BTC is likely headed below $400 (possibly with a dip below $300) and the recovery will not likely be swift rather a U bottom.
https://medium.com/p/ba5f3fcce103Finding Equilibrium : Searching for the true value of a Bitcoin
Vinny Lingham, CEO of Gyft, discusses some of the current forces affecting the price of bitcoin. A very worthwhile read imho.
Excellent article. I agree with everything he wrote.
I also have made the point that Bitcoin asymmetrically favors merchants at this stage. And he points that out well.
Risto you should read that article above. Then you will understand where the selling pressure is coming from and what has changed.
Did you read the article or not?
yes I did read the article. he said it will form a base in the next quarter, not crash. as for the range he describes, why would you believe he has the formula to predict $350 bottom? 436 bottom has given us all the signals we need.
all the past bubbles have consolidated in a wedge. thats a sequence of 5. if the price dropped to 350, this one would break that rule. wedges have significant meaning in consolidation.
Did you read his points about why there is now more structural selling? Specifically that there are too many retailers and retailers convert immediately to fiat. And consumers are not growing as fast. Because Bitcoin is wonderful for merchants (no chargebacks) but sucks for consumers .
This is why it is going lower, much, much lower:
http://www.businesswire.com/news/home/20131211005909/en/BitPay-Exceeds-100000000-Bitcoin-Transactions-Processed#.Uzp95qIryhoprocessed over $100 million in transactions this year, and has increased its merchant base to over 15,500 approved merchants in 200 countries
http://seekingalpha.com/news/1465461-bitcoin-bitpay-volume-triples-m-m-european-regulators-weigh-inBitPay volume triples M/M in November after the roll-out of a new pricing plan and integration with Shopify. Transaction volume tripled during the same period
Thus using an geometric series, I can estimate their December sales were $40 million, January, $120 million, February $360 million, March over a $1 billion. Now surely their Xmas surge was greater than normal M/M growth, but you can clearly see this is much larger now and very significant.The more success Bitpay has, the worse for Bitcoin. Because Bitpay is all about liquidating BTC from investors (not bringing in proportionally new customers to the ecosystem).
How could we have missed that! (Slams forehead into the wall)
I saw the silver chart pattern indicating a long grind lower ahead, and I saw the asymmetry in appeal for merchants vs. customers, but I didn't put 2+2 together.
The Gyft owner has a bullish bias so that is why he is saying $350. In fact, markets don't work that way. They have momentum and overshoot either upwards or downwards.
Bitcoin is pointed down now and it will be a vicious cycle that feeds on itself. It is structural and we have to go down and restart from a low equilibrium.
This is why it is going lower, much, much lower:
http://www.businesswire.com/news/home/20131211005909/en/BitPay-Exceeds-100000000-Bitcoin-Transactions-Processed#.Uzp95qIryhoprocessed over $100 million in transactions this year, and has increased its merchant base to over 15,500 approved merchants in 200 countries
http://seekingalpha.com/news/1465461-bitcoin-bitpay-volume-triples-m-m-european-regulators-weigh-inBitPay volume triples M/M in November after the roll-out of a new pricing plan and integration with Shopify. Transaction volume tripled during the same period
Thus using an geometric series, I can estimate their December sales were $40 million, January, $120 million, February $360 million, March over a $1 billion. Now surely their Xmas surge was greater than normal M/M growth, but you can clearly see this is much larger now and very significant.
Oh fuck look what just happened under our nose while we were not paying attention!
https://www.goldsilverbitcoin.com/bitpay-worlds-first-zero-transaction-fee-payment-processing/BitPay’s new model, however, asks for $30 per month per merchant, with zero additional fees. This is unprecedented in payment processing space, and will certainly send shockwaves through various payment processing spaces.
Both BitPay and Coinbase represent the world’s first zero-fee payment processors, driving home how revolutionary modern payment methods are.
Visionaries who invested in BitPay include Trace Mayer, Peter Thiel and Max Keiser.
So who is paying those high fees? We the customers in the exchange rate!!! And liquidating our investment!
Fuck we've been sucked into a fiat vortex by that same bastard Peter Thiel who angel funded Facebook and Paypal.
This is war. I'm livid. It is time to get serious.
I believe you are too preoccupied with USD. The feedback loop of (lower USD price -> less users -> even lower price) has never before held true with Bitcoin, and I have no reason to believe it would now.
What about 2011?
In between 7-11/2011, the number of non-dust addresses grew by 30%.
