Bitcoin Forum

Economy => Speculation => Topic started by: bittenbob on December 11, 2011, 05:24:02 AM



Title: $3.20 in one big buy?
Post by: bittenbob on December 11, 2011, 05:24:02 AM
Just saw a massive buy rally up to 3.20 instantly which is the single biggest percentage rally i have seen in my times of watching MTGox yet. What does everyone figure is going on now and are we headed up or down?

I have to think someone with a lot of cash and coins might have just hit the buy button on an order instead of sell. I suppose we could be headed for a big rally up to 4 soon but this seems like more of a fluke to me and think we will be down towards 3 again soon.


Title: Re: $3.20 in one big buy?
Post by: tiberiandusk on December 11, 2011, 05:25:53 AM
Some cartel is funneling cash into bitcoin. I expect $25 by tomorrow. :P


Title: Re: $3.20 in one big buy?
Post by: phorensic on December 11, 2011, 05:28:53 AM
Volume is off the charts today.  It's been fun watching the big buys.


Title: Re: $3.20 in one big buy?
Post by: antoineph on December 11, 2011, 05:29:40 AM
It seems to me like someone just bought 11k coins at 10 cents higher than they might have been able to.. A bid wall was placed at 3.195 and it got ate pretty fast. I guess we'll see what happens next.


Title: Re: $3.20 in one big buy?
Post by: bittenbob on December 11, 2011, 05:33:03 AM
It seems to me like someone just bought 11k coins at 10 cents higher than they might have been able to.. A bid wall was placed at 3.195 and it got ate pretty fast. I guess we'll see what happens next.

Someone has 11k in coins i suspect they may not have wanted to actually buy. I think we can expect an hardened effort to continue raising the price. It is possible they are acquiring all these coins trying to trigger a bubble.


Title: Re: $3.20 in one big buy?
Post by: notme on December 11, 2011, 05:37:06 AM
The price may have moved a little more, but this surge to 3.20 was half the volume of the jump from 3-3.13 a few hours ago.


Title: Re: $3.20 in one big buy?
Post by: adamstgBit on December 11, 2011, 05:56:09 AM
It seems to me like someone just bought 11k coins at 10 cents higher than they might have been able to.. A bid wall was placed at 3.195 and it got ate pretty fast. I guess we'll see what happens next.

Someone has 11k in coins i suspect they may not have wanted to actually buy. I think we can expect an hardened effort to continue raising the price. It is possible they are acquiring all these coins trying to trigger a bubble.

the bubble will not form easily.


Title: Re: $3.20 in one big buy?
Post by: Andrew Bitcoiner on December 11, 2011, 06:18:05 AM
I believe I saw what was a 300k transaction on bitcoinuity.  The Manipulator has nothing else to do on a Saturday night.


Title: Re: $3.20 in one big buy?
Post by: old_engineer on December 11, 2011, 06:29:09 AM
It is possible they are acquiring all these coins trying to trigger a bubble.
Ah, that sounds like the capitalism I know: using money as a tool to make more money.

I guess the question is, at what point will they stop driving up the price, and start to sell to recoup their investment?


Title: Re: $3.20 in one big buy?
Post by: notme on December 11, 2011, 06:34:13 AM
now


Title: Re: $3.20 in one big buy?
Post by: antoineph on December 11, 2011, 06:38:36 AM
I wonder if the selloff has anything to do with the fact that mtgoxlive isn't working at the moment.


Title: Re: $3.20 in one big buy?
Post by: notme on December 11, 2011, 06:40:18 AM
I wonder if the selloff has anything to do with the fact that mtgoxlive isn't working at the moment.

I watched it fall, then mtgoxlive went out.


Title: Re: $3.20 in one big buy?
Post by: somestranger on December 11, 2011, 06:40:47 AM
Selloff was happening before mtgoxlive crashed. I saw it drop to 3.00 and then lost connection to mtgoxlive.


Title: Re: $3.20 in one big buy?
Post by: notme on December 11, 2011, 06:46:44 AM
And minutes later, we're right back to PI.


Title: Re: $3.20 in one big buy?
Post by: Sitarow on December 11, 2011, 06:48:07 AM
Ahem...

Get them while their hot! :)


Title: Re: $3.20 in one big buy?
Post by: Andrew Bitcoiner on December 11, 2011, 06:49:17 AM
Selloff was happening before mtgoxlive crashed. I saw it drop to 3.00 and then lost connection to mtgoxlive.

Note to self: DOS mtgoxlive via a few 20,000btc trades.


Title: Re: $3.20 in one big buy?
Post by: Andrew Bitcoiner on December 11, 2011, 06:50:56 AM
I'm now thinking the Manipulator is a couple guys on IRC who drink to much and mess with the market for shits and giggles.


Title: Re: $3.20 in one big buy?
Post by: bittenbob on December 11, 2011, 06:56:43 AM
I have noticed that virtually every time we have major market moves MTGoxlive goes down. Thankfully there are a few other sites that track mtgox in real time  so it doesnt hurt to have all of them running at once. I am not sure if it is a volume thing that is bringing mtgoxlive down but I dont think its a DOS attack. I am getting a 404 error which is new and a DOS attack would leave it unreachable.


Title: Re: $3.20 in one big buy?
Post by: RyNinDaCleM on December 11, 2011, 06:58:26 AM
I found it was responding fine...until I refreshed!   :(


Title: Re: $3.20 in one big buy?
Post by: notme on December 11, 2011, 06:58:49 AM
I think it's probably choking when it tries to send out 2000 orders over 250 different connections within 10 seconds.


Title: Re: $3.20 in one big buy?
Post by: ElectricMucus on December 11, 2011, 07:13:57 AM
buy prices up
wait for suckers to place orders before your bidwall
sell bitcoins
?????
profit


Title: Re: $3.20 in one big buy?
Post by: old_engineer on December 11, 2011, 07:15:29 AM
I think two big players (and wanna-be manipulators) are duking it out.


Title: Re: $3.20 in one big buy?
Post by: Andrew Bitcoiner on December 11, 2011, 07:17:07 AM
Yeah, and I think the one drop to 3.01 was clearly a mistaken low ask, he quickly bought it right back up, I knew I should of bought but I was greedy  ;D


Title: Re: $3.20 in one big buy?
Post by: RyNinDaCleM on December 11, 2011, 07:19:09 AM
I think two big players (and wanna-be manipulators) are duking it out.

So be it. I've been scavenging the table scraps. This is the best I've done in days.


Title: Re: $3.20 in one big buy?
Post by: fastandfurious on December 11, 2011, 08:38:25 AM
The problem is that if they would take the price up to let say 4 dollars, they will most likely lose even more money.

My thought is this, there is a cartel right now that really wants to get the price to high levels again, like 5-15 dollars, but they also understand economics, so they know that they are fighting a hard competitor, in this case the miners (with the high inflation environment). They have the resources to take it up, meaning they have the fiat money. But, the problem is that they are already heavily invested in Bitcoin and they have been burnt really bad with the downturn from 30 dollars to 2 dollars.

They have three options.

1. Hold what they have. And lets see what the market does. This option I think will take Bitcoin back to 2 dollars within 1-2 months.

2. Buy as crazy and fast as they can and push it up over 4 dollars hoping to get others to bid it up even more. This will fail, and the reason is exactly why it failed last time, after a while it will go back, maybe from 5 dollars or something like that, but it will get back to 2 dollars in the end, the miners will sell as crazy in to that rally and panic will come back.

3. This is the smartest option. Lets assume they have 300 000 Bitcoins in total them selves. What I would have done is to sell 1/3 of that (around two weeks of Bitcoins created by miners), why? Because at 2 dollars they will get rid of all the greedy miners plus they can then accumulated back their 100 000 bitcoins that they sold at much lower levels, like 1,5-2 dollars, and from there build the price up. They will be the big winners. In the other two options, they will go for the greedy option and fail.


As a summary all options will take Bitcoin price back to two dollars. The different is the dates this will happen. I have been 100 % right with all my predictions until today, so lets see what the markets does this time.


Title: Re: $3.20 in one big buy?
Post by: mp420 on December 11, 2011, 09:06:18 AM
I have been 100 % right with all my predictions until today, so lets see what the markets does this time.

Wow, you must be filthy rich by now.


Title: Re: $3.20 in one big buy?
Post by: fastandfurious on December 11, 2011, 09:07:40 AM
If they where real investors with an intelligent brain, their mission should be to accumulated as many bitcoins as possible for the more normal inflation environment that will come Dec 2012 (that can't get manipulated by the miners). Not give away money to the miners today. This shows me why they probably lost money in the first place, they are to greedy and don't get the whole picture.


Title: Re: $3.20 in one big buy?
Post by: fastandfurious on December 11, 2011, 09:22:49 AM
Before Bitcoinica was around, this is just one of my earlier posts written when the price was at 10 dollars in August.

