Bitcoin Forum

Is the price really sustainable?

Eventually everyone will get scared and dump their load on the people who come in late  :D
Price will go crashing down and the manipulators will have made their multimillion profits.

I sense a price peak soon.

No it's not sustainable. I believe we would need to see a minimum of around $242000 USD/day of new money to maintain $192 USD/BTC (assuming ~65% profit for miners and 3600 BTC minted/day).

Bernanke prints 85 billion a month..

I'm not sure what you're trying to imply.

That you could be very wrong lol ::)

That does sound like a lot but worldwide it's not much.  A few people last night bought orders over 60 coins alone, and 200-250 is pretty common still.  Sometime during the early morning EST I think, I saw my recorded charts blip with a near 1,000 coin buy.  I think it is hard for us to realize just how much money there is in the world.

That's $12K and $40-50K respectively, more or less, at this rate.  A few of those scale buys and oh, $250K is taken care of.

Now, sure, I think there does need to be a lot more usability for BTC coming up but again I just look to gold.  Is the current price holding because people are dumping millions a day into gold?  I don't know.  I think we can still grow for a very long time though.

Well if I am just please post why without conjecture. I'm telling you that this money must come in from somewhere, whether it's miners, speculators, new adopters, whatever. If I'm wrong I'm very open to be enlightened, this is just my understanding.

Yes, it is, because miners have costs they need to pay for, and they're going to sell their gold to pay those bills. (Disregard this if you aren't referring to the price of gold).

Two problems I see with this:
1. You assumed ~65% profitability for miners.
2. You gave the amount required to sustain this in USD/day, when the real amount would be denominated in multiple currencies.

Yeah sorry, meant to say the literal metal (XAU).  It's sitting at a "low" of $1,500+ an oz.  Who's to say BTC couldn't reach that and level off?

I assumed 65% because that's what I've been told is currently the profit margin, which leaves roughly 35% as cost. USD is an example, price it in whatever you want it doesn't change the underlying principle. Inflation is still real and needs to be addressed with new inflow or value will go down.

Uh if you think $240K isn't possible well our tiny company does about 20% of that on a slow day (and >100% of that on our best days) honestly without really trying. Yes that is cold hard fiat being used to buy BTC (not day trading buy a direct conversion of fiat for BTC).

So via TC, LLC $50K fiat inflows .... entire balance of all other exchanges, brokers, service providers, plus all OTC traders <$190K?  I doubt it.

I'm not sure what you mean. Your "tiny" company nets $48,000/day?

The assumption that was made about the new miner calculation which wasn't brought up, but is probably the most important, is that the miners will choose to sell all of their bitcoins. Most miners I know keep the vast majority of their mined coins within the Bitcoin economy and only sell enough to break even with electricity costs.

If they keep it, they're investing their USD by covering their electrical expenditures out of pocket. It's still inflow (35% as I said above).

No but that has nothing to do with the price of tea in China.  The point is that $240K in USD (or other fiat equivelent) being injected into BTC economy is nothing, a rounding error.  If the exchange rate falls it will have nothing to do with not enough new money coming in to keep up with new BTC printing.

Bitcoin's rocket engines are blowing out huge balls of fire.

What? You brought it up why are you now suggesting it's meaningless? Why say you net $48,000 USD when you don't? And yes, that inflationary pressure is real and gets even more real the higher the price per BTC goes.

He said he facilitates 48k in volume, not that they profit that amount.

I don't know what he does but how does he know it's new money?

Depending on your business, 48k in volume is nothing.

That is what I was trying to say earlier, though I must not have been clear enough.

Well if that's true and there is $1.68million of new money coming in per week, nothing to worry about then. If I could be more thoroughly convinced of that I'd be bullish, too.

Actually, mining profitability is of no consequence. The costs that are poured into mining are new money too. So, actually, at $192/BTC,  $619200 of net new money must be inserted in the BTC economy. Whether that is a small or a large sum depends on what you compare it with.

edit: and by "new money" I mean "new value".

Well they're assuming they are hoarding their profit in BTC, and liquidating what's necessary to pay the bills. So in that sense I think profit margin would matter. I do believe miners aren't selling off right now, not more than they need to cover costs. I don't believe they're investing USD and hoarding BTC.

Maybe we can't predict the burst because all it takes is a coincidence: few large bears/hoarders decide it's time to cash-out in the same minute.

By hoarding they're forgoing the opportunity to sell, which is equivalent to spending the current market value.

Things will get worse before they get worse. Don't panic sell, if the price has peaked, you will get plenty of time to sell, just don't get too greedy and look to sell at the top.

If the price crashes any time this month, I really don't see it staying low for long (assuming no fundamental changes to bitcoin).

The amount of media coverage lately is crazy, a crash would only bring more. A lot of new people are either waiting to get money in, or they feel it's too late for them to buy. If the price drops a significant amount, it could be seen as a second chance.

We also know that bitcoin is capable of recovering from a bubble now, which probably wasn't as certain during the last one.

it's not going to blow

http://i47.tinypic.com/359io1l.png

It looks like there are large nets set up to catch selloffs (and buyups.) The highest volume days seem to result in screw all price movement, while the lower volume days are the ones that cause moves. Tis a strange economy.

Thats because these are the days that the bears committed seppuku by trying to cause a panic, but the bulls were just too strong. Then once they were out of the way, the bulls kept on and the bears had to catch up. The cycle has repeated over and over again just making the rate of increase stronger.

When the unicorns come.

