I sometimes have a hard time getting across my point because of my convoluted writing style. Apologies for that.
Here's my point, ultra condensed: Mtgox shutdown (in whatever form it'll happen) *does* matter. No question about that. But the question is *how* it will matter on which time frame.
Short term, it certainly will depress price (and did so already, yesterday for example). But I caution anyone who believes to know with certainty that it will depress prices for a long time. There are several plausible interpretation scenarios that will make mtgox closure *positive* in the long run, just like we know think of the SR closure as (obviously) a good thing.
Note that I'm personally not *sure* if mtgox closure will be seen as positive in the long run, but I see the real possibility for it. The market will ultimately decide, and I just mention the possibility that, in a year from now, we'll talk again about mtgox and everyone will go "Well, d'uh, of course it was good news. The worst run exchange in the BTC ecoystem *finally* went down. That's what brought us to the new ATH of 6000."
Easier to agree with you here. The important question is not yet answered, how will the fall of gox be played out. Will there be a bail-out where gox will be bought and the customers will get what they're owed, or will it just be a bankruptcy with all the money magically disappeared. The first option isn't easy. It would be a noble act if someone invested so much, just to save the integrity of the market, but it does have it's risks. For instance, what stops another exchange from repeating what gox did and by that nullifying previous attempts to save the integrity of the market? Only solution that I can see, is some kind of an self-regulatory system that will separate trustworthy exchanges from the shadowy ones. I agree, that right now you can't speculate the future, because there is no solid information to speculate the future on. Fall of gox could be a good way to show integrity and responsibility around bitcoin, but it could also make it lose all of it's existing positive halo. |
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At the time of the SR closure, the absolutely *dominant* sentiment among the pundits in here was that it will greatly depress price. Anyone who said differently was shouted down. Took a few days, and that sentiment very clearly changed.
I think "the pundits here" mostly have no clue what they are talking about or they are just plain out lying. Most of the things I say here get shouted down. For instance, if you currently say that MtGox demise is important, then you will probably get shouted down by the majority So, to translate it to the current day situation: yes, I compare the two events in the sense that, at face value, you might naively say "oh, it's going to keep price down for months to come".
In reality, it will probably throw price down for some days, maybe weeks. And then, gradually, it'll be seen differently, as extremely good news.
It's really hard to understand your point. You are telling me, that because of the people here didn't see the SR demise as unimportant, then MtGox demise is also unimportant? Well, I just don't see the logic in that. Just a few of those reasons, just from the top of my head: (1) the formerly largest exchange was run amateurishly, and was punished accordingly. (2) cheap mtgox coins that would have otherwise flooded the market are now unavailable to arbitrage down the price. (3) Mtgox investors will look to "replace" their coins (not all of them, of course. But those who *do* want to replace them will have to buy them again.
Questions that pop into my head: (1) Are the other exchanges honest or will they repeat the history of gox? (2) How can I know which exchange is honest and which is just building confidence for final strike (3) Could bitcoin be just a tool for those exchange owners to scam the general public? These are serios questions that will be left unanswered and therefor will create distrust and uncertainty. For instance, I myself, am not as comfortable holding fiat in stamp as I was couple of months ago. The demise of SR only hurt the BTC drug market, while the demise of MtGox will hurt the integrity of the entire bitcoin market system. |
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You are comparing the demise of an tor drug market to the demise of one of the biggest exchanges with the biggest holdings?
looking at the seized btc stash from DPR I think it is a fair comparison No it isn't. Not even in that perspective, because the sums that are involved with gox are much bigger. But the more important aspect is the confidence. Bitcoin is no longer just play money that is run by drug dealers. Currently it is pushed by legal financing. If some drug market goes bust, then it means nothing in the legal field. Investors with legal interests are even happy to see that bitcoin is distancing itself from drug trade. But when a big exchange goes bust, that is the intermediate link between BTC and $, then the entire system will be questioned. If gox can get away with "sorry, but the money seems to be gone", then people will question what stops the other exchanges from doing the same. After all, there are no repercussions. Not to mention that drug dealers/buyers won't be seen talking on TV, how they lost their drug money. But we will see fathers of 3, who will tell their stories, how bitcoin promised them riches, but instead wiped them dry. |
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Fact is, the *exact* same argument ("this will scare away new investors!") was made in September last year when Silk Road was taken down.