"To the Bitcoin community, I want to short sell 3 000 bitcoins, and I will pay 5 % interest per month on the loan. I have my money in Mt.Gox that covers all the loan (hackers f*ck off nothing to get here, I have a Yubikey). I want to make this a secure deal for both parts. I know that there are people in here that don't want to sell, you can make money now.

5 % interest per month gives a annual rate at over 79 %. That is really good terms. I would like to be able to hold it for at least 2 months, and also have the option to close the position before hand.

If anyone is interested, tell me how we can do this in a secure way. Maybe I can contact Mt.Gox and they can take care of it. We really need the opportunity to short sell Bitcoins, it have many benefits, for example more liquidity, people can make money on their bitcoins if they don't want to sell."


Title: Re: $3.20 in one big buy?
Post by: fastandfurious on December 11, 2011, 09:37:21 AM
I have been 100 % right with all my predictions until today, so lets see what the markets does this time.

Wow, you must be filthy rich by now.

I am one of few that have made money on Bitcoin after the crash, not filthy rich on Bitcoins, but I haven't lost money.


Title: Re: $3.20 in one big buy?
Post by: notme on December 11, 2011, 09:41:39 AM
So fastandfurious, what's the market going to do from here?


Title: Re: $3.20 in one big buy?
Post by: Savior on December 11, 2011, 09:45:28 AM
Market reversing now, get out now, buy back at 2.9


Title: Re: $3.20 in one big buy?
Post by: notme on December 11, 2011, 09:48:58 AM
Market reversing now, get out now, buy back at 2.9

I see one more run up where we decide if it's a double top or we want to go further.  This dip to 3.17 has given a little breathing room before the decision will be played out.


Title: Re: $3.20 in one big buy?
Post by: fastandfurious on December 11, 2011, 09:55:45 AM
So fastandfurious, what's the market going to do from here?

Read post #25. My conclusion is that it will hit 2 dollars again. Depending on the way the market wants it, it will take less or more time. Before it was easier to see the patterns with Price and Time. Now it is very hard to see Time, but it is still possible to give a future accurate estimate for the Price.


Title: Re: $3.20 in one big buy?
Post by: ElectricMucus on December 11, 2011, 11:34:24 AM
This spike is almost finished get ready for the smackdown.


Title: Re: $3.20 in one big buy?
Post by: fastandfurious on December 11, 2011, 11:36:52 AM
One of the best ways to see a accurate interest right now is to look at google trends.

One picture with a lot of information:

http://www.google.com/trends?q=Bitcoin


Title: Re: $3.20 in one big buy?
Post by: Gabi on December 11, 2011, 12:47:29 PM
3.3 now


Title: Re: $3.20 in one big buy?
Post by: fastandfurious on December 11, 2011, 12:50:42 PM
A light version of option 2 is right now happening, lets see how much dumb money that will fall for this by holding their bitcoins at this levels or even buying. Miners will get very happy the nearest weeks.


Title: Re: $3.20 in one big buy?
Post by: cypherdoc on December 11, 2011, 12:52:14 PM
ramping.  another short squeeze in progress.


Title: Re: $3.20 in one big buy?
Post by: fastandfurious on December 11, 2011, 12:59:12 PM
Someone/the manipulator/the cartel is manipulating this market hard right now, the only way they will succeed is if they will get the dumb money with them is this rally. One big sell off from someone and they are down with their pants.

Big orders are replaced and put in, the bots don't know how to act. :)


Title: Re: $3.20 in one big buy?
Post by: cypherdoc on December 11, 2011, 01:03:05 PM
the liquidity spigots have been thrown wide open by 6 central banks at once this past week.  where is all this money going to go? 

answer:  Speculation


Title: Re: $3.20 in one big buy?
Post by: Technomage on December 11, 2011, 02:52:47 PM
My take on the analysis in this thread is that it's clueless. What we're seeing are further signs of a reversal and right now we are seeing more and more bear traps going off. A longer term reversal can only be called after we break $3.8 and $4 though but that happening will not cause a drop to $2 (a ridiculous idea) but it will in fact multiply the demand from the players who follow trends. And many do.

A drop to $2 in any near future is getting more and more unlikely at this point and if we pass $3.8 I'm willing to bet that it's not going to happen for a very long time at least. My own take on the situation is that it's only a matter of time when we don't see prices under $3 anymore. The buying opportunities at those prices are close to over. If not yet, then definitely soon.

The whole talk about manipulators playing games is irrelevant. What we are seeing is more and more small and big players changing back to a buying long strategy which will make any price crashes that much more difficult. Players with a long strategy are in no hurry to sell. Not going to sell at $3.5 and not going to sell at $4 either. Miners holding bitcoins are investors as well and not all of them are going to mass sell at $4, some of them are investing for long term because they see the possibility of further price increase.

Most fundamentals support the current market behaviour strongly. We are seeing a surge of activity in the Bitcoin community, everyone is doing something to improve Bitcoin. We've recently had the best media coverage in the history of Bitcoin. We obviously had much more media coverage during the summer, but a high percentage of that coverage was focused on the massive percentage gains in Bitcoin price. Now we're finally getting some coverage that is positive in some other way than as a speculation vehicle. And we've basically had no bad news which is one reason why the coverage has been so good.

One of the strongest fundamentals in my book, the transaction count, is looking more and more like it's making a reversal. Here is the chart for both raw values and 7 day average, look at it: http://blockchain.info/charts/n-transactions & http://blockchain.info/charts/n-transactions?showDataPoints=false&timespan=&daysAverageString=7&scale=0

Bottom line is that unless the transactions go back into decline mode, the price will not go back to decline mode either. And I have a really hard time seeing that happening, Bitcoin is the most important invention of 21st century so far. At this time it's hard for me to see how the usage of Bitcoin is going down, I see it going up tremendously during 2012.

The peak transaction counts for 2011 will be broken and the one thing I know for sure is that when that happens people will regret that they didn't buy more coins when we were at the bottom. Even I will regret it because I only have the guts to invest a relatively small amount of my wealth to bitcoins.


Title: Re: $3.20 in one big buy?
Post by: fastandfurious on December 11, 2011, 03:03:28 PM
My take on the analysis in this thread is that it's clueless. What we're seeing are further signs of a reversal and right now we are seeing more and more bear traps going off. A longer term reversal can only be called after we break $3.8 and $4 though but that happening will not cause a drop to $2 (a ridiculous idea) but it will in fact multiply the demand from the players who follow trends. And many do.

A drop to $2 in any near future is getting more and more unlikely at this point and if we pass $3.8 I'm willing to bet that it's not going to happen for a very long time at least. My own take on the situation is that it's only a matter of time when we don't see prices under $3 anymore. The buying opportunities at those prices are close to over. If not yet, then definitely soon.

The whole talk about manipulators playing games is irrelevant. What we are seeing is more and more small and big players changing back to a buying long strategy which will make any price crashes that much more difficult. Players with a long strategy are in no hurry to sell. Not going to sell at $3.5 and not going to sell at $4 either. Miners holding bitcoins are investors as well and not all of them are going to mass sell at $4, some of them are investing for long term because they see the possibility of further price increase.

Most fundamentals support the current market behaviour strongly. We are seeing a surge of activity in the Bitcoin community, everyone is doing something to improve Bitcoin. We've recently had the best media coverage in the history of Bitcoin. We obviously had much more media coverage during the summer, but a high percentage of that coverage was focused on the massive percentage gains in Bitcoin price. Now we're finally getting some coverage that is positive in some other way than as a speculation vehicle. And we've basically had no bad news which is a good sign as well.

One of the strongest fundamentals in my book, the transaction count, is looking more and more like it's making a complete reversal. Here is the chart for both raw values and 7 day average, look at it: http://blockchain.info/charts/n-transactions & http://blockchain.info/charts/n-transactions?showDataPoints=false&timespan=&daysAverageString=7&scale=0

Bottom line is that unless the transactions go back into decline mode, the price will not go back to decline mode either.

My guess is that you have been wrong with your predictions for the last 6 months. This is a beginners mistake of a bull trap.

So lets see who is right for the next three months, I think the price is much closer 2 dollars in 3 months, and from what you have been writing you don't believe that. The price today is at 3.34 dollars.


Title: Re: $3.20 in one big buy?
Post by: Technomage on December 11, 2011, 03:17:48 PM
My guess is that you have been wrong with your predictions for the last 6 months. This is a beginners mistake of a bull trap.
You are incorrect. I was wrong for a time which cost me some money but I basically got it all back during the decline from $8 to $2. During that time my understanding of the market has improved massively and ever since I've been right most of the time.

Quote
So lets see who is right for the next three months, I think the price is much closer 2 dollars in 3 months, and from what you have been writing you don't believe that. The price today is at 3.34 dollars.
I don't like calling prices for a specified timeframe, especially not now. Even if I'm seeing signs of a reversal, it's is only confirmed when we pass the $3.8 - $4 area. Before that happens I simply think going back to $2 is unlikely, not impossible. We could still be bouncing between $2 and $4 for a while longer.

