Bitcoin Forum

The past week has been remarkably calm, with the price sticking in $3.16-$3.21. It "feels" calmer than I've ever seen it. It's almost as if... dare I say... the marketplace has found an appropriate price given the current economy + NPV of future economy.

It's almost like Bitcoin has become... a civilized asset.

Certainly, it won't stay like this. But, I must say I'm enjoying this current oasis. RIM, gold, and the EUR have been more wild in recent days.

That such a speculative asset like a bitcoin can enjoy stable value - if only for a matter of days - is quite remarkable.

Thoughts?

This is definitely remarkable, but I'm sure it's temporary too.

Bitcoin can almost never gain stability unless: 1) the price rises to above $100, or 2) it dies.

The potential instability is still there until the price is high enough to push market cap to an astronomical number.

I believe we have reached the area of true value for Bitcoin. I don't expect to see any major bubbles unless something happens. I also do not expect any sustained values below $3 for longer than a day in the foreseeable future. From the moving averages it really appears we have hit a bottom or market reversal. I am more inclined to believe we will stay around the current price for the near term.

You're reading too much into this.  Look at the volumes:
http://bitcoincharts.com/charts/mtgoxUSD#rg60ztgSzm1g10zm2g25zv
People are leaving for the holidays... anyone see those straight lines on mtgoxlive?
When all the traders and speculators come back, we'll see real price movement again. 

It is nice.  There is precedent though, as stability like this happened once before in July, with a similar percentage range:

http://bitcoincharts.com/charts/chart.png?width=940&m=mtgoxUSD&SubmitButton=Draw&r=180&i=&c=1&s=2011-07-13&e=2011-07-31&Prev=&Next=&t=S&b=&a1=&m1=10&a2=&m2=25&x=0&i1=&i2=&i3=&i4=&v=1&cv=0&ps=0&l=0&p=0&

What happens next depends on the next big player: is it someone dumping another 20k coins, or buying up 20k coins?
I could see price dropping to $2.5 again, or jumping to $4.

Dumping 20k? Still stable at 3.10.
In fact dumping 40k would take us to 3.00.
60k would take us to 2.95.  Still within sight of $3.

On the other hand, buying 20k would take us to 3.35.  Buying 40k... 3.75. :)

I like this explanation, the speculator are taking a 2 week break...
Question now becomes where they holding coins or USD b4 leaving?  :P

I'd like to think we've had stable prices because there is a lot of poeple buying things with their bitcoins

customer buys bitcoins at market rate and buys a gift with bitcoins right way
merchant sells the bitcoins at market rate right away

if enough of this is going on... the current price wtv it may be, is supported & stabilized.

I really should buy some bitcoins just to buy gifts.... i like buying things with my visa card because i get 1% cash back  :P

My sales have gone up quite a bit in the past month. Some newbies ask if I'll accept PayPal, etc, to which I answer 'no'. They go off to convert paper to digital and the economy grows. I presume other merchants will say the same.

My opinion :

When bitcoin had more variance, there was a lot of people dumping coin (omg ! i am rich !) and a lot of people randomly buying the most coin they could with the bandwagon, without paying too much attention to the price.

I believe a lot of those coins are now in the hands of market makers and that the float (the coins and $ available for trade on the market) has increased as well. So now someone dumping 20k randomly in a panick movement doesn't have an huge effect anymore.

So now we should except less volatility : with enough speculators, day like we seen some time ago where the price did 30 => 9 => 25 seems almost impossible. Those were merely possible because "traders" (lets say : THE MANIPULATOR) weren't a great part of the market.

In my opinion bitcoin was and still is a traders dream : Very low trading fees and insane volatility (usually), what trader wouldnt want that ?

Of course "real" traders (ie those with banks funds or their own assets, called "proprietary traders") are largely a legend, 98% of them are merely orders followers for clients and salesmen ("buy me this or this").
I just think there is enough small-time speculators wanting in for a profit.

Well.. that or the manipulator is tricking us for his next scheme  ;)

But i think we are moving towards UP. The speculators-wall are moving from 3.X onto 3.10 and lower as they are downed.

We can see that most of the trades these last days are onto the ask side.

Hopefully we can keep at 3 (or even better lower xD) for a few month still I have more coins to buy :)

Ditto.

Anecdotally, I have been talking to quite a few of the established bitcoin-shops; it seems that buying volume is has been slowly increasing over the last month.

I really am thinking that it will take more and more bitcoin to drop the price back down to 2.5  At some point it will take such a large % of the total market cap to shift the price large amounts.

