Bitcoin Forum

I don't expect price to go over 15 before new year,
it is amazing to see it holding above 10.

I agree that it won't hold above $15 before New Years, but I believe we have seen the last of the single digits, at least stable single digits. We may see a few more panic sells.

The halving is too far away for this to be related.

I'm crossposting my analysis because I originally put it in a pretty obscure thread:

People know about it but are miners hoarding coins now waiting for the halving?  I don't think many are, its still too early.  They have bills to pay.  But if you were a miner, would you sell ANY coins 1 day before the drop?  Might as well wait to see what happens... how about 1 week before?  So expect no ask depth in the days leading up to the reward halving.

I keep reading on these forums that people think supply vs demand means a reward drop in half = a doubling of price.  But this assumes a linear x=y supply demand curve.  Depending on the flexibility of demand (i.e. gasoline is inflexible while M&Ms are very flexible) this could be very much not x=y, but x=100y or x=y/100.  To figure out what the curve really is, you have to ask yourself, how flexible is demand for BTC?


But the above argument is faulty.  It focuses on instantaneous supply.  But in fact the supply is not changing (well due to miners, it will change due to anticipatory hoarding), it is the RATE of supply increase that is changing (because bitcoins are not a consumable).  So a lack of supply on day 0 of reward halving cannot be fixed in the classical econ 101 manner by an increase in production tomorrow.  There will be a similar lack on day 1,2,3, etc.  The issue must be fixed by a reduction in demand. 

Given a constant economy, this reduction in demand can only be addressed by an increase in the price of BTC compared to other commodities.  In other words, until SR merchants, etc lower their prices in BTC to compensate for an increase in BTC price (or sell less product) we'll see a constant increase in price vs USD to meet existing demand.  And if the BTC economy is growing and currently balanced by the 50BTC reward, we'll see great pressure on the price due to lack of supply at 25BTC. 

The above is the normal negative feedback mechanism that keeps prices sane.  But if the BTC economy grows BECAUSE of an increase in BTC price (i.e. due to new interest from investors),  we could see an unsustainable positive feedback mechanism.  This will cause the hockey stick bitcoin price appreciation until the positive feedback switches back to negative (i.e. investors see BTC as overpriced).

So the block rate halving is more likely to affect (increase) the rate of long term appreciation of the value of a BTC, combined with a spike leading up to the reward halving could possibly (low chance) turn into a massive price appreciation event.  And then (regardless of whether we see a small spike or a big rise), we'll see a dump afterwards as the short term hoarding is sold.

Theres still Dotcom's announcement in the queue.

I could see a rally into halving event. 

+1

I would like to see a real shortage next summer,
by then coins could run dry on the ask side.

The halving is creeping closer. Soon it will happen in November of this year.

There will be panic buying. Mark my words.

I strongly hope there will be a dip until then. I sold my bitcoins a little under $11 in anticipation of huge shitstorm as an aftermath of the Pirate's scam, but the market seems to be bullish.

And every crest will see fewer people divesting all their coins and every trough will see more people buying in. It's an ingenious method of ensuring liquidity by harnessing the profit motive, as speculation is the heart of liquidity. Every new bitcoin user that isn't mining or buying bitcoins will probably be selling goods/services to get bitcoins (not counting the thieves and fraudsters), increasing the both the value and velocity of bitcoin.

This leads to what I think to be true inspiration in bitcoin's design: because the increasing supply is a known and given factor, any rise in the value of bitcoin will increase its velocity. The increase in velocity will also add to the value. They reinforce each other because they're measured against the set-in-stone rate of increase, unlike fiat where the supply is always changing at unknown rates and at unknown times for unknown reasons.

Rational money only took us 5000 years to achieve.

i hope you have a bid placed... any dip or crash will be aggressively bought, if you dont have a bid you wont catch it.

you better hope some one has been hording for a very long time and is now looking to buy a new house :-*

now... how do we sell rational money to irrational people ?

