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Economy / Speculation / Re: Wall Observer BTC/USD - Bitcoin price movement tracking & discussion
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on: April 14, 2015, 10:26:17 PM
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If we had no speculation, only demand for e-payments, the price would follow the equation P = V * T / N, where P is the price ($/BTC), V is the volume of e-payments ($/day), T is the mean time between successive payments with the same coin (days), and N is the number of currency units in circulation (BTC).
Assuming N = 14 million, guessing T = 14 days, and V = 5 million $/day, gives P = 5.00 $/BTC only.
The guess T = 14 days assumes that most coins that someone receives in payment for something, or buys to spend, are sold or used to pay for things at various times within one month. (BitPay sells all the coins that they receive within a day or two, for example.)
The guess V = 5 million $/day is based on various bits of evidence that indicate that BitPay has been handling about 1 million $/day of payments over the last year. Since they are believed to be the largest bitcoin payment processor by volume, a factor of 5 seems to be a fair guess for the total volume of e-payments. This estimate includes other processors and raw bitcoin payments, but excludes illegal trade, since that is being curtailed and cannot be relied upon as a sustainer of the price. (Anyway, it seems unlikely to be more than 1 million $/day).
It is not correct to use for V the total USD transaction volume extracted from the blockchain, because most of the latter (probably more than 90%) is movement of coins between wallets that belong to the same person, or that is not payment for goods or services -- such as tumbling, hot/cold wallet flow, deposits and withdrawals at exchanges and similar sites, gambling, etc.
Clearly, the current price (~220 $/BT) is still largely sustained by speculation and speculative holding.
I like the Money Velocity Theory approach because I can understand it. But I think your estimates are misleading. IMO: N = number of coins that are being actively exchanged because they are the only ones that can be part of a velocity equation. At best I'd say N = 3 millions. The rest is hoarded or lost. T = 14 days looks like reasonable to me, considering the average bitcoiner is likely to do a couple of purchases in a month. V = use estimated onchain USD transaction volume from blockchain.info = above 40 million USD. That would give a BTC valuation above 40 * 14 / 3 = 187 USD, which is in line with what I expect. |
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Economy / Speculation / Re: Bottom is in at $215 buying like crazy
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on: April 14, 2015, 07:46:00 PM
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we might see some panic selling shortly, if not then this is the bottom.
the next 24 hours really are critical
My stupid chart (based on onchain volume vs exchange rate) says you and OP are spot on (with a possible short dip in the high 100s). Yet the high volume for a bottom isn't there, and our brightest EW chartists are bearish.  |
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8
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Economy / Speculation / about Facebook's free F2F payments
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on: March 18, 2015, 10:14:54 AM
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By now I suppose most of you have read the news. http://techcrunch.com/2015/03/17/facebook-pay/What does it mean for the BTC price in the long and in the short run? Post here your thoughts. ------- Brain dump follows, beware likely incoherent blurbs ahead Personally I'm worried for btc price. Why? Because it cuts directly into one major use case for bitcoin, for me. One can organize a Facebook event, and get payment in advance for restaurant, hotel room or trip expenses. Everyone and their mom is on Facebook! They will go through the effort of connecting their bank accounts to Facebook because network effect. I know I would do that myself. It's so much better than organizing paid for events using meetup.com + bank transfers. Or bitcoin. When everyone will have happily surrendered their identity and control of their money in exchange for ease of use and safety net of big brother Facebook, who will eventually care of using bitcoin instead, other than a bunch of freak techies like me? Of all the times I've seen this downtrend and thought we will eventually go up, this is the first time I genuinely feel fear for the long term. My head is making up analogies with MySpace social network or OggVorbis audio format. Like bitcoin not becoming the digital currency of choice to price anything as in my dreams, but instead just going in history as an attempt to a digital gold substitute, which eventually failed to succeed after a relatively promising start. Just like when I bought OS/2 Warp and convinced my father to use it. Call me a troll, whatever, I don't care. This is an emotional post. In Reddit it would just be downvoted to oblivion. |
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10
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Economy / Speculation / Re: This graph says you should get in now
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on: December 01, 2014, 05:38:37 PM
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I did like you told me on 17th, sold all my school books & invested like you said. Got margin called a few days later so my moneys gone and schol isnt going to gud. I now my moms credet card stuffs so i coud buy more bitcoin on circle.com but i got to be real shur this time.
Are you super shur this time, EuroTrash?
Lol  Who needs school books when you can just get rich by trusting someone on a forum. Of course I am sure. Go ahead. Either way you're about to learn a lesson.  |
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Economy / Speculation / Re: Everything except the price trend is going fantastic
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on: November 30, 2014, 01:39:12 AM
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Let me explain this for once. I am drunk after a great night out so let me be condescending about it.
The fact is, theire is a bunch of people out there that exchange bitcoins on-chain no matter what the USD price of a bitcoin is. They make the estimated USD transaction volume.
Now, you can speculate about their motives. They clearly don't care as much as this forum does about volatility. Be it the drugs markets, be it remittances, we don't know fur sure. We don't care either. What we care about is that the on-chain transaction volume is growing steadily.
That means that the price of a bitcoin, sooner or later, will have to catch up with that information, because bitcoins are a finite resource with predictable supply, and because money velocity.
Ignore this post at your own risk.
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13
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Economy / Speculation / Re: Everything except the price trend is going fantastic
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on: November 28, 2014, 07:52:40 PM
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What's happened is since the last rise a lot more trade volume has entered the market.  No, a lot more trade volume has not entered the market.What I see is in that graph is a U-shaped long bottom in the making. Go figure. Different people, different conclusions. |
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Economy / Speculation / Re: Call the bottom
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on: October 09, 2014, 01:20:21 AM
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Personally I am hodling on cold storage atm but were I not doing so, in order to try and sleep safe at night (lol @ this... as if that's even possible when most of your money is a number in a bitcoin exchange), today I'd leave a catch-all bid at 280$.
Just complimenting myself for the good call, how childish of me.  (doesn't mean I'm confident that the shakeout is over, but the Est. USD transaction volume chart is also turning bullish) |
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Economy / Speculation / Re: Crunch time!
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on: October 03, 2014, 07:45:42 AM
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Nice list of addresses of actors who are too lazy to spread their coins over a lot of different wallets. Also surely coinbase, bitstamp and chinese exchanges have their addresses listed there, which in theory does not make them rich because they are not their coins but their users'. |
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