Fair enough. The lulz were probably a secondary benefit. Note how he said he wanted to make a point - broadcasting his moves with a small lead time would've allowed some major profit to be taken, and publicly warning to stop buying should've also resulted in at least a slowing of bids. Instead, strong buying continued.

The point Pirate made was that the Bitcoin market is much larger than the vocal minority suspects, and if that majority were to continue unabated, another confidence-destroying bubble would've formed. To conclude: without Pirate and other highly capitalized participants acting as a brake on speculative appreciation, the Bitcoin system would quickly become wildly unstable to a point where it is unusable for any but gamblers; not conducive to longevity.

Keep in mind that I am not advocating blind, wholesale trust in Pirate - it is just as important to regularly question the course he's charted. Eternal vigilance...


Very true. At the same time, I have a lot of difficulty believing any court would absolve such a small cadre of participants from responsibility. This is not your traditional financial institution with thousands of clients. How many are involved? Maybe a couple of hundred at most? With that small of a group which is part of such a tightly-knit community, it would be nearly impossible to prove that any are at more than arm's length from the operation.


Yyyyyup! It can last quite a while, but interest rates will decline over the duration. The more the Bitcoin economy grows, the harder it will be to keep acquiring a high percentage of the supply. Enjoy it while it's here!

For those whom are still unbelievers: there are two active, opposing flows at all times. Managing a large fund is not manipulation, but navigation. Yes, the magnitude of the fund may cause disruption from time to time, but if run responsibly, it can have a highly positive effect.

In this video, the building could be seen as representing the entire Bitcoin economy, and the counter-balancing damper as FPS&T. And remember: BS&T is a group effort composed of multiple individuals' assets, not just Pirate's - he just directs/steers it.

Pirate is one person acting on behalf of, and in conjunction with numerous others. For your claim of manipulation, everyone invested with Pirate is complicit. If other large players would've dumped above $10, would you claim they're manipulative as well? And if others were to drive the price down, it would help Pirate, not harm FPS&T.


Greed would've been letting a bubble form, then slamming the price down another 90% like the drop from the 2011 peak.

In order to maintain the viability of the investment, yes. It's part of the cost of doing business. There is still a long way to go before capital flows into Bitcoin can no longer make that profitable, or the system becomes stable on its own.


Intraday volatility shakes out the day-trading gamblers. It does nothing for weighted averages. The ending exchange rate was virtually unchanged from the beginning of the rally.



Good! Would you want another grueling six month decline after an unsustainable bubble formed on nothing but vapor? Do you think any business would touch Bitcoin at that point, even those that are enthusiastic about it? Long-term investor exhaustion is much more dangerous than short-term trader tantrums. Lasting wealth comes from the former.

Not really. If anyone understands that a growing market can't be manipulated down in perpetuity, it's Pirate. The objective is not to keep forcing prices lower, only to stabilize. The previous weeks were punctuated by an early rise, then leveling off for the duration. That kind of stable growth is critical for businesses to be comfortable with using Bitcoin as a primary financial service.


Again, there is no need to control it - only influence. This is a stabilization effort by a heavily invested party attempting to maintain the quality of the investment. What's happening is similar to gold, only gold is viewed as a limiting factor by financial industry participants whereas Bitcoin is viewed as a liberating factor by the equivalents.

JPM is the traditional financial giant, viewing gold as a mere trading instrument that limits its flexibility. Pirate is a Bitcoin financial giant, seeing the system as a vehicle that enhances economic potential.

This requires a perspective shift - the old paradigms do not properly apply here.

My price estimates from late last year of $2,100-3,000 still hold, but they're a little low now. A doubling from current basing levels would put gold in the $3,100-3,400 range.

As for time: by the end of 2012. Unlike last year when I expected $2,100 to be broken and then a knockdown like we saw from just over $1,900, there's really no more room to the downside.

