Bitcoin Forum

The price has been floating around 19USD for the last couple of days.  Does anyone have any idea why?

The pedantic answer would be an equilibrium of buyers and sellers. There have been a few interruptions in trading with Mt.Gox, as Tux is working through some issues brought about by his growth and random DDoS events. Tradehill seems to have stayed in the game, so at least there's an alternative available.

You shouldn't worry so much about absolute price, though. Get people interested, this is the currency of the future.

Big guys have taken a nap in the face of the recent turbulence :) As soon as things stabilize a little they'll come back and the roller-coaster in on ;)

Is it just me or is it looking kind of similar to the period of relative calm following the rapid ramp-up from $4 to $9?

http://bitcoincharts.com/charts/mtgoxUSD#rg5zig15-minzczsg2011-06-11zeg2011-06-18zvzlztgSza1gWMAzm1g10zm2g25 (http://bitcoincharts.com/charts/mtgoxUSD#rg5zig15-minzczsg2011-06-11zeg2011-06-18zvzlztgSza1gWMAzm1g10zm2g25)

vs

http://bitcoincharts.com/charts/mtgoxUSD#rg90zig15-minzczsg2011-05-15zeg2011-05-22zvzlztgSza1gWMAzm1g10zm2g25 (http://bitcoincharts.com/charts/mtgoxUSD#rg90zig15-minzczsg2011-05-15zeg2011-05-22zvzlztgSza1gWMAzm1g10zm2g25)

Hmm, maybe just me... :)

EDIT: Fixed URLs (noob fail)

If I had a load of BTC to sell, I'd probably just leave a load of them sitting at $20 right now and let buyers chip away at them, which would constrain the price. Makes sense, no?

There's not enough "real economy"  as of now to support a stable price. So it's investors and not "real economy" that are supporting this price.

When the coins have had a price/dollar vary less then  +- 10% for over a year I'll call them stable...

The problem is that when the prices become too stable, Bitcoins seem more attractive which leads to the price increasing. Might not be a "problem" exactly.

real businesses and trade will not be possible until it is stable.  So yes, I think it would be a good thing

Take advantage of the chance to buy at a stable price

There is also an inherent volatility when the prices are low. For example, if I want to buy a $10,000 car using Bitcoins, and it is only 1 Bitcoins per dollar, then by nature that will extremely disrupt the market to do the conversion (in this example am converting currencies in addition to car purchase). People are only going to be converting 20-80k Bitcoins per day no matter what the price is. So this 20-80k Bitcoins will have to accommodate the cash flow of millions of dollars or the market will go berzerk.

yes, the market participants are emotionally exhausted.
This is an equilibrium price, the players have said "yeh ok thats good" to this range on both the buy and sell sides.
This happens to be the point between the launch point and the high.
Once rested they will return to the same type of volatility.   

-trader of many many years

What about stability wrt GBP and EUR?

It's an international currency, not a US currency.

Not so. Increased velocity effectively increases supply, which would lower price.

Can somebody answer me this question....

I see all this talk about how people selling their btc makes the value go down.

Why?

I could understand if there was in fact a central place buying up the coins per-se.  But isn't MTGOX simply filling orders that other users have on the books with them?  If somebody sells 100k btc, that means somebody is buying 100k btc, right?

So.. somebody please tell me where my logic is flawed.

If I have an order on the books for $20/BTC for 10 BTC's, and someone else wants to sell their bitcoins, but are a bit more desperate to do so, then they'll have to post their price below mine.

Really, when people say that selling btc makes the price go down, they really mean that listing bitcoins for sale makes the price go down.

If your selling at the market value then as each bid is filled the price will get lower as it goes to the next bidder in line.

Increase the number of sellers and you increase the quantity of BTC available at a certain price. Someone will be desperate enough to let a BTC go for less than you are selling, and consume orders before you are able to. If enough time passes before your sale goes through, you may be forced to lower your price.

If in your example, there was an order to buy 100k near that offer, yes - it would cross and not really move anything.

It's really all about the order book. You are right, your order is on the opposite 'side' of anyone elses, and you are matched to the closest bid/offer. Where order depth comes into play is what 'moves' price. (This also assumes you've put in a market order and not a limit order.) Your order simply takes out all the offers if you are buying, or the bids if you are selling - depending on how many are at each price level.

Hope that helps.

Thanks for the replies guys.

(never took and never plan to take any sort of economics classes)

Actually common business won't. Real business is priced in around 80/20 BTC/fiat. And that's always stable. :)

It is the calm before the storm.

Still, the stable price will BENEFIT ALL OF BITCOIN. Why? Because a stable price can lead to people setting up businesses with actual set prices. If you are selling something for 20$ USD, you can now set the price to 1 BTC and know that you won't be selling something and generating a loss.

