Bitcoin Forum

From June to Sep, the price nearly tripled without any significant fundamental news(unless i missed something).
Then pirate defaulted and there was a spike down to $7+, which was readily absorbed and price has slowly creeped back up to where it is now(14+).

Yes, i know Wordpress started accepting BTC recently and Bitcoin is going to be gaining exposure at CES. More businesses are accepting bitcoin, all well and good.
But a 300% gain(all before Wordpress and CES news) just smells fishy to me.

What i think:
A 300% price gain in 3+ months without any significant fundamental reason is the work of 1 large buyer.
1) Maybe this buyer heard of bitcoin, did his research and believes in it as much as we do and is trying to scoop them up while they are still a bargain and is in this for the long haul.
2) This large buyer is here to make a quick 200-300% gain. Ever since price has risen to 12+, all the buy orders that were $5 and below have slowly crept up into the $12+ range.
If you look below 12.90 in the market depth table, there is very little liquidity to hold the price. It's almost as if the the large buyer has suckered everyone into buying at $13+ and is slowly letting his coins go whilst keeping 1-2 big orders below market price to give the illussion that there is very strong demand.

Personally i was thinking it was scenario 1, but after watching the PA and the market depth today, its starting to look like the chances of it being scenario 2 is not remote. Also a rich banker or fund investor is unlikely to have the technical background to understand the details of Bitcoin and appreciate the genius of it's design or believe in it's security.

Interesting

Any evidence of this in the public trading records.

I also know there is a significant amount of otc transactions.

Interesting, if you don't want to give exact figures, how large is OTC trade in percent of Gox volume in your opinion?

The only reason for it is that the more and more ppl getting into bitcoin. Just see how many new users blockchain.info is getting: https://blockchain.info/charts/my-wallet-n-users Bitcoin subreddit is constantly getting more and more subscribers.

Also don't foget that amount of fiat money is practically infinite.

Your story of one large buyer reminds me of a conspiracy theory. And as usual with conspiracy theories they are often false.

Also below 12.90 there might not be a lot of orders, but if the price drops lower I will add to my position, and there are probably more people who don't have orders in place, but will act the same.

Again, im just speculating but seeing 9k orders from a single account at current prices points to someone spending 150k into Bitcoins only recently.

I may be totally wrong and am underestimating the exponential effect of Bitcoin popularity.

+1

I believe the recent media attention and the growth in user base supports this price increase and we'll continue to see it climb in 2013.  I am concerned about the effect that ASIC delivery or ASIC failure will have on the market.

I would have no idea how to extrapolate those figure however FastCash4Bitcoins has moved over 200,000 btc and counting and the other side of there business Bitcoinsdirect is often out of coin.  So there is not insignificant  volume there.

If I had to guess I would say at least  5000 coins move in any given week on bitcoin-otc

And I have see significant orders on localbitcoins.net.

Again what percentage of gox volume I have no idea.  

Why is there always this urge to attribute price movements to "one large buyer" or "the manipulator" etc?  ::)

I feel like there is a psychological need to attribute things to single people... maybe this is why so many believe in god, and in a king or president to control things?

Because the volume and market cap could certainly allow a single large buyer or a consortium of sophisticated traders, to manipulate the btc market very easily.

Even worse, its a schizophrenic manipulator who does stuff like BUY 10k BTC to raise the price up to 14.31 and about an hour or so later sells it down below 14!  And then buys little bits back up to 14.20...

I'm sure there's a simpler explanation to this story... :)

Actually the HUGE buy and then HUGE sell came within two or so minutes of each other. So yeah, the 'manipulator' may have needed to buy a bunch of btc just so he could use it to push the price down, and didn't care about the trading fee.

This might be some kind of tactics, to "test" the price level … probably in the past this trick worked a few times, then you can profit. But right now I don't see it. Also, no weekend-dip, afai-can-see.

I think the spike of new users the Blockchain.info wallet has gotten since December hasn't shown it's full impact yet. Bitcoin has a steep learning curve so I think people will typically trust it only after a few months of experimenting with it. Once these new users start moving bigger amounts it will put a firm support under the price IMO.

This. Just look at bitpays numbers to see how much its growing

As it is even harder to speculate on the intent of a possible speculator, Best pratice is to hedge in a ratio that you feel comfortable with. You know you struck a balance when you feel equally bad about your asks and your bids.

Same old story - where is 'The Manipulator' thread?

Together with - imagine that a millionaire  learns about bitcoin and decides to try it out with his pocket money

This thread reminds me of the "cautionary warnings" when the price went from 3-4$ (the 2nd time.)

can easily be changed to:

Is he the guy we can attribute everything to?

