That's what people said at $800, $700, $600, $500, $400, $300.

Shorting now is risky, picking tops when price is heavily bulltrapping is not a good idea.


If you are in BTC and you wanna take profit sure, but shorting right now is asking for trouble.

Nobody answered my question tho.


Why should the average Joe buy bitcoin? For what purposes?

If we take bid sum (the quantity of USD on the orderbooks waiting to buy BTC), ask sum (the amount of BTC on the orderbooks waiting to be sold), and bid/ask ratio in exchanges as an indicator of money sitting in exchanges, we can have an idea of the demand for BTC around the world.
Sure the two (bid sum and actual money sitting on exchanges) are not necessarily the same thing, but history shows that they can reliably predict uptrends.



Let's start with Chinese exchanges Huobi and BTC CHINA (since chinese exchanges move the market more than any other exchanges who just blindly follows them most of the time).


Huobi





The picture speaks for itself, bid sum decreases over time.




There something particularly interesting to note though.
Look at the decline that we have had that bottomed out at $275. Price was going down but the bid sum was slowly increasing.






Chinese buyers were waiting for that target and in fact we saw a short term recovery that lasted quite a while with a ridiculous bulltrap that topped at $475 before resuming the crash.
The same is NOT happening right now.
Sure price is pumping right now. But could just be a bounce pump after a flash crash, classic stuff, exactly like we had all year.
No new fiat money to support a healthy and prolonged uptrend.

BTC CHINA:








BTC CHINA shows a clear constant decline of demand.

The exchange is not really being abandoned, because there is a lot of coins to be dumped, but not fiat coming in.






Bitfinex doesn't show any particular difference over time, that is probably because of the fact that it is used mostly for margin trading and because of the maker-taker system. Still, we are not gonna observe any increase in demand here obviously.





BTC-E shows the same picture of BTCCHINA, demand slowly drying up but the exchange has lots of coins to be dumped.











Now Bitstamp. As you can see, the decline in bid sum is clear, but wait. What is that sudden increase we can see lately?




The bid/ask ratio has gone up, but that doesn't necessarily mean that the bid sum has gone up... Let's see more precisely what happened there.





As you can see, the bid/ask ratio has gone up, but the bid sum has stayed the same, no new money.
What happened is that the ask side has dried up right after the Bitstamp HACK.
My guess is that, because is a lot easier and quicker to withdraw BTC than it is to withdraw fiat, a lot of people have simply decided to GTFO of bitstamp after the hack.
Still, no new money, demand is not increasing.





Conclusions:

If we take bid sum and bid/ask ratio as indicators of new money flowing in exchanges, we can see that demand has been slowly and gradually decreasing in all exchanges since the peak of the bubble. Some exchanges show signs of 0 new money coming in but plenty of coins on sale on the orderbooks.

A healthy and sustainable uptrend needs constant fiat money being poured in exchanges, as we have seen with the previous bubbles.
Without real demand, any uptrend will be short lived. Price will not magically go up to $500-$1000 or in a new bubble as most are dreaming here.

"The invisible hand has stopped selling". "Bears who can sell have sold and are now gone"
That's not how markets work. A lot of liquidity providers in exchanges are just traders and they can dump as soon as they see the market lacking confidence and buying pressure.
Do you think all the ones who bought at $150-$200 are permabulls that are gonna HODL forever and never sell? Definitely not.

The high volume is simply because it was a crash of proportions not seen for a while. Price went in a free fall that margin called and stopped longers, late shorters, a lot of people sold, a lot of people got dumped on, resold, a lot of coins exchanged hands.
High volume alone is not necessarily a sign that the capitulation is in or that eventually BTC will actually capitulate and start a new bull run.



For VC money related arguments, read my thread: https://bitcointalk.org/index.php?topic=931714.0

This is just a claim without any evidence.
One of the reasons market has been crashing for a year is simply lack of demand, a lack of demand that you can observe in the bid sum slowly  drying up over time in all exchanges: check coinsight.org

The hypothesis that the crash is a reflection of demand simply not being there and no new money hitting exchanges has evidence that supports it, the "it's all manipulation" hypothesis has practically none.

Longs are still higher than shorts. Don't see the point. The "shorters have to eventually buy back" applies to longers as well, a lot of them are severely underwater and have already been margin called and stopped.

The second market investment trust fund has not done much for the price to be honest. Don't know why another ETF will do the trick.

Good post, it's nice to see somebody who is trying to be objective and look at things for what they are.

Nice arguments, you definitely sound like a smart, critically thinking investor.