The only realistic way of continuing the illusory mechanism is by causing a full separation between paper and physical prices. That can still happen at this point, and the indication that it has taken place would be a pop in the USDX of several hundred basis points without a commensurate correction on a monthly time frame; preferably within a weekly close.

Paper gold prices would then plummet due to effectively unlimited sell-side pressure, obtained through asset freezes like that seen with MF Global, and fractionally-supplied money. Bids would be completely overwhelmed regardless of funding because more can always be supplied directly to the sellers.

On the other side, physical would rapidly go into shortage and become impossible to obtain at paper prices. It would shortly become an off-exchange item, being used for large transfers with little to no public disclosure; similar to what exists now in the oil trade (e.g. India paying Iran in gold for oil), but becoming far greater in scope.

Whether the separation will actually occur remains difficult to call. HKEx has recently acquired the LMA, throwing uncertainty into the mix. If China deems squeezing western participants for their gold an important enough direction, then it may occur - ironically from the opposite participant expected. That would mean China will have obtained massive amounts of gold at the expense of other sovereigns, again mostly western. By breaking the paper/physical connection, it would be like burning the bridge after having crossed it so as to ensure China would be the sole gold power for an extended period.

It's also possible that the separation may occur regionally, wherein a particular nation may restrict communication, trade, and travel through its borders while breaking legitimate market valuations. That would have the same effect as price caps, only through market interference rather than exclusively by legislation. The same results would occur as well - shortages of the underlying real assets.

I only know the paper/physical connection could be broken - either way, direct physical metal ownership eliminates counterparty risk. Even in the event that it does break, Bitcoin exchange rates should continue to offer insight into what the true physical gold valuation is; their fundamentals are almost identical, strengthening as Bitcoin's base inflation rate continues halving.

Good for whom? Pure speculators? Traditional businesses? Consumers?

Yes!

Most people are missing the point. Pirate applied the brakes because the vehicle was getting out of control and heading for a crash - a real one. It doesn't matter that he isn't as big as the Bitcoin economy: he just has to nudge it from time to time so it stays healthy.

Only gamblers thrive in casinos. No sensible business will make use of an unstable foundation, and Bitcoin is still vulnerable to long-term dismissal as a viable option if excessive capital flows cause too much volatility.

Steady growth is absolutely critical for Bitcoin's future if it is to be universally adopted!

There's a whole bunch of fail in this thread regarding the precious metal fundamentals. Sentiment is clouding objective analysis. It is extremely important to determine which data sources are legitimate, or else any subsequent analysis will be flawed.

Understanding the paper/physical dichotomy is a core factor in properly assessing fundamentals for the two variants of gold. It is also necessary to examine various pools of wealth, since gold does not function in isolation. Incentive structures are more powerful than chart patterns.

Aaaaand we're back. Sorry, didn't mean to crash everything.




Consolidation here for a week or two will allow for resumption of a measured pace. We're almost back at a 5% weekly capital inflow rate.




Good man


But then you come back to this foolishness. Bitcoin is preceding gold.

Bitcoin continues to foreshadow movements in gold. Since there's more pressure on gold, there's a divergence. Since they're both subject to similar fundamentals, that separation can only last so long.

It's finally time. Gold will follow Bitcoin upward, probably doubling before hitting a correction.

Danger zone is $9.30-10.15 on a weekly basis - definite short-term sell above $12. So far, none of the past 10 weeks have closed in the danger zone...

I'm rarely getting insufficient work, and only immediately after longpolls. Then it's back to normal. Check your private pool or latency?

Who gets his coins?

Shhh... don't get his hopes up!

What's he going to do if it goes over $9.99...

"I predict single digits on 2013/04/15"

Is there an escrow being used?

On the plus side, I never have to look for utensils.

Minor issue

External flows entering Bitcoin from other currencies have remained consistent. None of the moves since the USD$5.00 level have been excessive on a weekly basis, and each time so far there has been sufficient time to stabilize. Nothing is overtly suggestive of a major correction.

Oh, cypherdoc...




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