Bitcoin Forum

In recent days and months, the dollar exchange rate for a bitcoin has been dropping.  As I write, it's gently bounced off today's low of $325/bitcoin.  Ouch.

I have a theory why.

Soon, two bitcoin commodity ETFs will be approved, COIN and BIT.  There is nothing any ETF sponsor would love more than to have their new ETF be immediately profitable.  But how do you affect that?

To do that, they would need to manipulate the bitcoin price lower so it has room to grow fast in the first few months of operation.  And how would they manipulate it lower?  One way would be to discretely dump bitcoins.  To do that, you have to have a lot of bitcoins.  As it happens, COIN is sponsored by the Winkelvoss twins who claimed at one point to own 1% of all bitcoins yet mined.  That's a lot.

So there you have it.  The bitcoin price may be being manipulated low pending the approval of one of the new bitcoin ETFs, after which it will shoot upward.

You've been warned.  Get 'em while they're cheap!

I agree with you.
Time to buy bitcoin now

Very interesting theory.. do you have an wallet address(es) linked to the Winklevoss to back this up?

Though even if 1% of the BTC were dumped, that'd be $50 million, we've been getting volumes per day higher than this.  True that they only need to dump enough so that others will panic and dump themselves.. but I'm not sure I buy it.

Plus don't they still need a large number of BTC to back the ETF funds?

Everyone has their "reason"

The only thing that matters is if you are buying thanks to the "manipulation" or selling thanks to the "manipulation"

It is likely that we will never know why, therefore I just buy.

Will BIT and COIN be traded on exchange soon?  When will that be?

they will be traded on my stock exchange at https://BitSpeculate.com .. we already offer a Bitcoin hedge fund AND a cryptocurrency hedge fund

Yeah? And how are they going to manipulate a market they are yet not participating?

I highly doubt thats the reason OP....


There hasnt been news on ETF's in months now... at least that Ive seen. Correct me if Im wrong.

I think its panic sellers & megamines dumping which Im fine with. Once we hit around $200 many miners, small time, medium farms & small farms will start powering down their crap. Once that happens its lower diffs for all of us. Expect this to happen even moreso once we hit sub $200 down to $100, it will be glorious.
Asic production will come to a halt & manufacturers will have dried up substantially under $100 ... the way it should be.

Bitcoin has a long road ahead of it at this point. The foundation is still being laid for adoption & general use.
The way I see it, we are just finished w/ the .com bubble of Bitcoin, now begins the true growth which is longer but more mature.

That is, unless USD completely implodes on itself in the next year taking out other major world currencies with it, then Bitcoin will easily hit the moon for that reason alone.
But, I have a feeling USD will take another 10 years, at least, before it reaches that.

So, heres to keeping the faith in Bitcoin alive as we enter its next era of true innovation 'beneath the radar' of press & hype and all this bullshit weve seen this year.

BitSpeculate?  Interesting.

Actually, ETFs BIT and COIN will be available from any stock broker.  Schwab, Fidelity, Ameritrade, Scottrade, etc.  The point is to allow pedestrians to get the benefit of bitcoin's volatility without having a CoinBase, BTCe or other account.  They'll not only be able to buy bitcoins as shares, but also sell short and buy and sell options.


There doesn't need to be news.  It's all in motion--they're just waiting on the SEC to shuffle papers.  But while they wait, don't you think they're at least tempted to dump a little?

Interesting theory about the miner panic.


That's a different topic, but I don't think it will take 10 years.  Six years at most, but probably next year.  I recommend a fascinating book on that topic: The Death of the Dollar (http://www.amazon.com/dp/1591846706/).

I totally agree with you. this price scarcity is completely planned.so how the Bitcoin community counter it,that's the question. Well for most of us,the answer is simple,we buy in or preserve our Bitcoin and when the price pick up, we sell. My question is,"IS THAT GOOD FOR BITCOIN COMMUNITY? "

GenTarkin.... great post.  Although I hope its the megamines that shut off all their inefficient shit and just run with all the new stuff.  The smalltime miners will keep running at a loss (I mine with about 5 th/s, I'll absorb the power costs until the blockchain explodes if I have to).

