Bitcoin Forum

What goes up, must come down. And the speed something goes up is usually the speed it comes down.

Now I'm not saying bitcoin is going to crash, but its rising so quickly (I'm sure due to recent media coverage) it's ridiculous. $90 up in a week or so? Bitcoin is now jumping $30 every other night it seems.

Thoughts? Will bitcoin crash? Soon, in a year, or not at all?

(It's not that I'm not happy about my money being worth so much more, it is I'm afraid it will crash and ill lose it all)

i honestly cant see it crashing i can see it dipping a few times but nothing more than 20% who ever boosted the market did something epic maybe its all the people loosing faith in all the governments

You shouldn't take a risk that you can't afford to lose. At the current price point, Bitcoin is highly speculative.

If you're afraid to lose your investment, why not take some profit now?

From a technical analysis standpoint, this graph does not inspire much confidence that a rally can continue without a correction / profit taking:

http://img259.imageshack.us/img259/6773/70211563.png

Based on what little research I have done, the value of BTC seems to dip whenever the difficulty rises.  As for the hyper inflation we have all enjoyed so far, it does seem a little scary to me.  Currencies are often tied to the political and economic climate of the country to which they are bound.  Since BTC has no country backing , the value is solely based on trades - much like a stock. The future value of Bitcoins are truly unpredictable.

I am probably wrong on many counts.  Please correct me if I am way off target.

Enjoy your day!

I don't think that orthodox prediction methods, which predict a crash, apply well to bitcoin. Bitcoin has no intrinsic value in the orthodox sense, which says it never should have risen in the first place.

Bitcoin will avert a crash if its usability as a medium of exchange can catch up to its speculative value. If many merchants (or just one like Amazon) adopt it, it will continue to grow to truly stratospheric heights.

Just today, a major NY landlord agency adopted bitcoin as a payment option.

I've watched "bubbles" in Real Estate for years.  Never seen the "crash" everyone talks about, yet anyways.  My personal thoughts are that Bitcoin will continue to rise with some pretty big bumps along the way, but rise nevertheless.  If you read these forums, you will see the sentiment here is very bullish and most people are hoarding their coins, putting pressure on the supply therefore increasing prices.  I think we have a ways to go before any major correction, but more likely stability.

Didn't real estate crash hard a while back though?

Wha?!

Ummm... take a look at the number of foreclosures on the market and home values after 2008 to a year ago... or even to this day. Where do you live? maybe not in the US?


I agree with you there... BitCoin is its own animal and will fluctuate differently than typical stocks or other fiat currencies.

When you say "it's going to crash" I feel their is an implicit comparison to other things like stocks, shares, gold or real-estate.

Bitcoin is none of these things so cannot directly be compared.

Now I'm not saying: "This time its different" or that their will not be a crash, just that this is not comparable to anything we have direct experience off previously.

It wont crash much at all because the moment people see BTC down 10-20% they go nutz buying it cus they know it will rebound and be worth double in a matter of weeks... so yeh, dont expect any crashes anytime soon.

If it doubles every few weeks, how long does it take before a single bitcoin is enough to buy a house? Do the math.

I feel pretty sure that this is a bubble. BTC may be worth a lot more in the future, but with the spike it's in now, it sorta has to go pretty much back down.

BTC is not big enough(at least yet) to absorb all this trading, so prices has to fluctuate wildly. Imagine what would happen if half the world suddently started buying Islandic kronas...

bitcoin reminds me of the tulip mania

Quoting from wikipedia (http://en.wikipedia.org/wiki/Tulip_mania):
At the peak of tulip mania, in February 1637, some single tulip bulbs sold for more than 10 times the annual income of a skilled craftsman.

This is not a technical analysis - it is just an evil thought (grins).

I think we're seeing an attempt at a 'corporate take-over'.  I think big fiat is now chasing little crypto 'cause big fiat has nothing else to chase today.  They've chased themselves into rather major holes.   