The off exchange market is much larger than many people realize.   Someone looking to buy or sell a large quantity (>1000 BTC) will find that due to lack of slippage an OTC transaction with a trusted counterparty makes more sense.  Generally when someone is looking to buy 10K BTC or more they get to know the other party so I have spent considerable time emailing and talking with potential clients.  There is a growing interest from non-traditional money (i.e. those people who have no interest in mining, or a certain darknet marketplace).  While I never ask "how much do you make?" or "what is your net worth?" you get an feel for someone finances on how they deal with money.  In FC4B we have clients who are freaking out because a $400 ACH is a day late.  We have also had direct buyers be willing to post six figure wires a couple days early because it was easier for them to get it done that day.  The later aren't people building mining rigs in their garage. 

We (Tangible Cryptography LLC) sell about 10K BTC a week in direct off exchange sales.  Our highest volume week was closer to triple that.  I have learned indirectly through clients that there are about three or four other entities which can handle transactions in the >1000 BTC range.  So what is total OTC volume (to include other direct sellers like BitInstant)?  It is hard to guess but I wouldn't be surprised if it is more than 40K to 60K BTC per week.

Thanks for this valuable info. I've always been suspecting that OTC Volume was high. Add to that volume on other exchanges and the gox market starts to look a little less mighty. The less liquid mtgox is the more likely it is to be "manipulated". It's just very tempting for someone seeking to buy a large amount OTC or on other exchanges to just slam the price on gox beforehand and then lock in good prices with bitcoin suppliers, isn't it?

I'm not sure arbitraging between exchanges is working the way I expected it to work (make it all one big market). I'll have to ponder this more.

Is BitInstant really a direct seller? I always thought that they just transfer the money to an exchange, so their trades show up in the order book.

I may have overspoke I don't want to define the role of another company but with the "BTC to email" option I would assume that is an off exchange transaction. 

I have bought recently and am not concerned if the price drops.

If the price drops, I will chalk it up to "Oh well, I missed a better opportunity to buy I could have never known for certain would exist", and that it will go up again eventually before I need to spend that money.

I am convinced that one day, which could be tomorrow, or could be 6 months, 12 months, 18 months from now, somebody who owns a single building in all of Manhattan (which on paper is worth more than Bitcoin as a whole) will make it over our arduous learning curve and will say OMG, $150 million for the future of money is a god damn bargain, this is it, right here right now, and the risk is manageable.  And they will act accordingly.  And at that point, buying bitcoin at anything remotely what we're used to will be a long gone opportunity, and people will be saying, "WTH was I thinking listing an ask at $15?"

In my view, the only thing standing between now and then, which may or may not happen, is some threat to the block chain or a major vulnerability, or someone successfully demonstrates a 51% attack or scary double spend, which would cause a temporary sharp dip in the price, followed by a fix within days.  People without the ability to assess the technical aspects of a problem and the soundness of any fix will fold and run, and meanwhile I know my well-secured paper bitcoins will be safe.  I'll be buying and telling everyone else I know to buy, watching the price slowly climb back as everyone else realizes that Bitcoin will always win the long game, the same way BitTorrent wins the long game against the Hollywood media cops.

This.

(and this)

i like your post, the problem of all enthusiasts here is that they are somehow already maxed out on how much they want to be exposed. or have to rethink their exposure over the next few months.

New enthusiasts discover Bitcoin every day  :D

I felt that way when I didn't buy at $2.

Can't have everything I guess.

 ;D

We will be repeating this conversation nearly verbatim in 2 years with quite different numbers involved.

If it is one buyer, they are not here to make 2-3 times their money.  They are here to make 100 times.  Trust me. 

There are many, many entities that could buy all BTC in circulation.  How much would it take to drive the price to 100?  How about 1000?  Remember, buying begets buying. 

noone else bothers anymore? :D

where are all the math nazis hiding?

The more that people think Bitcoin will go up, the less likely they are to sell now, and the price goes up.

A computer with $1000 of video cards brings in just a trickle of Bitcoins now.

But time would stop, and we would enjoy the enormous gains forever!

Meanwhile the outsiders can argue over Satoshi radiation.


Eventually people need to buy stuff, and if bitcoins are their last choice, supply will rise.

or maybe it went up because of a drugged out Christmas and bASIC needing to re-purchase bitcoins.........

I had a friend who I told about bitcoins, and he brought a few, and he told his boss, whis is a VERY rich man. His bosses comment was, Hmm, maybe I should just put 50 million into it. (Small change for him I think.)