But what I do believe in is that Bitcoin is here to stay which means that sooner or later, most likely sooner, the transaction counts start going up again and then prices below $3 are history. When this happens exactly is hard to say but both the price and the transaction counts are showing signs of a reversal. Signs are just signs though, it's the same as hearing rumors about something. We need more to confirm it.


Title: Re: $3.20 in one big buy?
Post by: fastandfurious on December 11, 2011, 03:29:21 PM
My guess is that you have been wrong with your predictions for the last 6 months. This is a beginners mistake of a bull trap.
You are incorrect. I was wrong for a time which cost me some money but I basically got it all back during the decline from $8 to $2. During that time my understanding of the market has improved massively and ever since I've been right most of the time.

Quote
So lets see who is right for the next three months, I think the price is much closer 2 dollars in 3 months, and from what you have been writing you don't believe that. The price today is at 3.34 dollars.
I don't like calling prices for a specified timeframe, especially not now. Even if I'm seeing signs of a reversal, it's is only confirmed when we pass the $3.8 - $4 area. Before that happens I simply think going back to $2 is unlikely, not impossible. We could still be bouncing between $2 and $4 for a while longer.

But what I do believe in is that Bitcoin is here to stay which means that sooner or later, most likely sooner, the transaction counts start going up again and then prices below $3 are history. When this happens exactly is hard to say but both the price and the transaction counts are showing signs of a reversal. Signs are just signs though, it's the same as hearing rumors about something. We need more to confirm it.

By saying "this is only confirmed when we pass the $3.8 - $4" shows me that you don't know what you are talking about, passing 4 dollars doesn't mean that it will will go higher. Fact. It means it could go higher as well as the way I see it, that it will go back to low 2 dollars. 3.34 x 7200 equals 24 000 USD. That is a pretty high number to sustain, then imagine that it will go to 5 dollars, that is over 35 000 USD that will need to go in to the Bitcoin Economy each day. Not possible with the fundamentals today. The reality is that this is most likely a bull trap.


Title: Re: $3.20 in one big buy?
Post by: ineededausername on December 11, 2011, 03:31:26 PM
After this enormous weekend rally, I can see $4 from my house!


Title: Re: $3.20 in one big buy?
Post by: cypherdoc on December 11, 2011, 03:38:06 PM
its been a while since i've looked at the level 2 but what strikes me now vs just a few months ago is the increase in liquidity we're seeing.  there are bids and asks at every penny up and down both books.  we didn't used to see this.

also the shape of the bid vs ask side is interesting.  whereas most of the high volume sells are stacked up close to the price, most of the bids are placed further back while the total bid value book is much higher than the asks.

what this means to me is if the bulls can crack those asks up to $3.50 there should be relatively clear sailing to $4 and probably beyond.

this is totally expected behavior at this point in the cycle with whats going on in the general economy as well as the bitcoin economy.  the bulls are back in business.


Title: Re: $3.20 in one big buy?
Post by: antoineph on December 11, 2011, 03:41:43 PM
I would just like to point out that the total bids to total asks ratio (in USD) since last night's rise has gone up.


Title: Re: $3.20 in one big buy?
Post by: Technomage on December 11, 2011, 03:43:37 PM
By saying "this is only confirmed when we pass the $3.8 - $4" shows me that you don't know what you are talking about, passing 4 dollars doesn't mean that it will will go higher. Fact. It means it could go higher as well as the way I see it, that it will go back to low 2 dollars. 3.34 x 7200 equals 24 000 USD. That is a pretty high number to sustain, then imagine that it will go to 5 dollars, that is over 35 000 USD that will need to go in to the Bitcoin Economy each day. Not possible with the fundamentals today. The reality is that this is most likely a bull trap.
This is nothing but flawed thinking. The "7200 x price" calculations are useless and don't mean anything. For mainly two reasons. First of all the inflating amount of bitcoins is not the same thing as the inflating amount of let's say, dollars. New bitcoins are created by users and many of them decide to save bitcoins instead of selling them. This makes a good portion of miners actually investors at the same time and the decisions they make are based on the same type of reasoning as they are for investors.

So if we can assume that more investors are starting to buy bitcoins using a long term strategy, there are a lot of miners doing the same as well. So the selling pressure the miners cause is also largely dependent on market psychology. The effect of new coins to the price is not a static "7200". It varies based on many factors and some of them are the same factors that cause an investor to either buy or sell.

Then there is the other reason which is simply the fact that Bitcoin is such a small currency, so dominated by speculation, that the inflationary properties have little effect in any case. The amount of volume that is caused by day traders, investors, speculators is so large that it makes even the maximum of 7200 per day seem quite a small amount.

It's the demand and the faith of all the players in the market that move the market. The same 7200 coins were created every day when we skyrocketed to $32. I admit that the new coins do cause some selling pressure but it's a minor issue. The key issue is market sentiment, this affects the price a hell of a lot more than the "issue" of 7200 coins created every day.


Title: Re: $3.20 in one big buy?
Post by: fastandfurious on December 11, 2011, 03:46:17 PM
its been a while since i've looked at the level 2 but what strikes me now vs just a few months ago is the increase in liquidity we're seeing.  there are bids and asks at every penny up and down both books.  we didn't used to see this.

also the shape of the bid vs ask side is interesting.  whereas most of the high volume sells are stacked up close to the price, most of the bids are placed further back while the total bid value book is much higher than the asks.

what this means to me is if the bulls can crack those asks up to $3.50 there should be relatively clear sailing to $4 and probably beyond.

this is totally expected behavior at this point in the cycle with whats going on in the general economy as well as the bitcoin economy.  the bulls are back in business.

Bulls are back in business because they work and think as a herd, they buy in when things goes at the right direction in the short term (all of them at the same time) and forget all about the long term fundamentals. Then they cry when the price after a while gets back to where the Bitcoin Economy is at right now with the high inflation environment. This bull periods can ONLY happen in a short term fashion.


Title: Re: $3.20 in one big buy?
Post by: dree12 on December 11, 2011, 03:50:15 PM
the bulls are back in business.
Bulls are back in business because they work and think as a herd, they buy in when things goes at the right direction in the short term (all of them at the same time) and forget all about the long term fundamentals. Then they cry when the price after a while gets back to where the Bitcoin Economy is at right now with the high inflation environment. This bull periods can ONLY happen in a short term fashion.
Bulls are always in business >:(.

Compare this rally to the one in May, or the drops to $2 recently. Which looks healthier? The May rally was quite obviously a bubble. The drops to $2 were unsustainable panics. This one is different: by my analysis we're going to $4 by January.


Title: Re: $3.20 in one big buy?
Post by: fastandfurious on December 11, 2011, 03:50:23 PM
By saying "this is only confirmed when we pass the $3.8 - $4" shows me that you don't know what you are talking about, passing 4 dollars doesn't mean that it will will go higher. Fact. It means it could go higher as well as the way I see it, that it will go back to low 2 dollars. 3.34 x 7200 equals 24 000 USD. That is a pretty high number to sustain, then imagine that it will go to 5 dollars, that is over 35 000 USD that will need to go in to the Bitcoin Economy each day. Not possible with the fundamentals today. The reality is that this is most likely a bull trap.
This is nothing but flawed thinking. The "7200 x price" calculations are useless and don't mean anything. For mainly two reasons. First of all the inflating amount of bitcoins is not the same thing as the inflating amount of let's say, dollars. New bitcoins are created by users and many of them decide to save bitcoins instead of selling them. This makes a good portion of miners actually investors at the same time and the decisions they make for selling bitcoins are exactly the same as they are for investors.

So if we can assume that more investors are starting to buy bitcoins using a long term strategy, there are a lot of miners doing the same as well. So the selling pressure the miners cause is also largely dependent on market psychology. The effect of new coins to the price is not a static "7200". It varies based on many factors and some of them are the same factors that cause an investor to either buy or sell.

Then there is the other reason which is simply the fact that Bitcoin is such a small currency, so dominated by speculation, that the inflationary properties have little effect in any case. The amount of volume that is caused by day traders, investors, speculators is so large that it makes even the maximum of 7200 per day seem quite a small amount.

It's the demand and the faith of all the players in the market that move the market. The same 7200 coins were created every day when we skyrocketed to $32. I admit that the new coins do cause some selling pressure but I it's a minor issue. The key issue is market sentiment, this affects the price a hell of a lot more than the "issue" of 7200 coins created every day.

The Bitcoin Economy cost some kind of effort, we can calculate it pretty easy in fiat money, in USD it is equal of 7200 x actual price / day. That is the fact long term, short term many things can happen. The miners pay for their bitcoins as well, it is a cost, same way it cost money for the fiat buyers. The Bitcoin Economy isn't that big today to handle a 4-5 dollar price with todays inflation rate. Maybe it can handle a 3 dollar price, but more likely it will go down to two dollars again.


Title: Re: $3.20 in one big buy?
Post by: cypherdoc on December 11, 2011, 03:53:46 PM
someone sounds like they're caught in a short position.