In my opinion, if you want to be true to the spirit of bitcoin, hold - take profit for sure, but make that big fiat struggle and pay for every bitcoin they are most probably trying to buy. 

And then, when they get tired of the game, have some limit orders in there to buy at a lower price.  And then let bitcoin continue in its own spirit, a currency that cannot be controlled. 

I doubt a crash will happen... seems just people are getting scared...

Somebody tell that to Voyager 1. Bitch thinks it can just disregard our gravity.

Without the political mumbo-jumbo, you are talking sense.

If you have a BTC stash, it would be wise to sell some now. Then when this speculation-spike is over, you can buy even more BTC back. -Or buy more hardware.

What no one has been talking about is the floodgate of ASICs that are coming online very soon. Miners are going to produce a lot of coins soon. More coins in circulation means lower value. That will burst the bubble, allowing a new set of long-term (stabilizing) investors to get in at a lower price. When is BFL delivering? Crash to follow.

Still - Voyager will most likely crash and burn at some point. Rather as soon as it comes close enough to something else with enough gravity.

if its like gold ... nope .. it wont go down  ;D

They will not mine more coins. The distribution of coins are already set. The effect will be that they will get a larger proportion of the coins, and that mining with GFC's will become absolete.

No thanks. My stash is nowhere near big enough to consider placing asks on an exchange*. I do buy stuff with BTC sometimes, though, to help bitcoin retailers and the economy.

* I'm following Trace Meyer's advice, basically. In future, I might want to make something useful of my life and run a bitcoin-related business. I have a BTC stash stored offline - no need to get into a pointless bragging contest about how big it is or isn't, let's just say, it's greater than BTC1 - and will put that to good use when it has appreciated into something meaningful. Can I start an enterprise with equivalent of 100 USD? No. 5000 USD? No. 50000? Possibly. When it's worth at least $100.000 in terms of today's dollars, and in all likelihood a lot more besides, that's the time to start unloading, but by then there'll be no need to place asks on an exchange! Buy fiat currency? No thanks. To speculate, to take a short position on bitcoin, there are always altcoins: that may be their killer use.

If it's like gold, it means that it wont go to 0, but keep some value.

http://www.macrotrends.org/1333/gold-and-silver-prices-100-year-historical-chart

It only needs one single event that let people think that the price will decrease, and it will most likely come close to 0, everyone being afraid of loosing money and willing to take a few bucks out of nothing.


Still, it's not proven that a single negative event will appear anytime soon ...

Meaning that you agree that it would be wise to sell some if you had 500+ :-D
I am just saying that if you have enough bitcoin for it to be equal to several months of paid work, and the price have skyrocketed within a few weeks, it would be wise to diversify.

Yes, I agree. But I'd probably be buying gold and general stuff, not fiat. :)

I do not think that BTC will become valueless, but my bet would be that it goes down to the $30-50 range. Most likely the lower end of that bracket before rebounding to the upper end of the bracket.

But then again, I'm not an economist. If I were, I would scream buy buy buy(at all cost) as long as it went up, and then sell sell sell(at any price) as soon as it started to decline.

nobbynobbynoob : I think gold is also overpriced ATM, just like in the start of the 80's. But I guess that you live in the US where the economic outlook is not too promising ATM.

If you really wanna hedge, you should go for a solid home in the countryside, some livestock and hunting gear. ;-)

What do you mean they will not mine more coins? What do you think the point of mining is? Bitcoins are a finite "resource," (is that what you mean by the distribution being already set?) but not all of them are in circulation today. Coins have to be mined before they are available (valuable). You can't buy a Porsche with unmined bitcoins. When production of coins increases, the value will decrease as people sell them for real money.

The network tries to mine 2016 bitcoins per 2 weeks.  If the 2016th block is mined before the end of 2 weeks, the difficulty will go up and it will be harder to mine.  The network corrects itself.

I agree with previous poster ;-)

The amount of bitcoins mined per week will never go up, only the effort needed to get the next one.