I think a lot of small time miners feel the same.  Whats an extra $30-200 on their bimonthly power bill anyway?  Unless the amount of bitcoin I mine is equal to peanuts, I'm going to keep running even if it costs me more in power.  I hope people with similar amounts of hashing power feel the same.  People running full nodes and mining on small pools and p2pools have a desire for a healthy market.  I hope they endure.  I will.

This topic, like the trillions of others posted in the non-Speculation subforums, is why the price of bitcoin is dropping. Fuck's sake.

When it comes to market, there is no such thing as manipulation.

Big players can get price to go up or down since they have a great deal of money, but this shouldn't be considered price manipulation.

Makes sense. Any other supporting facts to backup your prediction? If that's the case we should see a rebound pretty soon. The only thing I doubt is that btc market cap is too huge to be manipulated

Not necessarily. You can already sell bitcoins without even having a single satoshi. To do that you can use margin deposits and leverage - 1:2, 1:5 or 1:10. In other words you can place $10K in one such exchange and sell bitcoins worth $100K without having a single satoshi. If you meet somebody on the street that tries to sell you something they don't have undoubtedly you'll call them crooks and swindlers, but in the nowadays "regulated" financial world such crooks and swindlers are blessed as "liquidity providers"...

Another way of doing the same is by using the newly (hastily) licensed bitcoin swap exchanges like TerraExchange. You swap your dollars for bitcoins for a certain period at predetermined exchange rates. But why would you want to have bitcoins for 6 or 12 months instead of dollars? The only reason is to sell them hoping to buy them back with a profit when time comes to pay them back. But make no mistake, the final result of such swaps (profit or loss) is always cleared in $.

This is nothing new. Such price suppression schemes are applied to gold, silver, oil for a long long time. What happens if price doesn't want to go lower? You simply increase the leverage or margin collateral! That is why the leverage in the derivatives portfolio of big banks is currently at record levels! What happens if increasing leverage and margin collateral still doesn't work and you make a loss? Well, Fed or ECB or BOE or whatever central bank print additional money only for you at zero interest rate or even at negative (ECB). They are the too-big-to-fail guys and their cronies. For them bitcoin price is just a joke to play with...

you guys are forming opinions without even looking at volume levels or order histories,

most of the exchanges are playing with bots with multiple orders of just 0.011btc (under $4) & 0.0212 and a wall order usually around 200 coins max.
(these order amounts have not changed in a few weeks, its the same couple 'players' that are messing with prices)

the mega mines and whales are not even touching the crappy exchanges.(the majority is sold directly and privately)

hardly any coin is actually related to a proper bank deposit/withdrawal, its simple shrimp and small fish playing around with numbers on a website, not trading to enter or exit btc/fiat.

will you sheeple stop valuing bitcoins 13milion coin cap based on mysql database movements of 200 coins. when ETF's open, with their requirements to keep accurate accounting and transparency, you will see true value indicators return, but right now localbitcoins due to it being direct real fiat for bitcoin trading is the closest thing.

and lastly if your going to trade on localbitcoins, trade on numbers based on cost of mining, and based on the average price demand of localbitcoins. DO NOT continue to be sheeple and follow the exchanges.

its literally turning into mtgox december-january where little to none deposits or withdrawals were occuring and people soon learned to ignore mtgox when it tanked to $100 whilst everyone else was trading at $450-$650

@ topic:

i agree with you that i would buy bitcoin now.

but i dont think the market is down for that reason dude. the 2 ETFs are launching in 6-20 months maybe. alot of time.


@franky1

good point

Thanks for the tip KenJackson. Will order that book now.

So what would counter this?

Price manipulation like this, is hurting new Bitcoin business innovators now, for the temporary gain of a few profits on exchanges.

Satoshi got fed up with banks and financial institutions doing this, and he/they/she created the bitcoin protocol to counter them, now they doing the same with bitcoin on these exchanges.

How FU is that?

1. stop giving a damned crap about the crappy exchange prices
2. only trade on localbitcoins based on your costs and demand (never sell at a loss)
3. DONT base your localbitcoin valuations on the exchange movements
4. STOP GIVING A DAMNED CRAP ABOUT CRAPPY EXCHANGES
5. if you have coins on crappy exchanges NEVER EVER EVER SELL AT A LOSS.
6. if you have coins on an exchange GET THEM OUT

they may seem like repeats of the same points. but thats becaus the solution is easy, but still requires explaining multiple times to get into peoples heads.

if your trading for profit then play with the bitcoin/altcoins leave the btc/fiat for the people wanting real bitcoin/real fiat.


i know, and thats why we should be ignoring crappy exchanges. the only true value trading is on private swaps, bitcoin-otc and localbitcoins. where proper real bitcoins are swapped for real bank account amounts.. no mysql database involvement to manipulate

Well, if we ignore exchanges, and they only use exchanges to determine the price, posted on webpages, we would be shooting ourselves in the foot.