Again, not investments in bitcoin itself, VC money can fail, and even if it doesn't, it does not imply a high BTC price and doesn't imply BTC will survive.


You are easily impressionable by hype articles. I guess you're one of the dudes that said "you bear trolls are idiots, Barry Silbert just said that Wall Street money is going to flow in bitcoin directly this year (2014) in a massive way!" at the beginning of 2014 but got screwed right?

Does that give an indication that the number of people owning bitcoin but especially USING IT AS A CURRENCY (and not just for speculative purposes as an end to itself) is anyway significant? No. The only indication of how many people owning bitcoin is this:
https://bitscan.com/bitnews/item/how-many-people-really-own-bitcoins-and-why-does-it-matter

Low numbers, and that was in january-february 2014, any new guys coming in that were not traders got screwed with it because of price.
Don't know how many more people actually got into the game and sticked to it after that.

Aside from reasons related to drugs or wild speculation (profitable and easy trading of a volatile asset), who is using BTC? Mostly people who already own bitcoin for these purposes.

Why should the average Joe buy bitcoin and use it as a currency, if he is not interested in the use cases I just mentioned?
I mean, why are you here? Why do you own bitcoin? For speculative purposes amirite?
Me too tbh, to trade it.
Now why should the average Joe give two shits about all that?

-as a store of value? bitcoin is a shitty store of value, you said it yourself in a post recently. And 2014 clearly shows it (a whole year of terror if you hodled like a fool).

-because no fees? Volatility can fuck that over real good, so no point in saving 1-3% when you can lose 10-30% in a few days. You might argue that over time (IF bitcoin succeeds) volatility will gradually decrease. While I have doubts about that, in the long run bitcoin transaction fees will be higher anyway. I guess you know that miners “need to be paid” in order for bitcoin and the blockchain to exist, whether thanks to ridiculous inflation, or transaction fees. The blockchain is not gratis.
Peter Todd said it himself: “regarding fee economics, we’re fucked”.


So why should the average Joe put up with bitcoin’s volatility and the possibility of having his funds easily stolen (if he has to move his money around, you can’t just keep it in cold storage forever you know) and no consumer protection?
Why?


For musical chairs-ponzi speculative purposes or drugs, that’s why. But guess what, not enough people care about that to justify a high BTC price.


The masterplan for bitcoin’s world adoption and earth domination might not work out as expected I’m afraid…




As you said, these companies "accepting bitcoin" is just self-promotion and marketing, since they actually DON'T really accept bitcoins.

Who said “big money dislikes bitcoin”? Some big money bought it and is now bagholding it, as I showed in my first post.
Not only that, but VC money can easily fail, these guys are humans and not perfect. Like Tim Draper, Bill Miller, Barry Silbert and others. But most importantly, NSYE invested in an exchange not in bitcoin itself, that simply doesn’t imply that bitcoin price will be higher and that it won’t crash.
Simple as that.

They invested in an exchange in the cryptocurrency space.

What are other big money/names saying about the cryptocurrency space for example?

What is the Federal reserve bank saying about it?
Let’s have a quick look:

http://newsbtc.com/2015/01/22/federal-reserve-bank-vp-acknowledges-ripple-bitcoins-original-ledger/

What about Bill Gates about saving the unbanked and giving them access to financial services?
Let’s check it out:

http://www.coindesk.com/bill-gates-bitcoin-alone-wont-solve-global-payments-challenges/

To return to my dotcom bubble analogy, yes, bitcoin = world.com, pets.com


Now, the ripple network better represents the “internet-dotcom” analogy because it’s simply a technology (sure there is XRP the currency, but it’s not necessary to give a fuck about that as opposed to bitcoin in the blockchain system, which is a flawed concept), like the internet.

Ripple is just an example that takes what is promising about distributed ledger technology but without all the fuck ups (https://bitcointalk.org/index.php?topic=927036.msg10177316#msg10177316) that make the bitcoin blockchain not viable long term and without the NECESSARY incorporated pets.com get-rich-quick-but-without-a-real-purpose ponzi investment (bitcoin).


The analogy of the internet works because bitcoiners represent the dudes that during early internet days wanted to buy “shares of the internet”, but since you can’t technically do that, they stick to pets.com because at least that investment could make them rich quick, in theory.
The analogy works perfectly.

It’s pretty understandable why bitcoiners don’t like ripple the network. Right?


Again, ripple is just an example. Others projects in the cryptocurrency space might come up with something similar and better, replacing the ripple network and become “the internet” of my analogy.
I’m not promoting the ripple network itself, just to be clear.