But that's the point, there will be increasing numbers of very rich people who will want to invest in bitcoin. If I was  President Assad, I'd be doing that right now. On the other hand, if I was bright enough to do that I suppose I would not be doing what he is doing right now. More seriously, there will be increasingly large numbers of medium-rich investors who see bitcoin as safer than fiat. So many other killer-advantages to bitcoin, that I can only see long term going up.

And no, I don't think its one person, its a trend.

Until someone publishes a grandma-easy Bitcoin client that makes secure backups, most old people with money won't know how to invest.

Most old people don't have any real wealth to invest. Their retirement plan is to have the government pillage the younger generations.

I almost feel sorry for them. Not long now before they realize that their ponzi scheme is going to implode.

I don't feel as sorry for them as I do the younger generation.   People who have lived their entire lives under a lie of unfunded entitlements aren't suddenly at age 60, 70, 85 going to say "oh well guess I need to get back to work it is the fair thing to do".  No they are going to use their considerable power as a voting block to ensure they keep as much of what was promised.  The consequences to the overall economy, the future of the country, and the quality of the life for the next generation be damned.

No worries, the younger generation is too stupid to notice.

Trust me, I'm a member.

I am reminded of a TNG episode ( lol ) where at middle age all members of an alien race sacrifice their lives for their youth.

On a more serious note I genuinely do not understand why prolonging life past a point where quality of life is sufficiently diminished is a good thing.  The smart geneticists agree and focus on quality of life over longevity.

But as long as we aren't turning grandma in to soilent green I think it's unlikely that working elderly is a realistic solution.

They'll try, but it won't work for long. The pensioners and retirees in the West will end up just like the ones in the USSR.

I want thousands, then I can safeguard against inflation...

I want to have millions, then the price goes up specularly, and I will be rich...

I want to have all the bitcoins, like an uncle scrooge, then I'll have ... nothing

+1
I'm the black sheep of my family because I do not "respect my elders", because they hold to this exact false sense of entitlement.  If I try to explain it all to them, I'm either being a "know-it-all" or just an asshole.

Just remember this phrase for when the time comes:

"Sorry about your bad luck."

Haha, unfortunately if we are not supporting them indirectly, we will end up supporting them directly!

Not looking forward to having my mom move in.

So don't let her.

Good thinking! I need to start planning for this so that the obvious choice is living with my sister.

Why do you need to do anything? Aren't you an adult who is free to choose who you do and do not associate with?

Well, yes. And so is everyone I associate with. A lot of people tend to forget that. Unfortunately, there is no blanket solution that is going to work for everybody, there are only blanket problems.

I've taken steps to ensure that my kids will not end up in this situation. Bitcoin is becoming a bigger part of that for me, and I suspect a lot of other people here as well. But as mentioned previously, it's seriously lacking in accessibility for the older folks and non-tech types. That is probably the biggest factor limiting the growth of the bitcoin economy right now.

Hint: The magic word is 'distance' ;)

if your one large buyer theory is correct than we should expect to see the price increase to be decoupled from the increase in total number of searches on google trends. If your theory is incorrect than we should expect to see a strong correlation between the increase in total searches on google trends and the increase in price. Google trends is an amazingly powerful tool.

Well, as long as these enthusiasts think about their exposure in relative terms of their wealth and earn more than they need for a living then they will just continue buying some Bitcoins with every paycheck. If you don't have any other immediate use for your money then that's probably not such a bad idea and I'm pretty sure I'm not the only one doing just that.

I'm doing that.

We won't see big money get into bitcoin via direct purchasing of coins until late this year at the earliest.

We need ASIC's to hit and blend in well, the miners to increase in amount (how far spread the stability of the network is maintained)

Remember, this is CUSTOM hardware to make bitcoins. If the network withstands this drastic change; bitcoin is much more likely for a stable future.

Thanks for letting me know.  I will keep an eye out.

It depends. First, your big money is someone's pocket change. Also, while risk is higher at this moment, the potential return is also higher. The very-early adopters bore an even higher risk and many has already become millionaires, and potentially billionaires in the future.

There is the other side of "billionaire" status to consider though.

If the USD crashes, we could all be billionaires someday, despite it meaning very much.

I get your point though, early adopters may wind up with a lot of real world value in their wallets.

All you conspiracy nutjobs make me smile.

Posted on another forum today, this is the reason why Bitcoin has been rising.


It's simple. More and more people are finding a use for Bitcoin.

what the fuck does he mean he was buying for?

NZBsRus is a Usenet provider that had its Paypal account cancelled. The guy was buying a subscription.