,000 per day on bitcoins?  Because this is the kind of throughput you need to make any kind of noticeable difference on market levels.

FWIW, I reckon BTCs fall to well below $5 and will stay there until either

• someone with real money comes along (hedgefund billionaire?) or
• bitcoins start getting used by more than 1% of online retailers or
• the rate of bitcoin mining decreases significantly (2014?)

* if they are pure miners then they would sell their bitcoins to pay electricity. if on the other hand they pay electricity in USD and keep their BTC, then they are some kind of miner/investor hybrid.  But this doesn't really change the analysis above - it still means that the bitcoin economy need $1.5M of outside investment every month (either through bank transfers or electricity bills) to maintain a rate of $10/BTC.

now that's ridiculous, immediately after this clip there is an advertisement "on how to manage student loans".  

But he was right about one thing: BTC wouldn't want attention from "those"people.

Is the price really low? maybe the price is too high and has been too high for a while.

The price is low because the bitcoin convention did not attract much media attention, but everyone thought it would and everyone drove the price up to 11.5.

http://online.wsj.com/video/bitcoin-to-burn-a-hole-in-your-pocket/1FADAD1B-15D6-4250-AD7B-E62556C5D1A3.html

Nice!

Slush's difficulty atm, 1777774

No worry, this wont take long 

supply and demand!

high supply and low demand -> price down.

nothing important happen event -> goes demand down...