These exchanges promote their services VERY well, and are normally the first thing people look for when they want to buy bitcoin.

When you want to buy BTC you know nothing about these other sites, you simply know about an exchange, because it's being used in fiat everywhere.

So it's a familiar concept. If I tell people to go buy privately from some stranger, they will laugh at me, the same for some unknown site, they have never seen before, that are selling BTC for a higher price, that are on offer from exchanges.

BUT I see what you saying. They should promote the BETTER options other than exchanges better IMO.

But the localbitcoins dont have much different prices. The people prices are updated there much slower, but they follow the exchange prices with some delay

well then carry on being sheep, and follow crappy exchanges. just dont complain about it

lol no...
simply, no..

large majority of people on localbitcoins are not selling at a loss. and for the couple people putting in stupidly low orders because they are sheep following an exchange. they deserve the losses they are making

Well, I will look more into this, just to increase my knowledge.

franky1 - Calm down man, not all of us, are clued up with every method to do things in bitcoins.

I used a private before, and got burned. I Also used localbitcoin and nearly got scammed. {Trust system was pushed by the guys friends and fake accounts}

So it's not a straight forward alternative to exchanges, when you still new, like I was then.

Thanks for you inputs, it help to have people give as many opinions and sharing experience to help other people and the community.

People will never understand this!!! It will take them around another 10 years to understand that they make the price and not bots :)

im calm. and most of the time im laughing at the people panicking over the price. its just when i read 10 topics of no one knowing why the price is dropping, they themselves keep trading.. without knowledge of the whole market experience. its these people that need educating to ensure they dont make rash decisions.

as for localbitcoins... 'escrow' is the key word and helps protect people alot. never trade without escrow.

when people were panic selling at $400 last week i was happily trading at $500+ amounts and buyers were happily buying from me and other whales. but it seems that the uninformed (sheeple) were continually feeding the crappy exchanges without realising their own actions were causing their own losses.

to me the exchanges are just drama, with actors working with scripts (bots).

its just a damned shame the AMLKYC flags and limits cause so much headache as id love to deposit a large amount of fiat right now. but im happy playing the localbitcoin and other private markets instead.

Not everybody has a substantial mining set-up. If what you say about the prices on the exchanges being artificially low is true, then that presents an opportunity for the "minnows" to grab cheap coins.

I have even tried to start the paper work with FINTRAC so that I can register as a MSB here in Canada (the Canadian regulations do not appear to have the $1000/day exemption the US regulations do). If successful, I may buy low on the exchange, then sell slightly higher at locabitcoins. I have to be cautions, because, if I try it without informing my bank, they will probably close my account (when setting it up, I estimated 1-2 Bitcoin transactions per month, not 20-30).

http://www.fintrac-canafe.gc.ca/publications/typologies/2010-07-eng.asp#f10
http://www.fintrac-canafe.gc.ca/publications/typologies/2010-07-eng.asp#f11


i have found that no matter what country or regulations.. exchanges misinterpret the rules and add in their own limits for their(exchanges) internal policy handbooks.

i have seen some exchanges make report/ have flags for amounts exceeding $800 in one month, simply because multiplying it by 12 brings them to the yearly limit of $10k.

other flags such as trying to do $799. at the last day of one month and $799 at the first day of the next hits other flags.
the problem is not necessarily the AMLKYC rules themselves as there is nothing illegal about doing over $10k, as long as the customer explains why and its recorded.

but exchanges dont want the hassle thus they simply cut people off.

i and many other whales would love to throw larger amounts at exchanges, if only exchanges were rational..
for me, exchanges are like mtgox in january.. simply playing with mysql databases..

after all this time last year when mtgox was working properly it was doing 150-170k volume, right now mtgox's competitor of last year (btc-e) is doing les than 20k volume. and of that 20k very little is a result of actual bank account movements

Every time I try to purchase BTC privately I get refereed to some exchange and than taxed a 40 dollar fee over the top. I'm no whale so that is a lot when I'm buying BTC on a budget.  I've been lurking here and don't have much to add because I am still rather new to BTC.