Actually - the amount of new bitcoins will only decrease, until the end where you will (probably)need many times the current total hashpower to mine a single coin.

I think that what ASIC's from Avalon did so far, was only streangtening the Bitcoin value. Not only by distributing hash power between individuals (thus decreasing 51% HP attack possibility), but also by accepting Bitcoin as payment (it is still basicelly a computer, whatever it is used for).

Yes, there will be more bitcoins mined in short term. But the difficulty will rise for sure and solve that problem as it was ment to.

Just like $2 was the floor after the bubble popped in 2011, I think $40ish is the new floor now, so your $30 to $50 range speculation sounds about right. But I have no idea if a crash is imminent. If I knew a severe bear market was imminent, I would obviously sell now and buy back in the trough. If only trading were that simple. :P


The real gold price is (at most) about half what it was in 1980. I was pretty young back then, though, so I don't have any real first-hand recollection of economic events as such, but I know that the Fed (Volcker?) raised interest rates and somewhat tightened the inflation spigot, which helped pop the gold "bubble" at the time; gold remained depressed through the '80s and '90s because tech stocks and stuff like that made for a far more profitable investment.

Gold is outrageously undervalued right now iff we look at it as money. But there's no guarantee gold is going to be remonetized, even unofficially, so Peter Schiff-like predictions of $5k+/ozt could be way off base... or not, as the case may be. :)


No, I don't, but the economic outlook for much of the western world looks bleak (in a relative manner of speaking at least - this is not the 1930s), and the major central banks are starting to print money like the world is Zimbabwe writ large. Gold, silver and crypto look like good bets for store of value, volatility or no. I'd rather hold currency that can go either up or down at the whims of the markets, than currency that only goes down at the whims of banksters.

Uhm ... I really don't find much political in what I wrote, but, currency is politics - and I'm certainly not the only one who knows this.  

I wish I had written this   :D  :  "Bitcoin is getting there. But it’s not there yet. When it gets there, expect governments to panic and society to be reshaped into something where governments cannot rely on taxing income nor wealth for running their operations.

That is a bigger change to society’s fundamental structure than the ability to seek and share culture and knowledge we got with the net."

http://falkvinge.net/2013/04/03/why-bitcoin-is-poised-to-change-society-much-more-than-the-internet-did/#

I think the advent and popularity of crypto currency is a lever for massive societal change.  Anyway, I'm in for the long term.  If this run-up comes to a crash, I'm gonna get more at a more reasonable price!  Either to do something with in the future, or to move to an alternative currency as much as possible personally.

Wow, this must be post number 3 or something.  

If a lot of people here would sell their stashed coins now, the value of bitcoin would come done.

Do we really think BTC will reach $1,000?

In time I am sure... I think right now we are still seeing the whole "OOOooo pretty coins!" and "OMG 20-50% gains in a couple weeks!" and people are just throwing money in. Unless there is more media coverage, easier ways to get money turned into BTC or more businesses actually taking BTC as payment. We will see a sharp fall at that time.

The hope is the hype continues to the point where a few of the above things have a chance to happen.

if you sell you'll regret it.  People always thought a crash was coming-  at $5, at $10, at $50, at $90, but it never has.  Sure, it may crash, but until then, lets ride

If you never plan on selling any coins, I guess the price is moot anyways...

My point is that now BTC has real and high value, meaning that it's a good time to sell some. At best it will level out some time soon, before continuing to rise more slowly. But I think the price is much more likely to drop considderably, before climbing at a more healthy rate.

You buy into BTC and hope you timed it right and get INTO the money with it by atleast $20 or so.... then you can weather out any small drops even $10 because you are already IN the money.

then you wait to see a huge down turn starting and guess at where it should stop. If it is going to stop more than $5 below where you currently at. It would be best to sell, take some profit then rebuy at the lower price.