Stop pricing in dollars. No loss. Problem fixed.

Bitcoin needs a stable appreciation not a stable price.

Look how nicely symmetrical the order book is. I don't like it, it makes me feel nervous :)

24 hours of "stability" is not "stable"...

Stability is relative to reaction time / population not absolute time. For a thin market it is plenty stable.

BTC is not going to be "stable" in the way described here until it gets much closer to its actual value, which is at least hundreds of times its current value. In the meantime, early adopter merchants stand to profit greatly even with the day-to-day volatility.

"stable" currencies is dead currencies.
diamond cost fluctuate per/week several times. for example.

What is your basis for believing BTC's actual value is "hundreds of times its current value?"

Unsatisfied political demand. That's the white elephant in the room and pretty soon you can't ignore it.

I think he is right, just got the direction wrong ;)

I think you VASTLY overestimate the sheep herd's ability to even manage a gesture towards the white elephant in any meaningful way...

Bitcoin solves a variety of problems related to moving money; however, it is currently extremely underutilized as a solution to those problems. As its adoption continues to increase as people seek to solve their problems, the exchange rate will also increase.

How can I find out the average weekly rise of USD/BTC until now?

Please stop misleading people. Saying that some hypothetical "actual value" is thousands of dollars per BTC is no different from saying that it's "actual value" is 0.

For your average Joe and Jane, Dwolla Grid solves whatever problems related to moving money that bitcoin solves, and does it unquestionably legally too. And at $0.25 per transaction of any size, it's not much more expensive that the eventual suggested .01 BTC transaction fee and that at CURRENT exchange rates.

I believe that BTC will end up being no cheaper to use as an online transaction method than Dwolla or other new cash services. And in fact will be much more expensive from a certain point of view because of the cryptic disconnect from going from USD to BTC.

At any rate, your little explanation is still an outrageously tenuous reason for justifying BTC trading at "hundreds of times its current value."

In fact, if "ease of transactions" is the pinnacle of your vast speculative over-estimation of value, you have my sincere pity and concern for your well-being.

PayPal had a lot of great ideas too until EBay bought it and made it a lot less useful. The same thing will happen to Dwolla if it gets big.

You should also consider how ease of use has advanced over the last six months and extrapolate that into the future instead of basing your assessment on the current state of the software.

"BitPal had a lot of great ideas too until BitBay bought it and made it a lot less useful. The same thing will happen to BitBuddy if it gets big."

...you were saying?

I was saying that Napster failed and Bittorrent succeeded for the same reason that PayPal failed (to achieve the founders original intentions) and Bitcoin will succeed  - centralized control.

The only thing that can kill Bitcoin is insufficient demand for it. As long as people desire a decentralized currency the technology will outpace efforts to eliminate it.

I think you're a bit behind on the debate, friend.

It seems to me we've pretty much come to a consensus that centralization of certain bitcoin functions is inevitable, and even desirable.

The whole anarcho-libertarian cryptastic orgycoin concept is only appealing for a very select minority.

So, it's very very likely that demand could dry up quite quickly unless such centralization takes hold.

I don't understand how any of you got the idea in your heads that decentralized currency was ever in demand...frankly, the entire world minus you and a couple of your buddies that we could list in a small notepad, simply do not give two flying fucks about crapto-currency.

You haven't dealt with a lot of small business owners, have you? The concept of a low-cost means of exchange that doesn't have a single authority that can arbitrarily reverse a transaction six months after a sale is extremely appealing.

You haven't dealt with a lot of consumers, have you? The concept of an insured, high security means of exchange that doesn't have many disconnected and possibly untrustworthy entities, that can also allow you to dispute a charge when the product or service delivered is unsatisfactory, without having to resort to bringing a lawsuit, is extremely appealing...

And then?

People still use cash.

Not online...

Unless they're starting to use Dwolla Grid, which the whole point of is the things I mentioned...

Synaptic has a valid point:  consumers do want a chargeback option.

sellers don't.  sellers prefer to base their business model on reputation.  they don't want third parties getting between them and their buyers.

consumers want transactors which save them the embarrassment of returning goods 'face-to-face'.  and yes, some are thieves, or simply dishonorable.

there's room for both models - i don't see a problem.

no seller is going to limit himself to one payment system.  i can see a time not too far off when Bitcoin sales are offered at a discount roughly equal to the fees from other payment processors + a pooled fraction of theft.  something like that.

the good thing in all of this is that entities like PayPal will stop kissing consumer ass, and chargebacks will become much more difficult: they always should have been.

This made me LOL. Thanks error.