What about ASIC? As far as I know, it is supposed to come out before halving (i don't know exactly when). If it really improves mining that brutally, the price should fall due to influx of new coins.

That's the hard part. I'm doing my best on this end. I think it will get easier as fiat continues to crumble and all of our friends and family that think we're nuts see us all doing a little better than they are because of the currency/commodity we use.

IMO:
ASIC (if they do work one day) will not make an influx of new coins, but will increase difficulty.
Coins flow at 1block/10mn rate, and that will stay unaffected.
The halving will cut in half the coins flux tho. As a consequence, less coins flowing in => higher prices.

BTW, the difficulty is really bumpy these days, don't you think ?

ASICs are already there... still a small amount, but to me the increase of difficulty is not only justified by FPGAs (no proof here, just a gut feeling)
ASICs might cause a dip, because their owners will have to sell more to pay back their investments, compared to GPUs/FPGAs owner who are already in the green on their investment.
Though it could be wrong or short lived by the speculation of the rally from the block reward halving.

For a short period of time (a few days) ASICs will increase the rate bitcoins are mined with strongly:

Anyone who trades on bullshit like that deserves to get burned hard.

ASIC lowers the barrier to entry to 0.
you plug it in the wall and watch it make bitcoin.
it becomes a matter of how much money you willing to throw at your mining biz. no skills required.
this will lead to mining being more wide spread then ever b4, and profitably going to the absolute minimum.

what happens to the price because of that is anyone guess
my guess mining has even less of an effect on price.

during the 50-25 changeover, i expect to see the price go to at least $16.81 temporarily.

You'll have to clarify, what exactly is it that one *should* trade on? Is there some ethical consideration that underpins what is essentially forex trading?

notme is short and wants everyone to stop buying.  :D

i just went long.... really long....

Not really, although I did sell some bitcoins for cash the other day to a local guy.  I'm meeting him again on Friday, so I hope the price skyrockets.

What? not $16.82?

that's crazy-talk, it couldn't possibly get that high.

lol 16.xx...

you guys have lost already...

10million bitcoins that ALOT... NOT  :P

this singlar buy action bitcoin rally started few days ago around 11.10 and still in progress  ???
he/they can't stop before 14/16/18 or better otherwise it will fail.
why is happening guys ? does anyone know that after the London conference the price increases are inevitable cause a public mass interest ?

I'm pretty confident that the average price will go up but I'm not sure how soon after. I'm looking at somewhat long term, not just days. I'm mining off of one machine and I'm holding onto my coins and seeing what happens over at least a few months after the halving.

Supposedly Ben Bernanke is going to make some announcements today. The goldbugs are expecting a massive round of QE. There hasn't been as much hype about it in the bitcoin community but I believe this is part of the reason for the current rally.

http://www.kitco.com/reports/KitcoNews20120913JW_am.html (http://www.kitco.com/reports/KitcoNews20120913JW_am.html)

Lets say we rest all other influences aside, what impact on the USD/BTC price by this round of QE do you think is possible?

I have no idea.. I'm not an expert on that stuff. Since August gold has gone up from $1600 to $1730 say, while bitcoin has stayed nearly flat. There are only a handful of people here who seem to be watching the bitcoin/gold correlation. Personally, as bitcoin matures I expect that this correlation will start to look more like silver/gold, on top of the general uptrend of bitcoin. But again, I'm no expert!

edit: bitcoin hasn't really been flat of course, but you know what I mean

Price should double when rewards halves.

If it doesn't it does not mean I am wrong, it just means that the market is wrong

 :)

You've got it exactly backwards.

ASIC is raising the entry barrier because you can't profit from existing hardware. How much fiat will someone be forced to spend before they can start mining.
The only skill aspect to mining has always been programming related... most users aren't writing their own pool software or their own bitstreams. So those skills don't typically belong to the miner.

