Bitcoin Forum

Why did the value of 1 BTC fall from ~1100 USD in December to ~450 now? I can understand volatility for a couple 100 dollars even, but the value has almost halved. Is this due to the Mt. Gox hacking? 

A fall from $1100 was pretty much guaranteed considering the insane speed at which the price rose to get there. There's tons of discussion about why the price fell to where it is now, but the main factors that are often cited are the MtGox fiasco, as well as all the uncertainty coming from China.

It's really impossible to tie down exactly why a price fell. Some people probably lost confidence and tried to cash out into USD, enough people do this with a high enough amount of coins, and the prices sinks. What motivated all of them isn't really possible to determine.

Those are more speculations IMO, but I believe reasons are clear:
1. Mt.Gox
2. Other exchanges suffers attacks
3. Charlie S.
4. Then it was not bad :) until
5. ITS
6. China (maybe yes/maybe no)

but all of those means nothing ;) Bitcoin is not 1 year old project and it is very strong even with all of those issues there are plenty of good news too.

IRS, Mt Gox, PBOC, Google, masses got distracted...


http://www.thebitcoinchannel.com/

https://www.youtube.com/user/BitcoinChannel

So is this a good time to buy some bitcoins?

Satoshi went public with Bitcoin in 2009... I've been registered on bitcointalk since 2011. Not sure where you got the idea it was not yet 1 year old...

Back to the OP's question, this is Bitstamp's price chart for "all data" from Bitcoincharts - you can see than in April 2013 price went from over USD200 to under USD100 - and going further back similar falls occur with surprising regularity.

Edit: http://bitcoincharts.com/charts/bitstampUSD#tgSza1gWMAzm1g20za2gWMAzm2g1920zl (http://bitcoincharts.com/charts/bitstampUSD#tgSza1gWMAzm1g20za2gWMAzm2g1920zl) (Oops!)

I'm not saying MtGox et al didn't play their part, just that we tend to overemphasise the role of news. MtGox, for example, didn't come as the big surprise many people think it did - people had been expecting MtGox to screw up for some time, and that would have been reflected in the price long before February 2014.

There are several reasons. Mt.Gox fall is strongly influenced that

Ridiculous speculative frenzy

I bought some the other day on the way down to 450.

Long-term, most people are still bullish. I'm expecting some modest gains in time for summer myself.

You misunderstood :-) I told that indeed bitcoin is much older than 1 year and this is why problems from science last few months means nothing as bitcoin is much older and stronger in same time ...

Chinese melodrama, Gox, IRS, hackers... shaken trust in cryptos in general. Bit it will recover. Slowly.

Crypto looks like a playground, thats why. People arent interested in innovation now, only money making

Is it possible to short bitcoin?

You can short BTC at Bitfinex: https://www.bitfinex.com/pages/features (https://www.bitfinex.com/pages/features). Other exchanges, maybe!

The two go hand-in-hand

Bitcoin being young and all on a journey of sell discovery is going through bubble phases due to increased global interest and investment and will continue to behave this way as long as interest and investment continues to flow it's way

However when it reaches a certain threshold, where adoption has reached a far and wide audience growth will slow and bubbles will be less frequest or non existant. We're still pretty early, pretty risky too since failure is also a high probability.

Bitcoin is still fragile in terms of the ecosystem, so when a government takes a stance, or something happens to a prominent company in the space, it can easily affect the price. Large markets work the same way.

Thats the reason I like to study crowd behavior / crowd psychology ... from Gustave Le Bon to Jacob Moreno ... btw if you interrested on that subject I strongly recomend a book called Understanding Social Networks, Charles Kadushin isbn 978-0-19-537946-7

 I think that' both aspects caused this - the situation with MtGox and the high speed at which the price rose to 1100 USD! It was al in one time

it's bad time mate, we just need to wait and keep our btc.

The real reason that the price went does down is STUPIDITY!

People were panicking and selling coins like idiots.

I think you have your answer now ;)

Edit: Fixed that :)

I can agree with that with no problem :)
But this is how it all works over the market ....

:) this is what is making a price lower or higher. People :)

It fell down so much because of speculation. It will hit normal price at some point and slowly go up from there on.

this, it's pretty obviously :) stop selling and keep buying!

Prices for all the main crypto currencies are going down after a December peak.  I would say give it another month (or two) and see if they are still going down.  That is my plan.  Another couple of months falling and they will probably be back where they started. 