@oda:


Bitcoin = Pets.com

Distributed ledger technology = the internet


Make no mistake, I said distributed ledger technology, not its first shitty implementation (the bitcoin blockchain) that needs a ponzi currency flawed by design in order to exist.
...And definitely not the ponzi currency itself.

That's how the analogy as I used it works.


Tomorrow I will have more time to answer any points raised in this thread more carefully.

I see  a lot of people in here getting excited about VC money being poured in the bitcoin space (like the NSYE news) and taking it as some guarantee that the bitcoin's price is gonna go to the moon because of that.

Wrong.

First of all, some of them are investing in bitcoin exchanges, not in bitcoin itself. BTC price could crash to $10 and exchanges would do fine. Bitcoin "investors"? not so much.

Secondly, some of the VC guys investing in this space don't know what they are doing or what they are really getting into.
Now permabulls will probably shout at me something like:
-"you troll! We are talking about Citi CEO and NSYE! Do you think you know more than them of what's going on? Hahaha"

K.


Let's take a few examples shall we?

Tim Draper. Big VC guy, billionaire. He bought BTC in the millions at $500-600. Then he posted on twitter stuff like: "if I was Russian I would buy bitcoin right now". Right before the ridiculous BTC crash.

Does it look like he knows what he's doing?
No.

What about Bill Miller? I have enormous respect for the guy, but he bought BTC at $500. Let's be honest, he screwed up big time.

What about Barry Silbert and his fund investors who can't liquidate their holdings from the fund and they are stuck with their bags?
Did he fuck up? You tell me.

Those guys are now public Bitcoin BAGHOLDERS. We are not talking about small percentages. They lost millions.

Oh, and they invested on bitcoin directly, unlike others who invested in exchanges, who are not technically dependent on the bitcoin price to rise...


You still think you should take VC money as a guarantee that nothing can go wrong (it can easily fail by definition FFS)?  Or even better, as a guarantee that any VC money in exchanges is gonna make bitcoin's price go to the moon even if the two are not directly related?


There was a lot of VC money during the dotcom bubble too. Just sayin'.

Maybe because the price was ridiculously lower so that the USD VALUE of the coins mined a day was ridiculously smaller as well?

This is basic math.

Ps: i'm not lambchop

https://twitter.com/DoctorBitcoin/status/557526205709037568


The post was deleted on reddit but this guy saved it.



As always gentlemen, this is actually good news™

Yet the charts look the same

Problem?

Wow dude, just wow.
You are insane.

You are right "waaat."


"People here are too dumb to understand the topic".

Sorry to hear what happened to you but you can't say that bitcoin is a salvation from banks just because some banks fucked up.

Putting money in BTC, compared to a trustworthy bank, is pure suicide, let's be realistic here...
You are putting your funds in a speculative monster that is losing value every day, it's experimental (that's what andreas antonopulous and gavin themselves said) and might go to zero tomorrow for all we know.
Oh, and can be stolen very easily as soon as you have to move it around.

Zeroday:

To me it sounds unrealistic that the people you are talking about would use bitcoin, for a lot of reasons.
But even if that's the case, do you agree that we are talking about a ridiculous low number of people?
Sounds like you are suggesting that bitcoin is a currency for a marginalised minority.

The point of my thread is to show that the bitcoin price is a bubble and it's collapsing (and especially that the fact that in 2011 the price crashed from $32 to $2 and recovered is irrelevant, for example). Even admitting that the minority you are talking about finds usefulness in bitcoin (still have my doubts tho), price could be at $1 and stay there.

Since we have enstablished that the average joe has no reason to use bitcoin, will your minorities be sufficient for bitcoin (and not something else) to even survive? Considering the 3600 coins mined erryday and all...

Long story short: even if we admit that your minorities will use bitcoin (effectively making BTC a niche currency) , its price is a bubble and it's collapsing.

Yeah, why pay fees when you can lose more than 30% of the purchasing power in days.
Adide from people who already own bitcoins because speculation or drugs, why should the average joe go through the hassle of buying bitcoins to pay for stuff online?
Why?

Karpeles playing with his Willy and China were probably the reasons this thing reached the $260 and $1200 levels in the first place.

Willy is a thing of the past now, and regarding China, looks like they bailed long ago  











Our bulgarian friends have always BTC to dump too, not much fiat to gobble up on them cheap coinz tho  





PS: not posting bitswamp because irrelevant after the post-hack exodus (and before the hack the picture is the same, demand totally drying up and progressively going to shit), and finex is just shorters taking profit with the maker-taker bullshit.

Doesn't sound like a pump&dump at all, but keep glorifying it