Bitcoin Forum

I was just wondering what the reason behind the recent decline was? It's gone from £89 to £63.50. Does anyone know?

Could be many things. BTC is still volatile to individual events and the market is still a bit nervy IMHO.

I think it's prudent to not worry too much about short term prices. I haven't invested any more than I'm willing to lose and with such a good potential upside, I'm pretty relaxed about it. In the least a small stake is still being part of change. I think it is interesting to follow all the developments - who knows where it will go?

How come you only have one post but know so much about BTC? Forgive me but I'm always a bit wary to listen of listening to people with that low post count.

I bet the percentage of BTC users ative on this forum is rather small. And you can create multiple accounts here and sell them.

Probably because I'm a new user.

It is all my opinion, as IMHO signifies.

You can do whatever you want with your BTC, I just gave you my reasoning.

These are my impressions about BTC. I like to read and form my own opinions, however idealistic or naive they turn out to be:)

I think the two main reasons are that quite some ways to get money into Bitcoin from the USA have been stopped (+some Fincen news that they discuss Bitcoin) and someone with a lot of Btc decided to dump them into the market.

Other than that we had good news only.

I've been a miner since around 2010, you don't need to be active or have an account at all on bitcointalk to know something about BTC.

Well, this is my first and only account.

But thanks for the suspicion.

It's all just words on a screen. Take them all with a pinch of salt.

Agreed, I agree one of the major causes would be  Bitcoin from the USA has been stopped. USA were the biggest buyers/sellers

It's not stopped, but it's more limited than before.
It would be good if they get some more good exchanges/ways to send money to them soon.

Sorry tabnloz, don't know what's got into me lately.

Just my take on this...

Selling is constant. Miners have to sell on a daily or weekly basis to earn fiat to cover their real world costs (electricity, rent, food)

Buying comes in waves. People learn about bitcoin, and get involved in bitcoin, and buy bitcoins, in non-linear time frames. Events and news usually cause these buying spikes, as we saw with the Cyprus events from earlier this year.

It looks like we are in a quiet buying period combined with a constant selling cycle.

Just my two bits...

Tips if you found this info informative or entertaining.  1DQGTLJxiKnvRaYizpRo1Cy4hcHa4HqKqo

You are awesome.

Good analysis.

It's been getting harder to get BTC in and out of the network recently, especially stateside.

I would guess its the total lack of news about mtgoxs problems in the US.
I mean i wouldnt send any money to mtgox at the moment and im sure others are thinking the same.

Check out the historical chart at http://bitcoin.clarkmoody.com/ (put the time frame on D1).  Aside from the parabolic run up into the USD 200's, the level of 100 seems to be, for now, a new baseline valuation.

When markets don't know what things are fundamentally worth, they tend to trade around "round numbers."  Currently 1BTC = 1 Barrel of oil, approximately.

Better start advertising Bitcoin to you're friends & family ;)

Can't believe you were put down for this post. I agree 100% with both points. The system is definitely volatile right now and will likely remain so until media attention starts to plateau. As for short-term prices, that follows the volatility and BTC is just like anything else: only invest what you can afford to lose.

hmmm interesting...not saying that 1 btc should equate to a barrel of oil, but would like to see the cost of mining one btc compared to the cost of drilling for one barrel of oil.

of course the costs of mining one btc cannot be broken down like that and the costs of producing one barrel of oil cannot actually be determined what with all the government intervention in oil markets...but it would be a good thought experiment nonetheless.

Seriously, it's likely coincidental.  Arguably thye major forces holding oil in the USD 80 - 100 trading range are, on the top, the effect that $4 gasoline has on US demand, forming a cap, and on the bottom, the cost of US fracked oil, which will shut in below the production costs, in the 80s, forming a floor.

Most likely, IMO, the BTC trading range is formed by USD 100 as the floor, and EUR 100 (USD130 +/-) as the cap.

You mean basically seeing which one is more profitable? I've got to think that oil would be, just because while the barrel of oil may be $100 or whatever, the cost once it's been refined has a much higher profit margin.

I don't think a currency's exchange rate can be meaningfully compared to the price of a commodity.  The barrel of oil has defined value as the derived products' utility is consumed.  But a USD/BTC rate of $100 doesn't imply that a BTC provides or "produces" USD 100 of goods or services.

mmm, I see what you mean. The concept of virtual vs. actual, or the fact that while oil has a true usability (in that it runs vehicles and such) BTC has an inferred value, in that it is only useful for trade.

Exactly.  And in BTC's case, since it doesn' have the power of a sovereign behind it (which can cram down a currency on people by decree) the exchange rate has a element of risk still ("can I use it where I need to buy?" "how are others defining the exchange rate?" "will it be declared illegal by my government?" on and on.)

Hence, huge volatility. 