Problem with BTC is it is popping the investment cherry of alot of people who really don't know how stocks, commodities or currencies work. So the price fluctuations won't mimic other types of investments. Especially with sentiments like above... Buy and NEVER sell... HOARD it all!

Is it not just a matter of supply and demand?

Demand is: the total of those who want to invest their savings (Cyprus) + the increased use of BTC in trade
Supply = the total of those who want to sell BTC + the increment mined.

If that balance is lost, there is a sharp rise or a sharp fall. A look into the exchange rate development is a look into to symtoms. It says nothing.

So who can provide us with the data?

To me, the main problem is that BTC is not a standart trading asset. You can not open "short positions", hoping for prices to go down.
Furthermore, I do not see any demand.


The recent media coverage, and speculation of maybe 10 or 100 BTC that got buy, and overbuy by mtgox in order to increase their fees and benefits is not anything logic.
I mean, BTC are worthless. If you do not own a website giving BTC for ads, captchas or whatsoever, it is totally pointless. You just can buy it and hope the price to rise before selling it and making a small profit. But you can not buy anything in the real world or on internet cheaper with BTC than with euros ... You can't even buy it faster, since you need to wait days and days before being able to actually get your first bitcoins, and weeks to make your wallet synchronised.

The recent increase is probably due to:
- some people thinking that they can make profits, buying low, selling high ...
- the exchangers, making fake trades, increasing the prices in order to increase their benefits.


When the people will start understanding that you can not do anything with a bitcoin they will probably massively sell it.
I can't see any utility to that actually.


Some cyber-punk might say that they are fighting for freedom, being anonymous, but it is bullshit.
Everyone is now buying btc, hoping it to increase in value, nobody wants to sell, except the miners becoming rich :)

But when people will start thinking and seing that you can't do shit with a bitcoin.
At the end of 2014, btc will either has disappeared or worth 0.001 USD.




The problem is that it is nothing but a speculative asset that can be lost forever with a technical problem (and can only trade when price is increasing...).
If it has a value, utility or whatsoever, it could become consistent, and maybe last.

keep in mind that bitcoin started out at 1300 BTC = 1USD. every year bitcoin dramatically gains (and retains) its value. this is not the first "bubble". The value of bitcoin has gone up more than 1000% every year. If the price does go back down, it wont stay there very long.

Well I sell a writing service at $1500 a pop - and I've already decided to take part payment in BTC, say $500 worth, at whatever the rate is at the time.

So there's that?




AC

The fate of the Milky Way does not involve more than half the stars colliding with one another...

What's so hard to understand?  Send money from anywhere, to anywhere, from anyone, to anyone, in any amount, at any time, for free.

Seems to me there is great utility in that.

True, you have to exchange in and out, but that is ultimately a small price to pay when you consider how much banks charge for wire transfers, or even how much Western Union charges for transfers.

In this present time, nothing is a "bubble" until Wall Street gets its claws into it.  We haven't seen  "real" exponential growth yet. This in my opinion, is because we're missing 2 fundamental components of a "bubble". Those components being credit + the feed-back loop.  We don't have either one of those YET.

We will get credit infused into the BTC market when Wall Street jumps in.  They have to jump in, because there is no way that they're going to miss out on an opportunity to fleece the masses.  They will pump BTC up through hedge funds and the likes and then as the price soars, they'll publicize BTC's greatness to the masses. There will be BTC experts on CNBC spewing rhetoric as to why this is the new paradigm for commerce. 

Once the press gets rolling on BTC then the feed-back loop will go into full swing.  Your taxi driver will be telling you how great an investment BTC is. Let's face the facts, who outside of the IT world really knows what BTC is and how it works? Very few! Once the feed-back loop goes into effect, word of the price ascensions of BTC's will spread like wild fire. BTC will be the talk at the dinner table. Then a true "bubble" will begin to form (credit + feed-back loop). This will be unlike any "bubble" ever seen before because BTC transcends national boundaries. EVERYONE will be attempting to get rich. This will truly be a global "bubble".
 