Even if we assume that there is such a negative feedback loop, 2011 was a proof that it was reversed and did not self-immolate.
So far we have one vicious bear market that was reversed, and 5 years of gains. My theory is that Bitcoin has a self-reinforcing positive loop which will eventually consume fiat totally, and all the bear markets are temporary. If you say otherwise, the burden of proof is on you because such an assertion is not supported by neither history nor reason.
Strawmen avoid the points made.
1. Why can't a "vicious bear market" repeat? You admitted before that the 2011 bear market was caused by tech geeks early adopters who overextended because they are poor at speculation. Recently we've had a huge influx of n00bs into Bitcoin investing.
2. Who is arguing that Bitcoin won't continue to go up (i.e. "self-immolate") after the bottom? Not me.
3. What proof do you have that Bitcoin is different from every investment in the history of mankind, in that all investments are limited to a market segment and eventually peaked without reaching every man and woman on earth? You do no market demographics analysis. You just assume that Bitcoin will jump the chasm even though it currently lacks a compelling feature set to do so.
An anonymous coin would be great. Be sure to note it here when you find someone(s) to launch it. A well thought out alt could grow very quickly compared to bitcoin. The market is ready established, and crypto-funded.
Note that the
developer of Darkcoin admitted to me yesterday that I was correct and Darkcoin breaks anonymity by trusting the master node with your identity.
I provided him a suggestion, but it is not my best idea of how to do anonymity (which requires a different design than Darkcoin has).
Even if you are correct the US isn't the only country in the world.
I don't know to what extent tax issues (if at all) will affect European masses in adopting Bitcoin. I lack domain knowledge of those jurisdictions.
Capital gains tax is a non-issue in the developing world (masses here don't files tax returns). Yet they also are not currently the target demographic of Bitcoin.
The other issues I enumerated (look 2 posts up) should prevent Bitcoin from adoption of the masses for use as a daily currency every where on earth. Whether those issues will be fixed and whether they will be fixed in Bitcoin, offchain services, and/or an altcoin, is something that remains to be seen.
Right now Bitcoin is mainly adopted as a self-reinforcing (i.e. those who invest are supporting the rise in price, i.e. a sort of pyramid scheme of sorts but not entirely) speculative investment and some genuine use as a means to transfer value over distance. Also there are cases where one needs to use Bitcoin, e.g. buying drugs over the internet, registering domains anonymously (if you are very careful), etc.. Mostly Bitcoin is used to speculate in Bitcoin and altcoins. It is an investment unit-of-exchange. But none of that is really widespread mainstream use. I am still searching for that compelling need for the broader population.
One of the big needs I expect is when the confiscations begin, there will be a rush into crypto-currencies. Yet I expect an anonymous coin will get most of that, if that anonymous coin is respected and well established and is competing very strongly with Bitcoin (i.e. perhaps 1/10 or more of Bitcoin's market cap). Otherwise Bitcoin will get most of it.
This is an interesting point. In the long run, this IRS opinion that miners need to report income when they mine, is frankly absurd, and will definitely be reversed in a tax court, if they don't revise it before then.
How do you figure? The network is paying them for their services of mining. Seems correct to me and it is the ruling I expected and predicted since long-time ago.
I can freely produce a work with a market value, and the act of production does not result in a taxable event, in every precedent case. Selling the work produces a taxable event.
Mining isn't producing a unique work. It is providing a repetitive service that is scripted by the network. The litmus test is that the network is the manager, not the miner. The network sets the difficulty, the protocol, etc..
A network cannot manage anyone. Management flows in the opposite direction. Mining a block produces a novel work.
The network dictates which hash to solve. Which is what the miner is paid for doing. Everything else the miners do is optional in the protocol and thus incidental.
there are 12 million millionaires in the world, and 1500 billionaires. there are only 21 million bitcoins, and I imagine most of those people dont have any.
That 21 million will never stand as the asymptotic limit (actually it isn't asymptotic because the finite limit of divisibility is 1 Satoshi), because there is no way the world's billionaires will hand power to Risto et al (of course not!). That is pure fantasy like slumber party of overgrown, naive children playing a board game. There are multiple ways it can be increased.
- Off chain is the only way Bitcoin will go mainstream. Coins will be created just as the private banks did with gold certificates in the 1800s with gold on deposit.
- It is impossible that altcoins won't proliferate because Bitcoin can't offer every feature.
- One pool controls 50+% of the hash power, even one ASIC miner controls 10%. Government control of that pool (and a few miners) can force more coins to be created. This won't be done now, instead later when the lockdown is more ubiquitous and you have no way to avoid this control.