Title: Re: $3.20 in one big buy?
Post by: Technomage on December 11, 2011, 03:55:47 PM
The Bitcoin Economy cost some kind of effort, we can calculate it pretty easy in fiat money, in USD it is equal of 7200 x actual price / day. That is the fact long term, short term many things can happen. The miners pay for their bitcoins as well, it is a cost, same way it cost money for the fiat buyers. The Bitcoin Economy isn't that big today to handle a 4-5 dollar price with todays inflation rate. Maybe it can handle a 3 dollar price, but more likely it will go down to two dollars again.
The price the Bitcoin economy can handle based on real trade demand is for sure MUCH lower than the price we're currently at. A large percentage of the price is based on expectations. But this is how it always is, the speculative demand varies but it's never 0. To me the most healthy way for Bitcoin to grow is that the speculative demand doesn't skyrocket to totally unsustainable heights as it did when we bubbled and overshot massively. What I hope for is that the real economy grows causing real trade demand to grow. The speculative demand can stay well ahead and that's fine, but it's not sustainable if the difference between the two grow too large.


Title: Re: $3.20 in one big buy?
Post by: dree12 on December 11, 2011, 03:55:56 PM
That is a pretty high number to sustain, then imagine that it will go to 5 dollars, that is over 35 000 USD that will need to go in to the Bitcoin Economy each day. Not possible with the fundamentals today. The reality is that this is most likely a bull trap.
This is nothing but flawed thinking. The "7200 x price" calculations are useless and don't mean anything. For mainly two reasons. First of all the inflating amount of bitcoins is not the same thing as the inflating amount of let's say, dollars. New bitcoins are created by users and many of them decide to save bitcoins instead of selling them. This makes a good portion of miners actually investors at the same time and the decisions they make for selling bitcoins are exactly the same as they are for investors.

The Bitcoin Economy cost some kind of effort, we can calculate it pretty easy in fiat money, in USD it is equal of 7200 x actual price / day. That is the fact long term, short term many things can happen. The miners pay for their bitcoins as well, it is a cost, same way it cost money for the fiat buyers. The Bitcoin Economy isn't that big today to handle a 4-5 dollar price with todays inflation rate. Maybe it can handle a 3 dollar price, but more likely it will go down to two dollars again.
As supply increases and demand remains the same, the price will try to fall. That much is obvious. But there are two false assumptions there: 1) supply increases and 2) demand remains the same. Even if we do assume the 2) is true, 1) is still left unproven. In fact, going by your theory that the miners are selling their coins, supply should be remaining relatively constant.

What we might be looking at is an increase of demand because of speculation. And speculation is a good thing: it pushes the price up. The amount of Bitcoins minted each day is a constant until December 2012, and if we assume this is supply then demand only needs to stay constant for price to not go down. As speculation increases, demand will increase with it - fueling a bull market.


Title: Re: $3.20 in one big buy?
Post by: cypherdoc on December 11, 2011, 03:59:55 PM
The Bitcoin Economy cost some kind of effort, we can calculate it pretty easy in fiat money, in USD it is equal of 7200 x actual price / day. That is the fact long term, short term many things can happen. The miners pay for their bitcoins as well, it is a cost, same way it cost money for the fiat buyers. The Bitcoin Economy isn't that big today to handle a 4-5 dollar price with todays inflation rate. Maybe it can handle a 3 dollar price, but more likely it will go down to two dollars again.
What the economy can handle based on real trade demand is for sure MUCH less than the price we're currently at. A large percentage of the price is based on expectations. But this is how it always is, the speculative demand varies but it's never 0. To me the most healthy way for Bitcoin to grow is that the speculative demand doesn't skyrocket to totally unsustainable heights as it did when we bubbled and overshot massively. What I hope for is that the real economy grows causing real trade demand to grow. The speculative demand can stay well ahead and that's fine, but it's not sustainable if the difference between the two grow too large.

this is correct.

the point about the 7200 btc inflation is also.  the point is that its predictable with a known decline rate unlike the USD.  investors have calculated that rate into their models and expect a much higher price than what we have currently.  in this sense Bitcoin is acting like a stock which will have an increased value in the future.


Title: Re: $3.20 in one big buy?
Post by: fastandfurious on December 11, 2011, 04:05:29 PM
That is a pretty high number to sustain, then imagine that it will go to 5 dollars, that is over 35 000 USD that will need to go in to the Bitcoin Economy each day. Not possible with the fundamentals today. The reality is that this is most likely a bull trap.
This is nothing but flawed thinking. The "7200 x price" calculations are useless and don't mean anything. For mainly two reasons. First of all the inflating amount of bitcoins is not the same thing as the inflating amount of let's say, dollars. New bitcoins are created by users and many of them decide to save bitcoins instead of selling them. This makes a good portion of miners actually investors at the same time and the decisions they make for selling bitcoins are exactly the same as they are for investors.

The Bitcoin Economy cost some kind of effort, we can calculate it pretty easy in fiat money, in USD it is equal of 7200 x actual price / day. That is the fact long term, short term many things can happen. The miners pay for their bitcoins as well, it is a cost, same way it cost money for the fiat buyers. The Bitcoin Economy isn't that big today to handle a 4-5 dollar price with todays inflation rate. Maybe it can handle a 3 dollar price, but more likely it will go down to two dollars again.
As supply increases and demand remains the same, the price will try to fall. That much is obvious. But there are two false assumptions there: 1) supply increases and 2) demand remains the same. Even if we do assume the 2) is true, 1) is still left unproven. In fact, going by your theory that the miners are selling their coins, supply should be remaining relatively constant.

What we might be looking at is an increase of demand because of speculation. And speculation is a good thing: it pushes the price up. The amount of Bitcoins minted each day is a constant until December 2012, and if we assume this is supply then demand only needs to stay constant for price to not go down. As speculation increases, demand will increase with it - fueling a bull market.

Yes, but the price of one Bitcoin makes a lot more harder to sustain when it is at 5-6 dollars, sustaining high prices would have to give a lot of money/effort in some way to this Economy long term. Once again, because of the high inflation environment for every dollar the price is higher it will need to get around 2,6 million dollars in to the Economy in some way, let it be miners that keep their Bitcoins or fresh fiat buyers at the exchanges. This is a fact, short term people miss this fundamental fact and then cry ans ask why the price is once again down. Because of that every intelligent investor should know that and take advantage of that and don't get caught in the exaggerated bull thinking.


Title: Re: $3.20 in one big buy?
Post by: cypherdoc on December 11, 2011, 04:08:18 PM
That is a pretty high number to sustain, then imagine that it will go to 5 dollars, that is over 35 000 USD that will need to go in to the Bitcoin Economy each day. Not possible with the fundamentals today. The reality is that this is most likely a bull trap.
This is nothing but flawed thinking. The "7200 x price" calculations are useless and don't mean anything. For mainly two reasons. First of all the inflating amount of bitcoins is not the same thing as the inflating amount of let's say, dollars. New bitcoins are created by users and many of them decide to save bitcoins instead of selling them. This makes a good portion of miners actually investors at the same time and the decisions they make for selling bitcoins are exactly the same as they are for investors.

The Bitcoin Economy cost some kind of effort, we can calculate it pretty easy in fiat money, in USD it is equal of 7200 x actual price / day. That is the fact long term, short term many things can happen. The miners pay for their bitcoins as well, it is a cost, same way it cost money for the fiat buyers. The Bitcoin Economy isn't that big today to handle a 4-5 dollar price with todays inflation rate. Maybe it can handle a 3 dollar price, but more likely it will go down to two dollars again.
As supply increases and demand remains the same, the price will try to fall. That much is obvious. But there are two false assumptions there: 1) supply increases and 2) demand remains the same. Even if we do assume the 2) is true, 1) is still left unproven. In fact, going by your theory that the miners are selling their coins, supply should be remaining relatively constant.

What we might be looking at is an increase of demand because of speculation. And speculation is a good thing: it pushes the price up. The amount of Bitcoins minted each day is a constant until December 2012, and if we assume this is supply then demand only needs to stay constant for price to not go down. As speculation increases, demand will increase with it - fueling a bull market.

Yes, but the price of one Bitcoin makes a lot more harder to sustain when it is at 5-6 dollars, sustaining high prices would have to give a lot of money/effort in some way to this Economy long term. Once again, because of the high inflation environment for every dollar the price is higher it will need to get around 2,6 million dollars in to the Economy in some way, let it be miners that keep their Bitcoins or fresh fiat buyers at the exchanges. This is a fact, short term people miss this fundamental fact and then cry ans ask why the price is once again down. Because of that every intelligent investor should now that and take advantage of that and don't get caught in the exaggerated bull thinking.

by making the Economy argument you are totally dismissing speculation or investor demand. 

explain to me for instance why gold is at $1700?  there is zero economy wrapped around that.