But why would I buy privately if I'm still getting exchange prices? And risk getting scammed. Even if there is an escrow, who knows? All it takes is one guy wanting to screw over the next. I'll just continue to do as I've done and buy from the exchange myself. After all I'm not trying to stay anonymous.

Is bitstamp considered a "crappy exchange"? I've been buying all my BTC their.

All I'm saying is, exchanges are the tool that make BTC available to the public and help it grow as an actual currency. Isn't this what we all want? Not everyone knows miners they can get wholesale coins from. Not everyone is well connected with the BTC community to just purchase privately. I am a perfect example of this.

Excuse me if I said anything foolish, I'm still rather new. But maybe a perspective from someone that is just coming into this might help. As for me, I'm buying and holding. What's one less night out when I could buy BTC cheap and watch is make me profit.

thats cool. buyers are ok using exchanges, and if your a little fish, its the recommended method. but sellers wit over 30bitcoins would find localbitcoins better.

i personally would love to throw in many 10's of thousands to buy in at exchanges.. and its got nothing to do with anonymity. just crappy monetary flat limits.
all im saying is right now if you have bitcoin, keep them away from exchanges. but if you have fiat and fit inside their little fish criteria. carry on

What is ETA for these funds?

The volume is such that no one person can "manipulate" the price. Even the Winklevoss twins cannot afford $10 million per day, every day, for last six months.

The number of coin in circulation is limited.

Just need enough money to scoop up all the coins from mining plus a little extra to pump the price higher.

it only takes 200 coins to make the price spike or drop $75 difference..

not 200k, not 2million coins... just 200 coins.. which is $60k.

it might be worth you check order history and current live order values.. take btc-e.com.. LOADS of orders of 0.011btc..

the 3600 coin generation or the 13million market cap have no relevance on the crappy exchanges, estimates are that of the 3600 generated a day, only 600 end up being sold.. and of them 600 very little of that is sold on exchanges,

Bitcoins are fungible, just like gold and oil.

The exchanges this morning are selling bitcoins for not much more than a paltry $300, but if you are selling them locally for $400, you're ripping off the buyer.  Similarly, if you continue to sell for $400 when the exchange price jumps up to $500, you're a fool.

The bitcoin someone buys locally is exactly equal in value and acceptability to the bitcoin he buys on an exchange.  That's what fungible means.

Did you get anyone to actually believe your nonsense? why would localbitcoin trade at a difference price? everywhere I see, the localbitcoin price pretty much follows the exchange price. Because if localbitcoin trade at a different price, buyers would just go buy on a exchange, instead of paying 25% more to buy at your imagined localbitcoin price. Also if your localbitcoin price of $400 is true, then sellers would just buy at exchange at $310, and go back to local and sell at $400, which will soon equalize the price difference due to the arbitrage. Therefore, it's impossible for localbitcoin to maintain a price 25% more than exchange price.

Yes. And veteran sellers hedge their entire operation when selling on lbc and they could care less if the price drop to 0.

if buyers want to buy bitcoins on an exchange, they can...
but instead of making new posts wondering why the drop, try reading the other threads of the same topic, there are atleast 6-10 of them. you will see why.
then do your own research to add more weight to what you learn..
and then test the new theory (as i have done)

then you will see that trying to get more than 30 coins in and out of an exchange is a headache. let alone 3600. so atleast realise why people prefer localbitcoins and will pay extra for it.

just like gold. if you want to travel to the klondike or africa to buy gold from a miner at wholesale go ahead. or if you prefer to buy it at a pawn shop once they add on their costs and spot price.. try that too..

now you try selling gold to a pawn shop, and/or buying gold at a pawn shop and notice the difference.

if none of you can be bothered to look at the details and research why the prices are being manipulated, how thy are being manipulated.. then you really shouldnt be blindly trusting crappy exchanges as your price bases.

My intuition says it's much simpler than that.

It's been evident for the past year or so that Bitcoin is going to be adopted by businesses as a payment method. As services like Coinbase and Bit-Pay began to mature, others who agreed with that statement bought Bitcoin as a speculative investment, thereby driving up the price.