OK, no-one has still bothered to state what 'n' stands for (I'm assuming p = price) but it all sounds highly plausible.
I wrote that upthread. Here it is again.
It is the number of unique addresses from the blockchain.info chart. And Peter R showed that n^2 correlates with price p. This is Metcalf's Law and Reed's Law.
I had explained in an upthread post that if we use a ruler on the n chart along the bottoms since 2012, then should currently be at 100,000 yet it is currently at 150,000.
Also there was a divergence since February where p declined but n rose. That divergence must be resolved. Will p rise or n decline?
If n must drop by 33%, then p price could drop to 0.67 x 0.67 = 45% of recent p (inconclusive to determine which recent p to multiply by .045, perhaps $450 - $600).
I also projected the bottom from July 2012 using compounding and I also get a $300 to $350 target for the bottom within next 2 weeks.
$450 is a lot closer to the bottom than $600 was. Risto is correct about that.
AnonyMint is concerned about mass adoption, because he wants to save the world. More power to him. Being in the world, I think it could use some saving. But his particular form of mass adoption is not necessary or to be expected during the time between now and the next two or three hype cycles. IRS treatment of bitcoin can be harmful to mass adoption in the medium term, but good for institutional adoption in the near term.
Medium-term I'm concerned about those who are adopting Bitcoin now, and that they have no anonymity and they can't spontaneously mine it any more (without a serious investment in mining). And I am concerned that the mass adoption of Bitcoin will come in the form of off chain (to fix the slow transaction speed and other issues which
INTENTIONALLY won't be fixed on chain) and government control over mining and off chain coin supply, and that we Bitcoin adopters won't have any other option. We will be trapped in the new digital slavery NWO. My perspective is viewed by many as extreme and paranoid.
For next week or two, I think the tax ruling can deflate the confidence of some of the n00b investors who bought at $600 - $1000 if the price breaks down through $400. Capitulation would then come when they lose resolve to hodl. I could be wrong about this bottom call. I have presented some ways of looking at the chart of adoption to support my short-term perspective.
I also presented a new theory of the adoption curve being log-logistic instead of logistic. They key distinction is the rate of adoption would be declining since the launch of Bitcoin and not after 50% have adopted. The chart of n seems to support my view, but (from eyeballing it only) there are not enough data points yet to reliably conclude.
Because of my negative view on the potential outcome of Bitcoin on us, I have a very bad taste in my mouth if I buy BTC as an investment. I feel like I am a traitor to humanity and I would be better served to invest my time in an alternative instead. So it would take a very low bottom price to maybe cause me to potentially incriminate myself (assuming totalitarian effects of debt crisis subsequently emerge). I realize I am being somewhat irrational if my goal is to maximize return on capital. Also no man is an island.
I suppose I am not appreciating Risto as much as I used to because he preaches what I believe to be the NWO coin, and he uses hyperbole such as claiming it is at a fraction of adoption of world's population as if he can be sure how Bitcoin can morph to be compelling to masses. The only way I see it doing that is with government blessing. And this outcome is not the way investments usually work. Yeah it is always "different this time". Yet I am trying to not let this affect my feelings about any person. Frankly I need to do less talking and more working. (Mea Culpa)^1000000.
Correction: Note if I remember correctly Risto wrote 99.5% of adoption remaining, which would mean 200 x 2 million = 400 million target. Actually that is not too far from my expection of the current white male demographic target market. That is qualitatively not mass adoption by the entire world. That is 1 in 17 people in world. So I am not clear if Risto is arguing for mass adoption as a currency or for white male adoption as an investment bubble? His numbers are straddling the two. My expectation is either Bitcoin will top out as an investment bubble at up to one or two hundred million, or it will be prodded by the government to become the digital fiat. I don't see another outcome for Bitcoin, because I see no relevant development at all on the block chain protocol.
Certain developers who you know their name spend more time meeting with the CIA and the Council on Foreign Relations than developing the protocol improvements.
Since when should a programmer be a political liaison
Fishy smell.
Please don't ignore the question.
...
Do you really think the government is going to give up its control over money?
I think this is a very good question, and I think the answer is no, they will not give up control over money. At least, not on purpose. So in my mind the question becomes: does the government regard cryptocurrencies as a threat to their control over money? A few years ago I might have predicted yes, but recently I have been leaning more towards no, based on less-than-hostile comments from various people like Ben Bernanke, Janet Yellen, Alan Greenspan.
