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Price manipulation may be going on, but the price of a bitcoin is still high compared to the cost of mining it. When the hashrate curve flattens out again (as it has before), or at least when the "cost of mining a bitcoin" flattens out near (but less than) a bitcoin, we will have a correct bitcoin price. This will happen either if the bitcoin price goes low enough or the hash rate goes high enough. Since the current hash rate is still going up, we don't have a low enough bitcoin price yet.
Have you got any idea how much it costs to mine 1 BTC currently? No, but he likes to open his mouth anyway to sound like hes smart. Too bad, the dumbest usually sound the loudest. Way to say that nice and loud there. The principle that bitcoin mining cost should determine the price of bitcoin was given by Satoshi in the white paper, and is reiterated many times in the early posts on this forum. Here's Hal Finney in 2010: One reason price might follow difficulty is that mining should not be too profitable (because nothing should be too profitable, the world doesn't leave free money lying around). Therefore the price of Bitcoins can't rise too much above the cost of mining (counting equipment depreciation among the costs of course). The cost of mining is proportional to the difficulty (approximately). Therefore we might expect to see price proportional to difficulty.
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Price manipulation may be going on, but the price of a bitcoin is still high compared to the cost of mining it. When the hashrate curve flattens out again (as it has before), or at least when the "cost of mining a bitcoin" flattens out near (but less than) a bitcoin, we will have a correct bitcoin price. This will happen either if the bitcoin price goes low enough or the hash rate goes high enough. Since the current hash rate is still going up, we don't have a low enough bitcoin price yet.
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On my working hypothesis, the smart coins are buying, and the dumb coins are instant selling. Thousands of dumb coins captured on the way back down, and the price won't go much below the previous floor of 365, then shoot back up to 450 quickly... just at a guess. Some lucky limit sellers get to buy back in at a BTC profit. Cool.
Hmm. I don't think I shall subscribe to your market analysis service then. Damn, wish I'd guessed differently myself. I held on to my 2 BTC, having canceled my sell order at 520 because I didn't want to play. Now they are down to half that. Doh! Doesn't prove the market isn't being manipulated though. |
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Well, the outcome is fairly clear. That's why the order book is so thin in that area.
All you see now is speculators trying to outspeculate each other. Or <insert your conspiracy theory here>.
Conspiracy theory: The trades are making massive bitcoins for the multi-username coordinated bot that is fleecing the regular folks who are dropping bitcoins out of the trees right now, still at low price compared to market. That coordinated bot is stacking the order book and running weird buys. The sellers are regular folks giving up their bitcoins. This is an attack on the exchange, but somehow isn't being stopped by gox or authorities... one guess who the conspiracy theory points to as attacker. |
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On my working hypothesis, the smart coins are buying, and the dumb coins are instant selling.
on my hypothesis the smart coins are not even using mtgox and the dumb coins are being deposited and trading on mtgox You got me there, smart and dumb being relative things. I'm a dumb noob with 2 BTC stuck on gox, waiting for this weirdness to play out. Although I might hold to my hypothesis that there are indeed some very smart coins trading on Mt. Gox. And making bitcoin bank. |
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On my working hypothesis, the smart coins are buying, and the dumb coins are instant selling.
on my hypothesis the smart coins are not even using mtgox and the dumb coins are being deposited and trading on mtgox You got me there, smart and dumb being relative things. I'm a dumb noob with 2 BTC stuck on gox, waiting for this weirdness to play out. |
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On my working hypothesis, the smart coins are buying, and the dumb coins are instant selling. Thousands of dumb coins captured on the way back down, and the price won't go much below the previous floor of 365, then shoot back up to 450 quickly... just at a guess. Some lucky limit sellers get to buy back in at a BTC profit. Cool.
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I can't help wondering if the reinstatement of BTC withdrawals will coincide with the price reaching near market rate again, then we all get our BTC back eventually? But the BTC will most definitely be in different hands...
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Anyone notice how the instant orders on Mt. Gox for this crisis have been almost exclusively sell orders? Watch your consoles. Even the green volume bars are mostly sells. The first sells were at a high price, and the price tanked. Now the price has bottomed out just above 300, and the sells can't drive it down any further but they don't stop coming. These bottom sellers are chasing the market, and they are being fleeced. Now the new floor is currently 370 or so, and the fleecing continues. Anyone else think it will be mostly up from here, with pauses here and there for more sell-lows? And then up from there again, for the most part, until we reach market or above? Coins are transferring into smarter hands, it looks like. Quite a show.
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