The *exact* same argument was made when price dropped sharply from ~260 to ~60 in April last year.
In either of those cases, nothing like that happened. In case of SR, it was particularly stunning how the brief flash crash (that did happen as a result of the news) revealed a solid underlying buying pressure that was lying dormant until then. It started the rally that led to the December ATH, in fact.
Please note what I am saying vs. what I am *not* saying: I don't claim to know whether the bear market just reversed. Just that looking at an "objectively bad" news item and concluding it will negatively affect price will get you nowhere in market analysis. It's simply not how the human mind seems to work, collectively: any event is interpreted in a highly contextual framework. And right now, I would be careful to conclude that the result of that interpretation is going to greatly depress price (see, e.g., the very solid recovery to ~600, or the huge jump in USD on the Bitstamp order book)
You are comparing the demise of an tor drug market to the demise of one of the biggest exchanges with the biggest holdings? |
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Dunno about you guys but I am sick of having to defend bitcoin over the last couple of days against all the told-you-so mockers.
Its like everyones gone retarded and decides nows a good time bring up all the old fallable arguments against Bitcoin.
I even had the old " You can't pay yoru mortgage in BTC so its a speculative investment and thats it" to "I heard that the CEO of bitcoin took everyones money"
One co-worker couldn't understand when I said I'd rather hold a deflating asset than an inflating one that I meant in general and to convert btc to fiat if and when necerssary. To which he replied so you could live without cash now?!
I mean WTF these are intelligent people.
It's the steep deflationary nature of bitcoin that turns most people off. It does make bitcoin look like a pyramid scheme and the number of followers who are exhibiting cult behavior aren't exactly helping either. |
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Ol' Gil is not worried, even if he bought in at 700$600$. Ol' Gil sees that the price is going down very slowly, so it's not dangerous at all! Soon there will be an upwards wave and Ol' Gil will finally catch his big break with his bitcoin investments!  |
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How much fiat was destined for btc that ended up getting gox paper btc. Now when funds are wired to an exchange to purchase btc they will be purchasing btc. Future fiat will have a greater impact as it's not traveling down a black hole.
there will also be a percentage of people who lost all of there stash but now fully buy into the bitcoin bull scenario. They must buy again
I agree that the market system will be of better quality without gox. But the market system hasn't restarted itself yet. The problem with gox is still without answers and solutions. It was funny to me how many people translated gox just shutting it's doors as the solution and how everything is fixed now. |
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The point is: You are speculating on a specific price point you believe is a "good investment" based on your future predictions of where bitcoin will head
This is absolutely no different than anyone else investing at any price point.
You can elaborate all you want on how it is not important to you to invest and how bitcoin as a protocol will fail etc.
All I am seeing here is someone who wants to buy in cheap. There is nothing contrary to this perception in your statements
The main difference is that I need more certainty then "look! everyone are buying! you should also buy!". I need some real developments regarding the commodity or the integrity of the entire market system. Thats just the way I roll and it's no use to try to convert me. |
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except a large percentage is not stupidity and hype, but real world market influencing events and conditions.
Yeah right. One of the biggest exchanges just shut it's doors, without announcing any proper explanations or plans of action. Only information you have on it are all kinds of rumors. And you are telling me that this rise isn't fueled by stupidity and hype but by "real world market influencing events and conditions". Well, I think that we should agree to disagree here. |
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Well given that you were dead set on only buying coins at 200-300 usd and not above I can understand your sentiment
Gox was/is really bad news and the crash down to around 400 reflects that.
But I still believe that without the massive Goxxing we would have bottomed out at 500-550ish
Whatever, this is speculation. You may still get your coins. I however don't feel sorry for you.
If you are not willing to take even a little bit of risk (buying in at around 400) or being too greedy its solely your own fault
There are always opportunities to invest your money in. Many people here may see that bitcoin is the only investment opportunity given to them next to their daily routine jobs and I think this will also make them take stupid risks. They are just too dependent on bitcoin and they have become emotionally attached. I'm ok with not investing into bitcoin at all if it wont become attractive enough. There are always good investment opportunities around. |
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If 7% of all bitcoins really are gone then the price rise would be more like 30% because the 7% were from the actively traded float, not from the several million hoarded and locked away in Arctic-cold storage.