Propaganda. Have you followed what Larry Summers said? They want digital currency so they can easily confiscate. The establishment is supporting Bitcoin because they can more easily track where all the money is.
....but bitcoin is not as high on that list as early enthusiasts (like me) used to think. In an ideal world, bitcoin will not topple the central banking system, something else will; and when that happens, bitcoin will save us all from chaos. I am sure my thinking on this question will continue to evolve.
It is very high on their list if it can grow.
They are trial ballooning different ways to bring the world onto a digital ledger so they can confiscate by pressing a button. Off chain on Bitcoin will be the mechanism to achieve this control.
They have nothing to fear from Bitcoin, because one pool already controls 50% of the mining. They could easily blacklist coins tomorrow if they needed to.
Now they just to manage their baby well to keep you all supporting their desired outcome of slavery.
Proof is in the facts. Bitcoin is not decentralized. You all are controlled by propaganda. The mining is already controllable by the government.
The key now is to manage it so you all don't wake up and move to an anonymous coin. To keep you all locked in by your greed and the thought the largest market size is best.
The less totalitarian governments (I include the US here) have no immediate plans to do any crazy-ass confiscations. But, if and when they decide to borrow a page from FDR ... it will be too late. Bitcoin will be entrenched.
The head of the USA Treasury department that oversees FinCEN has said in recent interview (have a link to it on my thread) they are monitoring adoption very closely. He specifically said that government oversight will increase if it becomes possible to move large amounts of money with Bitcoin and/or you can live by spending only Bitcoin. And that was only the financial crimes division. He said other departments were watching it with other mandates. This will not fly past their radar. He specifically mentioned anonymity as a threat many times. He also said they have people tracking the block chain.
The other near-term implication of the tax ruling is the margin call on miners who have to get cash before April 15.
Ditto in China apparently with April 15 deadline to sell and get out before exchanges close.
So we have perhaps persistent selling for next 2 weeks.
About the tax planning+timing issue. You just don't get it. Normal people already have no incentive to use Bitcoin and now they will really stay away from it. Why fuck with the hassle? Most people don't even know what a Schedule D is.
New software? Have you tried using H&R Block? I do every year, and they are the experts on simplification. My ex can't figure it out. I have to do her taxes this week.
Do you realize how stupid Americans are? They voted for Obama.
None of that affects the fundamental adoption by fanatical white males, but it is enough to bust the bubble run we've had and cause capitulation among all the weak hands.
And I think there are a lot of newbies that bought at $600 - $1000 who are sweating it right now.
Then there are those who are sure it can't go lower than $400. Some of them might capitulate as it breaks down from there.
We don't have the system of Sweden. IN the USA, everyone is afraid of the IRS. Or at least they don't want to add hassle with IRS just to use some stupid technobabble money that they don't need any way.
http://www.wired.com/2014/03/bitcoin-currency_martin/Bitcoin Is Pointless as a Currency, But It Could Change the World Anyway
Why Bitcoin May Be Different
If history is a guide, it is here that bitcoin’s real potential lies: in its hybrid payments technology. As Europe’s medieval merchant-bankers proved, a brilliant new means of recording and verifying money transfers can indeed be a revolutionary event — not just in economic, but in political terms.
The existing, bank-based payments system is expensive and antediluvian — but also profitable and therefore jealously guarded by its powerful owners. Other technologies co-exist — such as cash payment face-to-face, or the developing world staple of hawala for international transfers — but they cannot seriously compete with banks. If Bitcoin’s technology is as cheap, as scalable, and as secure as its advocates claim, it may be different.
That last point, of course, is crucial. One reason that cash, that most archaic of payments technologies, still exists, is because it really is anonymous. Anonymity in transactions can be abused, of course. But it remains a basic civil liberty. Payments systems that use ledgers rarely offer the same assurance. Efficiency and economy are nice to have: but not at the cost of our right to privacy.
If history is a guide, it is here that bitcoin’s real potential lies: in its hybrid payments technology.
It was thirty-five years ago — long before bitcoin, the internet, or even the Macintosh — that the French philosopher Jean-Francois Lyotard warned that “the computerization of society…could become the ‘dream’ instrument for controlling and regulating the market system, extended to include knowledge itself and governed exclusively by the performativity principle.” An unreasonably dystopian vision, perhaps, given the enormous increases in prosperity and individual freedom that the web has brought. But it is only now that computerization is transforming money — the most basic institution of all in our market societies. So it is a dystopia we must make all the more certain does not become reality.
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