I am one of few that have made money on Bitcoin after the crash, not filthy rich on Bitcoins, but I haven't lost money.

Before Bitcoinica was around, this is just one of my earlier posts written when the price was at 10 dollars in August.

"To the Bitcoin community, I want to short sell 3 000 bitcoins, and I will pay 5 % interest per month on the loan. I have my money in Mt.Gox that covers all the loan (hackers f*ck off nothing to get here, I have a Yubikey). I want to make this a secure deal for both parts. I know that there are people in here that don't want to sell, you can make money now.

5 % interest per month gives a annual rate at over 79 %. That is really good terms. I would like to be able to hold it for at least 2 months, and also have the option to close the position before hand.

If anyone is interested, tell me how we can do this in a secure way. Maybe I can contact Mt.Gox and they can take care of it. We really need the opportunity to short sell Bitcoins, it have many benefits, for example more liquidity, people can make money on their bitcoins if they don't want to sell."

If they where real investors with an intelligent brain, their mission should be to accumulated as many bitcoins as possible for the more normal inflation environment that will come Dec 2012 (that can't get manipulated by the miners). Not give away money to the miners today. This shows me why they probably lost money in the first place, they are to greedy and don't get the whole picture.

The problem is that if they would take the price up to let say 4 dollars, they will most likely lose even more money.

My thought is this, there is a cartel right now that really wants to get the price to high levels again, like 5-15 dollars, but they also understand economics, so they know that they are fighting a hard competitor, in this case the miners (with the high inflation environment). They have the resources to take it up, meaning they have the fiat money. But, the problem is that they are already heavily invested in Bitcoin and they have been burnt really bad with the downturn from 30 dollars to 2 dollars.

They have three options.

1. Hold what they have. And lets see what the market does. This option I think will take Bitcoin back to 2 dollars within 1-2 months.

2. Buy as crazy and fast as they can and push it up over 4 dollars hoping to get others to bid it up even more. This will fail, and the reason is exactly why it failed last time, after a while it will go back, maybe from 5 dollars or something like that, but it will get back to 2 dollars in the end, the miners will sell as crazy in to that rally and panic will come back.

3. This is the smartest option. Lets assume they have 300 000 Bitcoins in total them selves. What I would have done is to sell 1/3 of that (around two weeks of Bitcoins created by miners), why? Because at 2 dollars they will get rid of all the greedy miners plus they can then accumulated back their 100 000 bitcoins that they sold at much lower levels, like 1,5-2 dollars, and from there build the price up. They will be the big winners. In the other two options, they will go for the greedy option and fail.


As a summary all options will take Bitcoin price back to two dollars. The different is the dates this will happen. I have been 100 % right with all my predictions until today, so lets see what the markets does this time.

I cancelled my withdrawal earlier, but how is it looking now.

Is Paxum withdrawals still under investigation (at Mt.Gox)?

I start by saying good work. I really like Max Keiser, so that is a big plus as well.

But the problem is this, if 1 million users show interest for Bitcoin, the high inflation environment will very quickly put them off. Why? Because the miners (and not the fiat buyers)  are in total control right now with the high inflation that Bitcoin have. Bitcoin will get big, but not right now, it is to early, when we hit the 25 BTC/day inflation (around 10 % annual inflation) the it will get much more interesting when the fiat buyers are pretty much in control. But that is in one year, you guys are in a hurry. If this get big 2012 it will end as it did last time and the questions is if Bitcoin will then get a third chance. As I see it, this should start earliest in the summer of 2012. This is my point of view.

Also, in five years time, then this will get a lot more interesting, with the very low inflation rates, then miners have very little power and the fiat buyers almost 100 % control. The upside at that time are very very big, but that is if everything plays out well until then.

Fair in not in the way I am guessing you are thinking, fair from a fundamental point of view knowing that we are still in a high inflation environment.