What will the price of 1 BTC be then? $1,000 - $100,000 - $1,000,000

The price of a BTC when the true "bubble" emerges will be much much higher than it is today and when it is sufficiently high enough for Wall Street, that's when they will pull the plug and that's when the "bubble" will burst.  Until Wall Street gets involved, there is no "bubble".

As someone who knows an actual portfolio manager back in London, I can say this:

  Everyone in the buy-side knows about bitcoins, and they've known about them for quite some time.

  I tried structuring a trade to go long bitcoins / short some argentine stuff as a pair trade, but I ran into TWO major problems:

  1) bitcoins have no custody:  who owns it?  The person with the key.  Ok, and so how does a HF "control" a BTC?  On a scrap of paper, like that Malta "fund"?  I think custody remains the key problem for massive BTC adoption/speculation by big money.

  2)  Because of #1, banks WILL NOT TOUCH THIS:  NO!  If the banks don't touch it, and the banks provide the liquidity to the brokers, then how will the custodian at DB hold BTC's?  What if some desperate intern gets his hands on $100m of Bloomberg's BTC's at the bank and sends them to his cousins in Almaty?  They're gone: poof.

  Please feel free to savage my response, but this is my understanding, as of now.

  I still believe, with metaphysical certainty, that BTC's and other crypto-currencies are here to stay and will revolutionize, for the better, commerce and banking.  I especially hope it bankrupts Paypal and all the smug assholes who made their billions from it! :D

With the price of these ASIC systems going upwards of $30,000 the people invested wont be willing to take a loss after the difficulty corrects itself.  We'll see a short spike in BTC production until all units are shipped, but it will VERY quickly correct itself because of the enormous hash rate.  The fact that so much money was thrown behind these miners will cause the price to increase dramatically, because while no more than usual bitcoins are found, everyone will seek a profit from their investments, and that alone will cause the market to spike.  This isn't some huge economy here, Bitcoins are still alot smaller than you think when compared to the population of even one US state.  These small markets are much more predictable but you really have to think about all aspects and piece it together, its not just a one factor deal.

Summary - ASICS= short spike until correction -> network will resume normal bitcoin output -> people not willing to lose on huge miner investments -> huge spike in BTC price to compensate.

I would love constructive criticism, this is just my personal opinion and im in no way an expert.  I've been following for quite some time, since BTC was a baby in the $2 range.

This is gonna be interesting.

If you have a nice stash of coins now you'd be wise to sell. Take your profits, mine, and wait for the drop. It's coming in a few months max.

If this were a stock chart, I might agree with you, but it's not. It's a new medium of exchange, the likes of which we have never seen before. Why, then, does it follow that this is also a bubble? Sure, some folks will want to take profits, but consider:

1) Speculators want the exchange rate to increase, and to increase for as long as possible. Speculators will hold as long as the price trends higher.
2) Merchants want the exchange rate to increase. They will take new approaches (for instance, sell products for lower than their value in anticipation of an exchange rate increase).
3) New users want the exchange rate to increase. The higher the price, the more interest, the more users of the new currency.
4) As the market cap rises the rate eventually reaches a balancing point. It won't fluctuate by many dollars per day, but instead by fractions of a cent. When its stable, more merchants will enter the market, and users have less incentive to cash out since they can finally take advantage of the true benefits of the new currency: anonymous, global, simple payment processes. And all this without the tax implications.

I anticipate corrections but an upward trend until some (much higher) market cap is reached.

If anyone out there is interested in swapping their BTC for my Vanilla Visa Prepaid Gift Card, Please let me know! I very much need to buy some BTC as soon as possible. If anyone has any idea where I can do this, please let me know ASAP!

Homo economicus speaking here
Listen to him...

Basically this, btc does not jive with the top down trust based structure of traditional trading and banking. Theres simply too much power in the hands of whomever holds the key. Without some sort of fallback for theft or misuse there is really no way any traditional structure is going to mess with it. And without there being more utility to it other than buying drugs and hosting, the value of btc is just hype. I for one hope this bubble bursts and some sort of order comes back to the market as this volatility, however positive it may seem, will ultimately create distrust when it breaks.

