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Is the next dive gonna take us past 32 and beyond?
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Guys can we have another Valentine's Day rally please?  |
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I've done it too. Then again, I've made worse mistakes because I was drunk. So until they introduce three-factor authentication with a breathalizer, no confirmation box will save me.
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I want to offer a bit of follow-up speculation: the process as I outlined it is symmetric. That is, people are now able to both buy and sell with greater ease and increased ignorance. But let's consider the dynamics here: it is the customer who is buying BTC and it is the vendor who is receiving (and possibly selling) the BTC. It is far more likely that the vendor has a deeper understanding of Bitcoin economics than the customer. Thus, although the customer may simply buy at market price (driving the price high), and then immediately part with his BTC, the vendor is much more likely to either hold the BTC, or sell it off gradually (keeping the price stable).
SR is a prime example of this (since prices are pegged to the dollar), but I believe this asymmetry would apply to most emerging points of sale. Just like the high street shopper does not concern him or herself with foreign exchange rates while on a shopping spree abroad, while the owner of a high street retail chain probably has a good understanding of their market, currency rates and the economy in general.
So in conclusion, this supplier/consumer asymmetry will continue to facilitate an increasing number of uninformed BTC buys at market price by consumers. However we will not see a corresponding number of dumps because the suppliers receiving the BTC know better. As a result, the price will continue to climb.
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This is my theory. For the first time, people are able to buy Bitcoin simply by linking their bank account. That means no need for Dwolla, Mt. Gox, etc. and hence no need to understand (or even know about) "the market". I think all this talk about panic sells, big players, reversals etc, is just speculators writing their own narratives. "Who would be so stupid as to buy/sell xxxx BTC at market price? It must be manipulation." The truth is, what we have is a live wire in a bathtub. People who don't know or care about markets want to cash in or cash out immediately, and Coinbase gives them the opportunity to do this, directly, from end to end, at the click of a button. I would bet a lot of people are not even aware that there is a "market".
And for what it may be worth, remember that all SR prices are pegged to the USD. Most users would have their SR interface displaying in USD with the BTC/USD conversion happening implicitly, and only affecting the customer at the checkout. If some "big player" (read: some random rich dude with money to burn) wants to buy a lot of drugs, all he has to do is buy BTC and then immediately part with it to get his products. Market prices do not affect his actions.
I think that all these crazy peaks and dips are natural consequences of increased activity in a (relatively) shallow market, and we should not read too much into them. We have been slowly drifting into a seismic zone -- if you can't handle the tremors, you should move somewhere else.
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Thank you for the great service. Got my 16GB within a few hours! Would recommend this to anyone!  |
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