Title: Re: $3.20 in one big buy?
Post by: dree12 on December 11, 2011, 04:12:35 PM
That is a pretty high number to sustain, then imagine that it will go to 5 dollars, that is over 35 000 USD that will need to go in to the Bitcoin Economy each day. Not possible with the fundamentals today. The reality is that this is most likely a bull trap.
This is nothing but flawed thinking.
The Bitcoin Economy cost some kind of effort, we can calculate it pretty easy in fiat money, in USD it is equal of 7200 x actual price / day.
As supply increases and demand remains the same, the price will try to fall. That much is obvious. But there are two false assumptions there: 1) supply increases and 2) demand remains the same. Even if we do assume the 2) is true, 1) is still left unproven. In fact, going by your theory that the miners are selling their coins, supply should be remaining relatively constant.
Yes, but the price of one Bitcoin makes a lot more harder to sustain when it is at 5-6 dollars, sustaining high prices would have to give a lot of money/effort in some way to this Economy long term. Once again, because of the high inflation environment for every dollar the price is higher it will need to get around 2,6 million dollars in to the Economy in some way, let it be miners that keep their Bitcoins or fresh fiat buyers at the exchanges. This is a fact, short term people miss this fundamental fact and then cry ans ask why the price is once again down. Because of that every intelligent investor should now that and take advantage of that and don't get caught in the exaggerated bull thinking.
Of course it is harder to sustain, but if the price can go up to $5-$6 it can sustain $5-$6 too. Consider the Austrailian dollar: as people who buy it usually sell it later, there is a giant amount of downwards pressure on it. But the price is sustaining itself not because it's used in Austrailia, but because the traders believe in its value. This is what cypherdoc and I mean by speculative demand.

Right now, the bulls are dominant and believe $4 is possible. And that entails that it is. It may happen in days, or it may happen in January, but I think it will at least happen before February. After that, dieing bullish sentiment will entail a correction - but for now, we are in a bull market.


Title: Re: $3.20 in one big buy?
Post by: fastandfurious on December 11, 2011, 04:24:51 PM
That is a pretty high number to sustain, then imagine that it will go to 5 dollars, that is over 35 000 USD that will need to go in to the Bitcoin Economy each day. Not possible with the fundamentals today. The reality is that this is most likely a bull trap.
This is nothing but flawed thinking. The "7200 x price" calculations are useless and don't mean anything. For mainly two reasons. First of all the inflating amount of bitcoins is not the same thing as the inflating amount of let's say, dollars. New bitcoins are created by users and many of them decide to save bitcoins instead of selling them. This makes a good portion of miners actually investors at the same time and the decisions they make for selling bitcoins are exactly the same as they are for investors.

The Bitcoin Economy cost some kind of effort, we can calculate it pretty easy in fiat money, in USD it is equal of 7200 x actual price / day. That is the fact long term, short term many things can happen. The miners pay for their bitcoins as well, it is a cost, same way it cost money for the fiat buyers. The Bitcoin Economy isn't that big today to handle a 4-5 dollar price with todays inflation rate. Maybe it can handle a 3 dollar price, but more likely it will go down to two dollars again.
As supply increases and demand remains the same, the price will try to fall. That much is obvious. But there are two false assumptions there: 1) supply increases and 2) demand remains the same. Even if we do assume the 2) is true, 1) is still left unproven. In fact, going by your theory that the miners are selling their coins, supply should be remaining relatively constant.

What we might be looking at is an increase of demand because of speculation. And speculation is a good thing: it pushes the price up. The amount of Bitcoins minted each day is a constant until December 2012, and if we assume this is supply then demand only needs to stay constant for price to not go down. As speculation increases, demand will increase with it - fueling a bull market.

Yes, but the price of one Bitcoin makes a lot more harder to sustain when it is at 5-6 dollars, sustaining high prices would have to give a lot of money/effort in some way to this Economy long term. Once again, because of the high inflation environment for every dollar the price is higher it will need to get around 2,6 million dollars in to the Economy in some way, let it be miners that keep their Bitcoins or fresh fiat buyers at the exchanges. This is a fact, short term people miss this fundamental fact and then cry ans ask why the price is once again down. Because of that every intelligent investor should now that and take advantage of that and don't get caught in the exaggerated bull thinking.

by making the Economy argument you are totally dismissing speculation or investor demand.  

explain to me for instance why gold is at $1700?  there is zero economy wrapped around that.

I thought more of you cypherdoc, now I understand why you are a super bull, you don't get the fundamentals. Gold is very special, why? Because the total amount of gold and the gold that is refined every year are very very different, the amount is something like 2 % a year that is added to total amount (supply) of gold, that is the reason new supply doesn't have a big impact. Bitcoin will be there some day as well, in like 6-7 years time. Today the inflation rate is around 30 %. If gold had a inflation rate of 30 % the price should have been at around the cost of creating it (plus a margin of a couple of %). Do you see the point now?


Title: Re: $3.20 in one big buy?
Post by: RodeoX on December 11, 2011, 04:30:45 PM
My amateur analysis is predicated on a correlation to recent media stories. As anecdotal evidence, two nights ago at a business related dinner I met a person who had already heard of bitcoin. My wife practically did a spit-take when he mentioned it. He saw an article by wired. Then again last night at a party I hosted, a friend says he read about somewhere. This morning I have another speaker request in my email.
There is a lot happening right now and despite organized attack, bitcoin is still standing. That has attracted new attention and changed the way bitcoin is portrayed. The old message was something like; "Bitcoins are a type of electronic Monopoly money used to buy hit men". Now the articles are more sensible and less sensational. They also tend to focus on contrasting it against the current state of the euro and dollar.

Congrats your all early adopters all over again. ;D


Title: Re: $3.20 in one big buy?
Post by: cypherdoc on December 11, 2011, 04:48:48 PM
That is a pretty high number to sustain, then imagine that it will go to 5 dollars, that is over 35 000 USD that will need to go in to the Bitcoin Economy each day. Not possible with the fundamentals today. The reality is that this is most likely a bull trap.
This is nothing but flawed thinking. The "7200 x price" calculations are useless and don't mean anything. For mainly two reasons. First of all the inflating amount of bitcoins is not the same thing as the inflating amount of let's say, dollars. New bitcoins are created by users and many of them decide to save bitcoins instead of selling them. This makes a good portion of miners actually investors at the same time and the decisions they make for selling bitcoins are exactly the same as they are for investors.

The Bitcoin Economy cost some kind of effort, we can calculate it pretty easy in fiat money, in USD it is equal of 7200 x actual price / day. That is the fact long term, short term many things can happen. The miners pay for their bitcoins as well, it is a cost, same way it cost money for the fiat buyers. The Bitcoin Economy isn't that big today to handle a 4-5 dollar price with todays inflation rate. Maybe it can handle a 3 dollar price, but more likely it will go down to two dollars again.
As supply increases and demand remains the same, the price will try to fall. That much is obvious. But there are two false assumptions there: 1) supply increases and 2) demand remains the same. Even if we do assume the 2) is true, 1) is still left unproven. In fact, going by your theory that the miners are selling their coins, supply should be remaining relatively constant.

What we might be looking at is an increase of demand because of speculation. And speculation is a good thing: it pushes the price up. The amount of Bitcoins minted each day is a constant until December 2012, and if we assume this is supply then demand only needs to stay constant for price to not go down. As speculation increases, demand will increase with it - fueling a bull market.

Yes, but the price of one Bitcoin makes a lot more harder to sustain when it is at 5-6 dollars, sustaining high prices would have to give a lot of money/effort in some way to this Economy long term. Once again, because of the high inflation environment for every dollar the price is higher it will need to get around 2,6 million dollars in to the Economy in some way, let it be miners that keep their Bitcoins or fresh fiat buyers at the exchanges. This is a fact, short term people miss this fundamental fact and then cry ans ask why the price is once again down. Because of that every intelligent investor should now that and take advantage of that and don't get caught in the exaggerated bull thinking.

by making the Economy argument you are totally dismissing speculation or investor demand.  

explain to me for instance why gold is at $1700?  there is zero economy wrapped around that.

I thought more of you cypherdoc, now I understand why you are a super bull, you don't get the fundamentals. Gold is very special, why? Because the total amount of gold and the gold that is refined every year are very very different, the amount is something like 2 % a year that is added to total amount (supply) of gold, that is the reason new supply doesn't have a big impact. Bitcoin will be there some day as well, in like 6-7 years time. Today the inflation rate is around 30 %. If gold had a inflation rate of 30 % the price should have been at around the cost of creating it (plus a margin of a couple of %). Do you see the point now?

but markets tend to be forward looking indicators.  the market will not wait 6-7 years to price Bitcoin appropriately; they will today tend to project forward as best as possible what they think Bitcoin will be worth once the inflation has plateaued.

also you didn't really answer my gold question.  without an economy behind it, how is it that the price of gold has gone from $250 in 2001 to $1700 today?  answer:  speculation.  the exact same thing can and will happen, IMO, to Bitcoin.