I hope it will lead to wide-spread mining - that's the point of this, strengthening the network. Profitability will always be in how well you manage your investment- period. This is a different skillset that most miners have already, and it won't be affected by ASICs.

the skill required for miners right now is.. setup this make shift computer running 100 video cards.
but NO MORE! with ASIC you just 1) buy the unit,  2) plug it in,  3) and watch it make bitcoins!  a 3 step process!

this will lead to wide-spread mining....

the more people mine the less profitable it becomes. if enough people mine... running a 100 Jalapeno can end up costing you, big time!

i would not be surprised to hear next year, that only Mini Rig 'SC' are profitable.

with this sort of thinking... "read a web site" & "sign up for pool membership" & "download and run cgminer" all count as skills too.

anyone who can read directions can assemble a computer or a mining rig. Sure some can do it better than others, but that's not what mining is. Mining is the daily management of your hardware, moving between pools at the correct times and maximizing profits.

Even after ASIC release some of us will still be making much more than others. Actually mining already does what you're describing... just slower.

the hardest part of doing anything is getting started
now that getting started is about to get a hole lot easier.
you can expect a BOOM of new miners learning to hop between pools and all that.

face it dude, ASIC = the end of your profits

also... bitcoin is about to crash like a bat out of hell... how much BTC are you sitting on, and how much do you think its worth?

Honestly - I'm only sitting on about 20 btc --- the rest is cashed out once a month and put towards purchasing new hardware, paying bills and letting my wife shop.

I'm also planning to drop between 40 and 100 grand on more hardware after ASICs are in the wild and we can see what the real world numbers are.

that's cool
I'm sitting on 200.. i bought them... i don't mine cuz i figured i got in the game to late.

Why is EVERYONE so fucking rich!?  >:(

They all got to buy their bitcoins at $0.01  :'(

I'm in my mid 30s I work a regular job - I invest in things I both like and think will make me money. I've had some failures and some successes. I've made some good decisions and some bad ones. I've only been in btc since june. I looked at it briefly - mined for like a day back when btc was worth 0.02 usd and decided it wasn't worth the electric cost. Took another look during the bubble and decided I'd wait for it to break. Then I bought some btc (20) and spent about 3 grand on hardware for mining. I've been re-investing about 50% of my mining profits into growing my gpu/fpga farm. I didn't start buying BFL hardware until their ship times came into an acceptable range (between 6 and 7 weeks). But my invest there is on track to earn itself out before asics hit.

I've already paid to have 1 bfl single upgraded - the other 2 will be ordered after I have that one in hand. I'm in the process of getting some bASIC stuff funded (will probably wait until it ships tho). If nothing drastic happens to bitcoin once ASICs hit, I'll be liquid enough by jan or feb to make that investment, it will depend on ship times / real world specs what exactly I buy... but I'm leaning towards BFL SC rig(s) at this point.

I guess the answer to your question is this: If you're diligent with what you have... manage it well, make good goals (like getting debt free and having good savings/emergency funds) then when you come across the 'chance of a lifetime' you'll have to option of investing.

The road to financial freedom is a hard one, but it's worth the effort. But if you're planning on using bitcoin as your vehicle then the best advice I can give you is simply 'invest then reinvest' you've got a keep upgrading your income stream via reinvestment in order to make a long term profit.

If you aren't in mining right now - it's not the time to get into it - you won't hit ROI before things change. If you want to get into it - start small or wait until you can start big. If you look at it like a monthly bill, 150 > bfl for a jally or 100 a month and you buy a bASIC every 6 months... then you've got the right idea. Before you know it you'll have an income stream to rival your day-job (and that's when it gets really hard). Frankly scraping up the desire to goto work every day is a huge problem for me, since I'm making slightly more than my wage from mining atm. I've chosen to keep my employment for the time being, for the simple reason that ASICs and the halving are going to introduce some instability in the next year and I'd hate to have to deplete savings to pay bills.

Bitcoin may or may not be the chance of a lifetime - it might or might not turn out well for everyone involved - but I'm glad the way I live my life has put me into the position to choose how much and how I invest. Because if bitcoin doesn't make my fortune, something else will.