I will buy your BTC right now if you like, so you can cash out.

First... Boooooo...

Second... Whale is correct. Things are different about BitCoin compared to any other financial instrument that has ever been. The points you make are valid, but they are not as big of a deal in the near term as you might think.

Whale actually said some things I hadnt' thought of before. Merchants ... I always said they won't want to take it because it is so volatile. But some might actually take a chance on it due to the fact it just hasn't gone DOWN yet. Besides drugs and hosting the kind of merchants that will want to take up BitCoin will be products and services that already have a HUGE markup. Like beverages, item rentals, labor services like massages, nails, hair...

These kinds of items don't exactly tie a monetary cost to them... just time or maintenance.

There are actually alot of possibilities which will come in time and during that time more people will finally get their money into the mix and figure out how to use wallets etc. BitCoin is still in it's infancy and is only now tarting to 'grow up' with all the recent media attention and money influx.

Look at the charts. And the arguments everyone uses that it's "not like the money being printed" is BS. BTC cannot be made in jewelry, it cannot be held, it has not bee used as "money" before. You might be able to use the for gold/silver since they have been used in trade for thousands of years, but BTC is new, more of an idea than anything else, and is probably only so high because of:

1. Hacking
2. Speculation
3. Money laundering
4. Fraud/ID theives buying on credit...

It will DROP no doubt. Take your profits and mine for a while.

Can i get some hot chocolate on top and some nuts too with some of those colorful sprinkly things for like birthday cakes and a few candles to blow out please.

Yeah mee too.

Good advice. I always preffer to buy cheaper bitcoins. I like it.

I dont think so!  No money in mining unless you are well set up and have good and expensive equipment and know what you are doing.  and there might never be a drop and you will be left out when btc doubles and triples in value and you have nothing left and have lost everything.  Best things is to invest what you can afford to loose and just hold out as long as you can and dont cry if you loose it all  thats all and it might go back up it might not.  Just speculate thats all.  WHy sell something that is tripling in value that is the worst advice.  COnsidering it is so new and being realized by the public and media.  If  you look at stocks they always do good in the first year of being realized and then level out go lower or higher.  SO this is so new and its not a stock so it might do very good.

You know what scared people do?

Panic sell.

Scared people did not found this country people with balls did.

You mean Vikings right? :D
Sorry, i had to...

All the newcomers want their own bubble too :D
The veterans can therefore sell all they want - there's lots of hands to take what they drop.

I think it will just bounce.
BTC is just what everyone wanted. Get their money out of the hands of banksters.
Don't see any reason why it would crash unless something serious shit happens.

Western union might start using BTC like they said. Who would want to dump?

Just be careful everyone. This is not a normal rise in price. It shows every sign of a bubble. I hate to say it, and I'm here and I believe in BTC, but don't bet your house on it going up more or staying up too long. This is all just speculation. BTC is backed by nothing but faith, same as fiat currencies. Once the price drops significantly and everyone looks to cash out, we'll be back at $5 a piece.

I wish you are right, I would buy thousands at this price. But Im not sure if I have to wait for it and losing oppurtunity to buy at $200

I'd be interested to see the daily transaction value of BTC at Mtgox as a percentage of the rest of the BTC economy.  Wouldn't be surprised if it is more than 50%.  In this case, a lot of the value of BTC as it regards to fiat is exposed to the credit risk of mtgox. If everyone sells, even if you sell early, mtgox withdrawal limits would keep you from getting the cash for a long time.

I though i had missed the curve at $60 :/

-And God bless them.  ;D

Yeah, I think a lot of us are fervently praying it'll tank today or tomorrow.  Buy (mine) and hold at cheap prices like the early adopters did.

I am hoping BTC drops to something low enough for me to invest again, possibly.