Title: Re: $3.20 in one big buy?
Post by: fastandfurious on December 11, 2011, 04:51:37 PM
That is a pretty high number to sustain, then imagine that it will go to 5 dollars, that is over 35 000 USD that will need to go in to the Bitcoin Economy each day. Not possible with the fundamentals today. The reality is that this is most likely a bull trap.
This is nothing but flawed thinking. The "7200 x price" calculations are useless and don't mean anything. For mainly two reasons. First of all the inflating amount of bitcoins is not the same thing as the inflating amount of let's say, dollars. New bitcoins are created by users and many of them decide to save bitcoins instead of selling them. This makes a good portion of miners actually investors at the same time and the decisions they make for selling bitcoins are exactly the same as they are for investors.

The Bitcoin Economy cost some kind of effort, we can calculate it pretty easy in fiat money, in USD it is equal of 7200 x actual price / day. That is the fact long term, short term many things can happen. The miners pay for their bitcoins as well, it is a cost, same way it cost money for the fiat buyers. The Bitcoin Economy isn't that big today to handle a 4-5 dollar price with todays inflation rate. Maybe it can handle a 3 dollar price, but more likely it will go down to two dollars again.
As supply increases and demand remains the same, the price will try to fall. That much is obvious. But there are two false assumptions there: 1) supply increases and 2) demand remains the same. Even if we do assume the 2) is true, 1) is still left unproven. In fact, going by your theory that the miners are selling their coins, supply should be remaining relatively constant.

What we might be looking at is an increase of demand because of speculation. And speculation is a good thing: it pushes the price up. The amount of Bitcoins minted each day is a constant until December 2012, and if we assume this is supply then demand only needs to stay constant for price to not go down. As speculation increases, demand will increase with it - fueling a bull market.

Yes, but the price of one Bitcoin makes a lot more harder to sustain when it is at 5-6 dollars, sustaining high prices would have to give a lot of money/effort in some way to this Economy long term. Once again, because of the high inflation environment for every dollar the price is higher it will need to get around 2,6 million dollars in to the Economy in some way, let it be miners that keep their Bitcoins or fresh fiat buyers at the exchanges. This is a fact, short term people miss this fundamental fact and then cry ans ask why the price is once again down. Because of that every intelligent investor should now that and take advantage of that and don't get caught in the exaggerated bull thinking.

by making the Economy argument you are totally dismissing speculation or investor demand.  

explain to me for instance why gold is at $1700?  there is zero economy wrapped around that.

I thought more of you cypherdoc, now I understand why you are a super bull, you don't get the fundamentals. Gold is very special, why? Because the total amount of gold and the gold that is refined every year are very very different, the amount is something like 2 % a year that is added to total amount (supply) of gold, that is the reason new supply doesn't have a big impact. Bitcoin will be there some day as well, in like 6-7 years time. Today the inflation rate is around 30 %. If gold had a inflation rate of 30 % the price should have been at around the cost of creating it (plus a margin of a couple of %). Do you see the point now?

but markets tend to be forward looking indicators.  the market will not wait 6-7 years to price Bitcoin appropriately; they will today tend to project forward as best as possible what they think Bitcoin will be worth once the inflation has plateaued.

also you didn't really answer my gold question.  without an economy behind it, how is it that the price of gold has gone from $250 in 2001 to $1700 today?  answer:  speculation.  the exact same thing can and will happen, IMO, to Bitcoin.

Two things, markets look 6 month in the future not six years (generally). Second, speculation yes, that is one part on the answer the other one is a hedge against fiat currency's.


Title: Re: $3.20 in one big buy?
Post by: jwzguy on December 11, 2011, 04:53:53 PM
someone sounds like they're caught in a short position.

Agreed.


Title: Re: $3.20 in one big buy?
Post by: cypherdoc on December 11, 2011, 04:58:56 PM
That is a pretty high number to sustain, then imagine that it will go to 5 dollars, that is over 35 000 USD that will need to go in to the Bitcoin Economy each day. Not possible with the fundamentals today. The reality is that this is most likely a bull trap.
This is nothing but flawed thinking. The "7200 x price" calculations are useless and don't mean anything. For mainly two reasons. First of all the inflating amount of bitcoins is not the same thing as the inflating amount of let's say, dollars. New bitcoins are created by users and many of them decide to save bitcoins instead of selling them. This makes a good portion of miners actually investors at the same time and the decisions they make for selling bitcoins are exactly the same as they are for investors.

The Bitcoin Economy cost some kind of effort, we can calculate it pretty easy in fiat money, in USD it is equal of 7200 x actual price / day. That is the fact long term, short term many things can happen. The miners pay for their bitcoins as well, it is a cost, same way it cost money for the fiat buyers. The Bitcoin Economy isn't that big today to handle a 4-5 dollar price with todays inflation rate. Maybe it can handle a 3 dollar price, but more likely it will go down to two dollars again.
As supply increases and demand remains the same, the price will try to fall. That much is obvious. But there are two false assumptions there: 1) supply increases and 2) demand remains the same. Even if we do assume the 2) is true, 1) is still left unproven. In fact, going by your theory that the miners are selling their coins, supply should be remaining relatively constant.

What we might be looking at is an increase of demand because of speculation. And speculation is a good thing: it pushes the price up. The amount of Bitcoins minted each day is a constant until December 2012, and if we assume this is supply then demand only needs to stay constant for price to not go down. As speculation increases, demand will increase with it - fueling a bull market.

Yes, but the price of one Bitcoin makes a lot more harder to sustain when it is at 5-6 dollars, sustaining high prices would have to give a lot of money/effort in some way to this Economy long term. Once again, because of the high inflation environment for every dollar the price is higher it will need to get around 2,6 million dollars in to the Economy in some way, let it be miners that keep their Bitcoins or fresh fiat buyers at the exchanges. This is a fact, short term people miss this fundamental fact and then cry ans ask why the price is once again down. Because of that every intelligent investor should now that and take advantage of that and don't get caught in the exaggerated bull thinking.

by making the Economy argument you are totally dismissing speculation or investor demand.  

explain to me for instance why gold is at $1700?  there is zero economy wrapped around that.

I thought more of you cypherdoc, now I understand why you are a super bull, you don't get the fundamentals. Gold is very special, why? Because the total amount of gold and the gold that is refined every year are very very different, the amount is something like 2 % a year that is added to total amount (supply) of gold, that is the reason new supply doesn't have a big impact. Bitcoin will be there some day as well, in like 6-7 years time. Today the inflation rate is around 30 %. If gold had a inflation rate of 30 % the price should have been at around the cost of creating it (plus a margin of a couple of %). Do you see the point now?

but markets tend to be forward looking indicators.  the market will not wait 6-7 years to price Bitcoin appropriately; they will today tend to project forward as best as possible what they think Bitcoin will be worth once the inflation has plateaued.

also you didn't really answer my gold question.  without an economy behind it, how is it that the price of gold has gone from $250 in 2001 to $1700 today?  answer:  speculation.  the exact same thing can and will happen, IMO, to Bitcoin.

Two things, markets look 6 month in the future not six years (generally). Second, speculation yes, that is one part on the answer the other one is a hedge against fiat currency's.

as a rational participant in this market, i can tell you that i am looking way further into the future than 6 mo.  i have based my investment decisions on the calculated value of Bitcoin after the inflation has plateaued. 

granted there are various ways to make that calculation depending on how bullish you are but surely one way is to take US money supply and divide by 21 million. :)


Title: Re: $3.20 in one big buy?
Post by: fastandfurious on December 11, 2011, 05:01:30 PM
That is a pretty high number to sustain, then imagine that it will go to 5 dollars, that is over 35 000 USD that will need to go in to the Bitcoin Economy each day. Not possible with the fundamentals today. The reality is that this is most likely a bull trap.
This is nothing but flawed thinking. The "7200 x price" calculations are useless and don't mean anything. For mainly two reasons. First of all the inflating amount of bitcoins is not the same thing as the inflating amount of let's say, dollars. New bitcoins are created by users and many of them decide to save bitcoins instead of selling them. This makes a good portion of miners actually investors at the same time and the decisions they make for selling bitcoins are exactly the same as they are for investors.

The Bitcoin Economy cost some kind of effort, we can calculate it pretty easy in fiat money, in USD it is equal of 7200 x actual price / day. That is the fact long term, short term many things can happen. The miners pay for their bitcoins as well, it is a cost, same way it cost money for the fiat buyers. The Bitcoin Economy isn't that big today to handle a 4-5 dollar price with todays inflation rate. Maybe it can handle a 3 dollar price, but more likely it will go down to two dollars again.
As supply increases and demand remains the same, the price will try to fall. That much is obvious. But there are two false assumptions there: 1) supply increases and 2) demand remains the same. Even if we do assume the 2) is true, 1) is still left unproven. In fact, going by your theory that the miners are selling their coins, supply should be remaining relatively constant.

What we might be looking at is an increase of demand because of speculation. And speculation is a good thing: it pushes the price up. The amount of Bitcoins minted each day is a constant until December 2012, and if we assume this is supply then demand only needs to stay constant for price to not go down. As speculation increases, demand will increase with it - fueling a bull market.