I hope it will blow pretty soon because I am then ready to buy some bitcoins to play this big game too. I am too late and if the things go down hill, then I start to take care about some bitcoins to drive them up hill. You are right.  ;D

img18.imageshack.us/img18/5691/difftoprice.jpg

Blaming the mythical bear conspiracy for keeping the price down, now... I bet you'll be blaming them and imploring everyone to STOP SELLING! IF WE JUST STOP SELLING! on the way down, too... where have I seen this before?

Theres nothing mythical about it. There are plenty of people around here who readily admit that they sold their coins at 13 (and other prices) anticipating a drop.

Hehe, I remember that vividly. "MINERS DETERMINE THE PRICE JUST STOP SELLING" was the tune alright.

That's a far cry from "trying to cause a panic" and "the bulls were just too strong." That sounds like some garbage the Norks would say about America.

Anticipating a drop and trying to create a drop are nearly the same thing, just depends on your level of aggression and willingness to do market orders vs. limit orders. Maybe you are new around here and dont remember what it was like after the price fell from 16, but there were very itchy sell fingers who were burned.

Correction coming fairly soon I think. We're close to a line of resistance on a same trend that goes back to the 2011 bubble.

From another thread but this is how I feel about this thread!!

The only "stupidy tax" being paid will be those that didn't go all in and have since sold. I saw the potential and went all in at $27. So far the best decision of my life! And why do people not get that you can not compare Bitcoin to anything that has ever existed. The most similar thing you could compare it to would be the adoption rate for the Internet, Google or Facebook.

History will be written like this: First there was the Internet which gave people the freedom to share knowledge, then Google organized the internet so others could quickly find it, then Facebook connected people on an daily basis within their entire social network and finally Bitcoin freed people financially from the rule of corrupt banksters!

I can see the future 60 minutes/ Dateline interview title. "Alarming suicide rate amongst early adopters of Bitcoin that sold too early." I am seeing a lot of negative "you are all stupid" for not selling posts. Obviously people are bitter that they sold too early. Do yourself a favor and buy back in while you still can. ..... ok I am done venting now :)

bitter. lol. I am already no lose. If it goes to the moon I still have some, if it crashes to zero I am already thousands of dollars up.

Understanding risk is key to financial health. Right now you seem to think "ALL IN !!!1111one" is viable strategy. Good luck.

Bitter. lol.

+1

Patriot missiles were deployed around Tokyo today, so an international coordinated military operation will blow Gox if the bubble doesn't burst by itself!

Approaching my next sell order at $240, part of me wants to pull it because it might go higher.

THEN I PUNCH MYSELF IN THE FACE FOR BEING STUPID

140 000 $ is what mtgox has made today with that 0.6% fee. (23m$ volume)

so it's even less possible,,, it would need 242k$ + 140k$ ... /sarcasm/

Out of curiosity, can you share how you got to this number? Not trolling or criticising, to the contrary I'm genuinely interested in knowing more about this.

3600 BTC are currently minted every day. Hardware and electrical costs need to be paid, so a portion of that 3600 will be introduced into the market and sold at whatever they can get so they can pay their bills. If we assumed 50% of those 3600 were to be sold off, right now selling 1800 at the highest bids would bring the value to around $225/BTC. To keep it at $230.80/coin, $415,440 in new money/value would need to enter the market.

Edit: Sorry misread your post. Not sure why you're being sarcastic I believe that's a valid concern.

Why sarcastic ? because miners are hoarding at the tune of ~90% and new money comming in is many million per days, not all of those 24 million $ in trade are pure inter exchange trade,,, at least 50% of it is new money, yes that's a number between 250 000$ and 12 000 000$

Yes if they are hoarding they are part of the new money. But they still have bills to pay, so they can only be "new money" for as long as they have some outside source of income to pay the bills generated by mining.

In terms of you suggesting 50% of 24 million in volume is new money, how do you know this to be true?

On that 50% calculations can be made taking into account the line of 10000+ people waiting AML verification, the size of the spread time the number of cycles,

Any trade made within a 2.30$ range is a loosing one.

I haven't really made any real calculation but I would bet my number of ~10m$ for 1000 news bitcoins are closer to reality than the 230 000 for 2350 bitcoins (65%) I was replying to.

Where did you get that number 50%? I suggest 2.71828 %, a very nice number, you are free to use it in your calculations.

I'll repeat: Hoarded vs. sold does not matter from opportunity cost perspective, and any other perspective is misguided.

Frankly, I think the (BTC monetary) inflation rate is so low compared to all other factors that it does not really influence the price. It's only about 20% yearly.

And, did you have plenty of time at the top? ;)

This current rally is based on very small volumes. The trend seems to be for low volume rallies and high volume crashes. I can't really make head nor tail of it.

We can't ignore the usual speculative rise, crash, rise, big crash format that tends to play out.

I'm not sure why people keep saying the volume is so low. Is it not at similar levels to March?

It influences it greatly because of the fact that a large part of it (50%) must pass trough exchanges.

It might seem low because we are still close to the top of the bubble, so your perceptions are distorted.

Here in Canada, Virtex does have low volume today.  For example, if you want to sell, the price is 157$, but if you want to sell 5BTC, it goes down to 149$, and there's pretty much nothing until 145$... http://bitcoincharts.com/markets/virtexCAD.html

So, it's not incentive to buy at high price.  If it start "crashing", then you're stuck watching the price fall or lose a lot selling.

It will blow this week.