It is the poor saps who brought at $1000 I feel sorry for.  ;)

a good time to buy bitcoins is when you need to use them to buy something!

My guess would be -

Talks of regulations, fear of government intervention, and investors who just want to cash out..

And don't forget, just like stock market, price is bounded to be manipulated by whales

 ;D

Haha, as if someone can explain the whimsical fancies of humanity. Economics tries hard and the theory works to an extent - but when working with humanity somethings are just completely illogical. I'd say the fall is just fear cramping demand from people simply out there speculating on the price (plus people's expectation that negative news will drop the price so they sell out and hence drop the price - ie self fulfilling prophecy). There is going to be a crapload more volatility before we see anything closely resembling stability.

time to get coins cheap  ;D

This is first day from many many many days where I am telling to people: wait one more day before you buy :D

Simple answer:  It's a bubble

More detail?

Its a technology in the same way like the world-wide-web, its not air that’s being sold here;

As a tech its more comparable to torrents than the WWW.  Anyways WWW is not a priced commodity so don't make the fallacy of comparison. 

Just look at the price since thats what you are trading.  Its a bubble.  I can show you charts of lots of bubbles and they all have a resemblance

show me

A resemblance to this? http://bitcoincharts.com/charts/bitstampUSD#tgSza1gWMAzm1g20za2gWMAzm2g1920zl (http://bitcoincharts.com/charts/bitstampUSD#tgSza1gWMAzm1g20za2gWMAzm2g1920zl)

I think it went to fast upwards. A correction was needed i think. It will go up again, but nut so fast as the second half of last year. That's what i think.

Its all speculation  , someone spreads rumour , boom , prices fall .

It's been one blow after the other: GOX, Silk Road, Silk Road 2, China 1.0, Russia, China 2.0, Blockchain problems etc. etc. But it's still worth more than 10 times what it was worth this time last year

Just have some patience,stop selling your bitcoin,buy if you can,i think this is the best thing to do now!

yeah I bought some at 560 USD thinking to myself -  ;D what a bargain  ;D, but now I see I could have waited a little longer...

But the thing is, no matter what you buy there is never the perfect moment, there are always ups and downs ahead....

Indeed. You bought at 560$ and it was VERY good price! As you know we already had ~800$ so do not worry about, that you could wait till tomorrow ... and buy then... this is not working like that.

There always are going to be like that with ups and downs

And EVERY moment in your life is a great moment to buy BTC!

And people should understand a thing that I understand well!

Bitcoin is not an investment! Bitcoin is a currency! -crypto currency to be precise.

You should buy bitcoins and use bitcoins! :) and then - you do not really care a lot about a price - like I do..

Was, not every thing dies after a pop.  See house prices in America.

I really do not like when people are saying that Bitcoin is/was a bubble.

Bitcoin is indeed a crazy thing! I must say! :) A digital currency that isn't manufactured by common money sources but it is mined by a computers ... this is like crazy isn't ...

A bubble ... A bitcoin is a bitcoin! BTC ♥ BTC

speculations about is it a bubble or not ... uhm we can say Internet was a bubble, Amazon was a bubble, google was a bubble,

I am  not a pro economist but a bubble is what 99% of altcoins are showing to us.

Bitcoin is not a bubble that you can pop and it will die.

Value of BTC will change, but soon or later it will land on the moon. If it will not - I do not care - I will use bitcoin anyway :)

A lot of people rushed into Bitcoin with hindsight when the price over 500USD,they have no idea about bitcoin, they just saw the wealth story .But when their investment have loss, they will also hesitate to cut the loss off.
Exchange and government are also key factors for the price falling.

If you have faith in Bitcoin, then do the following:

1. Buy as many bitcoins as you bought earlier, for $420 now. The average purchase price becomes $490.
2. Place a sell order for 50% of your coins for $495. Now you will get a profit, and you can keep the coins as well.

People panicking over everything and selling it, not experienced traders that put last money in BTC. Price goes down a bit all get scared and start selling like maniacs...that's all

Also market is small, you don't need a lot to take price down, someone comes with 10kBTC for sale  and price would go down a lot

Don't want to mention fake news from China

:) right, the 5$ per BTC profit sounds great....

However this is one the best moments to buy as much BTC, LTC as you can.