Yes, but the price of one Bitcoin makes a lot more harder to sustain when it is at 5-6 dollars, sustaining high prices would have to give a lot of money/effort in some way to this Economy long term. Once again, because of the high inflation environment for every dollar the price is higher it will need to get around 2,6 million dollars in to the Economy in some way, let it be miners that keep their Bitcoins or fresh fiat buyers at the exchanges. This is a fact, short term people miss this fundamental fact and then cry ans ask why the price is once again down. Because of that every intelligent investor should now that and take advantage of that and don't get caught in the exaggerated bull thinking.

by making the Economy argument you are totally dismissing speculation or investor demand.  

explain to me for instance why gold is at $1700?  there is zero economy wrapped around that.

I thought more of you cypherdoc, now I understand why you are a super bull, you don't get the fundamentals. Gold is very special, why? Because the total amount of gold and the gold that is refined every year are very very different, the amount is something like 2 % a year that is added to total amount (supply) of gold, that is the reason new supply doesn't have a big impact. Bitcoin will be there some day as well, in like 6-7 years time. Today the inflation rate is around 30 %. If gold had a inflation rate of 30 % the price should have been at around the cost of creating it (plus a margin of a couple of %). Do you see the point now?

but markets tend to be forward looking indicators.  the market will not wait 6-7 years to price Bitcoin appropriately; they will today tend to project forward as best as possible what they think Bitcoin will be worth once the inflation has plateaued.

also you didn't really answer my gold question.  without an economy behind it, how is it that the price of gold has gone from $250 in 2001 to $1700 today?  answer:  speculation.  the exact same thing can and will happen, IMO, to Bitcoin.

Two things, markets look 6 month in the future not six years (generally). Second, speculation yes, that is one part on the answer the other one is a hedge against fiat currency's.

as a rational participant in this market, i can tell you that i am looking way further into the future than 6 mo.  i have based my investment decisions on the calculated value of Bitcoin after the inflation has plateaued. 

granted there are various ways to make that calculation depending on how bullish you are but surely one way is to take US money supply and divide by 21 million. :)

:)


Title: Re: $3.20 in one big buy?
Post by: ElectricMucus on December 11, 2011, 05:06:49 PM
granted there are various ways to make that calculation depending on how bullish you are but surely one way is to take US money supply and divide by 21 million. :)

Oh boy.

If you think that will happen you better set aside 1/3 of you coins, cuz you'll need them to pay the mercs.  ::)


Title: Re: $3.20 in one big buy?
Post by: Technomage on December 11, 2011, 05:09:22 PM
My amateur analysis is predicated on a correlation to recent media stories. As anecdotal evidence, two nights ago at a business related dinner I met a person who had already heard of bitcoin. My wife practically did a spit-take when he mentioned it. He saw an article by wired. Then again last night at a party I hosted, a friend says he read about somewhere. This morning I have another speaker request in my email.
There is a lot happening right now and despite organized attack, bitcoin is still standing. That has attracted new attention and changed the way bitcoin is portrayed. The old message was something like; "Bitcoins are a type of electronic Monopoly money used to buy hit men". Now the articles are more sensible and less sensational. They also tend to focus on contrasting it against the current state of the euro and dollar.
+1

I tried to make this point earlier as well.


Title: Re: $3.20 in one big buy?
Post by: cypherdoc on December 11, 2011, 05:09:28 PM
granted there are various ways to make that calculation depending on how bullish you are but surely one way is to take US money supply and divide by 21 million. :)

Oh boy.

If you think that will happen you better set aside 1/3 of you coins, cuz you'll need them to pay the mercs.  ::)

i said that was one way.  i don't necessarily think that will happen.  but i don't think its unreasonable to say it can reach the gold price.


Title: Re: $3.20 in one big buy?
Post by: dree12 on December 11, 2011, 05:12:08 PM
That is a pretty high number to sustain, then imagine that it will go to 5 dollars, that is over 35 000 USD that will need to go in to the Bitcoin Economy each day. Not possible with the fundamentals today. The reality is that this is most likely a bull trap.
This is nothing but flawed thinking. The "7200 x price" calculations are useless and don't mean anything. For mainly two reasons. First of all the inflating amount of bitcoins is not the same thing as the inflating amount of let's say, dollars. New bitcoins are created by users and many of them decide to save bitcoins instead of selling them. This makes a good portion of miners actually investors at the same time and the decisions they make for selling bitcoins are exactly the same as they are for investors.

The Bitcoin Economy cost some kind of effort, we can calculate it pretty easy in fiat money, in USD it is equal of 7200 x actual price / day. That is the fact long term, short term many things can happen. The miners pay for their bitcoins as well, it is a cost, same way it cost money for the fiat buyers. The Bitcoin Economy isn't that big today to handle a 4-5 dollar price with todays inflation rate. Maybe it can handle a 3 dollar price, but more likely it will go down to two dollars again.
As supply increases and demand remains the same, the price will try to fall. That much is obvious. But there are two false assumptions there: 1) supply increases and 2) demand remains the same. Even if we do assume the 2) is true, 1) is still left unproven. In fact, going by your theory that the miners are selling their coins, supply should be remaining relatively constant.

What we might be looking at is an increase of demand because of speculation. And speculation is a good thing: it pushes the price up. The amount of Bitcoins minted each day is a constant until December 2012, and if we assume this is supply then demand only needs to stay constant for price to not go down. As speculation increases, demand will increase with it - fueling a bull market.

Yes, but the price of one Bitcoin makes a lot more harder to sustain when it is at 5-6 dollars, sustaining high prices would have to give a lot of money/effort in some way to this Economy long term. Once again, because of the high inflation environment for every dollar the price is higher it will need to get around 2,6 million dollars in to the Economy in some way, let it be miners that keep their Bitcoins or fresh fiat buyers at the exchanges. This is a fact, short term people miss this fundamental fact and then cry ans ask why the price is once again down. Because of that every intelligent investor should now that and take advantage of that and don't get caught in the exaggerated bull thinking.

by making the Economy argument you are totally dismissing speculation or investor demand.  

explain to me for instance why gold is at $1700?  there is zero economy wrapped around that.

I thought more of you cypherdoc, now I understand why you are a super bull, you don't get the fundamentals. Gold is very special, why? Because the total amount of gold and the gold that is refined every year are very very different, the amount is something like 2 % a year that is added to total amount (supply) of gold, that is the reason new supply doesn't have a big impact. Bitcoin will be there some day as well, in like 6-7 years time. Today the inflation rate is around 30 %. If gold had a inflation rate of 30 % the price should have been at around the cost of creating it (plus a margin of a couple of %). Do you see the point now?

but markets tend to be forward looking indicators.  the market will not wait 6-7 years to price Bitcoin appropriately; they will today tend to project forward as best as possible what they think Bitcoin will be worth once the inflation has plateaued.

also you didn't really answer my gold question.  without an economy behind it, how is it that the price of gold has gone from $250 in 2001 to $1700 today?  answer:  speculation.  the exact same thing can and will happen, IMO, to Bitcoin.

Two things, markets look 6 month in the future not six years (generally). Second, speculation yes, that is one part on the answer the other one is a hedge against fiat currency's.

as a rational participant in this market, i can tell you that i am looking way further into the future than 6 mo.  i have based my investment decisions on the calculated value of Bitcoin after the inflation has plateaued. 

granted there are various ways to make that calculation depending on how bullish you are but surely one way is to take US money supply and divide by 21 million. :)

:)
I have to agree. That target is unreasonable for the next decade...


Title: Re: $3.20 in one big buy?
Post by: Technomage on December 11, 2011, 05:15:42 PM
i said that was one way.  i don't necessarily think that will happen.  but i don't think its unreasonable to say it can reach the gold price.
In my opinion it's not unreasonable to think bigger. Bitcoin is very viable as a payment system, as a real currency. It's fast, the fees are very low and it's reliable. This gives Bitcoin a massive advantage over gold and if it really takes off we could easily see one Bitcoin priced higher than an ounce of gold 10 years from now.


Title: Re: $3.20 in one big buy?
Post by: julz on December 11, 2011, 05:17:26 PM
granted there are various ways to make that calculation depending on how bullish you are but surely one way is to take US money supply and divide by 21 million. :)

Oh boy.

If you think that will happen you better set aside 1/3 of you coins, cuz you'll need them to pay the mercs.  ::)

By the time 1 BTC could buy a small car, most of us will have let many if not most of our coins slip out of our hands at various points on the way up.
Unfortunately, I think the time-scales for this sort of thing will mean I'll have to hope for some serious advances in human life extension technology in order to see this!

edit: but if it does come sooner..  I'll be investing some of that bitcoin wealth in 'Aubrey de Grey'-style research anyway :)


Title: Re: $3.20 in one big buy?
Post by: conspirosphere.tk on December 11, 2011, 05:19:49 PM
i have based my investment decisions on the calculated value of Bitcoin after the inflation has plateaued. 
granted there are various ways to make that calculation depending on how bullish you are but surely one way is to take US money supply and divide by 21 million. :)

Let me dream  ;D 10 trillions/21 millions amounts to what?

http://goldseek.com/news/GoldSeek/2007/7-24mh/4.gif


Title: Re: $3.20 in one big buy?
Post by: cypherdoc on December 11, 2011, 05:44:18 PM
granted there are various ways to make that calculation depending on how bullish you are but surely one way is to take US money supply and divide by 21 million. :)

Oh boy.