You are right now investing in Bitcoins. As an idea I think this is a good one, you will probably make some kind of good return on it within 2-5 years, but what you are missing is that you guys are in a hurry, don't forget the high inflation environment. You have put in your buying orders at least 6 months to early, we are still printing 7200 bitcoins/day, so you are buying to high to soon, it is a classic beginners mistake and you will pay it by forced liquidation (if you buy through Bitcoinica with leverage) or you have to wait maybe up to several years to get a good return. Let the market do what it is best at doing, giving what is traded the right value, knowing that we are printing 7200 BTC/day will let everyone that is interested get in to BTC at fair levels, and that level isn't 3 USD, it is much lower.

The market will do this with "force", meaning people will do all what it takes to tackle the high inflation environment (and losing a lot of money doing so), or we can just get to a good fair value as soon as possible and start building up the Bitcoin community and price.

To compare it, it is like the Economy in the real world, the central banks tries in every way keep the bubble intact, what is necessary is to let the bubble burst all the way as soon as possible (like 1929-1932 great depression), and after that start building it up again.

This is my point of view, lets see which one the market will choose.

So why do they tell me on 24th of November, "The funds in question have been confirmed as processed on our end and should appear in your account within 3 business days."

So what does this mean, can we just cancel the withdrawal or is the money in limbo for days and weeks??

Just to be sure, has anyone been successful at withdrawing in any of the withdrawal options like Paxum, Dwolla, international wire etc. for the last week?

They told me that my money should have been at my Paxum account yesterday (no money on the account yet), I requested to withdraw 2500 USD more then a week ago.

If it airs to 13 million people, and if Bitcoin is mentioned many times in the episode it will bring some interest, the problem is that it can be a short term thing. The positive part is that it is at a time when the Bitcoin Economy is shrinking and desperately needs something like that. It can give it a boost, no question about it, but how long time that will endure is a hard question to answer. As a risk/reward point of view, 3 dollars looks to be a to high price for the moment and it reflects the short term optimism.

Your point of view is probably right, 1000 active users are to low, but still, what number is it, is it 2000-3000, or is it double of that.

10 000 is to high, maybe 1000 is to low, but as I see it at this high inflation environment Bitcoin needs at least 3000-4000 active users to sustain the price at this levels.

It would be interesting if someone could show that number, total active users the last month.

That means that the 1000 number probably is a bit lower. But even it you calculate with the higher number of 1000, 7500 USD /person is still a hugh number. My guess is that the average investor maybe puts in more like 1000-2000 USD /year.

As a conclusion, the interest have to pick up again, if not it will trade at 2 dollars within 1-3 months. The chance of that is very high as I see it. Sustained prices at 4 dollars is very unlikely as I see it for the nearest months.

Ok, lets say 800, or even 1000. 1000 active members, that is still not that of a big number if you think about the inflation numbers, it is 7500 USD/person for a year ((7200 x 2,86 x 365) / 1000). I don't think that the average user will put that type of USD in to the Bitcoin Economy per year. As an example this thread have 600 users looking at it for the last two days.

I see that the Bitcoin community is buying up the price, now it is about 45 % over its low if you look at the couple of months back. My target of 2-3 dollars that I had when Bitcoin was at 6 dollars is now fulfilled.

So what will happen now? Two things I think, first it will get back to lower levels after this buying optimism is gone, it will happen within 1-2 weeks. After that, let see it this show will get some new interest in, the up side is still pretty small, the main reason is the high level of inflation that still is in the system. At today's rates the inflation level in USD is around 20 000 USD/day, a pretty big sum with the Bitcoin community that have around 400 active users (top number for this month) on its biggest forum.

I think he should reverse the trades, this is the way it works on the financial markets, and I because of that didn't make any short selling trades. I can say that with 100 % confidence, that reversing is the right choice.

1. What you are doing is not right. You know the price is wrong so you are doing something that you shouldn't do, hopefully Zhou will ban all these accounts and freeze the money, because of your act(s).

2. Be careful not getting a margin call if you are doing it with max margin. bitcoin price is very volatile.

Yes, hopefully they will find a European bank that don't see Bitcoin as a threat.

I just talked to Mark, my money is on its way, but as it looks right now, no more SEPA transfers from now on.