Bitcoin Forum

This infographic of bitcoin's price is something I've been pondering today.

It tells bitcoin's often dramatic price story in fundamental trend lines that abstract away some serious doses of speculative activity.


There's a lot in this chart, so lets break it down:

    In late 2015 through to May 2016, we saw a three cats and a moon consolidation pattern play out over six months after a multi-level marketing (MMM) pyramid scheme took bitcoin price action through some exciting times.
    By early June 2016, we saw a speculative bubble (marked in green above) as the market sought to price in the upcoming block reward halving event. This was to be the second halving event, slashing payout and therefore the supply of new bitcoins from 25 BTC every 10 minutes to… well, exactly half to 12.5 BTC.
    Leading up to this, many people were afraid miners would exit (taking their protective hashing power with them), and that the block processing would slow and the price could crash. This did not happen. What happened was simply that the markets saw less sell-side pressure from miners who had fewer newly minted coins to sell. (The blue trend shows the steeper rate of price appreciation this had on the markets.)
    Finally, what we may be seeing from Q4 2016 to present is the market undergoing a much larger and longer speculative phase for the upcoming bitcoin ETF decision. If approved, hundreds of millions at a minimum are expected to be poured into bitcoin. Understandably, the blue-shaded area in our infographic would then be drawn out.

Current market speculation

Needham and Company published a report early this year estimating that an ETF approval was likely below 25%. However, at the time of writing, the newly released BitMex EFT prediction market is expecting a 33% chance. We've seen speculative bitcoin pricing in the range of $1,050-$1,150 and success probabilities of 25% to 33%, figures that are in line with a $500m-$1bn capital injection from ETFs. In such a scenario, we would see bitcoin's market cap swell to $20bn-28bn.

This made me laugh reading it.


I hope and wish Needham and Company really know what they are talking about and getting into. They should visit this forum more and see what is really happening with Bitcoin. We had spammers attacking the network causing more than 50,000 unconfirmed transactions twice this week and more the past few weeks. We have scalability problems and more problems on how to solve it. We have an experimental payment system with Bitcoin but the people outside of it treats it like digital gold. So amusing.

the amount it is predicting price will rise because of possible ETF approval is too small in my opinion. at this point the approval can potentially be one of those big good news that creates a huge hype and then leads to a  rally.

$300million added to the current value would be a small single digit increase. But the price will go much higher, more like 30% then there will be a huge correction. This is only assuming the ETF takes off of course.

$300Mn inflow into bitcoin won't result in a $300Mn increase in market cap/value. :)
When an ETF decides to buy $300Mn worth of bitcoins, due to lack of adequate market depth, the price could shoot up. This would result in the market cap going up by billions of dollars.

I think maybe ETC ETF will come first

Very true. In some ways, the ETF might expose Bitcoin's problems to the mainstream media and cause irreparable harm.

$300Mn inflow into bitcoin won't result in a $300Mn increase in market cap/value. :)
When an ETF decides to buy $300Mn worth of bitcoins, due to lack of adequate market depth, the price could shoot up. This would result in the market cap going up by billions of dollars.

http://www.coindesk.com/charts-etf-approval-impact-bitcoins-price/



There is a lot more in this article - I highly recommend people click and read it

I really can't see the ETF happening. Just my opinion and can't really back this up with anything.


It just doesn't seem like the right time. I'm usually bullish but I expect a large drop come March the 11th when everyone realises it's not happening.

Too much hype on this.

Edit.

Winkle lawyer says ETF unlikely. Well that says it all to me.
I hope I am wrong.

you both got it wrong.

if $300 million buy bitcoin within a few days it would raise the price way more than single digit. currently it needs $400k to raise the price $20 on bitstamp. multiply that by 10 for the ten biggest exchanges (=$4 mio) and the price would rise $20 on 10 biggest exchanges.

$40 mio injection would equal a $200 rise
$400 mio injection would equal a $2000 rise.


after a $2000 rise btc would be at a $3000 level. if one btc is traded at $3000 the current market cap would equal approx. 48 billion.

that is only considering the ten biggest exchanges. i am not sure how many exchanges are needed to really raise the price. my guess is that they would just follow.

Nice calculations, I just realize that it needs $400k to rise the price $20, if Bitcoin ETF get approval, we know what will happen when $300 million to enter the market.
Many investors may come and join in bitcoin investment, to store their wealth, but we know that ETF approval probabilities may less than 33% or 25%, so I do not expect it's going to be happen.

The race to launch a bitcoin exchange-traded fund for retail investors became a three-way competition.

According to Paul Vigna at The Wall Street Journal, Grayscale Investments, a firm run by technology entrepreneur Barry Silbert, filed with the SEC to list its Bitcoin Investment Trust (GBTC) on the New York Stock Exchange.

Grayscale joins two other groups seeking approval for their bitcoin ETFs. Winklevoss Capital, the firm operated by Cameron and Tyler Winklevoss, is awaiting an SEC decision on its filing, which is expected by March. SolidX is also seeking SEC approval for its bitcoin ETF, which also would be listed on the NYSE.

As the newspaper reports:

    The move by Grayscale Investments, a unit of Mr. Silbert’s Digital Currency Group, could expand the audience for the fledgling virtual currency if the fund is approved by the SEC. It also could prove an early test for how an SEC run by a Donald Trump appointee will greet innovations that may raise investor protection or other market-structure issues.

    …The benefits of being first on a major exchange could be big, assuming that bitcoin does manage to establish itself as a viable asset class. The SPDR Gold Shares ETF launched in Nov. 18, 2004, and has $31 billion in assets. The iShares Gold Trust ETF launched on Jan. 21, 2005, and has $7.7 billion in assets. Gold, a commodity not backed by any particular government, appeals to investors for some of the same reasons that bitcoin does.

I really can't see the ETF happening. Just my opinion and can't really back this up with anything.


It just doesn't seem like the right time. I'm usually bullish but I expect a large drop come March the 11th when everyone realises it's not happening.

Too much hype on this.

Edit.

Winkle lawyer says ETF unlikely. Well that says it all to me.
I hope I am wrong.

This.
And the fact it is taking so long suggests.... a problem.
If it were a hot commodity, it would have come out already.
The whole ETF smells of BS - why not just buy Bitcoin, cut the middleman out?
JMHO

because there are lots of institutional investors who are - by law - only allowed to invest in exchange traded assets. On top of this especially those investors happen to be very big investors with billions to invest. They cannot buy physical gold but they can buy gold etf. same with bitcoin: they cannot buy bitcoins directly - it is against the law.

Not to mention, any inflows of fiat directly into Bitcoin ETFs will go only to buying and selling of bitcoin (e.g. that investment/trade money would not be allowed to flow into BTC/altcoin pair trades).  So in theory, Bitcoin marketcap would pull away from other altcoins.