When BTC was over 1000 $ I kept saying, ok, when it goes down bellow 500 then I buy.
Some of my friends ridiculed me but it is there now, so stop hesitate , sell everything and commence the purchasing frenzy :)

...and do no freak out when it drops bellow 200$, cause we all know, that the moon is the final destination.... one nice sunny day far in the future ...  ;D ;D

Every time i bought some btc the price went down, but i think just keep buying is not the badest idea.
Not too much at all but permantly buying because i guess the price can also fall down to 200$.

 Sometimes in life you feel the fight is over,
 And it seems as though the writings on the wall,
 Superstar you finally made it,
 But once your picture becomes tainted,
 It's like they call,
 The rise and fall

:) price is going up, I am sure it will fall little bit too, and later for sure it will rise even more ;)

Welcome in the world of Bitcoin.

If you bought and sold a lot of bitcoin last year, then you know EXACTLY why bitcoin price has been falling and staying low the past 2 weeks and why today it is finally rising.  Anyone who has a lot of bitcoin relative to their income and net worth are going to have to sell bitcoin in order to pay taxes, and it is retro-active for past years.  If they're listening to half-educated professionals saying to use FIFO method (first-in first-out) instead of a weighted average of all their bought and sold trades....then they really messed themselves up.   Imagine someone unemployed or retired and bought 200 coins last year at $200 each, a "typical" $40k trade for a lot of the guys who are serious about bitcoin and keep silent.  The people posting here are more like $4k traders.  Then they sold last year at $1000 each because they are not stupid.  Then they bought back at $800 because they are not stupid.  So now they own $50k in taxes in addition to losing about $5k in deductions and credits, if they used FIFO instead of the averaging method for their trades.  Using the average method, they would owe only $10k in taxes (and their cost basis for the future is lower, so the tax burden is shifted to future years).   The reason for being allowed to choose between FIFO and average is just for cases like this: FIFO can be incredibly unfair if your trades are causing large swings in your adjusted gross income.

So if you want to know why bitcoin is falling, it's because large bitcoin holders are using FIFO instead of average method for their taxes.  Give it another month and it might be about $800, and still people will keep posting these threads, not understanding the tax consequences.

http://i.space.com/images/i/000/022/711/i02/shuttle-xing-los-angeles.jpg?1350054018

make sure you will be on a board :)

It is nice to read this topic today "Re: Why did bitcoin value fall?"

Last month will became a legend in a future of a Bitcoin. :)

There are few factors one of them are mtgox, china policy ect...

so basically you are saying, that there are few people with a cristall ball, who know exactly, where the price will be at a given time and than they sell and buy to avoid(optimize) taxing....

The taxing issue is very new and mostly for US citizens who, according to some are not the major holders (unlike China, Japan) so I doubt it is about taxes now.

It is still the echo of the bloody Gox and the chineese uncertainty, as many said before.

No, I just gave an example where a lot of people were buying and selling last year, especially if they had a lot of bitcoin, and that they now owe a lot of tax if they use FIFO instead of weighted average trade, and therefore may need to sell BTC to pay taxes.  If they had the same crystal ball as me, then they would not be selling before April 15.  Sure, Gox and China has an effect, but those effects were strong as it happened, and yet uncharacteristically the price is staying low, and dropping lower even as Gox became old-news (more than a week). It's been 7 weeks since Gox imploded and the low from that was $500...then it rose to $700 before the official confirmation of China's position.  This latest news did not even seem like news to me.  It seemed like everyone was expecting it.  

It dropped to $350 just 5 days before checks to IRS are in the mail and is now rising up to $500, 5 days later as it is now too late to be cashing out and trying to get money in the bank before the IRS cashes your checks.  Big dummies. They shouldn't be using FIFO and not need to sell bitcoin to pay taxes.  Admit it.  I know some of you reading this have done just that, and now you have to watch it go back up to $800 in a month, double what you used to pay taxes, so instead of 28% tax rate you actually paid 56% tax rate.  Long-term trend for bitcoin is $800 as of today.

Basically it is still too volatile. It shot up way too fast and then when people stopped buying so hard the price started to insta-tank. I think honestly even without gox this would have happened. There comes a certain point where more and more people start to believe that it can't keep going up forever and decide to wait. Also some people can't fathom buying something at 1000+ that was like a tenth of that a few months ago so they will wait until it "goes back down to $100."

Yea I'm gonna go with the band news from Gox and the way the handled that whole fiasco.  Also the Wave of Hacks and news surrounding China made prople uneasy.

Boy... did you bought the coins as I told you?

I bought as much as my financial situation allowed me :)