You seem to be forgetting that there were also a lot of fiat afloat at mtgox that was meant for BTC. BTC will lose that fiat, and probably any new fiat that would of came from those who owned it. the fiat can be just Ctrl-P 'printed' back into existence ... the bitcoins, they are gone forever ... chew on that genius You seem to have trouble understanding the point I was making. |
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I am certain that it will go back down again after this rally, but even so you are missing out on 30% profit by continuing to wait till it goes back down to the $200-$300 range? It might go back down to that price range, but I assure you it will not stay at that price point for longer than a day.
I don't like to play these unstable rises that are made up of stupidity and hype. To me, it's the same as passing the roulette table and cursing at yourself "If I should have called red at the right moment, then I could have won big". Sure it would have been great to win money, but I'm not planning to earn with playing like this. |
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If 7% of all bitcoins really are gone then the price rise would be more like 30% because the 7% were from the actively traded float, not from the several million hoarded and locked away in Arctic-cold storage.
You seem to be forgetting that there were also a lot of fiat afloat at mtgox that was meant for BTC. BTC will lose that fiat, and probably any new fiat that would of came from those who owned it. It's fun to see how everyone are trying to downplay the gox situation and are trying to make this look good. |
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No one knows what happened to MtGox, or what happened to the coins and fiat on MtGox, and everyone are cheering "good news" and are buying in.
This market is beyond stupid imo.
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1100btc wall at 348$ at stamp... This could be a toughy...
You mean $548 Looks like Bid Wall @ $540 is increasing too. I panic bought earlier and he pulled his wall and dumped There are still a lot of coins out there whose owners are determined to sell. It didn't stop at 400 yesterday because sellers ran out of coins, but because the price got too cheap. They will let the price rise, if they see that there are buyers enough. But if they see that the price isn't moving up, then they will continue dumping. |
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How in hell can coins (even more so cold storage) be "unavaliable"?
Lost Keys?
Lost Wallet files?
DB corrupted?
You guys have any ideas wth he could mean?
I think that it's simple. You just take the coins and choose one answer from the list above, and you will not be responsible in the eyes of the law. There is this threat that the creditors may hunt you down and do things to you. But you can pay the more capable kind and let everyone else whine about their bad luck in their forums. Change your identity and sell those coins back to the market through different channels. If the coins are "lost", then mr. Karpeles didn't do anything new here. There have been many cases of "lost" coins before. People who are able to code working bitcoin web exchanges, but who are somehow stupid enough not to create enough backups for the most important database. And if you like, then you can also blame unknown hackers and no one could prove otherwise in court. |
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Sounds like we have very different trading/investing strategies. I'm definitely a mid/short term trader so charts are a must for me. I think there have been huuugely positive signs coming out all through this bear market that have been overshadowed by negative press. So much investment in bitcoin based businesses, apps, big companies accepting bitcoin as payment, atms, general public consciousness of bitcoin, etc, etc. As a long term bull, I think this is the best time one could possibly buy. The price is only currently low because people are freaking out about Gox which has nothing to do with all the positives mentioned above. Here's what I'm talking about... I mistyped before, this is the 52 week EMA which is exactly the line that the last crash rode up and off its final bottom. Also note that the low of that crash was not near the high of the previous bubble.  Sadly I don't see many news that can make the bitcoin price turn upwards. To me - bitcoin based businesses - Not bitcoin based businesses, but crypto based businesses. They can ditch bitcoin and just jump to another crypto with relative ease. So, they are not dependent on bitcoin and their existence isn't supporting the success of bitcoin. Those investments wouldn't been made if they were dependent on bitcoin. apps - I haven't seen a lot of new good apps for bitcoin. I think that the most important piece of software that gives value to bitcoin is Armory. And the development of Armory is rather slow. big companies accepting bitcoin as payment - Big companies accept bitcoin for marketing reasons, not for financial benefits. Implementing bitcoin payment will actually cost you more money and work hours then it is gained by any transaction efficiencies. Companies are accepting bitcoin because it can create free press + new loyal customers, that are loyal to bitcoin. And if someone buys something with bitcoin, then he will only hold bitcoin temporarily or he will waste the bitcoins that he held before. The company that receives the bitcoins, will convert it to $ right away, because bitcoin doesn't enable liquidity. So, if new companies are adopting payment, then I can see that it will more probably have a negative effect on the price, not positive. ATMs - I think that the atms are a gimmick. If someone wants to buy bitcoins then it's cheaper to buy them online. I think that ATMs were meant to catch the regular folks who find buying bitcoins online too difficult. I think that this idea failed because those regular folks distrust those ATMs even more. I think that zipzap cash for coins was a better idea. general public consciousness of bitcoin - during the past months it hasn't been exactly a good thing. People are more sure that bitcoin is just a pyramid scheme and they ridicule people who are involved. I think that EU/USA market is saturated. Almost everyone knows about bitcoin and they have made up their decision if they want in or not, and it's very hard to turn those decisions around. People tend to be rather radical when deciding their stance on bitcoin. They either love it or hate it and there is a low chance in turning it around. I see that the only choice is to enter those markets that haven't been touched yet. Then you can create actual demand and then you can be certain that the price will go up. |
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Thanks for the honest reply, kkaspar. It is difficult to buy at the "bottoms" because the feel in the air is always so negative [although I'm not saying that yesterday was necessarily the bottom]. The recent Gox news has shaken some people's beliefs in bitcoin, and the price is lower to reflect that.