Ideally we want the collected order-books to have move than the total issued Bitcoin holdings… so we know if every Bitcoin was spent how far the price would drop. (Not that would ever happen).

Its as stable as this:
http://3.bp.blogspot.com/_Fk_mQKR-bSU/S-hzdd_nYYI/AAAAAAAAAEA/ud1giWmIC-c/s1600/776px-Unstable.svg%5B1%5D.png

All it needs is a small push in either direction and then the speculation will take off again, because bitcoin is inherently instable, certainly the way its currently used (ie, hardly used, mostly hoarded and speculated with).

+1

+1 again.  We've seen metastability before :)

I don't think the image is right. We're already converging into some direction, we just don't know which yet. The system has become larger, it now has a massive amount of inertia.

That said, a little punch into either direction will not cause sudden accelerated hyper-huge movement. Yes, we may see another correction one way or the other, but I doubt we'll see positive feedback loops at the speed we had before. Remember that a good bit of immaturity has been purged from the market by now; people think twice before hopping onto a trend now.

It's good. Things have turned out quite well. Unless there's a catastrophe around the corner, Bitcoin has achieved an unprecedented state of maturity; software support is better, sensitivity to larger orders was reduced, volatility is lower. A more liquid, more robust market than before.

Let's wait for the whole stuff to settle, until the new year begins. If things are still as sane then, we have reason to celebrate.

I'm not entirely convinced of the Holliday theory. I will out of the USA during the holidays. But I will still be checking prices and buying, if a deal is to be found.

A rollercoaster building its own tracks? That's...that's just like the blockchain!

+1 so, what are you waiting for? buy, and the rainbow will shine! ;-)

Looks like someone just touched the ball and it got rolling. So much for the stability.

Hah lack of volatility. About 6 hours ago there was a 10 cent spread with people selling at 3.30 and buying at 3.20 changing back and forth multiple times per second. Now this massive rally/short-squeeze/whatever up to 3.60.

I feel lucky to have been asleep durring that exchange because I would have been tempted to get in on it and could have ended up on the wrong side.

look how long that "stability" lasted.

this volatile price rise will Doom the Bitcoin economy.  all the merchants will be forced to go away. ;D

Bitcoin is neither fish nor fowl, desert topping or floor wax.

On the one hand it trades like the cheesiest sub-penny stock ever, offering a combination of tiny total market capitalization, lack of transparency, and very few interested participants of size that takes me back to when the "pink sheets" were really listed on pink pieces of paper that got physically passed around. In this regard it's a toy for all practical purposes, an amusing diversion.

As a medium of exchange it offers a requirement of unusual determination to actually use it for its own sake, the wide acceptance and universal recognition associated with cowrie shells, and an ability to store a relatively fixed value for hours at a time. Thank goodness for the drug trade which generates enough volume for the speculators to have something to play with, for otherwise the "bitcoin economy" would likely be much, much smaller.

However, let's not overlook it's utility for money laundering, transaction fees for placement of many small amounts filtering through a number of addresses are much better than old-fashioned vehicles like Cayman banks and single premium life insurance policies. Too bad it's not big enough to absorb the demand and still keep laundering somewhat hidden.

So, all in all, bitcoin is a pretty interesting online game/simulation. Isn't that good enough?

I'm sure there is still some dickbag out there wanting to exit BTC that accumulated a lot early that has no clue about trading volumes and sustainable sales.

Although... if prices are rising, I think you'll see fewer people jumping ship in earnest and less downward pressure.

As someone else said, this has a great deal to do with market cap.  While gold certainly has SOME value in electronics manufacturing or for jewelry, the price of it has very little to do with these things.  It has a great deal instead to do with speculation.  The price of gold would likely be only a fraction of what it is without said speculation and as such, ultimately is subject to the same inflationary pressures as other commodities.

In this way, the value of gold as an investment instrument has very much to do with speculation and not at all with consumption.  Similarly, if BTC are seen to have value as a relatively liquid, semi-untraceable currency... it could achieve the same perception.  Similarly, BTC as a transaction medium will become a sort of consumptive good as well.  So to some degree consumption will drive price moderately (as with gold), but maintain its value primarily on speculation (as with gold).

The reality is that BTC has a substantial value as a medium for transaction.  It will grow as does the technology to utilize it easily.  It will also grow with a greater market cap and relative stability.  

I think deriding its long term prospects because of volatility and such ignores that other commodities depend on like factors and mostly social psychology grants them their value.