If you think that will happen you better set aside 1/3 of you coins, cuz you'll need them to pay the mercs.  ::)

By the time 1 BTC could buy a small car, most of us will have let many if not most of our coins slip out of our hands at various points on the way up.
Unfortunately, I think the time-scales for this sort of thing will mean I'll have to hope for some serious advances in human life extension technology in order to see this!

edit: but if it does come sooner..  I'll be investing some of that bitcoin wealth in 'Aubrey de Grey'-style research anyway :)


whether you realize it or not, you just made the rational counter argument to the Bear argument against hoarders and speculators.

their argument goes something like this; hoarders will dump their coins when the price goes up to some magical price thus crashing the economy and price and hurting everyone and their mother which is bad for bitcoin.  thus speculators and hoarders are bad.

but you're right, on the way up hoarders and speculators will sell their coins at some personally deemed rational price for profit.  whether they sell them gradually (which most will do into a rising price) or dump them all at once won't matter at all to the price or economy.  the upward push will damp out any crash scenarios as long as the fundamentals and security of Bitcoin is maintained.  new holders of Bitcoin will take over and the distribution will be much more diversified and spread out.


Title: Re: $3.20 in one big buy?
Post by: casascius on December 11, 2011, 05:53:35 PM
So.... I bought as part of that 3.20 buy.  Essentially everyone is trying to guess what I was thinking without knowing who I am.  I don't play the speculation game too much, so I don't mind sharing.

I bought the price up to 3.16.  Shortly after, somebody else (or somebodies else) brought it up to 3.20, but most of that volume was at the 3.15 mark and went to me.

Why did I buy?  POssibly speculation, but let me share what was in my head.  This weekend, we gave out physical bitcoins to all employees at my software business at the Christmas party as part of their bonuses.  Everyone got a 25 BTC coin.  The BTC's to fund the physical coins came from my stock, and the company is getting the bill (yes, it's my company, but this is necessary documentation to keep the books kosher).  I had planned on rebuying BTC to replace those given out (it was $3 the night of the party), and as the price started inching up, I figured it would be best to execute the transaction timely so there wouldn't be a big disparity in the price.

I gave BTC because everyone at work hears me constantly talking about Bitcoin, and now everybody at my work - no matter their job - has a small but meaningful stake in it so they can cheer with me.  (I have been passing out 1 BTC coins as impromptu rewards as well, they are very well liked).

The actual speculative value of the BTC wasn't considered too strongly - I simply wanted my BTC back.

And the physical BTC that got distributed to the employees... well for all intents and purposes, they'll probably be out of circulation for a while, since most of them won't know what to do with it other than put it in a safe place.


Title: Re: $3.20 in one big buy?
Post by: ineededausername on December 11, 2011, 05:59:16 PM
The Manipulator shows his face! ;D


Title: Re: $3.20 in one big buy?
Post by: casascius on December 11, 2011, 06:02:00 PM
The Manipulator shows his face! ;D

How honored to be thought of as the manipulator. 

The MtGoxUSD that went into that buy went straight from my bank account, to a wire, to this transaction, and has never been put anywhere on the order book other than for the transaction I executed.  No playing with the orderbook on my part.


Title: Re: $3.20 in one big buy?
Post by: cypherdoc on December 11, 2011, 06:06:41 PM
So.... I bought as part of that 3.20 buy.  Essentially everyone is trying to guess what I was thinking without knowing who I am.  I don't play the speculation game too much, so I don't mind sharing.

I bought the price up to 3.16.  Shortly after, somebody else (or somebodies else) brought it up to 3.20, but most of that volume was at the 3.15 mark and went to me.

Why did I buy?  POssibly speculation, but let me share what was in my head.  This weekend, we gave out physical bitcoins to all employees at my software business at the Christmas party as part of their bonuses.  Everyone got a 25 BTC coin.  The BTC's to fund the physical coins came from my stock, and the company is getting the bill (yes, it's my company, but this is necessary documentation to keep the books kosher).  I had planned on rebuying BTC to replace those given out (it was $3 the night of the party), and as the price started inching up, I figured it would be best to execute the transaction timely so there wouldn't be a big disparity in the price.

I gave BTC because everyone at work hears me constantly talking about Bitcoin, and now everybody at my work - no matter their job - has a small but meaningful stake in it so they can cheer with me.  (I have been passing out 1 BTC coins as impromptu rewards as well, they are very well liked).

The actual speculative value of the BTC wasn't considered too strongly - I simply wanted my BTC back.

And the physical BTC that got distributed to the employees... well for all intents and purposes, they'll probably be out of circulation for a while, since most of them won't know what to do with it other than put it in a safe place.

ah, so no speculation involved whatsoever?  this will continue to happen more and more which is the natural progression of a continually improving economy and technology.

if i were a Bear i'd get out of the way.


Title: Re: $3.20 in one big buy?
Post by: casascius on December 11, 2011, 06:31:10 PM

ah, so no speculation involved whatsoever?  this will continue to happen more and more which is the natural progression of a continually improving economy and technology.

if i were a Bear i'd get out of the way.

It'll be nice if the price goes up, but what happens to me will be offset by the fact that I just gave away a boatload of BTC as gifts, so whatever happens will happen to the recipients of the gifts.

If you follow the Uberbills Casascius coin analyzer, you may have noticed a nice healthy jump in the number of 25 BTC coins in circulation.


Title: Re: $3.20 in one big buy?
Post by: cypherdoc on December 11, 2011, 06:42:58 PM

ah, so no speculation involved whatsoever?  this will continue to happen more and more which is the natural progression of a continually improving economy and technology.

if i were a Bear i'd get out of the way.

It'll be nice if the price goes up, but what happens to me will be offset by the fact that I just gave away a boatload of BTC as gifts, so whatever happens will happen to the recipients of the gifts.

If you follow the Uberbills Casascius coin analyzer, you may have noticed a nice healthy jump in the number of 25 BTC coins in circulation.

please link to this.


Title: Re: $3.20 in one big buy?
Post by: casascius on December 11, 2011, 07:52:26 PM

please link to this.

http://www.uberbills.com/casascius/


Title: Re: $3.20 in one big buy?
Post by: cypherdoc on December 11, 2011, 08:00:41 PM

please link to this.

http://www.uberbills.com/casascius/

interesting.  so "opened" means the owner ripped open the hologram and moved the btc to another address which theoretically prevents you from "stealing" the coins?

1/3 of 100btc gold bar holders did this and the only 1000btc gold bar buyer did this...

edit:  seems like this would detract from the resale value over time.


Title: Re: $3.20 in one big buy?
Post by: casascius on December 11, 2011, 08:05:31 PM
interesting.  so "opened" means the owner ripped open the hologram and moved the btc to another address which theoretically prevents you from "stealing" the coins?

1/3 of 100btc gold bar holders did this and the only 1000btc gold bar buyer did this...

edit:  seems like this would detract from the resale value over time.

This is happening because those bars are getting sold at MemoryDealers as a way for people to buy BTC with credit cards and paypal.

Some non-tech people just don't mind paying 15-20% extra for the simplicity of not having to bother with Dwolla, exchanges, downloading the client and blockchain, backing up their wallet, etc., I guess.


Title: Re: $3.20 in one big buy?
Post by: cypherdoc on December 11, 2011, 08:59:47 PM
interesting.  so "opened" means the owner ripped open the hologram and moved the btc to another address which theoretically prevents you from "stealing" the coins?

1/3 of 100btc gold bar holders did this and the only 1000btc gold bar buyer did this...

edit:  seems like this would detract from the resale value over time.

This is happening because those bars are getting sold at MemoryDealers as a way for people to buy BTC with credit cards and paypal.

Some non-tech people just don't mind paying 15-20% extra for the simplicity of not having to bother with Dwolla, exchanges, downloading the client and blockchain, backing up their wallet, etc., I guess.

the reason buyers of these bars are cracking them open to tx to their own privately generated addresses at a higher frequency for the higher denominated bars is b/c there are larger amounts at stake if in case you happen to be a criminal, which you're not.

i just find it interesting b/c of the one's i've bought i've kept them all intact as a way to preserve their collectors value just in case i sell them for a higher price at a later date.  i've convinced myself you will not steal their bitcoin value.  if they are cracked open i believe they will sell for less than ones not opened.


Title: Re: $3.20 in one big buy?
Post by: Raize on December 12, 2011, 04:52:24 AM
Casascius,
I would highly recommend not updating the list with the new wallet addresses PRIOR to purchasing the BTC.


Title: Re: $3.20 in one big buy?
Post by: casascius on December 12, 2011, 06:34:20 AM
Casascius,
I would highly recommend not updating the list with the new wallet addresses PRIOR to purchasing the BTC.

Any particular reason why?