But imagine the feel in the air if Gox returns a fair % of customer deposits, well-funded and professionally-audited exchanges open up in NY and London, and the price starts to rise. Eventually we would look back to the days of getting Goxxed with whimsy--a bump along an enchanted road to great things.
That being said, if you believe that bitcoin only has 1-2 years left, then I think you are gambling no matter what you do.
If gox will be taken over by a team of people who have proper financial backing and experience, then I'll probably go bullish for the coming period, until the volumes hold up. If an exchange is run by people capable enough, then it's probable that bitcoin will me marketed in new ways and in new places. But that is a if. I am very skeptical on any information involving gox, because to me it seems more likely that Mark Karpeles isn't this innocent fool that just tends to screw up, but he is actually a rather obnoxious confidence man. I agree that there is always some gambling with the crypto market. For instance, I am gambling with the fiat that I'm holding in Bitstamp, because there is no guarantee that I can trust them. Only thing I can do is to cut down the gambling part as much as I can. If the bitcoin market system will get it's sh*t together, then I think that the hype can live around 1-2 years and there can be around 1-2 more bubbles/crashes. I see that bitcoin won't have a very long lifespan, because it's simplistic financial properties will stop it's development at around 100b$+ market cap. It my vision, bitcoin won't ever be a serious financial tool, but it can be a large gambling platform. |
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Yep, yep. Not trying to give you advice, just speculating.
Wouldn't the fact that sub-$300 prices would be a major break of the long term trend make you uneasy?
$400 is right on the 200 EMA on the week chart. A perfect place to bounce up off of just like we did in July 2013 at the bottom of the last bear market.
As I see it, going to 200-300$ is the continuation of the long term trend. Every bubble has dropped to the level around the peak of the previous bubble. I actually don't use the charts much with cryptos to make decisions in trading. This market is unregulated and the wealth highly concentrated, so the price doesn't move in a way that would make sense in regular commodity markets. What interests me the most are the proper reasons that give potential to the rise of demand. If there are new reasons for people to buy and hold, then I'm back being bullish. During the past months there have been only reasons why people should drop bitcoin. I see that only hype and stupidity has postponed this drop. To me "look! everyone seems to be buying!" is no reason to buy. I need better reasons about the success of the commodity itself, not just another wave of hype. |
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You are correct, kkaspar. We are all just guessing--including yourself.
If you think bitcoin will be successful, then at some point in the future the price will be vastly higher than today. You've done well so far by waiting, but why not deploy 25%-50% of your allocated funds now? If yesterday was the bottom, you can enjoy the ride up from here. But if we hit your $200-$300 target, then you can purchase more.
People don't have to buy and sell all at once.
Before the situation with gox, I was more certain that bitcoin has about 1-2 years still left in it. Right now I am not sure, because gox can hurt the integrity of the entire market sysem in a way that there won't be anymore rising at all. I think that the market is too fragile to even invest 25%-50%. It makes more sense to me to wait until there is some certainty and then act. I don't like to invest on pure hype alone. |
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