As it shot up through the hundreds of dollars, we had a bubble. People piled on, and the price shot up to USD 1,200 practically overnight. The slight distrubance, and *pop* - the bubble burst, and the price came tumbling down.

It stabilized around 600 USD, and stayed there for a long time. Months went by, and it became clear that the majority of people who were invested short-term had already dumped their coins - but still, the downward trend continued.

Basically, as merchants began to implement Bitcoin as a payment method, some portion of the people using it were using coins that were previously not on the open market - coins they had mined, or had saved for some time. Those coins were sold on the open market immediately when they were spent to merchants, thereby exerting a negative price pressure. This is the source of the months-long slight downward trend in the USD/BTC price.

When we broke 500 USD on the way down, people panicked a bit and sold. Others saw it as an opportunity and bought, causing a nice little bounce. Still, the trend continued and we got down to USD 350. People panicked again, and we dropped to USD 300 in a heartbeat. As I write this, Coinbase is reporting a buy price of USD 307.

At this point, I believe USDBTC should be at about USD 375 - it's currently about 20% undervalued. I also believe that the USD 300 line is a psychological barrier, and once its broken many people are going to lose confidence and try to get out - or they won't buy, which is effectively the same thing. I wouldn't be surprised to see USD 200 Bitcoins within a month. I also wouldn't be surprised to see USD 700 Bitcoins within a month. It all depends on what the public at large is thinking, and no one has any real way to anticipating that.

Either way, the longer-term downward trend will continue as long as Bitcoin continues to be adopted by merchants, unless there comes a new wave of adoption where people are more interested in "buy and hold" than "buy and spend". This might be a financial crisis in a country with a modern economy (a'la Cyprus), it might be war, it might be the high-profile success of crypto ETFs... I don't know. I do believe that such an event will occur eventually, and Bitcoin price will not bottom out due to merchant sell pressure.

I stand by my previous judgement that Bitcoin will be the foundation of the future world economy. Given the limited number of coins available and in circulation, if my prediction comes true then the price must rise by several orders of magnitude in order to support the volume of transactions that would require.

I've bought Bitcoin as low as USD 0.8, and as high as USD 1170. I'm buying Bitcoin now at USD 307, and I'll be buying it at whatever market price happens to be tomorrow, so long as the fundamental nature of the currency remains unchanged.

Only HAlf agree .

The top 100 addresses shows , the wealth are stilling buying bitcoins , so it's not likely Winklevoss twins are dumping , unless they have many small addresses.
http://btc.ondn.net/topamount

What i agree it's the price is now highly manipulated by exchanges . From bitcoinica to mtgox , the exchanges wont stop disturbing bitcoin market .

In 5 minutes dropped for 20 USD. Coindesk shows 288.

I personally think that it's mostly because of the recent merchant adoption, and rather than holding the coins they receive they're selling them at a lower price, creating this downward trend in price, which also leads to people selling their Bitcoins, leading to a further downward spiral.

I got an email saying this thread was moved to speculation.  Why? 

We're not speculating on the future.  We're discussing two bitcoin commodity ETFs and their possible affect on the price of bitcoin. 

Price of Bitcoin is going ebb n flow..

It is not smart of wvinklevoss to sell their coins if their goal is to own 1%. given that, just because the price is falling, it is not like supply at the exchanges is huge. As long as you can match buyers and sellers at whatever moment those 2 parties are attempting to trade, then boom you have a trade. Perhaps at lower prices, random small fish instead of big whales, will stock up and when the wvinklevoss and other big whales step up, the supply is virtually nonexistent, either causing a massive flash rally, or the guys do their best to slowly run the price up in hopes that a rising price will bring bitcoin holders back into the market to sell. And then the big whales could in theory stock up, but right now, in the entire world, the dollar is looking better than it was a few years ago... If only marginally so.

Time is the test. I sold all remaining coins earlier this week at around 385.  Glad i did so, now if i want to I can almost double up the amount of bitcoin I own.

However I am such a small player, holding 5-10 coins does me little. At these prices, if I want to jump back in, it would be very easy for me to do so in a minutes notice.

Start a business you fools. The value MIGHT be owning a business that creates cash flow, and then running it smart.