@galahad: low post count is artificial, some of us have lurked for a long time and only participate glancingly with the forum but read through from time to time.

I don't like newbie jail, but i dont like spammers either, so posting to threads I go, solving that very problem for my own account.

The analysis above was spot on, media cycle is down so miners that sell immediately are putting downward pressure on price. But tons more miner capacity is coming online soon, as we are in a paradigm shift going on right now in the migration to ASIC based mining equipment. So those who both mine and sell will likely fluctuate quite a bit in the upcoming timeframe. Get ready for volatility.

I also saw this and wondered why bitcoins lost so much value in a day or two.

It will bounce back. It always has. BTC is still fairly new in terms of mass adoption so it's finding its place.

It's all good.....stimulated a bit of debate anyway.

It may be coincidental but BFL has started shipping increasing difficulty even more. Maybe miners who don't want to move into asics or alt coins are selling their coins forcing price down.

+1 I think the lack of ways for Americans to buy bitcoins is really slowing things in the short term. 

It's coincidental. The opposite is what should happen under normal circumstances (supply goes down and can't meet demand, so price goes up).

The mining supply of Bitcoins is constant as difficulty compensates for increase in network hashrate.

My thought was that miners who can't / don't want to continue mining because of asics are getting out while the price is high. They are selling, increasing the supply of bitcoins forcing price down. Or maybe just general uncertainty of what's going to happen when all the asics come online.

The supply, in the general sense, is constant. However those with the highest hash rates are undoubtedly holding on to their coins. It's the people with lesser hash rates that usually spend theirs. This means that more coins are ending up being held by a small subset of people, lowering the supply to everyone else. In a sense, you can view it as the "1%" situation.

I agree with that. However in the short term the price dropping means somebody or some group of people suddenly decided to unload a substantial amount of Bitcoin. Assuming that this is not some large holder dumping a bunch of coins to purposely lower price isn't it feasible that the BFL asics shipping triggered some sort of sell off from existing GPU miners who were just hanging on until asics shipped?

It was only a passing thought as I've, and I'm sure most of us, have been following BFL for a while now and they've only started shipping in quantities in the last 2-3 weeks.

Mmm, this is a really hard one. While that is definitely a possibility, another idea I saw the other day (that I think is likely more plausible) is that it has to do with the recouping of funds used to purchase the asics. People have had their money out of their pocket for a year or more with absolutely nothing to show for it, so this could be their way of trying to get financially back up again.

Also, keep in mind that something we see (at least in games, but I think it should apply here?) is that if one person drops their price, by say 10%, someone else will as well. It turns into people undercutting each other, lowering the prices until someone (or a group) manages to buy the wall back up again.

I absolutely agree. We should totally expect bc to be extremely volatile. Since we are so much at an investors stage and not yet at a currency stage it could easily fluctuate rapidly as normal panic/greed cycles go through their paces. Once it becomes more of an actual currency (accepted by a substantial number of businesses) the fluctuations will level out a bit.

Another thought experiment scenario.  What would happen if a significant proportion of the daily mined BTC (closer to 4000 than 3600 right now due to gaming the difference between difficulty and hash rate) were to be garnered by venture capitalists who really have no interest in holding BTC rather than USD, EUR, or JPY? 

YiFu mentioned the chance of this happening last month, the appearance of the Winkies in BTC suggests it, and, face it, there's a lot of Silicon Valley based VC's for whom the development of a simple task ASIC isn't a huge, new challenge.

If this were to happen, theoretically the price would start plummeting. This is UNLESS people were buying it up as fast as it was being put on the market (I'm thinking that wouldn't happen though). There is another side-effect of this, though, which is that the prices dropping like that causes panic and makes other people sell, driving the price down more (some won't do it out of panic, but to buy back at the lower price).

So what we would experience is a drop (in your scenario a pretty large one I think), followed by a slow incline.

That's what I think, too.  Which is why I think this period of time (the coming of the ASIC's) is the moment of truth for BTC.  If there was one mistake made in design, it was in choosing a crypto algorithm that was "too easy" in the sense of chip processes.

Keep in mind though that BTC is over 4 years old. So it's taken 4 years to get ASIC's and such created. I think in the next few years Scrypt will also be ASIC'd.

Panic when there is a large sell causes significant flash crashes, where prices drop rapidly in 30 mins. It takes longer generally for the price to head back up.

In the long, it will as businesses and infrastructure develop.

One person mentioned earlier that the drops also happen on the weekend (especially on Sundays) due to no bank's being open. And I heard a rumor that a few big players like to move the market on the weekends by selling a ton of bitcoins and buying them back up. I can't confirm this. Simply things I've heard around the block.

the price is still going low.

This is actually an interesting theory. It makes sense as well... though I think there's a somewhat large element of risk there. When you do a mass sell to get the price down to re-buy, you are hoping that others will also sell theirs. If they don't, you lose.